The Inc. Network
Opening the Books
It's my goal to have a completely open company. I've started sharing sales and budget figures with my employees, but they seem skeptical. How can I make this tough transition easier for everyone?
Boston* * *
If you want to open your books, start by educating yourself. For the philosophy and culture of open-book management, read Inc.'s April cover story, "A Company of Businesspeople" ([Article link]). For a how-to, read Jack Stack's The Great Game of Business (Doubleday/Currency, 1992, $24), or attend a "Great Game of Business" seminar held by Springfield Remanufacturing Corp. (SRC; 800-386-2752). Network with other attendees; contact some of the case-study companies you learn about, and ask what's worked for them.
It's smart to develop employee learning programs before you crack the books; otherwise, staffers won't understand the numbers or their context. Invite an accountant in to teach "Financial Management 101," then apply those concepts to your industry and your company. Or SRC can teach you and your employees how to quickly become financially literate through its on-site interactive seminars ($250 per participant). "Teaching the basics first makes the knowledge transferable," notes Leslie Danziger, CEO of research-and-development company LightPath Technologies, in Tucson. (See "Opening the Books at a Start-up," Financial Strategies, March, [Article link].) Let employees know that education can help make them more adaptable to change inside and outside the company.
Organizational change shouldn't be taken lightly, so seek help and encouragement throughout the transition. Tom Irmiter, president of Irmiter Contractors and Builders (ICB), in St. Paul, Minn., leans on a 3M executive, a board of directors (complete with a psychologist), and some of ICB's own large customers to help sharpen the company's vision, support its employees, and modify its open-book policy. Irmiter rereads Peter Senge's The Fifth Discipline (Doubleday/Currency, 1990, $19.95) to be sure the open-book policy still meshes with his company's continuous-improvement efforts. He's also inspired by Stephen Covey's The Seven Habits of Highly Effective People and Principle-Centered Leadership (both from Simon & Schuster, 1990, $12 each). Those books taught him the merits of employee involvement, moving him to initiate quality circles and staff meetings in which managers ask employees, What do you need from us to help you get your job done? By walking that talk, Irmiter and his managers have helped ICB's revenues double during the past 20 months, to reach $2 million.* * *
Hiring the Other Half
I'm a landscaper thinking about bringing a partner or second-in-command on board. How should I attack the process? What should I be looking for?
Chaparral Wood Art
Chaska, Minn.* * *
Hiring is tough enough, but sole proprietors have it tougher because survival trains them to become skilled at compensating for their weaknesses. Often, a sole proprietor's instinct is to hire his or her clone, but because owners are often blind to their own personal shortcomings, they "risk hiring someone who makes the same mistakes they do," explains consultant David Kurlan of Westboro, Mass. Instead, seek someone whose attributes complement yours -- preferably someone who constructively challenges the way you think about your business goals. "There has to be synergy," says Ed Laflamme, founder of Laflamme Services, a commercial landscaper in Bridgeport, Conn. "It's as if you're creating a third person."
Before you start hunting, assess yourself. Jot down your personality traits and your strengths and weaknesses in managing your company. In what areas (sales? finance?) can you afford to be less hands-on? Seek objective help if you can't tell. Ask yourself, In a perfect world -- with me as I am -- who'd be the best fit? Then list the specific skills you'd want your partner to contribute and weave a tight job description for that post. For more drills and other vital prehiring tips, read "Hiring Without the Guesswork" (February 1992, [Article link]).
Now, advises Laflamme, "get inside people's heads." Laflamme explores the depths of candidates' trust, motivation, persistence, education, and skill. His blueprint for hiring is simple: business savvy is always welcome; nice people finish first ("People do business with people they like"); fancy degrees can't camouflage inexperience; and nine-to-fivers should be avoided. For a roundup of the issues faced by employers seeking to fill a key slot, see "Looking Out for Number Two" (July 1991, [Article link]).
You'll share close quarters with this person, so although it's key to see him or her in a relaxed mode, never let informal interviews take the place of formal ones. "Friendship can neutralize your effectiveness as a working team," observes Kurlan. "You can't be tough when you need to be." And stay in the driver's seat during any type of discussion. Laflamme recalls the time an interviewee invited him to lunch: "He took me off guard, told me how great he was. It was a disaster." And interview your top picks a few times; otherwise, you might not get an accurate idea of their willingness to shoulder risk. Multiple meetings will also help you gauge a candidate's vision, ethics, character, and direction.
For the latest in hiring law, call the Bureau of National Affairs' research arm, BNA Plus (800-452-7773; 202-452-4323 in Washington, D.C.), to request its $35 package of recruiting guidelines, testing techniques, model hiring policies, and jargon-free employment law.* * *
Are there federal and state tax advantages for socially responsible companies? What are the benefits of being socially responsible?
