How Retailers Can Improve Operations for Profits

Sources of customer data are often underutilized by many retailers, according to a study by A.T. Kearney.

 

June 3, 2013

Many retailers could turn their operations into higher profits, if they do a better job of utilizing their customers’ data according to a study. That includes adequately learning insights by better engaging their employees who deal with customers on a regular basis.

“Leading retailers encourage measurement of the right data, invest in the skills to gain insights from that data, and use those insights effectively to frame future actions,” says Joel Alden, an A.T. Kearney partner. He’s also co-author of the 2013 study, “Achieving Excellence in Retail Operations.”

Key findings:

• Leading retailers are much better than others at collecting data, measuring activities, acting on their insights, and measuring again to see the results.
• Retailers that most actively engaged their employees and customers were the most successful.
• Retailers often weren’t managing the multichannel environment. In this new environment, customers will often return products to a store that they ordered online, or ask a store employee to order an out of stock item through another channel. When employees are not measured on the success of non-store channels, they have little incentive to encourage the growth of those channels.
• Retail field managers are spending too much time on administration and not enough time in the field.

Engaging employees

Interestingly, few retailers take full advantage of employee insights – employees interact with customers all day long, gaining valuable insights into customer needs.

“The problem today is a lack of formal requirements or processes to gather these employee insights. Leading retailers create formal pipelines that capture and use these insights,” says Adam Pressman, A.T. Kearney principal and a study co-author.

“With all of the moving parts, retail leaders dedicate resources to effectively drive and manage change,” says Dean Hillier, A.T. Kearney partner and study co-author.

“This includes focused and measured pilot efforts, tailored communications and communication channels based on messages and employee groups, and a focus on continuous improvement, not just one-and-done mandates,” Mr. Hillier adds.

Social network data

The authors also suggested retailers would be better served by taking advantage social network data from third party domains. Apparently less than 50 percent of retailers do, and only 8 percent understand its importance.

So they underscore the importance of leveraging social media, but the core principles remain: People, customers, and physical store layouts.

With more than 100 questions, the survey probes the strategy, tactics and execution of retailers in more than 20 countries.

It covers multiple sectors, including apparel, health and personal care, mass-market and hypermarket, electronics, food and grocer, and cash and carry.

To see the report, visit: www.atkearney.com/AERO.

From the Coach’s Corner, more tips:

• Want More Business? Build Trust with Consumers…Here’s How
• Why Your Customers Stay or Leave – Insights from Study
• Your Supply Chain Can Meet the Expected Standards of Customers, If…
• Research – Are You Making the Same Mistake as Big Box Retailers? 

It takes less effort to keep an old customer satisfied than to get a new customer interested.

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

 

Do You Want to Prevail on Google? Watch the Cheesy Stuff

If you want to win on Google, heed its warning.

 

May 31, 2013 

Sure, every online publisher wants to earn money from advertising these days. Note the emphasis on the word, “earn.” But there are ways to do right and ways to do it wrong.

As a publisher of what is designed to be thought leadership here on The Biz Coach, perhaps you can imagine how I felt on Monday, May 20, 2013 when the following email arrived: 

Hello,

I am Kyle with Clear Web Solutions. My company represents a leading provider of online degrees. They would like to purchase ad space on your site’s page, www.bizcoachinfo.com/archives/8426. 

Ideally, we’d like to mention our client in a sentence on your site, which would link to our client’s site.  We could pay you via PayPal for your time and efforts as soon as an agreement is made.

Please let me know if you are interested so we can discuss the details. Thanks for your time and consideration.

Kyle

Advertising Representative

Clear Web Solutions

www.clearwebsolutions.org 

Not to be self righteous, but I had an immediate reaction of disgust. Someone wants me to mention his client with a link to his site for pay? Really?

On the same day, here was my annoyed response:

Hi Kyle:

If I understand you correctly, you and www.clearwebsolutions.org want to insert a paid-sentence with a link to you as a product advertisement in a Biz Coach article, 10 Key Differences between Leaders and Managers? 

Well, I can see why you inquired – data shows the article is perennially one of the most-requested and trusted business-coaching articles on Google.  But your request is ironic. 

