CEO's Notebook

CEOs give advice on allowing employees to donate vacation days, saving money on radio advertising, explaining financials to employees, and improving employees' presentation skills.

By Inc. staff | 
 

Can you achieve high impact with a low-cost perk?
How about allowing employees to redistribute something that you're already giving them--such as vacation time? Kevin Harper, president of Autumn-Harp Inc., a 65-person manufacturer of skin-care products in Bristol, Vt., permits workers to donate unused vacation days to other employees who face family illnesses or personal problems. The donations can be either open or anonymous. "It doesn't cost the company anything," says Harper, "but it gives employees some control over each other's well-being." Jim Larkin of Romac Industries has a similar program at his foundry in Sultan, Wash. When a Romac employee's son became ill with leukemia and the father ran out of sick and vacation time, Larkin says, a number of employees approached him about donating vacation time. "It was the employees' taking care of each other," Larkin explains. He reports that employees developed a sign-up form and solicited vacation donations from fellow workers. "We had so much vacation time for him that we had to cut it back." --Christopher Caggiano

BENCHMARK
A Computer on Every Desk?

When it comes to the use of information technology, small companies sure are...diverse. That's the implication of a recent survey of small and midsize businesses conducted by Arthur Andersen's Enterprise Group and National Small Business United. The study surveyed 953 companies, most of whom had less than $5 million in sales, and found that their technological sophistication varied considerably. While 41% of the respondents reported that all office-based employees in the company had their own personal computers, more than one-fifth said their companies had no computers whatsoever. But the trend toward increased computerization is clear: 52% of the businesses surveyed said they had upgraded their computer systems within the last 12 months. That's more than in either 1995 or 1996. --Martha E. Mangelsdorf

Source: Arthur Andersen's Enterprise Group and National Small Business United, 1997.

How can I save money on radio advertising?

"I buy my radio advertising when the price is right: there are times you can practically steal it," says Bob Juniper Jr., CEO of two-time Inc. 500 company Three-C Body Shops, based in Columbus, Ohio.

Juniper, who has fueled much of his automotive-repair company's growth through marketing, estimates that his 1997 sales will approach $8 million. Here's his advice:

Buy radio ads in bulk. "Instead of buying month by month, I book a full year at a time," Juniper says. The savings are as much as 30% for radio ads, in his experience. "We still pay only monthly. It makes sense because we know we are committed to running ads throughout the year."

Buy cancellations. Let stations know that if they have a last-minute cancellation, you're willing to buy it. That can happen when, for instance, a business doesn't receive the inventory it's expecting and needs to drop the advertising it was planning for a sale next week. "You can get up to 50% off," says Juniper. The downside of such an arrangement: you must be prepared to buy the spots whenever they become available.

Buy 10-second ads along with 60-second ones. Juniper launched an aggressive radio campaign for his auto-body shops five years ago, running ads on rotating stations for one week a month, every month. After a year or two he was able to mix in 10-second spots, which cost half as much. "All advertising is based on having a unique message," Juniper says. "Assuming you have one, customers who have heard it at 60 seconds will recall it in 10 seconds." --Leslie Brokaw

How can we explain our financial statements to our employees?

Get a discussion going. Brian Quint, CEO of Aqua Quip Pool & Spa Inc., a Seattle retailer and supplier of pool products, wanted to start sharing financial information at his $8-million company. However, he worried that his 80-plus employees would find the financials intimidating. So he gave everyone a blank income statement, with labeled line items but no numbers. Then he asked the employees to form groups and discuss what numbers they thought should go into the blanks. "One group had me making a million in net profit, and one had me losing a million," says Quint. After that introduction, Quint handed out the actual income statement and explained what contributed to each expense line--and how each employee could help control expenses.

Another idea: break the statements down. Prakash Laufer, CEO of Motherwear, a catalog company for nursing mothers based in Northampton, Mass., started with his company's average net sale of $100. Then he broke the sale down to show how much of the $100 went to each line item on the company's income statement and how much was left over in pretax and after-tax profits. Last August, Laufer held a meeting to celebrate that the $5-million company had taken its spring 1996 loss of $3.23 on that typical $100 sale and raised it to a 1997 profit of $11.23--a change he attributes partly to the original exercise. --Christopher Caggiano

Hot Tip
David Schulhof, owner of Internet direct-marketing company Make It So, in San Mateo, Calif., draws attention to his company's corporate-giving program by getting customers involved. Visit Schulhof's Web site for ClubMail (www.clubmail.com), a division of Make It So, and you'll find a menu listing various children's charities; customers choose which causes they want a percentage of their purchases to go to. The input also helps Schulhof continually evaluate which charitable causes are most popular. "Some people may think it's exploitative to market this way," says Schulhof. "I think every company should do it. Maybe there wouldn't be such a high rate of poverty among children" if they did. --Stephanie Gruner

Off the Record
Entrepreneurs' New Year's Resolutions

"I resolve, as God is my witness, to set up a report that will contain critical performance numbers and will go to each of the owners daily. Right now we have information flying in a dozen different directions. If there's a problem, we don't see it until the end of the month. That's going to go away." --President, $6.5-million Georgia telecommunications company

"I plan to get to know my employees better. I used to be one of the guys. Now I'm just this 'boss guy' who doesn't go out to lunch with anyone very often." --President, $3.6-million California food-processing company

"One of my New Year's resolutions is to build a playroom for grown-ups at the office. I also plan to start offering employees stock. My other resolutions are to start contributing time and money to organizations addressing violence against women, and to remember to focus on balance rather than success." --CEO, $1.5-million New Jersey communications company

How can I improve employees' presentation skills?

FMG, an information-technology company in Herndon, Va., that appeared on the 1997 Inc. 500 list, holds weekly brown-bag-lunch seminars on topics ranging from advances in 3-D animation to Guitar 101. At the Thursday sessions, employees at the $8-million company hone their speaking skills in front of 10 to 30 of their colleagues. "It's great, especially for young engineers who don't have experience getting up in front of customers. That was definitely in the back of my mind," says CEO Scott Gessay. Customers are even invited on occasion; one client sat in on a session relating to Java technology, for example.

What had started three years ago as a purely technical exchange has expanded into a platform for a variety of business and personal interests. "People in different parts of the company get to share their knowledge," Gessay explains. Last summer, Gessay and 14 others attended the guitar seminar, led by a blues-playing staffer. All volunteers receive a T-shirt and are entered in FGM's annual speakers contest. --Susan Greco