Friday, February 5, 2016

Here's Why You'll Work for China, Israel, or Korea One Day

If new technology is at the heart of getting ahead in business, the U.S. is about to hit a competitive bump in the road.
US jingoists and believers in general "exceptionalism" should take note that the country is setting itself up for global economic failure. Not that there's a "going out of business" sign hanging on entry ports. However, there's a trend that is going to be a serious problem in the future -- one that will put the U.S. behind a number of up-and-comers.
The issue is R&D. Businesses depend on innovation to anticipate the needs of old markets and to meet new markets. And while, of course, you can waste money in R&D and efficiencies can be had, there's a strong correlation between what you spend and what you get. (I remember years ago HP under then-CEO Mark Hurd, HP's R&D budget nose-dived. And yet, some PR person tried to convince me that it was all in eliminating waste. We all know what happened there.)
In this case the R&D spending trend is negative but on a national level, according to the Organisation for Economic Co-operation and Development. And it's not that businesses have given up on R&D, but that public budgets have pulled back. Here's one sample:

In constant dollars, many countries, including the US, have been on a downward trend:
Provisional data for 2015 indicates that public R&D budgets in the OECD area continued their downward trend since 2010 after briefly stabilising in 2014. Among countries for which 2015 data are available, two thirds have decreased their R&D budgets in real terms and the estimated area total has dropped by 1.3%. In a number of cases, this decline may have been mitigated through growing support through R&D tax incentives, which have been increasing in relative importance over time. On the basis of leading budget data, it is expected that R&D performed in government and higher education institutions in the OECD also declined in 2015.
Like many other countries, the US is putting less and less publicly into R&D, and public funds have been a traditional support of the basic science and development whose scope is beyond the capabilities of individual corporations. But notice that South Korea is rocketing ahead. According to the data, China continues to grow R&D, albeit at a slower rate given macroeconomic challenges, but still 9 percent in real terms. Israel's R&D is at 4.1 percent of the country's GDP, while Korea is at 4.3 percent.
Some countries understand the connection between today's R&D investment and tomorrow's economic success. Many more may say they do but act differently. And the US is in that group.
Maybe that's why so much research is being sent overseas these days -- and why kids might think about learning Chinese, Korean, or Hebrew rather than Spanish, French, or German.


Kevin Minton
Chief Executive Boards International

Tuesday, December 22, 2015

Daily "Adrenaline" Meeting

Author: Verne Harnish

There is one indispensable routine; one absolute essential habit more important than any other I can teach an executive team; one discipline that is non-negotiable – and that is an effective daily meeting rhythm.

Before dismissing the idea (I’ve heard every excuse over the years), consider that from the top teams at Goldman Sachs to the assembly floors of Dell Computer to the Oval Office of the White House, an effective daily meeting rhythm is at the heart of their management practices. And I’ve not encountered a single start-up to mid-size firm that didn’t benefit greatly from initiating a short daily huddle organized around a specific agenda which I’ll detail below.

“I lead a daily ‘Adrenaline’ meeting,” explains Tony Petrucciani, CEO of Single Source Systems, Inc., a computer services firm based in Indianapolis. Petrucciani gathers his management team (five including himself) and meets each day at 10:07am to discuss roadblocks. Their goal is to be out in 15 minutes. The name came from the substance which makes the heart beat faster. “In our case, we wanted the business to pulse faster,” adds Petrucciani.

“Our key customers really like that we do these meetings and it has become a sales tool, differentiating us from the speed that our competition pulses,” adds Petrucciani. “It used to take days for issues to work their way ‘to the top’ to get authority to allocate resources – it’s now like Fedex – it’s there by 10:30.” It wasn’t always like that at Single Source. The meetings were launched when they faced a large project in overrun status and their customer was getting angry. “We implemented a specific Project Adrenaline daily meeting. Within a week, we were making much better progress, and had gained back credibility from the customer (we told them about Adrenaline). This kept a 6 figure project from imploding,” describes Petrucciani.

Since then, his team has implemented other types of daily Adrenaline meetings (Channel Adrenaline, Sales Adrenaline) that pulse just before his management meeting. If a major issue comes up in those earlier meetings, they pulse thru to the Management Adrenaline meeting, keeping the company operating at an effective pace.

“The daily huddles are particularly key when you’re the busiest and spread the thinnest,” notes Chuck Hall, founder and CEO of Charles Hall Construction in Clarendon Hills, IL. With a focus on clients with multiple projects across multiple regions, Hall has teams working all over the country. And with the economy picking up, he’s facing an onslaught of business. “We have approximately $24M in contracts signed or under negotiations for work this year waiting to start,” explains Hall. “With the daily, we’re much better equipped at keeping our daily tasks aligned with our plan. And it has helped us keep moral high during the difficult slow months, and step by step prepare us for the tidal wave of work that will hit us in June/July of 2004,” says Hall.

