Chief Executive Boards Blog: April 2009

Monday, April 27, 2009

8 Easy Places to Find Content for Your E-Newsletter

The 2009 Spring Summit of Chief Executive Boards International included an all-member Forum session on Business-to-Business E-Marketing. Members shared both questions and ideas on how to use web-based tools to enhance the sale of complex products and services to other businesses.

Of course, selling consumer products (books, shoes, electronics, etc.) on the Internet has been honed to an art. But how can a business that doesn't have relatively simple products to put in an online "store" use the tools of the web to reach their customers and prospects?

One of these tools, an E-Mail Newsletter, provides direct, regular "touch" of customers and prospects, reminding them of your company and your message, and refreshing their "front-of-mind" recall of same. Many companies have resisted E-Newsletter marketing, saying, "I (we) could never come up with enough content to put out an E-Newsletter on a monthly, or even quarterly basis."

In the Forum session, members shared the variety of rich sources of content for E-Newsletters, much of which is readily available, either within the company or the industry at large. Of course, a newsletter should contain original content. But it doesn't all have to be brand new. For example, consider repurposing or recalling content you already have on hand, such as:

Application Data -- Application Notes, Field Engineering Reports, and "best practice" FAQs. Write a couple of sentences highlighting a current industry issue or situation, and then link to the article.

Articles or White Papers -- Easy to re-position or recycle as current information of interest.

Press Releases -- If your press releases and announcements aren't already posted on your website, post them ASAP. Then occasionally reference a press release in your newsletter.

Case Studies -- You may have case studies of product applications or services you've provided customers or clients. Post these as pages on your website, and occasionally summarize one in a couple of paragraphs in your newsletter, then link to the complete case study.

Blogs -- Your company may use blogging as a means of quickly capturing ideas from customers or staff. Surf your own blogs and highlight interesting posts in your newsletter. Industry or Trade Association blogs are another such source of fresh, timely content.

Ask the Expert -- Perhaps your site has an "Ask the Expert" section, and hopefully you're posting the answers to these inquiries to enhance the content of your site. Occasionally pose one of those questions (or a variation on one) in your newsletter and link to the answer.

Purchased Content -- There are numerous sources of newsletter content available for license. These can be ready sources of ideas in a "slow month".

Trade Publications -- Your industry probably provides an online magazine. Write a two or three sentence "teaser" about one of those articles, and then link directly to the industry publication's article.

The important thing about an E-newsletter is not that it's all new, original content. What's important is that it's relevant content that the reader finds valuable and usable. Don't fall for the temptation to put a lot of commercial content into your newsletter. If your newsletter works, there will be plenty of time for that.

Remember, your E-Newsletter is content all its own for your website. Be sure you post an "archives" page of your past newsletters on your website -- each one becomes another page, therefore enhancing the "importance" of your site to search engines and crawlers. Check out the CEBI Newsletter Archives page as an example.

If you have questions, comments or experiences to share about E-Newsletters, please click "Comments" below and share them with others.

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Terry Weaver

CEO
Chief Executive Boards International
http://www.chiefexecutiveboards.com/
TerryWeaver@ChiefExecutiveBoards.com

Friday, April 10, 2009

The Bezzle -- Is it Happening in Your Company?

Members of Chief Executive Boards International meet regularly to share ideas, observations and concerns. Curiously, something that ISN'T on most business owners' or CEOs' radar screens is employee theft -- generally charged (if prosecuted) as embezzlement.

Some business owners regularly review their internal controls to be sure they have precautions in place to prevent or discover employee theft. Most don't. As a result, they're surprised and angry when an employee theft comes to light.

Embezzlement happens in all scales, in all sizes of companies. Here are a series of articles on embezzlement in small, closely-held companies:

An employee forging checks to a fake company

An outsource provider falsifying invoices

An employee giving himself a raise, plus a separate case of an employee skimming checks

One of the more sophisticated embezzlement schemes of recent memory is the Enron scandal. Enron execs "stole" money from investors in a surprisingly simple scheme. They conspired to falsify company results in a web of interlocking businesses -- each one reporting "profits" from selling things back and forth between each other. Investors, believing they were buying into a high-performance energy company, provided plenty of capital, bidding up the stock price. As the deal began to unravel, Enron execs, who had generously awarded themselves low-priced stock options, cashed in and pocketed the money. The company collapsed and employees, investors, suppliers and bondholders were victimized.

A more recent example, perhaps the granddaddy of embezzlement, is the Bernie Madoff scandal. Bernie stole money from investors in a Ponzi Scheme -- taking money from investors, and pocketing it himself (where in the world has he hidden $50 billion??). He embezzled from his own company, thereby stealing from his investors. A fox watching his own chicken coop. As that tale unravels, it appears he also paid his accomplices well -- New York has just charged the former chairman of GMAC Financial Services with civil fraud. Apparently he was receiving a commission of roughly 20% on funds he channeled to Madoff from his wealthy clients. And he didn't think that was unusual??

