CEO Notebook

CEOs from diverse businesses offer insight into training, technology and sales presentations.

Our employees need specialized training. What can we offer?

Developing in-house training sessions for employees is often prohibitively costly for small businesses. But don't let a resource deficiency stop you from directing employees to training that's available outside and then reimbursing them. At Pro-Dex Inc., a $25-million holding company of dental-product manufacturers and distributors, employees who want training play a part in designing their own curriculum. Typically included are college classes, outside seminars, and assigned reading. Currently, 16 staffers are involved in the program. Admittedly, Pro-Dex, in Boulder, Colo., is big enough to pay for someone to manage its customized learning program--an expense many entrepreneurial companies can't afford. However, there's nothing to prevent smaller companies from designing more informal customized learning programs. And despite the cost of the training manager, president Charles Strait says this type of individualized curriculum development is still a bargain. "If I had had to pay headhunter fees last year for the management positions we filled in-house, we would have spent more than we did on this program," he explains. --Stephanie Gruner

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Benchmark: What Really Matters to Small-Business Owners

The Internet is still pie in the sky for many small businesses, according to a recent survey of 250 small retail, service, and manufacturing companies, most with less than $5 million in sales, conducted by the Dwyer Group. When asked to rank 20 business issues, the owners of those companies said their most urgent concerns were basics like "generating more sales" and "marketing." "They're more interested in surviving and growing a business, rather than looking for frills that may have no impact on their business, like the Internet," says John Appel of the Dwyer Group. --S. G.

The 5 Highest Priorities of Small-Business Owners*

Generating more sales: 73.3%
Marketing products or services: 58.7%
Understanding financial condition of business: 52.4%
Establishing retirement plan: 49.5%
Setting personal and business goals: 45.1%

The 5 Lowest, of 20 Choices*

Developing fringe-benefits packages: 26.2%
Compensating employees: 22.8%
Using Internet to market business:15.5%
Developing Internet site for business: 11.7%
Expanding internationally: 6.3%

*by % of respondents ranking it as a "high" or "urgent" need
Source: Survey of 250 small businesses, the Dwyer Group, Waco, Tex., 1996.

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Help! How can I make better decisions about new technology?

Five years ago a handful of executives at $27-million Keystone Helicopter Corp., in West Chester, Pa., chose new companywide software after listening to some sales pitches. The software bombed. After a year and more wasted money than co-owner Peter Wright Jr. will say, Wright turned to employees for help buying a replacement system. Volunteers from each department documented internal processes and asked their peers to suggest improvements. The volunteers met weekly to compare notes and then interviewed vendors, reviewed software, and recommended a system. With most of the employees pitching in, the aviation service got effective software this time--and some improved internal processes. --S. G.

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I wish our sales presentations were more polished

HMC Group, an approximately $16-million architectural-design business in Ontario, Calif., holds dress rehearsals for sales presentations--with an audience. The head of marketing directs the team as they run through the presentation. Senior staff members act as customers and ask tough questions culled from past client meetings. Afterward, the audience critiques the cast and gives advice. "They judge more harshly than a client ever would," says CEO Robert Kain. --S. G.

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I've got to cut costs. Any unusual ideas?

It's not unheard of to ask customers to pitch in when high costs are choking your business. Here's how two CEOs did it:

Ask for help with expenses associated with customers' accounts. When a number of airlines imposed commission caps on travel agencies, Jim Roberts of Uniglobe Regency Travel called 50 of his core corporate clients and asked them to pay the cost of overnight mail and other deliveries. The owner of the Ontario, Calif., company, which expected 1996 gross volume of $6.5 million, explained the situation and said his alternative was to charge fees for each travel transaction. Surprisingly, only two clients refused to help out. Many even offered their own Airborne, Federal Express, and United Parcel Service account numbers because they got larger discounts than the travel agency did. The result: Uniglobe's delivery costs dropped from more than $300 a month to $50.

Charge for selling expenses. Benjamin Goldfield, founder of TS Partners, in Conshohocken, Pa., funds sales presentations the audacious way: his banking-software company asks prospective clients to pay for them. "I tell them we keep our costs low," explains Goldfield, "and I don't want to pass the cost of sales calls on to existing clients." Since many of his customers are large banks with deep pockets, Goldfield doesn't mind asking. Although many prospective customers balk, others don't and agree to pay travel and hotel expenses for TS Partners, which projected 1996 sales of $600,000. "Some people think it's outrageous," Goldfield admits, "but I would rather lose a few sales than incur thousands of dollars in marketing expenses." --S. G.

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Icebreaker

To get people to contribute to brainstorming sessions, Gary Thornton has found, it helps to lighten the mood first. At his company, Cincinnati-based Thornton Gardens, he starts each meeting with a different silly exercise. For example, at a recent meeting, employees began the session by answering 10 quasi riddles, in which the answers were stated in the questions. "It's basically a good icebreaker that points out that everything they hear isn't exactly what they think they heard," says Thornton, whose company expected 1996 sales of $6 million. On other occasions he clips cartoons and asks people to come up with clever captions for them. "We've been trying to get people involved for years," he says. "This is fun, and it gets everybody thinking." --S. G.

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Off the Record
What entrepreneurs are telling Inc. about taking a break

"This year I took only four weekdays off. That's not healthy for the company or for me. My new goal is to take at least a long weekend off every quarter."
--CEO, $5-million-plus Ohio manufacturer

"I choose to not take vacations in order to do this. Besides, I don't need many vacations. I have the perfect job."
--Owner, $2-million medical-equipment manufacturer in Missouri

"I schedule vacations just like everything else: I put them in my Day-Timer. If it is scheduled, it becomes doable."
--Owner, California landscaper with more than $10 million in sales

"My 1996 New Year's resolution was that I would take a vacation. In 1997, I'll actually do it."
--CEO, $6.5-million Louisiana-based company

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How can I motivate employees I can't--or shouldn't--promote?

It's a classic management problem: employees who excel at their jobs get promoted to jobs for which they're less well suited. "I had always assumed people wanted to move up the ladder," says CEO Tom Lied of $13-million Lied's Landscape Design and Development, in Sussex, Wis. He found out otherwise after talking an exceptional worker into accepting a managerial promotion. The employee quit three weeks later because he didn't like bossing others around. Now the landscape-maintenance company rewards valuable employees in other ways. By creating multitiered job categories, Lied has enabled employees to increase their salaries by adding responsibilities like teaching others--without changing their basic job. He also removed a salary cap on jobs, so that workers wouldn't hit a wage ceiling. And the staff is compensated for other contributions, like designing more efficient ways to do work. "It's equally as important to do a job faster and more efficiently as it is to take on a management role," says Lied. --S. G.