The immediate pushback I get when recommending a daily huddle is “We’re too busy!” Executives can’t imagine finding the time to get everybody in the same place or on a conference call every day for one minute, let alone five or 15. And if the company is quite small and travel isn’t that big an issue, they’ll tell me, “We don’t need a meeting when we’re seeing each other all day long.”
Yet, routine actually sets you free. Teams that huddle daily find they interrupt each other considerably less the rest of the day. There’s a fixed time when everyone knows they’ll have everyone else’s attention. Meeting daily also clears up issues that otherwise linger to clog up the weekly meeting. This frees up time to focus on more strategic issues during the weekly gathering (focus of a future column).

I recommend that companies set the time at an odd time, like Petrucciani’s 10:07am. People do a better job of being on time when the time’s not on the half- or quarter-hour. Worried that you’ll forget the meeting while traveling? For a nominal monthly fee use, a reminder service which pages or phones you just prior to the daily meeting. And offers a free conference bridge you can use to host a daily conference call.

Make attendance mandatory and on time, with no excuses. I’ve been in intense meetings with clients. I’ve been in the midst of seeking funds from venture capitalists. It doesn’t matter; I tell them I need to take a break for my daily meeting. And it only gains one respect -- a disciplined firm exudes success.
Overall, start and end on time and don’t problem solve. This meeting is simply for problem identification. If the meeting is face-to-face, stand up to avoid going too long. And back the meeting up against other regular meetings or appointments to force an ending. If it starts to go longer than 15 minutes, people will drop the habit.

The Agenda: It should be the same structure every day, and it’s an agenda just three items long: what’s up, daily measures, and where are you stuck? In the first few minutes, each attendee shares “what’s up” the next 24 hours. This lets people immediately sense conflicts, crossed agendas, and missed opportunities. The key is to highlight specifics without simply reading one’s ‘to do’ list.

Next, review whatever daily measurements your company uses to track its progress, highlighting any unusual trends.

The third and most important agenda item is where people are stuck. You’re looking for bottlenecks. There’s something powerful in simply verbalizing, for the whole group to hear, your fear, your struggle, your concern. It’s the first step to solving the problem, because “until the mouth runs, the brain won’t engage.” And the only people who don’t get stuck are those who aren’t doing anything. So, scrutinize the person that reports “everything is fine!” or “no stucks today.”

Important as it is, the bottleneck conversation shouldn’t be allowed to drift on into problem-solving. It’s okay if somebody wants to reply to a bottleneck by saying “Call so-and-so,” but if two people start engaging over an issue, politely suggest they “take it off line.” Remember: The daily meeting needs to be kept short. 

While reading Titan, in preparation for writing the chapter on meetings in my book, I was struck by the fact that John D. Rockefeller had lunch with his top team every day, starting with his co-founders in the early days and ending with Standard Oil’s nine directors at headquarters in New York. Rockefeller insisted that this routine was crucial in the success and global reach of his company – and it will for your firm as well.

Sunday, November 1, 2015

Seven Commandments for Business Success

Nobody likes rules. They tell us to do things that might not come naturally, or that are simply “hard” to do. But follow these simple rules and you’ll be moving closer to achieving business success.