And, finally, the "creative" investment vehicles of this decade, including securitized mortgages and derivatives, permeated the financial services sector, accounting for the depth and breadth of this recession and the resulting stock market decline. And, distressingly, so "creative" and complex were these schemes that even the institutions promoting them didn't seem to understand them. Madoff and the Enron execs were out-and-out thieves. The crooks in a pyramid that securitized bad mortgages stretch all the way out to the brokers who falsified borrowers' incomes on loan applications -- it's going to be tough to round all those guys up.

A recent article on National Public Radio tipped me off to the curious coincidence of timing in the two blockbuster embezzlements (Enron and Madoff) coming to light -- an economic downturn followed by a stock market selloff -- Enron in 2001 and Madoff in 2009.

The article pointed out that John Kenneth Galbraith identified this segment of a market crash as "The Bezzle" in his 1954 book The Great Crash of 1929. The Bezzle is the period in a market downturn when embezzlement comes to light -- when the laws of gravity are restored and there's no longer upward market momentum bringing more victims in to reassure (and bail out) the prior victims.

Galbraith writes:

"To the economist, embezzlement is the most interesting of crimes. Alone among the various forms of larceny it has a time parameter. Weeks, months, or even years may elapse between the commission of the crime and its discovery. (This is a period, incidentally, when the embezzler has his gain and the man who has been embezzled, oddly enough, feels no loss. There is a net increase in psychic wealth.) At any given time there exists an inventory of undiscovered embezzlement in -- or more precisely, not in -- the country's businesses and banks. This inventory -- it should perhaps be called the bezzle -- amounts at any moment to many millions of dollars. It also varies in size with the business cycle.
"In good times people are relaxed, trusting, and money is plentiful. But even though money is plentiful, there are always many people who need more. Under these circumstances the rate of embezzlement grows, the rate of discovery falls off, and the bezzle increases rapidly. In depression this is all reversed. Money is watched with a narrow, suspicious eye. The man who handles it is assumed to be dishonest until he proves himself otherwise. Audits are penetrating and meticulous. Commercial morality is enormously improved. The bezzle shrinks."
John Kenneth Galbraith
The Great Crash 1929

One thing that a recession flushes out is The Bezzle -- there's no place to hide and the perpetrators are run out into the open. You may have been damaged by the Enron fraud. No doubt you've been damaged by the recent meltdown of financial institutions, leading to a credit crunch, leading to a stock market selloff.

Perhaps you're more damaged than you think. If Galbraith was right, the "inventory of undiscovered embezzlement" may extend into your own company. Somebody may be stealing, and it's most likely discovered when you dive into the books yourself to look for the profit leaks in a weak year. Even if you didn't find any evidence of embezzlement, do consider a financial controls audit -- it could be good insurance against the next cycle, when you become "relaxed, trusting, and money is plentiful."

If you've found an employee theft scheme that you're willing to share, please click on "Comments" below and share it with us.

Theft and Embezzlement -- Another Interesting Case

I'm constantly amazed at the amount of employee theft and embezzlement that persists in American companies, large and small. And also amazed at the fact that most business owners and CEOs are convinced "It's not happening here."

Another of those stories surfaced recently in our local market (Upstate South Carolina). In that scheme, a man operating three local businesses (apparently fronts pretending to be trucking, warehousing, etc.) was charged with mail fraud and money laundering that took place over a 6-year period. The amount of the fraud? Four Million Dollars! Like many, this was an imaginative scheme.

The victim was a $20 million Oregon-based company owned by a private equity group. The scheme was built around falsified freight invoices, charging for freight that was never hauled. You might suspect an "insider" accomplice in such a scheme -- surely somebody would notice all that freight cost and ask some questions, wouldn't he? From news accounts, it sounds as if the person approving and forwarding those invoices was a contract employee of the scammed company, located in yet another state! Apparently he invented the scam, and the recently-charged local guy just helped step it up by providing even more fake invoices (for a 50% cut).

Simple deal -- one guy produces invoices. Another, as a work-at-home contract employee, approves and submits them as legitimate and the company pays them. The guy generating the fake invoices was apparently also very good at fielding questions about those invoices from "real" company employees. Considering the 2700 miles between company headquarters and the perpetrators, one can assume nobody drove past the "freight terminal" and realized there were no trucks.

I believe such stories include great lessons for business owners, such as members of Chief Executive Boards International. They're tipoffs to things we should be watching in our own businesses every day, and pitfalls we don't have to suffer if we learn from the misfortunes of others.

If you have a tale of an imaginative embezzlement, fraud or employee theft scheme, please click "Comments" below and share it with us.

Tuesday, April 7, 2009

Occam's Razor -- A Modern Guide to Decision-Making

Ken Keller, a great friend of Chief Executive Boards International, suggested another idea that may be of help to CEBI members and readers.

