Monthly Archives: March 2014

Business Lessons Learned from the 2014 NCAA Tournament So Far

2014 NCAA TournamentEven when a team has over 34 consecutive wins, some jerks will question the legitimacy. Wichita State. Their game against Kentucky was as exciting and well played as any NCAA Tournament game I have ever seen.

You wouldn’t expect an organization to be motivated and succeed if its CEO keeps telling the media that his team really isn’t that good. It’s time for Jimmy Boeheim of Syracuse to retire. He has forgotten that one of his responsibilities is to build team morale, energy, and their drive to win.

Industry ranking doesn’t predetermine success. In the first round of this year’s NCAA Tournament, a team that had been ranked # 14 in its bracket (Mercer) beat the better known # 3 ranked team (Duke). And three of the four # 12 ranked teams (Stephen F. Austin, Harvard and North Dakota State) won against 5th ranked opponents.

Just because an organization was top ranked the last time around, doesn’t mean that they will continue to be #1…or even “play” that well the next time around. Louisville finally won against St. Louis in the second round, but it sure was a low scoring, uninspiring game.

Team chemistry, mutual respect and experience matters. I think that fact that the seniors had played together at MERCER for 4 years helped them beat DUKE.

It is not your imagination. Sometimes a situation is set up for one organization to succeed or for another to fail. Ask any informed fan if Wichita State had a tougher bracket than Florida.

Corporate Sponsorships: Investment Brings Involvement

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One of my roles is as a growth financing intermediary. Recently, I have been seeing more and more situations in which Corporate Sponsorshipowners of mid-sized companies haven’t learned enough about the various types of growth financing and are inadvertently chasing the wrong kind of money.

One of the most common mistakes is the assumption that the company must be able to follow through on its plan ALONE, and the only thing a possible funding source will provide is MONEY. Financing from a commercial bank works that way (loans and lines), but just about every other type of financing involves PARTICIPATION. A venture firm won’t want to stand on the sidelines if/when the decision to invest has been made. They expect to be required to provide an expert “at the table” (on your board) to help growth and success happen. Similarly, growth financing achieved through joint ventures involves an expanded leadership team. Also, corporate sponsorship isn’t about handing over money to just watch your company “do its thing.”

Non-profit organizations have figured this out. Maybe their development officers can only talk about their cause when requesting contributions from foundations, but when corporate sponsorship money is involved, the corporation’s marketing department expects their sponsorship money to fund a partnership, produce something exciting, fit their messaging and accelerate the generation of prospective customers…which after all is the goal of marketing.

The folks at Frito-Lay are intimately involved and visible at the golf tournament they sponsor. The people from Dunkin’ Donuts are involved with the Thanksgiving Day Parade in Philadelphia. They don’t just hand parade managers a check and then stay home. IBM and AT&T have been involved with the National Association of Women Business Owners (NAWBO) for over 30 years.

Over the years, my companies have successfully worked with over 50 repeat corporate sponsors (IBM, SNET, Bell Atlantic, Bell South, Northern Telecom, Wachovia, Entrepreneurial Edge magazine, etc.). That would not have happened if the projects were small or if they weren’t economic development strategic initiatives to help mid-sized companies to continue to grow.

Does your organization have a big bold project in mind that is not happening only because you have convinced yourself that you must go it alone and you lack sufficient funds to execute on a large scale? Why stop? Why ask for a loan or a line when you can do something that could really make a difference with corporate partners?

IEG is an excellent resource for information about corporate sponsorship. I agree with their promotional description: IEG is the global authority on sponsorship and the leading provider of sponsorship consulting, analytics, measurement, valuation, research and publications. Visit IEG at www.SPONSORSHIP.com.

Selection of a CFO is Sometimes Your Most Important Decision

Ambler CFOHaving a complementary CEO and CFO has become a competitive advantage in the dynamic world of major hospitals.

Read health industry or business publications, and you’ll soon notice the name Amy Mansue. She’s the CEO of Children’s Specialized Hospital. NJSPOTLIGHT.com recently recognized Mansue as a “Top Healthcare Policy Analyst.” Plus NJBIZ includes CHILDREN’s SPECIALIZED Hospital on its list of “best places to work.” With an ever expanding geographic reach and 12 locations, CHILDREN’s SPECIALIZED Hospital’s services now include inpatient, outpatient, rehabilitation, long term care, medical day-care, early intervention, etc.

Mansue clearly leads the process of identifying opportunities for CHILDREN’s SPECIALIZED Hospital but is the first to point out that CFO Joseph Dobosh plays “an important role in the expansion.” Mansue particularly values that Dobosh is a “visionary.” 17% of the 1,200 fte report to CFO Dobosh.