leon j. owens business
Leon Owens: Enjoying your work can lead to success.
In business, what we want—what is essential for survival—is a level of success over the long haul. Yes, business is full of ups and downs, but if we can get the former to outnumber the latter, then we’re a success.
What follows are the fundamental rules for any successful enterprise. Maybe it’s an affront to Moses to call them “Commandments,” so let’s just call them “Really Good Suggestions” and I’ll cut them down to my lucky number: 7.
  1. Anticipate failure. Not ultimate failure, hopefully, but failure along the way to success. If you can arrange it, fail early. Get it out of the way. Don’t be afraid of it. Business is risky, nothing is certain, and a large percentage of endeavors fall flat on their face. Make failure your friend. It will be the most valuable business lesson you’ll ever have. You learn things, it will make you stronger, and you’ll be that much closer to success.
  1. Get rid of your pride. Here’s a fundamental reality: nobody’s waiting for you to succeed, and nobody really cares what your brilliant plans are. If you hang out in the hallways talking about your degree from Yale or Harvard and expect anyone to give you a purchase order or an investment because you “deserve it”…you’ll be in those hallways for a lonngg time. Waiting for the perfect moment to approach a client or to be “discovered” for that promotion? Not gonna happen. Don’t just knock on doors. Push them open and just walk right in. What’s the worst that can happen? You’ll be escorted to the back of the line…but you will have already been inside and you’ll know what to expect the next time you get in there. And while you’re at it, leave your pride outside.
  1. Don’t count your money. A fundamental in poker and in business. Noodling over every dollar takes time away from what you should be doing: breaking down doors, creating opportunity, serving a need, and delivering on promises. Okay, so money’s short. You think you’re alone? Well, you will be alone if you don’t get out there and create value that earns a financial return. Stop counting money and start making some. Remember what J. Paul Getty said: If you know how much money you have…you don’t have enough.
  1. Don’t look for money. You can be sure it’s not out there waiting for you to come along and just pick it up. You need to do something to make money, and if all you do is look for money that’s just “looking” and not doing. The trick, of course, is to do something you believe in, something that you would pay to do. Do that, and eventually someone will actually pay you for it.
  1. Learn the value of…love. What? I know, you’re shocked. What does love have to do with business? Well…everything. Without it, what’s your real motivation? Have someone in your life to share your success (as you achieve it) and to share your disappointments when you fail (you’ll both be stronger, and so will your love). Love creates a unit, a team. Business is a team sport; you don’t want to go onto the field to face all those opponents all by your lonesome. Find love and a teammate; success follows.
    success in business
    This way to Success!
  1. Know what success means. Your business thrives, you make serious profits, and everyone suddenly loves you. Not on this planet, folks. You’ll work hard, overcome obstacles, become a success…and find a world of naysayers and critics trying to bring you down. You’ll find it hard to trust anyone. Trust Success least of all, because it is never guaranteed, never eternal. When you achieve it, enjoy it…but it can be short lived, so get back to work and create the next success.
  1. Be and feel lucky. We’ve all heard the cliché “It’s better to be lucky than good.” Well, there’s nothing wrong with being both. If you prepare for it, work for it, and are always open to the unexpected, success is waiting for you to show up. The real secret to success: work hard and never stop showing up.

Courtesy: Mr. Leon Owens - Cienega LLC

Kevin Minton
Chief Executive Boards International

Monday, October 19, 2015

You don’t know what you don’t know

Don’t assume you have to give away a piece of your business to attract a great employee 

How can you recruit, retain and reward outstanding employees
without giving away stock? Many times a key executive you are recruiting or who has performed very well for you wants to be a partner. They want ownership, or at least they think they do. How many owners have thought to ask the question: Why? You may think the answer is obvious – but you are thinking with your brain, with your experiences and motivations. The obvious answer to you may be totally different for them. Some possibilities might include: 

1: They want more money (the most commonly assumed answer) 
2: They want recognition for all the blood, sweat and tears they put into the business. 
3: They want respect from the other employees. 
4: They want more involvement in decision-making. 
5: Their spouse has been telling them for years they deserve more. 
6: They want the title or a bigger office. 

If you want to know what they want, ask them the question directly. Most owners don’t. The answer to that may be fear. So what are you, the business owner, afraid of? 
1: Giving up control.  
2: Giving up control. 
3: Giving up control. 
 4: Not usually giving your person more money (if they really deserve it). 

So what does the average entrepreneur owner do? Choose one of the following missed opportunities: 
1: They don’t hire the dynamo who could triple the bottom line. 
2: They tell the executive “you aren’t quite ready yet” but give them no clear, measurable performance targets for getting there. 
3: They lose that key person to a competitor. Profits shrink, and it costs cash and your time to replace them for someone who turns out to be not as good (but for whom you paid more). 
4: You give them a piece of the pie, but no authority to do anything. They get frustrated and leave. You don’t get it. You gave them what they wanted – or did you? 

Does any of this sound familiar? Has this happened to you not once, twice, but several times? You are either so depressed by now you don’t want to read any more, you really don’t care or you have figured it out and have already solved the issue. 

Here’s my three-step solution: 
1: Have you determined if there’s a key person you need to recruit, retain or reward? Look at your motivation. Are they driving profits? Do they have skills that would be very difficult to replace? Are they a leader? Or have they just been there a long time? Are they a “good guy”? 

2: Has the employee approached you? You need to determine their motivation. Ask questions. Why do they want a piece of the pie? Do they truly understand the risks of being an owner? Do they have the capital or credit to buy in? Do they deserve something more? 