A leader would neither make such a request nor would allow such a sinister-advertising approach.  Not only is your request insulting and immoral, it would result in a violation of Federal Trade Commission blogging rules.  Find another occupation before I report you and your company, and before it’s too late for your career.  

Terry Corbell

Publisher 

The abhorrent inquiry from Clear Web Solutions was certainly not the first of its type to be received here. There have been other insulting requests, which is why I once wrote this article: Is the FTC’s Blogger-Payola Crackdown Working?

Candidly, I had forgotten about them. But I was reminded of them today when I spotted a WebProNews article by Chris Crum entitled, “Google Warns: You Better Adequately Disclose Paid Content.”

It was a reminder to heed Google’s policies on ethics.

“Google’s Matt Cutts has been talking about the subject a lot lately, so if your site offers any advertorial content, you better make sure you’re doing it the right way, under Google’s guidance, or you just might find yourself slapped with a harsh penalty independent of any black and white animal-named algorithms,” writes Mr. Crum.

Amen.

“Earlier this month, Cutts put out a video talking about a bunch of big SEO-related changes Google is working on, and that webmasters could expect to see over the coming months,” adds Mr. Crum. “The video discussed the most recent Penguin update, which we’ve already seen take effect.”

Again quoting Mr. Cutts, Mr. Crum warned about advertorials and native advertising.

“Now, Cutts has a new video talking for five minutes specifically about Google’s policies on advertorials and native advertising,” he explains. “Yes, they’re taking this seriously, so you should too, if you’re at all concerned about your Google rankings.”

Mr. Crum’s article linked to a second video warning that advertorials need to be properly disclosed if you want to avoid Google’s wrath.

There’s more.

“In case you’re still not convinced that Google is cracking down on this stuff, a couple weeks ago, Cutts tweeted that Google had just took action on thousands of linksellers,” Mr Crum warns.

See the original WebProNews article for more details.

From the Coach’s Corner, see these resource links:

• Google insights – 23 key questions about your Web site
• Secrets for Attracting, Keeping Readers on Your Blog
• 12 Tips to Develop the Best Content for a Top-Rated Blog 

“Ethics is knowing the difference between what you have a right to do and what is right to do.”

-Potter Stewart

 

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

8 Tips to Avoid Being Victimized by Phishing Scams

 

Despite all the publicity about phishing scams, even the University of Washington has still found it necessary to warn its employees.  

“The University of Washington has been a target of some high-profile ‘phishing’ attacks recently, and the Office of the UW Chief Information Security Officer is offering some tips to protect personal, financial and institutional information stored on personal computers,” wrote Bob Roseth at www.washington.edu/news in February 2013.

“Phishing is a form of email or Internet fraud in which cybercriminals entice victims to provide personal information, including login credentials, that can be used to gain access to UW or personal systems, bank accounts and other financial assets, as well as other sensitive information,” he explained.

“Phishing messages often include distressing or enticing statements to provoke an immediate reaction, or they may threaten consequences if you fail to respond,” Mr. Roseth added.

Just as it appeared that phishing has been a heavily publicized topic, the university’s warning serves as a reminder not to be complacent. We can never assume that everyone is cognizant of dangers posed by cybercriminals. The university joins a long list of victimized organizations.

To avoid being victimized, here are eight tips:

1. Take great care in sending e-mails.

You shouldn’t ever e-mail passwords or other sensitive information. If you’re forwarding an important e-mail with a password-protected attachment, make sure it’s challenging for anyone to open it.

2. Be strategic if you’re asked to set up security questions and answers.

Many questions are easy to answer for cybercriminals if they know anything about you, especially if you are active on social media. People put all kinds of information on their Facebook page.

So don’t answer with information that can easily be found by cybercriminals– in other words, don’t answer the questions directly. In other words, if a question is “What was the name of your high school?” answer with the name of your most disliked subject or most-inspirational teacher.

3. Be skeptical when a cybercriminal tries to get your attention.

Mr. Roseth was right when he wrote that authors of phishing methods know how to use fear to get your attention. They also use other methods.

4. Take extra precautions when an e-mail that appears to be a legitimate Web site asks for information.

Savvy organizations don’t send such requests for your information. Many illegitimate Web sites are copycats. Look closely at the URLs and check for slight variations in the spelling.