Eugene B. Crowe
Tampa* * *
Steven Kaplan, director of taxation and a partner at Sax, Macy, Fromm & Co. in Clifton, N.J., says that aside from the breaks you might get by making charitable contributions to Internal Revenue Code Section 170(c) nonprofits or writing off socially responsible deeds as marketing or promotional expenses, there are currently no tax breaks designed specifically for socially responsible businesses.
For many CEOs of socially responsible companies, doing business in a good way is simply good business. "If you're running a company in a respectable way -- respectful of your employees, customers, community, and environment -- then that will come back and create an economic benefit for you in the long haul," says David Berge, director of the socially responsible banking fund at Vermont National Bank in Brattleboro. "There's a link between company profitability and responsible corporate practices."
Proactive businesspeople develop and bolster relationships with customers and suppliers through their positive work attitudes. "When people see us out there 'doing good,' they want to be a part of it," says Bill Seretta, president of Connecting Point Information Technologies in Portland, Maine. Fully 20% of Connecting Point's customers discover the company through its ties to community projects (such as auctions and benefits for educational and art programs).
Name recognition has also helped Widget Factory Cards, in Concord, Mass. President Suzy Becker says buyers associate her company with events like bike-a-thons for AIDS resources and other national social causes. "Recognition improves our account-retention rate and helps set us apart in a marketplace of more than 1,200 greeting-card companies," says Becker.
For more thoughts on social responsibility, Becker suggests Paul Hawken's Growing a Business (Simon & Schuster, 1987, $9.95). And to learn about the latest initiatives, contact Businesses for Social Responsibility (202-872-5206).* * *
Tracking Trade Tips
How should I go about tracking down foreign companies willing to do business with me? Are there consulting firms that distribute leads?
Chicago* * *
If you've done your homework and you've found that leads in the Journal of Commerce, World Trade Center Network, and the National Trade Data Bank's Trade Opportunities Program are either too competitive or not to your liking, call the Export Opportunity Hotline (800-243-7232) or the Trade Information Center (800-872-8723). Both of them are user-friendly hot lines that can direct you to the sources that will best fulfill your lead-generation needs. If you have a bright idea but no company, advice from a small-business-development center may be needed first. Your next step depends on what your product or service is, which foreign markets interest you, and how committed you are to follow-up, says Regina Tracy, executive director of the Small Business Foundation of America, in Washington, D.C.
Do whatever homework is necessary to figure out if, where, when, and how you should position yourself. Tracy recommends Exporting from Start to Finance (Tab Books, 800-233-1128, 1991, $39.95) as a desk reference. Use a consultant if you have specific questions your banker, lawyer, trade-information providers, or peers can't answer. Bear in mind that though consultants are plentiful, they usually require up-front fees, so you never know if what they'll deliver is what you really need. Also, "hiring someone to come in and tell you how and where to export is unsettling," says Tracy.
Assuming you're beyond the start-up phase and can readily fulfill foreign orders, contact your local trade-promotion agency or department of commerce to look into matchmaking programs. Eric Thorgren, international sales manager at Electronic Liquid Fillers (ELF), a liquid-packaging-equipment maker in LaPorte, Ind., likes his state's trade missions, which offer face-to-face contact with qualified leads. When Thorgren can't travel, reps from the Indiana Department of Commerce distribute ELF's literature at trade shows abroad (cost: roughly $300). For more on ELF's "just-do-it" approach to making global contacts, see "Easier Done Than Said" (February, [Article link]).
Since 50% of all trade leads are "dead on arrival," one of the best ways to find the hot ones is by asking people in your industry. Also contact the Department of Commerce's country-desk officers, or place an ad in its monthly magazine, Commercial News USA. Alternatively, if you want a full-service nonprofit that offers fresh leads from many sources, Tracy endorses the Phoenix Institute for Global Entrepreneurship (314-567-6527; free one-month trial membership). Surf its databases by modem for anything trade related. And if you're targeting Japan, VentureLink USA (310-822-5628) helps U.S. companies that plan to enter Japan in areas such as product analysis, market research, advertising, and deal negotiation.
A sales lead can be torpedoed by a poor response, so be sure to answer queries from abroad quickly, and "keep the paper chain flowing," says Thorgren. Buy a fax machine, don't scrimp on travel, and do credit checks on foreign companies. And don't ignore foreign customs and protocol; brush up on those cultural nuances with Roger Axtell's Do's and Taboos Around the World (John Wiley & Sons, 1993, $12.95). n* * *
Reported by Karen E. Carney and Vera Gibbons* * *