3: Determine the best course of action. Can you give them a new title or bigger office? Will a bonus or raise satisfy them? Would “phantom stock” accomplish the same goal? Are you truly willing to give up some control? Then perhaps a cash or installment buy-out is the solution. If it is, make sure you have a well-thought-out, funded buy-sell agreement in place ahead of time. It could save a lot of money, time and agony down the road. 

Or what if there was a way to give a benefit to one or more people without ERISA discrimination rules? Make it like “golden hand-cuffs” so if they get approached by another company they would really have to think twice because the benefit might not be vested. Make it so the benefit is tax-deductible when paid out. Make it so that you could even recoup the cost of the benefit. Maybe there is a better way than giving up equity. 

So how do you recruit, retain and reward key people? Ask questions. Consider options. And take action when called for. 

Courtesy: Mr. Roger Brooks - CEBI Member

Kevin Minton
Chief Executive Boards International

Wednesday, September 23, 2015

Focusing Cybersecurity on What is Critical to Your Business

Nick Coleman, IBM’s global head of cybersecurity, discusses the keys to a strong cybersecurity program and what companies can do to keep pace with the evolving nature of security threats, in a Wall Street Journal blog post.

Having a clear governance and leadership model, translating that into a real risk management program and understanding what happened after a cyberattack are the three key strategies for eliminating or reducing your cybersecurity risk. “If you have no feedback loops, if you don’t understand what happened operationally, if you are not seeing attacks and the way you are handling them, are you really understanding what is happening in those systems in real time?” Coleman said in the Journal blog.

“The volume of security incidents increases every year, they’re getting more complex, and data breaches are more frequent and costly than ever. That’s why businesses are turning to cyber resilience – accept that security breaches are inevitable and develop the ability to efficiently handle them and move on, just like any other business challenge,” John Bruce, CEO of Resilient Systems, which sponsored the latest Ponemon Institute report on cyber threats, told recently.

Data breaches that get reported are just the tip of the iceberg, the Ponemon Institute says. Ponemon notes that as part of everyday business, there are exponentially more security incidents than data breaches. Under federal law, all security incidents need to be assessed to determine if they are data breaches that require reporting. The study’s findings indicate that organizations are not thoroughly assessing their security incidents. In fact, one-third of the respondents do not have an incident response process in place.

Coleman advises that cybersecurity teams use common language to keep the board and the C-suite up to date. “Generally, organizations that embrace it understand the conversation, they don’t just keep it in the technical area,” he said. “That is one thing that is still emerging, those reporting mechanisms and how to get the board to see the overall risk management in a way that translates the technical risk into showing how it relates to the business.

In a recent conversation Coleman had, a board director relayed to an IT person that his company had been talking about a digital transformation of the board for two years, but the conversation never involved the security team. It’s critical that companies close the loop on keeping everything informed and involved.

Courtesy: Chief Executive Magazine

Other CEBI Blog Articles... 

Kevin Minton
Chief Executive Boards International

Tuesday, July 14, 2015

Top 5 Leadership Issues

Recently, a CEBI member suggested they would be interested to hear what's happening with the other members.  So, as I traveled around to facilitate the latest local board meetings I took note of all the issues surfaced by the participants to see if there were any common themes.  While there was significant variation in the items brought to the table for discussion, I noticed there were certain issues that seemed to be common among many of the participants.  I'd never taken notice of this before but I'm glad that I've started the process as it seems to signify sort of a general feeling or experience in the business community.  So what were these issues?  Well, in no particular order, here are the top 5 that seemed to be on the minds of the CEBI community.

Image result for Problems
  1.  Lack of Sleep and Anxiety - this appeared to be related to a general lack of double digit growth during the first two quarters that was thoroughly enjoyed the previous year.  Most indicated they were having a flat year so far even though they may have been experiencing single digit growth.  Relatively speaking, the fear of the unknown seemed to be the root cause of this issue.
  2. Lack of Sales Management Leadership - some had indicated a lack of leadership by their sales managers because they weren't experiencing the same growth pattern as last year and they didn't have the skill set to coach and drive expectations.
  3. Family, Friends and Partners Causing Problems - many who have family, friends or business partners experienced frustrations regarding expectations and being on the same page.  Apparently, people change and sometimes we grow in different directions and there's more emotion involved when dealing with these individuals.
  4. Sales Training for Reps that Don't Know How to Sell - while there are various selling methodologies, it appears there could be some improvement in the skillset ranging from identifying an opportunity all the way through deal closure and getting paid.
  5. Time Management and Being Productive - many felt as though they were walking uphill in sand throughout the day, dealing with problems, getting into the weeds and not being able to focus on being a leader.  Whether the cause related to a lack of human resources or simply not knowing how to set priorities each day and sticking to them in order to move the needle, the tone of not feeling like a productive leader surfaced on several occasions.
 It was interesting to hear how these were discussed and resolved during the meetings.  Even though these were common general issues, the resolutions for each were quite different for each specific problem. 