Better still, I always ignore such requests. Instead, I enter the site’s address in the URL and go to the Web site in-question, just to be sure.

5. When you receive e-mails asking for information or for you to click on a link, first consider the circumstance.

If you don’t recognize the e-mail address, even if it’s supposedly from an acquaintance or your bank, don’t open it. Certainly, don’t click on such links or open attachments.

As this article was being written, I received this cybercrime e-mail:

From: JP Morgan Chase Bank [webexxxoffice42@att.net]

Please open the attachment for more information Mr. James Dimon CEO JP Morgan Chase Bank Fax:1-847-496-8147

Note: the discrepancy between the the alleged bank and e-mail address – a bonafide bank would not have an ATT.net email address.

6. Guard against scams from overseas.

Usually, such scams have grammatical and spelling errors. They’re often been translated poorly into English. They also include weird-looking phrasing or out-of-character letters in e-mails to get past spam filters.

7. As Mr. Roseth stated, phishing scams try to get your attention with urgent statements for you to take action.

Ignore them. They also pretend to send you important personalized information, but they mistakenly reveal that the same e-mail is being sent to others. Often, they don’t address you by name.

Or, they hack Twitter or Facebook and pretend to send you e-mails from your acquaintances. So check the context of such e-mails – they don’t use the same verbiage as your friends.

8. Take precautions with your smartphones, mobile applications and social media.

Watch out for illegitimate apps that want to access your device in order to steal your personal or sensitive information.

Note: Android has had countless security issues. Identity fraud has escalated in smartphones and social media. Once considered perfectly safe, even Macs have had security issues, too.

From the Coach’s Corner, if you want information on other security subjects, chances are you’ll find what you want in this portal’s Tech section. Remember, if you read e-mails carefully and take great care, you’ll minimize any threats.

Be careful about reading the fine print…there’s no way you’re going to like it.

 

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

 

Taxes – What Should Washington State Do about Medicaid?

With 18% of residents on Medicaid and Washington’s $2-billion budget shortfall, the state should follow Oregon’s example

 

Updated Feb. 6, 2013

ObamaCare seeks to enlarge Medicaid programs across the country. What does this mean for Washington state?

Published reports indicate that as many 500,000 Washington residents would be eligible for Medicaid if it’s expanded.

Are you sitting down? That would be in addition to the 1.2 million already receiving Medicaid among just 6.82 million Washingtonians. Enrollment has skyrocketed since the early 1990s – at a growth rate that’s 50 percent faster than the population.

Under ObamaCare, adults who make less than 138 percent of the federal poverty level would qualify. But you might recall that the U.S. Supreme Court ruled that individual states can’t be forced to expand their Medicaid programs.

What’s helping to fuel talk about Medicaid expansion in Washington is the supposed federal funding for the first three years, but would then change. It would drop from 100 to 90 percent.

Gov. Inslee

As expected, liberal Gov. Inslee adamantly supports an expansion. He confirmed his support at a gathering of healthcare providers, insurance companies, and policy analysts. But he acknowledges the high cost.

“Governors in the next several years are going to succeed or fail, largely dependent on their ability to be successful in advancing healthcare reform,” he asserted. “And the reason is, is that these budgets are going to be extreme pressure and that their ability to solve this mystery of health care reform in a way that’s cost effective and improves health is absolutely pivotal to the success of any governor in any state.”

Originally, Medicaid was launched in 1965 to help poverty-stricken families.  As you might expect with all federal and state programs, Medicaid coverage been amended periodically to provide additional benefits such as for disabled and long-term care patients.

Ten percent of U.S. citizens received Medicaid benefits 37 years ago. In 2012, 20 percent of Americans were enrolled in Medicaid.

Unfair burden to business owners

Currently, costs are split evenly between federal and state taxpayers. So in Washington, mostly as a result of business and occupation taxes, this means business including mom-and-pops to medium-size business owners pay 100 percent of Medicaid costs.

At a cost of $6.2 billion annually, Medicaid is the second-highest Washington state expense – right behind education. As it is, Washington is one of the top 10 states in making cuts to higher education – a 22.4 percent cut from 2008 to 2013, according to the Grapevine Project at Illinois State University.

