What to Expect in the 2nd Half of 2013 – Expert Business Panel

ImagePresented by DataKey Consulting

At a dynamic panel hosted by DataKey Consulting on July 9th, local area experts shared their experience and insider knowledge to help Westchester business owners address their pressing business concerns for the remainder of 2013.  Here’s what you need to know:

A Challenging Economy

Looking out through December 2013, expect that the economy will grow at less than 2%. In fact, GDP may not go above 2% for the next decade. Though the economy added 195,000 jobs, many are part time workers, while unemployment is still at 7.6%. For the first time in the history of the US, there are 4 generations (Baby boomers, Gen X and Y, Millennial) in the workforce, and many people have either been unemployed and under-employed since 2008. We need to see 250,000 jobs added per month for 10 months to really start seeing improvements in unemployment.

On the bright side, companies have proven that they can do more with less.  Technology continues to drive productivity, but at the same, the advances have a destructive force – technology is making us more efficient and cutting the need for workers. We no longer need to hire 5000 employees to make X; we need only 50 employees to make X2.

In major European markets like France, UK, Germany and Spain, youth unemployment is a disturbing trend, foreshadowing the potential to lose an entire generation of youth work experience. As we’ve seen in the Middle East, disenfranchised youth is a HUGE problem. Even here in the US, many young people are not major consumers. How can they be when they’re under-employed, living with their parents until their 30s, and not buying their own homes?

In past generations, youth coming out of college had lots of flexibility to find a career path. Now though, our country’s young people have a collective 1 trillion dollars in debt. Physician’s Assistant positions used to make $300,000; those titles now start making only $75,000, and even more crippling debt is needed to qualify for the job! It’s tough to go out and get an apartment when you can’t even afford your loan payments. The fundamental problem is a negative cycle for youth: no work experience à no income à lack of consumers à lack of jobs à cycling back to no work experience. They are struggling today and will need to innovate their way out of the problem.

In addition, today’s economy is fractured, with no one engine driving our economy forward. The few growth areas we’re seeing in the modern economy include: Technology (smartphones, tablets), Healthcare, Energy (energy exploration, western NYS, PA, Oklahoma and Texas) and Banking.

Creating Business Opportunity

The reality of the situation is that the economy is not going to magically fix itself and lift your business into prosperity. As a business owner, you are responsible for creating the future of your company. We have always reinvented ourselves here in the US – our ingenuity and flexibility allow us to discover and create new opportunities.  Likewise, your business must continue to evolve and change to survive.

New product development is absolutely essential. For example, in Healthcare, entrepreneurs are responding to the market and the black holes of Medical legislation. Under Medicare regulations, hospitals are penalized if patients are re-admitted within 60 days – as a result, hospitals and insurance companies are beginning to subsidize the emerging service of medical concierge. Similarly, construction companies are starting divisions to retrofit homes to be more accessible to those with disabilities, and catering companies are offering affordable meals on wheels. Can your business gain from the growth in healthcare?

On the positive side, there is so much information easily available in the age of data. Never in the history of mankind have we had this much knowledge at our fingertips, and it continues to grow every day. “I don’t know,” is no longer a tolerable answer from your team. Every company has the opportunity to be well informed, capture data, and use it. Data is king, data is key!

What seems to keep us moving is the ability to re-invent the economy with an entrepreneurial spirit. Even in a struggling economy, still anyone in this country can be inspired, start their own business tomorrow, and change the world. Businesses must re-invent themselves to grow.  Is your business doing all it can to innovate and thrive?

Based on Discussion from DataKey’s 7/9/13 Key Advisors
Featured Panel of Experts

Wells Fargo John Mulvey, SeniorVice President, Wells Fargo BankFinancial Signs of the Times & Commercial Lending OutlookJohn Mulvey, currently Group Team Leader at Wells Fargo’s commercial banking office in White Plains, manages a team of bankers covering industries including manufacturing, industrial, chemicals, apparel, technology, distribution and construction. Mr. Mulvey is a 30-year veteran of commercial banking who has spent the majority of his career working for major money center banks headquartered in New York City. He has provided financing solutions both to family owned middle market companies and to small- and mid- corporate public companies. He has structured and negotiated both single bank and multi-bank syndicated credit facilities and has extensive experience in lending to the apparel industry. Financings that he has worked on range from revolving credit facilities and term loans to real estate loans and ESOP financings. 
 Larry Larry Gottlieb, President, Hudson Valley Economic Development CorporationSmart Financial Management for the New EconomyLarry Gottlieb was named Hudson Valley Economic Development Corporation’s new President and CEO in February of 2013.  With over 20 years of experience as a top management executive in several major corporations, public affairs agencies and a global non-profit organization, Larry leads HVEDC in marketing seven counties in the Hudson Valley as prime business locations to corporate executives, site selection consultants and real estate brokers. Larry has also served as a senior counselor to CEOs on a broad range of subject areas, including media and government relations, crisis communications, marketing, sustainability, and social media, and joined HVEDC after successfully running the Westchester County Office of Economic Development.

Key Advisors Overview

Key Advisors CEO Peer Advisory Board brings together business owners who share common business challenges and the desire to deepen their business knowledge and expertise.  More info.

Update your Operating System

On June 11th 2013, Apple unveiled the next version of iOS – the Apple device operating Imagesystem. The new system will update the current device functionality and enable new services. What about your business operating system? Have you been thinking about updating how your business operates to improve your functionality, improve quality, and enable new services?

Your company is just like Apple.  The market moves ahead and your customers are always expecting more. Your customers’ needs change, competition changes and the way you operate needs to adjust along with them.