Well, that's a flavor for what's on the minds of many in the leadership community.  I'm curious to see if some of these same issues continue to surface in future meetings or if there will be a change of tone.

Other CEBI Blog Articles... 

Kevin Minton
Chief Executive Boards International

Thursday, June 4, 2015

U.S. trade, jobs data encouraging; services sector disappoints

The U.S. trade deficit narrowed in April on a drop in imports, which surged in March following the end of a West Coast ports labor dispute, while companies picked up their hiring in May after a pullback the previous month.

The data supported the notion the U.S. economy has recovered somewhat from a first-quarter contraction and bolstered expectations the Federal Reserve may consider raising interest rates later this year.

Not all the news on Wednesday was as encouraging. 

Two private reports signaled slower growth in the U.S. services sector, which has propped up the economy as it faced drags from a strong dollar, a recent rise in oil costs and sluggish demand abroad.

"This is consistent with modest growth. It's enough for the Fed to consider tightening. September is very much on the table," said Christopher Low, chief economist at FTN Financial in New York.

U.S. central bank, which will hold a policy meeting June 16-17, concurred with that view in its latest Beige Book released on Wednesday.

This collection of anecdotes on the economy from early April to late May showed U.S. growth will continue at a "modest" to "moderate" pace, despite weakness in metal and energy industries and a strong dollar crimping exports.

U.S. stock indexes gained 0.4-0.5 percent after the data. The dollar and prices of U.S. Treasuries fell, which traders said was due more to the selling of German Bunds and gains in the euro after the European Central Bank upgraded its inflation outlook. [.N] [US/] [FRX/]

The U.S. Commerce Department on Wednesday said the trade gap narrowed to $40.9 billion from March's revised deficit of $50.6 billion. The 19.2 percent drop in the April trade deficit was the largest decrease since early 2009, and the deficit was about $3 billion less than forecast. 

Imports fell 3.3 percent to $230.8 billion as West Coast

ports, a key gateway for goods to and from Asia, cleared a

backlog created by a labor dispute that was settled earlier this year.

Exports increased 1.0 percent to $189.9 billion in April with foreign sales of U.S. services edging up to a record high of $60.9 billion. In recent months, the strength of the dollar has made U.S. goods and services more expensive abroad.

The April petroleum deficit stood at $6.8 billion, the Fed won't raise rates until Q2 2016 - Mizuho's Ricchiuto, lowest since March 2002.

The latest trade data led Morgan Stanley to raise its forecast of U.S. economic growth in the second quarter to 2.7 percent from 2.2 percent. 


Meanwhile, private employers added 201,000 jobs in May, the most since January, payrolls processor ADP said on Wednesday.

That was in line with analyst forecasts and higher than a revised 165,000 jobs in April, which were the fewest since January 2014.

The ADP data came ahead of the U.S. Labor Department's more comprehensive non-farm payrolls report on Friday, which includes both public and private-sector employment.

Economists polled by Reuters are looking for total U.S. employment to have grown by 225,000 jobs in May, similar to April's 223,000 increase. The unemployment rate is seen holding at a near seven-year low of 5.4 percent.

Flying in the face of the better trade and jobs outlook, other data showed services industries booked fewer new orders last month.

Financial firm Markit said its final May reading of its Purchasing Managers Index for the services industry slipped to 56.2, its lowest since January.

The Institute for Supply Management's own services sector gauge fell to 55.7 last month, its weakest since April 2014.

Courtesy: Richard Leong - Reuters (June 3, 2015)

Other CEBI Blog Articles... 