No one wants an unhealthy populace. But there are fiscal limitations.

Washington has a lot of red ink (State’s Budget Hole at Least $2 Billion Deep, Lawmakers Told …). Other states’ programs, including the Oregon Health Plan, have found it necessary to put a freeze on Medicaid enrollments.

So, what should Washington state do about Medicaid?

The state’s leading think tank, Washington Policy Center (WPC), provides an analysis in “Washington State Should Not Expand Its Medicaid Program,” by Roger Stark, an MD and WPC’s healthcare policy analyst at www.washingtonpolicy.org.

Dr. Stark points out state taxpayers will face more taxes.

“Even with the federal government paying 100 percent of the health care costs for three years, our state will still need to pay immediately for the administrative costs of the expansion,” the WPC analyst writes. “Then, when the 90-10 match occurs, state taxpayers have to pay $2.4 billion over the first 10 years.”

Underestimated ObamaCare costs

He makes an eye-opening assertion.

“Worse, the federal government has grossly underestimated the cost of ObamaCare,” writes Dr. Stark.  “If states are forced to pay a ‘blended’ rate close to the existing 50-50 match, the cost to Washington state taxpayers would jump to at least $12 billion over the first 10 years.”

Again, that would be in a addition to what business owners pay in federal taxes.

Dr. Stark argues that Medicaid expansion will prevent low-income workers from getting employer-paid health coverage.

“Employers with fewer than 50 workers will make a logical financial decision and drop employee coverage,” he explains. “Under ObamaCare’s individual mandate, these workers will then be forced into the expanded entitlement program against their will.”

He points out that the state’s already-high Medicaid costs will skyrocket if the program is expanded.

“…virtually every policymaker predicts a ‘coming out of the woodwork’ or ‘welcome mat’ effect, by which people who qualify but haven’t enrolled in the existing Medicaid program will do so,” Dr. Stark explains. “The Urban Institute estimates 545,000 Washington residents fall into this group. These people would only be eligible for the existing Medicaid plan and would add $14 billion in state taxpayer costs for the first 10 years.”

Questionable value

He also questions the value of Medicaid for patients.

“Except for very specific populations such as HIV/AIDS patients, there is no solid scientific evidence that Medicaid provides better health outcomes for patients than having no insurance at all,” he writes.

“Also, Medicaid pays providers on average only 40 percent of what private insurance pays,” he asserts. This shifts the financial burden to private insurance companies and reduces the number of providers financially able to see Medicaid patients. Each year access to health care for our existing Medicaid patients gets worse.”

After five decades, he believes that Medicaid has become a too “costly, inefficient, centrally planned government health insurance program” necessitating a complete overhaul.

“Simply adding hundreds of thousands more Washingtonians to Medicaid will not improve their health, but it will limit choices for those patients, and will be a huge burden on state taxpayers,” he concludes.

Agreed.

From the Coach’s Corner, see these related healthcare articles:

• Healthcare Crisis – What the Plight of Doctors Means to You
• Fiscal Fact-Check: Deficit, Social Security, and Medicare
• Inefficiency, Fraud in Healthcare and Insurance – How You Can Help

It’s not hard to meet expenses … they’re everywhere.

 

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

 

More Companies Know that High Morale among Employees Propels Profits

 

More companies are aware that employee engagement enables a better customer experience, which leads to higher performance. That’s a salient conclusion of the Temkin Group’s “Employee Engagement Benchmark Study, 2013.”

The study’s findings of the direct benefits to a company with engaged employees:

• Such workers are more twice as likely to stay late when necessary.
• They’re more inclined to act as good team members.
• They will pitch in even if the task isn’t in their job descriptions.
• They’re three times more likely to offer solutions.
• Such talented workers are more than six times more likely to refer their friends or relatives to apply for a job.

Levels of employee engagement

The research examines the level of employee engagement within different types of organizations.

Seventy-five percent of employees in companies with significantly above-average financial performance are moderately or highly engaged, compared with less than half of firms with subpar financial results.

The study, which is based on a survey of employees completed in August 2012, shows that 57 percent of U.S. employees are moderately or highly engaged, an increase from 47 percent that Temkin Group found in its 2011 survey.