Occam's Razor (aka Ockham's razor) is a problem-solving principle attributed to a Franciscan friar, William of Ocham, a 14th-century English logician. The principle is that the explanation of any scenario, observation or problem should be reduced to the simplest terms and simplest assumptions possible.

This is remarkably confirmed by Joe Busby, another friend of mine who has applied incredibly sophisticated neural network and pattern recognition tools to the analysis of massive arrays of manufacturing process data. Know what Joe found? In several cases, an amazing correlation between yield in continuous manufacturing process and outdoor temperature and humidity! Think about it -- a production line making plastic film is instrumented with hundreds expensive sensors and quality measuring devices. Yet, Joe found that the primary factor in making good film at high yields was ambient temperature and humidity.

So, how can we use this in a typical business? It's the philosophical origin of the KISS principle (keep it simple, stupid). In the category of problem solving:

Look at all the asserted root causes of the problem. Pick the simplest one -- likely to be the closest to correct

Consider the proposed corrective actions. Pick the simplest one -- likely to be the one most easily implemented and the one most likely to solve the problem.

When looking for opportunites:

Look at the proposed opportunities, and the complexity of pursuing them. Pick the simplest course -- likely to be the one most successful.

Consider the simplest strategy to pursue an opportunity as the preferred strategy

Ask really simple questions -- likely to get the simplest answers
- What do my customers want from me?
- Am I delivering it?
- The way they want it?
- Are my costs in line?

Action on a sub-optimal strategy is preferred over inaction and further analysis in pursuit of the "best" strategy

Simply stated, when there are two competing ideas or solutions, the one that is simpler is better. What's your experience with simple vs. complex explanations? Or simple vs. complex strategies? Please click on "Comments" below and share your experience with others.

Friday, April 3, 2009

Grey Hair is on Sale -- 7 Reasons to Hire Older Workers

The "bring your own agenda" nature of Chief Executive Boards International meetings has recently led to some different views and ideas on where and how to fill job openings as business is (or will be) picking up.

The 2009 recession has disrupted numerous businesses, careers and lives. Some particularly disadvantaged casualties are now job seekers in the 50+ age bracket. Many of these people are highly skilled, hard workers who find themselves jobless due to factors far beyond their control. Many have been highly paid in the past, now hampering their marketability in a perverse way. They're simply considered too expensive for many small and mid-size businesses.

This, like other collateral damage of this recession, is a huge opportunity in disguise for savvy business owners. These people not only need work, they need a place to contribute and to be valued. And in many cases they need those things (along with health care benefits) worse than they need the great salaries they enjoyed in the past.

As the recovery from this recession (yes, there will be one) progresses, you're going to need more help. You're still standing, and many of your competitors aren't, thereby putting lots of growth opportunities on the table. Look at this 50+ age group far more seriously than you have in the past. Consider their salary requirements highly negotiable. Many, for example, will be happy to trade salary for time off. Who says you need a 40-hour employee in every position? How about a 30-hour employee for a 25% discount? Let them work it in three 10-hour days, and you've probably got a deal. Many are likely to be so sure of their skills that they'll work for a reduced salary and a performance-based bonus.

Here are at least 7 reasons you should be not just considering, but seeking out workers over 50:

Work Ethic -- The widely chronicled difference in the view of what "work" is between the boomers (now turning 62) and Gen-x (30-somethings) and Gen-Y (20-somethings) will feel good to you, particularly if you're a boomer yourself (over 45).
Maturity -- These are grownups. They understand that if the plane leaves at 7:30 am and they're not there, it's going without them. They realize there are things they don't know. They can look beyond themselves.
Organizational Skills -- These workers have years of experience inside organizations, large and small. They know how things work and how to get things done. And many of them have well-developed leadership skills that may not be required by the entry-level job but will become valuable to you elsewhere.
Responsiveness -- When you communicate with these people, whether by email, phone, or in person, they'll answer you. And they understand "I need you to...." or "We need to..." as a directive, not a suggestion.
Functional Expertise -- If you're hiring for a specific functional specialty, why not look for years of experience, hard knocks, and perhaps continuing education in the field? Many older workers have all that.
Loyalty and Commitment -- These people are not looking for the next rung on their career ladder. You're it. If you treat them even close to fairly, they'll be with you as long as you want them.
Cost -- Most of your workforce takes fringe benefits for granted, particularly health care coverage. Not this group -- they've faced the world without health care coverage, priced it on the open market, and know what it's worth (if available at all). And many will be happy to exchange schedule flexibility for salary. Their income requirements may be lower than you think, or than they used to be.

Consider the value to your business of an experienced, expert and hardworking resource. Granted, he or she may not be a 20-year employee. Chances are, however, a displaced person hired in his or her mid-50s will be around for 10 or even 15 years, if you wish.

What's your experience with hiring older workers? Or if you've used creative compensation, flexible hours or other strategies to hire highly experienced, senior employees at a bargain price, please click on Comments below and share your experience with others.

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