Kevin Minton
Chief Executive Boards International

Thursday, May 7, 2015

How to Protect Your Company From Your Business Partner's Divorce

Before you formed your business partnership, did you vet your partners’ marriages along with their bank statements? You may not consider it until divorce proceedings are underway, but your partners’ spouses likely own a part of your company, whether you want them to or not.
In my day job as a financial strategist specializing in complicated (and often highly contentious) divorces, I rarely see a case where the day-to-day operations, valuation and ownership structure of a business is not affected in some way by a breakup. If your partner’s soon-to-be ex receives a part of the business in the divorce settlement, you’ll gain a new, unwelcome partner who now has a voice in how your business operates and, by extension, can impact your own net worth.  
Michael Lees, a business attorney and partner at Solomon Ward Seidenwurm & Smith in San Diego, recommends including a contingency for divorce in your company’s setup. “Start with a well-drafted partnership, ownership or shareholder agreement that requires a partner’s spouse to sell his or her awarded interest back to the company (or to its co-owners) in the event of divorce,” he says. “This buy-sell provision should contain a comprehensive list of terms and conditions, including the method by which shares will be valued, the transaction timeline and the source of funds to be used for the purchase, such as cash on hand, an existing line of credit and/or a loan.”
To ensure that the “right to purchase” can be upheld in family court, it is worthwhile—and often essential—to have all non-partner spouses consent in writing to all aspects of the agreement long before any marital dispute arises, according to Lees. In the event a buy-back is not possible, this agreement can limit an ex’s voting rights and/or management participation.
Even with such arrangements in place, John Ovrom, CEO of Coronado, Calif.-based Exit Consulting Group, regularly sees divorces play havoc on operations. “If one partner has to step away from the day-to-day operations to tend to his or her divorce, the balance is thrown off,” he says. “Resources are spread thin, resentment increases very quickly, and the partnership begins to look more like a sole proprietorship. The impact on cash flow can be dramatic and devastating.” 
Ovrom’s advice is to plan for the worst. Divorce, illness, disability or the death of a loved one will affect your partner’s ability to contribute to the business. “You need to set up a legally binding plan that addresses how to handle these challenges,” he says. “One that answers some basic questions, such as how long one partner can step away from the company before his or her compensation drops. Who will assume his or her daily duties? If a loan or pay advance is needed to cover skyrocketing legal bills, what are reasonable terms?”
These are tough queries, but it’s better to ask them now than in the middle of a messy divorce. Handled correctly, every partner, including you, should come away with a greater sense of trust in one another to do the right thing to preserve the company—even when someone’s personal life is going down the drain.

Courtesy: Steph Wagner - Entrepreneur Magazine

Other CEBI Blog Articles... 

Kevin Minton
Chief Executive Boards International

Monday, March 23, 2015

Understanding DPOs: Should Your Small Business Go Public?

“Going public” doesn’t have to mean heading to Wall Street. Small-business owners of any size can now use direct public offerings (DPOs) to sell ownership stakes in their company to raise capital, without the tight securities rules of an initial public offering (IPO). But is it a legitimate move for your small business? We spoke to Brenda Hamilton, a lawyer specializing in securities and going public with Hamilton & Associates Law Group, to get answers.

Small Business Center: What is the difference between an IPO and a DPO?
Hamilton: Both an IPO and a DPO involve the sale of an issuing company’s securities to investors as a way to raise capital. An IPO always involves a public offering registered with the Securities and Exchange Commission (SEC), and an underwriter sells those securities and receives a commission. In addition, the issuing company typically enters into an agreement with the underwriter that significantly impairs its ability to change its offering, offer other securities, and/or engage in certain transactions.

On the other hand, a business owner can register a DPO with the SEC, or can conduct an unregistered offering in some circumstances. The issuing company will market and sell its shares on its own behalf without an underwriter. As such, the success of the DPO is dependent upon the issuing company’s own efforts. Since the enactment of the JOBS Act, many companies conduct unregistered DPOs with accredited crowdfunding. This allows the issuing company to engage in advertising and solicitation as long as it verifies the purchasers are accredited investors.

Can any size business conduct a DPO?
Yes, that’s one of the benefits of this type of offering. Because you can structure DPOs in a variety of ways, you have flexibility. A DPO can be used by a startup company or an established company with a proven track record.

What other benefits can small-business owners realize from DPOs?
There are numerous benefits to DPOs. For instance, a DPO allows business owners to raise capital at their own pace, and the SEC doesn’t limit the amount of capital a company can raise in either registered or unregistered offerings. Both private and public companies can offer a DPO, and the issuing company can offer securities to investors without an IPO’s limitations. Finally, DPOs are less expensive than IPOs because there are no underwriter fees.

Are there any disadvantages to conducting a DPO?
The principal disadvantage of a DPO is that the issuing company is responsible for raising its own capital, and that could take time away from running the company.

How much does it cost to conduct a DPO?
The price will vary depending upon how the small-business owner wants to conduct the DPO. The minimum cost of a registered DPO is $40,000, and the minimum cost for an unregistered DPO is $15,000, and that includes fees to an accountant, attorney, transfer agent, EDGAR filing agent, and for a registered DPO, an auditor. However, a DPO costs hundreds of thousands of dollars less than an IPO.