“It may not show up on any balance sheet, but a highly engaged workforce is one of the most valuable assets that an organization can possess,” states Bruce Temkin, Customer Experience Transformist and Managing Partner of Temkin Group in a press release.

Additional findings:

• Professional services and construction companies have the highest level of employee engagement, while travel and retail firms have the lowest.
• Sixty percent of the workforce at companies with 100 or fewer employees are moderately or highly engaged, compared with only 46 percent at companies with 10,000 or more employees.
• Seventy-five percent of senior executives are moderately or highly engaged, compared with only 46 percent of individual contributors.
• The most engaged employees tend to be older, male, college educated, and African-American. 

The complimentary report can be downloaded from www.TemkinGroup.com.

Conclusion

The study’s findings make sense. Engaged employees are more polite to your customers. Politeness has a bearing on whether your customers will stay or leave.

A sure-fire way to improve employee engagement for profit is to partner with your employees. It’s advantageous to power your brand with employee empowerment.

From the Coach’s Corner, related resource links:

• 13 Management Tips to Solve Employee Absenteeism
• The 3 Keys to Turbo Charge Your HR Program for Higher Profits 
• Human Resources: 4 Reasons Why New Managers Fail
• Management and HR for Higher Performance

There are two kinds of people: people who like their jobs, and people who don’t work here anymore.

 

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

 

Will NLRB’s Controversial Decisions be Reversed after Court Rules Obama Violated Constitution?

 

Updated Jan. 29, 2013

In a court case involving a Washington state employer, it’s also a win for the U.S. Constitution and employers. 

In a unanimous ruling, the three-judge panel of the U.S. Court of Appeals for the District of Columbia ruled President Obama has abused the appointment process. The ruling was cheered by Republican critics, as well as by some liberals.

Mr. Obama has been abusing his power by claiming his disingenuous appointments of three political partisans to the National Labor Relations Board (NLRB) were legal recess appointments.

In truth, the Senate wasn’t in recess but in pro forma sessions meeting every three days.

The court ruled presidents can only make recess appointments between formal sessions of Congress, which normally occur once at the end of the body’s business year. It also ruled Mr. Obama can only make appointments for openings that occur during the same recess.

Checks and balances

So, Mr. Obama has been violating the checks and balances in the Constitution’s advice-and-consent requirement. For 200 years, presidents have been making recess appointments. But no other president has tried to circumvent Congress by making such appointments under false pretenses.

Since Mr. Obama’s appointments on January 4, 2012, the NLRB has made some 300 decisions –many were huge – that adversely impact employers and help his political supporters.

But now, legal experts believe the decisions will be thrown out because of the unlawful appointments.

This ruling immediately invalidates a dubious action by the board against a Pepsi-Cola bottler in Washington state.

It also means the president’s appointment of Richard Cordray to head the Consumer Financial Protection Bureau that same day in January 2012 may be nullified. That would include his actions. Many have been dubious.

The court ruling may have other implications for recess appointments by future presidents. Their recess appointment power is in doubt.

NLRB’s future

Temporarily, the ruling might also stop the NLRB from overseeing labor disputes – the board doesn’t have a quorum with the removal of the three appointees.

Of course, the administration will probably appeal the ruling to the U.S. Supreme Court.

Meantime, the court’s decision represents a rebuke to Mr. Obama. He deserves a reproach for many other reasons.

Justifiably, his critics have increasingly condemned his corrosive presidency – such as his refusals to work with Congress, his demand for a blank check on the nation’s debt limit, the $16.5 trillion in red ink and growing, saddling small businesses with his unpopular ObamaCare, his broken promise of transparency, and his failure to create productive policies for family wage jobs.

QE3 (printing money), borrowing billions of dollars from China, the interest on the borrowing now costs 46 cents out of each federal dollar, nearly 50 million Americans on food stamps, and no federal budget for four years — aren’t solutions. Further, the massive debt is grossly unfair for our children and grandchildren, and it’s unacceptable.

So, his disingenuous claims regarding his NLRB appointments typify why many of us are alarmed by his efforts to turn his presidency into an imperial monarchy.

Hurray for the Constitution.