TRINITAS CEO Gary Horan also speaks highly of their CFO, Karen Lumpp. “In this ever changing healthcare environment, a CEO needs a CFO with the background and expertise Karen brings to the table,” says Horan. TRINITAS is the result of combining Elizabeth, NJ’s three previously struggling hospitals. 10% of TRINITAS’s 2,000 FTE report to CFO Lumpp.

John Sheridan is the CEO, and Doug Shirley is the CFO of COOPER University Health Care in southern New Jersey. 400 of COOPER employees in this $900 Mil/yr entity report to CFO Shirley. Well known for its trauma center, COOPER has expanded dramatically over the past several years. “We recognized the need to increase our access to clinical trials,” said CFO Shirley. COOPER had already looked at 4-5 leading cancer hospitals when MD Anderson contacted COOPER. CFO Shirley played a key role in deal structure and making sure managed care rates were in place during the creation of the recently opened $100 Mil MD Anderson COOPER Cancer Center. “The two-way due diligence process spanned about a year,” said CFO Shirley.

These CEOs and CFOs agree that today’s hospital-based CFO must have extensive experience handling major projects. The CFO doesn’t just “crunch numbers” any more. Dobosh, Lumpp and Shirley all view their CFO role as predominantly focused on major strategic initiatives. It is very telling that these hospital CFOs view ICD 10 compliance as a “short term project.” CFO Lumpp shared that hospitals complying with ICD 10 coding by October 1, 2014 involves “quadruple the information, a big learning curve and dual coding.” CFO Dobosh shared that the project to transform hospital records to a MediTech paperless system involved “a few years and less than $6 Mil.” Clearly, changes in coding and going paperless would have been viewed as major projects for a CFO not very long ago. When CFO Shirley isn’t structuring a joint venture with the #1 hospital in the country, he is leading COOPER’s Lean Six Sigma initiative or teaching niche surgeons about supply costs. When CFO Dobosh isn’t structuring the financing for a new service and/or location, he is “retiring debt, refinancing to direct placement or thinking about Triple-B bonds.”

Clearly, today’s hospital-based CFO must have strong communication skills. No longer do CEOs and board executive committees consider strategic options and then consult the CFO. The CFO is “at the table.” Hospital CFOs are expected to make frequent presentations at executive team and board meetings. It can take as long as five years for a CFO to earn trust in a hospital setting, so the CFO must demonstrate that he/she is motivated to help find ways to help other professionals use state of the art technology, treatment techniques, etc. Today’s CFO cannot sound like a negative bean counter.

Perhaps more than in any other industry, health care-based CFOs must be level headed and accept that the rules will constantly change. CFO Lumpp says that hospital CFOs must “replace the word hospital with health care systems.” The reality is “by the time a brick-and-mortar project is built, it will already be out of date. Even insurance could collapse into a new system,” predicted CFO Lumpp. Apparently, she is correct given the recent headlines about Saint Barnabas’ plan to introduce its own health insurance plan.

It is a challenge given the limited time available, but health care-based CFOs must commit to continuous learning. CFO Shirley reads industry publications like Healthcare Financial Management (HFM) Magazine, Healthcare Executive, Modern Healthcare and HealthLeaders Magazine. CFO Lumpp warns that a health care CFO’s time can “too easily be chewed up by simplistic popular ideas that don’t consider the 40+ variables involved.” CFO Dobosh is convinced that his auditing background, experience as a referee for high school basketball and leadership level participation in the Healthcare Financial Management Association (HFMA) have helped him. He suggests that someone who is interested in becoming a health care-based CFO should “look for mentors and get experience handling major projects within the industry.”

Clearly one of the most important decisions made by a hospital CEO is the selection of the CFO.

The Evolution of Customer Service by Family Owned Businesses

The first generation of the family business grew by investing long hours of hard work and detailed attention to customer Family Owned Businessservice. The owners got to know customers through long conversations over dinners. Loyal customers told the first generation owners when something was wrong. They would complain and might even make a suggestion and then wait for the first generation owner to tell them how the problem would be remedied and then offer a discount or tangible evidence that the suggestion and continued loyalty is appreciated. Often the first generation owner would immediately call the second generation employee in to demand that the customer’s problem be fixed immediately.

Ahhh…the good old days. Continued customer purchases were usually yours unless you didn’t fix a problem.

The majority of second generation owners have been fixing problems for most of their lives. They now realize that customers may not always let you know what went wrong and most reluctantly admit that their customers don’t readily suggest solutions or remain loyal customers when the business had fixed a problem.

Now the third generation comes along and views the first generation as having more time to talk and make friends. They also view the second generation as worriers who are too focused on problems.

The strategic growth plans of today’s companies led by third generation owners are fascinating. They typically want to create, leverage new technologies, stay ahead of customers and not wait/react to complaints. They often assume that customers won’t openly share what they want, think, expect or feel. Third generation owners tend to want to make their mark on the world while having more personal time for family and leisure.

Think about how this trend impacts the research needed to guide strategic direction and growth. What do you think? Am I way off base?

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