How should small-business owners decide if a DPO is right for them?
To raise capital from investors, any company must be prepared to provide transparency. This means opening up the company’s books and records and disclosing all information that would be important to a reasonable investor. If a company cannot do this, it should not conduct a DPO or any other offering.

Another factor to consider is whether management has the ability to market its own offering. And even a DPO involves costs. In a registered DPO, these costs include legal, accounting, auditing, transfer agent, costs of electronic trading, and EDGAR filing fees, which is the SEC’s system for collecting, validating and publishing submissions by companies. For an unregistered DPO, the costs will vary depending upon the particular issuer, but will generally include legal, accounting, EDGAR filing fees and other costs.

How important is it to hire a securities lawyer for the process?
It is critical to hire a securities lawyer for the DPO process. There are expansive regulations that apply to both registered and unregistered securities offerings. Although the regulations are manageable with proper guidance, deviations can disqualify an offering and subject the issuing company to civil penalties and fines as well as investor rescission obligations.

What advice would you give to small-business owners who are considering a DPO?
If I had to choose one piece of advice, it would be to avoid professionals associated with multiple reverse-merger transactions, including lawyers, accountants, auditors, and transfer agents. Small companies and investors are often inexperienced in the financial markets and are easy prey to unsavory market participants in the micro-cap markets. Over the course of my career, I have seen numerous companies and investors devastated by reverse-merger transactions, some of which were actually recommended by securities lawyers. I would also encourage small-business owners to learn as much as possible about the process before they begin.

Courtesy: Suzanne Kearns - Freelance

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Kevin Minton
Chief Executive Boards International

Sunday, March 15, 2015

Setting Goals: 3 Steps to Igniting Workplace Engagement

The most important power a CEO has is the power to motivate the company’s employees. However, few CEOs realize just how critical it that job is. Often, the ability to motivate is chalked up to a natural flair or charisma -- but in fact some simple practices can help any leader inspire an entire company.

To begin the process, follow these three steps:


1. Begin with company goals. 

It’s the job of the CEO to select the company’s top goals. Maybe they include new product development or a way to help the local community. They’re not random, of course; you’ll listen to the market, analyze past results and brainstorm with key advisors. But the real secret here is listening to the customer. The smartest businesses today practice agile strategies, and in this case that means aligning your goals with what your customers are trying to achieve.

Pro tip: When you draft your official goals, don’t just stick to the operational. Include two or three big ambitious goals -- the kind that move the needle. They’ll be too remote to feature in your immediate plans, but you want to promote them anyhow. Why? Because these are the goals that will get your employees excited about coming to work every day.


2. Focus on the 'why.'

Let’s face it, most businesses don’t have Apple’s hipness factor or a clear and relatable purpose like an environmental company. That means it’s your job as CEO to draw the connection between the employee’s duties and the customer’s benefit. Employees need to know that what they do during the day impacts big-scale results. By putting the employee’s purpose in the context of helping others, you can help everyone understand their role in achieving the company goals. It’s a critical ingredient in making sure the goals get executed. If you fail to provide a “why,” your busy employees simply won’t make their goals a priority.

Pro tip: Link the “why” of goals back to your company’s core values and mission. That provides wind at your back and makes it easy to prioritize plans.


3. Get your employees involved

This is where most leaders derail the whole goal-setting enterprise, as they tend to get overly detailed in their planning and try to set everyone else’s goals. Because the CEO doesn’t know how to actually do everyone’s job, those plans wind up being implausible and disconnected from the staff’s day-to-day reality. Instead, trust your people to write their own goals. Allowing employees to select the “how” of their contributions will boost morale and help them connect their work to results. Provide guidance and motivation, but let them chart their course.

Pro tip: Encourage employees to align their goals with their manager’s to ensure all goals line up with the company end game. Tools like scorecards and dashboards will help keep everyone on track, while metrics for measuring progress will keep your workforce enthusiastic.
When you get down to it, the heart of goal setting is communication. Employees feel motivated when they understand how their work impacts the company’s mission. Communicate a sense of purpose and give your team autonomy in their contributions, and you’ll have a workforce committed to driving the company forward.

Courtesy: Entrepreneur, Author: Alex Raymond

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Kevin Minton
Chief Executive Boards International

Tuesday, March 3, 2015

26 Unsettling Truths About Social Security

Courtesy Daily Finance - By Lucy Mueller

The Social Security program is turning 80 this year, and though most Americans won't commemorate this milestone, 57 million will benefit from it for more than $1,200 a month.