From the Coach’s Corner, see these articles:

• Obama’s Broken Promise for Transparent Government – Study
• Canadian Study – U.S. States Plummet in Economic Freedom
• The Connection: 7.8% Unemployment and Obama’s Failure to Convene His Jobs Council
• Inefficiency, Fraud in Healthcare and Insurance – How You Can Help

It’s only unethical if you get caught.

 

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

 

HR – Interviewers Give Higher Marks to Applicants Interviewed Early in the Day

 

Interviewers often mistakenly give higher ratings to job job seekers – whom they interview early in the day – at the expense of other applicants. That’s one of the conclusions from research of 10 years of data from more than 9,000 MBA interviews.

Released in 2013, the study was conducted by Uri Simonsohn of The Wharton School of the University of Pennsylvania and Francesca Gino of Harvard Business School. It was published in Psychological Science, a journal of the Association for Psychological Science.

“People are averse to judging too many applicants high or low on a single day, which creates a bias against people who happen to show up on days with especially strong applicants,” according to the researchers.

They indicate interviewers have a difficult time seeing the big picture. Instead of evaluating applicants in relation to all of the applicants who had been or would be interviewed, interviewers would only consider them in the frame of applicants interviewed on that day.

This phenomenon is often referred to as “narrow bracketing.”

Gambler fallacy

The researchers drew on previous research on the “gambler fallacy.”

Much like gamblers bet on red after the wheel stops at black four times in a row, an interviewer bets on “bad” after interviewing four “goods” in a row. The difference in this case is that the interviewer controls the wheel.

If the interviewer expected that 50 percent of the whole pool would be recommended, the interviewer would avoid recommending more than half of the applicants interviewed in a given day.

As predicted, interviews earlier in the day had a negative impact on the assessments for the interviews that followed — if the interviewer had already given several high scores, the next score was likely to be lower. This held true even after various applicant characteristics and interview characteristics were taken into account.

As the average score for previous applicants increased by .75 (on a 1-5 scale), the predicted score for the next applicant dropped by about .075.

This drop may seem small, but the effect is meaningful. An applicant would need about 30 more points on the GMAT, 23 more months of experience, or .23 more points in the assessment of the written application to make up for the drop. Additionally, the impact of previous scores grew stronger as the interviewer progressed through the day.

The researchers said they were surprised by the overall strength of their findings: “We were able to document this error with experts who have been doing the job for years, day in and day out.”

In case you’re wondering, yes, the study results are applicable in other situations – from bankers considering loan applicants to reality-show producers choosing contestants.

Obvious conclusions

So interviewers beware of your potential unintended bias. Applicants, schedule interviews no later than 10 a.m., but 9 a.m. is better.

From the Coach’s Corner, more tips if you’re a job seeker:

The study’s results aren’t a surprise to me personally as I’ve always believed in meeting early in the day – as I’ve sought new clients – or early in my career when I was seeking employment.

My two-fold strategy:

• Always have a presence in the room before meetings. I’ve made certain that the other parties were well-acquainted with my background before the meetings — via publicity, public speaking and other “shameless self-promotion.”
• Mornings were considered prime time. I’ve always preferred client meetings in the morning. Prior to my consulting practice, I preferred job interviews early, too. I inherently realized that morning was prime time for making money. In most cases, if a potential client or employer wouldn’t commit to an early meeting, it was not a good sign.

If at first you don’t succeed … skydiving is not for you.

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

 

HR Lessons from Failed Mergers of Canadian Businesses

 

Only 20 percent of Canadian mergers and acquisitions succeed, according to a survey of finance executives. The study confirmed that mergers only succeed if companies strategically plan to minimize risks in their cultures and workforces.  

“Human capital risk stands out as a critical area for the success of an M&A, and, as such, requires management’s attention as soon as an organization enters into discussions with another entity,” said Michael Conway, Chief Executive and National President, Financial Executives International Canada (FEI).

The study, “Human Capital Risk in Mergers and Acquisitions,” examined M&As from 2007 and 2012. Sponsored by Towers Watson, the study was conducted by the Canadian Financial Executives Research Foundation (CFERF). CFERF is the research arm of FEI Canada.

“Our research also shows that companies that very successfully completed an M&A all paid unwavering attention to human capital at all stages of the process, while this was not the case for less successful transactions,” added Mr. Conway.