The future of the Social Security program has been much debated, especially this month, as a new Congress looks to approve or deny a budget that would decide the immediate future of disability payments. We can expect full saturation of headlines, a fair amount of politicking and, ultimately, a sneak peek into what this program will look like in the coming decades.

It could be drastically different. Social Security was created in the wake of one financial crisis; nearly a century later, as the country limps to recovery from another, policymakers are making decisions about the program's future that have real-dollar effects on just about everyone.

That makes it a scary time for the millions of Americans approaching retirement -- and the millions who are just starting to fund the Social Security system. We've put together a list of everything you need to know -- the good, the bad, the awful, the silver lining -- so you can start building a realistic retirement plan.

1. At Its Current Pace, Social Security Will Run Out by 2033
2. Social Security's Disability Program Will Run Out Much Sooner
3. People Rely On Social Security Than Ever
4. The Ratio of Taxes to Payout Is Shrinking
5. All the Boomers Are Retiring at Once
6. People Are Living Longer
7. People Are Having Fewer Children
8. Benefits Are Growing Faster Than the Economy
9. First Beneficiaries Put Less In, Got More Out
10. Income Inequality Is Eroding Social Security
11. Social Security Benefits Could Get Cut
12. Social Security Taxes Could Be Raised
13. The Retirement Age Could Be Moved
14. Trust Funds Are Invested in Low-Yield Securities
15. Investing a Portion in Corporate Securities Could Be Risky
16. It's Not a Politically Convenient Time for a Fix
17. The Social Security Administration Is Understaffed                             
18. It's Losing Field Offices All Over
19. Wait Times Are Increasing at the SSA's 800 Number
20. The SSA Spent $288 Million in a Failed Attempt to Update
21. Most People Don't Know How Social Security Works
22. People Aren't Working in Early Retirement -- and They Should Be
23. People Lose Lots by Collecting Too Early
24. People Get Lower Benefits by Not Working for 35 Years
25. The SSA Won't Tell You About All Your Benefits
26. More Beneficiaries Will Owe Taxes on Benefits 

For more details regarding each of these facts, click here.

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Kevin Minton
Chief Executive Boards International


Thursday, January 29, 2015

11 Things Remarkable Leaders Think Every Day

By getting to the heart of what makes some leaders truly great, you can become pretty remarkable yourself.

Remarkable leaders are admired--and followed. Learning how a great leader thinks is essential to learning how to become a great leader.

1. What's happening in the world today?

The best leaders begin their day with the news because they know that what's happening in the world today can have an effect on their business. They stay ahead of technological and industry advances so that they--and their companies--can evolve along with the rapid pace of change.

2. What are my goals for the day?

Remarkable leaders set goals for themselves daily--some easily achievable, and others a reach, because they thrive on challenges.

3. Which tasks should I begin first and which should I delegate?

Once they have a set of goals in mind for the day, great leaders prioritize, and then decide what tasks they need to personally accomplish, and what things should be delegated to others.

4. How are our products/services doing and are we making money?

Every highly effective leader thinks about the products or services that his or her company or department produces, and how much revenue and profit is being realized from them. Without these facts--examined on a regular basis--leaders can't readily see the need for change, or which direction to take.

5. Which contacts should I reach out to today?

Remarkable leaders are great at networking and staying in contact with others, first and foremost, because they enjoy the camaraderie and friendship. They also understand that these same connections may one day be a valuable resource for advice and information. And, these leaders are always there for their contacts when they're the ones who are in need--whether it's to pass on their expertise, give advice, or make a recommendation.

6. I am going to listen closely

Remarkable leaders ask questions and listen closely to what others have to say and share. They consider and listen to the views of others in an effort to learn and grow and enrich their business, others, and themselves.

7. How can I help you have a successful day?

Great leaders want their employees, customers, and vendors to be successful. They take the time to notice when someone is struggling, and they ask what they can do to help.

8. Can we find a better way?

Remarkable leaders are constantly thinking, asking, listening, and observing in an effort to learn new ways to be faster, more efficient, and more successful at what they do.

9. I really appreciate the hard work of my team

A great leader is the first to say, "They get all the credit because they deserve it." When employees do something exceptional, great leaders are the first to shine the spotlight on their people.

10. Were we successful today?

At the end of each day, remarkable leaders ask themselves and the members of their team whether or not they were successful. If the answer is yes, then these leaders know they should do more of that. If the answer is no, then they know that it's time to try a different approach.

11. I am grateful for...

Finally, remarkable leaders never forget to be grateful for what they have and make it a point each and every day to find something positive to reflect upon and be grateful for.

Courtesy: Inc. Magazine, Author: Peter Economy

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Kevin Minton
Chief Executive Boards International