The study’ conclusions aren’t a surprise. Most mergers fail. If you’re contemplating a merger, be very careful about your human capital – whether you’re in the public sector, a small business or a global company. At the minimum, if an M&A tempts you, consult your HR pros.

Remember, if one of the companies has cultural issues, the merger will be too difficult to achieve. At least six salient steps are needed to implement a cultural change for profits.

What determined the success of the Canadian mergers?

The successful mergers involved companies that were the most-diligent about identifying people and cultural issues to address early in the M&A process. Obviously, key factors must be identified and addressed during the initial due-diligence stage.

Survey respondents indicated that they determined the success of their transactions by measuring different metrics:

• 69 percent of respondents measured revenue growth
• 63 percent of respondents measured achievement of specific synergies other than cost reduction
• 45 percent of respondents measured retention of key talent

“In order to effectively manage a cultural integration, organizations should upgrade their toolkit before the next deal” said Eric D’Amours, Account Director & Canada Leader, Mergers & Acquisitions, Towers Watson.

“When the next transaction comes up, they would then be better prepared to prioritize issues to be addressed as part of the due diligence process, including plans to help employees cope with the upcoming change,” he explained.

The study also showed that more than 80 percent of respondents expect try another M&A. My sense is that they, too, won’t be successful without due-diligence and implementing strategic measures.

The study caught my eye because it confirms what I’ve long maintained – companies must consider culture and employee-morale factors and use best practices to solve issues – before implementing an M&A.

See the full report here.

From the Coach’s Corner, tech giant Hewlett-Packard has been on a downward spiral since its ill-fated merger with Compaq. (See:Leadership, HR, Marketing Lessons from HP’s Executive Turmoil)

Xerox and Wurlitzer will merge to produce reproductive organs

 

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

 

Google’s Move from Passwords Gets Applause from Leading Security Expert

 

Jan. 22, 2013

Google’s efforts to make the Internet more secure by eliminating the use of passwords is drawing praise from one of the nation’s leading authorities on digital security.

“The premise is indeed interesting and is most likely destined to become reality,” says Dr. Stan Stahl, a principal at Citadel Information Group, www.citadel-information.com, in Los Angeles.

Published reports including “Google Prepares to Leave the Password Behind” in PC Magazine indicate Google wants to use “a tiny cryptographic USB card called a YubiKey with a modified version of Google Chrome.”

Google ostensibly wants to make a gadget available that would corroborate the identity of users on all machines from computers to mobile phones.

“Passwords are challenging and difficult for people,” acknowledges Dr. Stahl. “Strong passwords are hard to construct – in part because we do a lousy job of instruction.”

It can be a tedious process if you have a lot of passwords.

“Strong passwords are hard to remember,” says the security guru. “And when we need several of them, they become very are hard to manage.”

Feasible alternative

“Replacing passwords with authentication devices could have the positive benefit that both the web site and the user will be able to authenticate the other,” says Dr. Stahl.

“Right now, it’s often too easy for a fraudulent web site [set up by a cybercriminal to steal your information when you visit, for example] to look legitimate to an unsuspecting visitor,” he adds.

“Done right, an authentication device could authenticate the user to the site and the site to the user,” asserts Dr. Stahl.

But what if the device is lost or misplaced? Indeed, the PC article reports Google probably has a solution.

The search engine has “developed a Google-independent protocol that requires no special software to authenticate a security device. It even includes measures to prevent websites from tracking users via their security devices, and only requires that the user be running a browser that supports the protocol.”

The Google approach appears to be easier and more secure than passwords. However, don’t get complacent and start celebrating.

“…no technology – including technology that replaces passwords – is a silver bullet in the fight against cybercrime,” cautions Dr. Stahl.

“A cyber criminal who takes control of the computer you use to access your bank account will have your access to that bank account, whether you gain access through a password or through an authentication device,” he adds.

From the Coach’s Corner, visit Dr. Stahl’s informative security blog, where you can sign up for his complimentary security updates.

More of Dr. Stahl’s expert opinions:

• Our Mobile-Banking Warnings about Security Prove Prophetic
• 5 Safety Measures to Thwart Mounting Social-Network Attacks
• Who Profits from Android’s Security Issues? Not Users.
• Cyber Security: Is Your Business Prepared with Precautions and Response Philosophy?
• Lesson about Passwords after Theft of 16,000+ UCLA Patient Records

 “Criminals should be punished, not fed pastries.”

-Lemony Snicket

 

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

 

Canadian Study – U.S. States Plummet in Economic Freedom

 

If you or your business has unwarranted problems with any level of government – from the IRS to local zoning ordinances – your economic freedom is being trampled. Further, there’s a connection between the arrogant trampling of our economic freedom and our unhealthy economic climate. 

Coinciding with America’s economic decline, a leading Canadian public-policy think tank reports that citizens in many U.S. states are suffering from a decline in economic freedom. That’s the conclusion from a study by the Frasier Institute entitled, “Economic Freedom of North America 2012.” 

“Economic freedom is a key ingredient in creating prosperity,” said study co-author Nathan Ashby, a professor at the University of Texas at El Paso. “States with high levels of economic freedom provide families with higher standards of living.” 

Frasier Institute’s body of work encompasses more than 25 years by three Nobel laureates among more than 60 scholars. The study measures the key indicators of economic freedom in the U.S. and Canada. 

The key indicators: 

1. Size of government
2. Taxation
3. Rule of law
4. Property rights 

“The heavy-handed regulation and extensive overspending by Washington in response to the domestic and European debt crises not only caused America’s global economic freedom level to drop, it’s now affecting economic freedom levels at the state level,” he added. 

U.S. compared to Canada 

Ironically, the report indicates economic freedoms have improved in the 10 Canadian provinces. Among 144-ranked nations in the 2012 “Economic Freedom of the World Index,” Canada ranks fifth. After being ranked second in 2000, the U.S. declined to No. 16. 

“The link between economic freedom and prosperity is clear: States that support low taxation, limited government, and flexible labor markets benefit from greater economic growth,” said Fred McMahon, co-author of the report. 

“In contrast, states with reduced levels of economic freedom see lower living standards for families and fewer economic opportunities,” he added. 

The report notes that the average per-capita GDP in 2010 for the top 10 states was $51,737 compared to $44,889 for the remaining states. 

Delaware, the most-economically free state, ranked first among all states for having the smallest size of government and most flexible labor market – while Alaska, Delaware, and Texas impose the lightest overall tax burdens.  

The states with low scores on these measures have corresponding low levels of economic freedom. New Mexico and West Virginia score worst for size of government. New Jersey and Rhode Island score worst for taxation. 

West Virginia, Alaska, and Hawaii score worst for labor market freedom at the all-government level (comprising federal, state/provincial, and municipal/local). 

Where’s the leadership? 

All of this means America needs leadership – not disingenuous politicians promoting dysfunctional public policy for their political gains. 

Everyone agrees the U.S. was in a much better fiscal situation in the mid-1990s during the Clinton Administration. Unlike the Obama Administration and Senate Majority Leader Harry Reid, who refuses to allow a vote on the federal budget, President Clinton and Congress cooperated in a nonpolitical fashion. 

Mr. Clinton was effective because he was budget-minded, and he reached across the political aisle to negotiate with his opponents. It’s a matter of record that Mr. Clinton met with House Speaker Newt Gingrich on 35 occasions to discuss issues facing the country. 

In contrast, Mr. Obama doesn’t bother to meet with Congress. 

Evidenced by his incessant sarcastic name-calling and innuendos, Mr. Obama ostensibly prefers campaigning to sitting down and negotiating an economic recovery. 

Nor does Mr. Obama appear to care about the 23 million unemployed and under-employed Americans. He hasn’t even convened his own jobs council since January 2012. 

The obvious conclusions: 1. Congratulations to Canada. 2. America’s murky fiscal situation is unacceptable. 

Resource link: Download the economic freedom report 

From the Coach’s Corner, the decline in the average American’s economic freedom is not a recent development. I’ve been writing about it for several years in this portal’s Public Policy category. You’ll find well over 100 articles with solutions.

“The problem with the federal government is that common sense is not necessarily common.”

- Terry Detrick

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Author Terry Corbell has written innumerable online business-enhancement articles, and is also a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

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