Find out what customers are expecting and how well you measure up:

  • Implement a metrics driven review of customer needs. Track Net Promoter Score and benchmark your company’s performance.
  • Understand what’s new in the market. Talk to your customers about the way they would like to do business with you.
  • Look closely: what are your customers are collectively saying and note any patterns or trends.

Uncover sources of customer satisfaction or dissatisfaction inside your organization:

  • Optimize processes to determine the most efficient workflow, reducing wasted time and resources.
  • Define the key operational process metrics that lead to customer satisfaction, such as on-time delivery, back-orders, or returns.
  • Determine the cost of quality in your organization. Find ways to eliminate double- or triple-checking of a single step in the process.

Keep up with the times and remember to continuously innovate:

  • Innovate your business processes from supply chain to ordering to customer delivery. Make use of mobile technologies and automation to streamline the information flow and get real-time updates.
  • Create new services to improve your connection to the customer, create repeat business, and generate new revenue streams.
  • Need ideas? Read the article 3 Ways Mid-Market Companies Can Innovate

Updating the way you do business is just another way to take care of your customers, employees and yourself. Think back to when you started the company, or took over as the CEO, COO or CFO – you wanted to leave your mark on the company by making things better, and changing the status quo. It’s time to do it again!

DataKey Difference: Our passion is helping our clients accelerate their financial and business objectives. Our goal is to give you the tools for lasting and self-sustaining advancement. Over the last 10 years, DataKey has successfully completed hundreds of projects across 30+ different industries for mid-market and Fortune 1000 companies. As a measure of client satisfaction, over 90% of our clients reengage on multiple projects. Contact us today for a free initial consultation and see how we can help your business thrive.

Is there a Social Media Bubble?

Social Media BubbleSocial media represents the real world network we all desire but prefer to access from the comfort of our couch, desk, or coffee shop. We can effectively ‘keep in touch’ with many more people at one time than if we were to plan coffee, lunches, dinners and phone calls. The old standard email among friends has diminished. Instead, we say, “Didn’t you see my Facebook post?” For individuals, social networking is a big win. What about for business? Does social media efficiently help businesses grow revenues, reduce expenses, and build a brand? The answer: it depends.

Social media is a powerful tool as part of an overall strategy and aligns well with organizational functions such as customer service, HR, marketing, and sales. DataKey consults with CEOs and leaders of mid-market companies in dozens of industries who are primarily concerned with business growth. Organizations that identify a target market, define their customer needs and fine-tune content to build engagement use social media more effectively than those without a well-defined marketing strategy.

Social media is often more useful in B2C organizations for lead generation, voice of the market / customer and customer support. According to Nielsen[1], there’s a 92% trust level with a recommendation from a friend, vs. only a 29% trust level from the advertiser itself. Social media has enabled a more informed consumer who now gathers third-party reviews, references and ratings before visiting your website or making a purchase. Once a customer (or potential customer) follows your company on social media, they are more much likely to make a purchase. According to one study[2], “64% of Twitter users and 51% of Facebook users are more likely to buy the products of brands they follow online.”

Case in point: Pretzel Crisps[3]. They launched a $1.00 coupon on their Facebook page. Within 36 hours, their fan base grew from 5,000 to 12,000. So, they launched another coupon – Buy One, Get One Free. Only this time, they didn’t tell their fans. No matter – fans found out on their own and the “letting you in on a secret” factor had a viral effect that exploded the fanbase from 14,000 to 29,000.  Now it’s at over 250,000. But fans just tell one side of the story.  The redemption rate for the fist coupon was 87%; the redemption rate for the second was 95%, and annual sales increased 93%.

The case is not as clear for social media for B2B business development and sales. We did a poll of 25 mid-sized B2B business owners and found that none of them are using social media as a major component of their business development strategy. In some cases, it is gaining traction where digital natives are the organizational buyers and leaders. Yet, business leaders are constantly being bombarded with messaging about “getting social” and the new “integrated marketing.” Perhaps we are experiencing a social media bubble where it is hyped to the point of not being realistic. Where is the ROI?

There is a big downside and RISK in ignoring social media – it’s ever-evolving, businesses are constantly innovating new ways to use it, and the last thing you want to do is fall behind. Undoubtedly, the value to all companies in any industry will only continue to grow over time. So even if you’re one of those B2B companies that doesn’t see the value today, it’s essential to keep your eye on social media trends and be ready to invest when you can gain an advantage.  Any well-developed marketing strategy must include a comprehensive social media plan – even if that plan is to watch and wait – now and in the future.

DataKey Difference: Anticipating ever-changing demands in the marketplace has never been more critical, especially when the competition is only a mouse-click away. To make data-driven management decisions, it is essential to fully understand the market, prospects and customers. DataKey will bring knowledge, experience and best practices to your door and translate them into techniques that will create results for your company. DataKey is accountable for recommendations and implementation. Contact us today for an initial consultation.

3 Ways Mid-Market Companies Can Innovate

If you are a mid-market CEO, you need to be concerned about innovation. If you’re like most mid-market CEOs outside of the technology industry, you’re probably concerned that your core product(s) are or are becoming a commodity where price is dictated by the market. As a result, these you have internal cost pressure while profit growth has slowed or is starting to decline. New competitors are entering the market, competitors are taking your business, and/or consolidation is happening because scale is the only way to get better business results. Innovation is the way out of this dilemma. Here are three ways mid-market companies can be more innovative.

Innovate!Look at Consumer Products

Consumer product innovation happens at an amazing pace. Think about any product, even a commodity – for example, toothbrushes. The toothbrush itself is very basic, a handle with bristles. But with clever innovation, the toothbrush became more than just a plain old piece of plastic. Bristles were produced in different colors and lengths, handles became different shapes, battery operated toothbrushes were introduced. These days, kids listen to hit music in their heads, played by a toothbrush!

Now think about your products: what features or functions can you change? If you sell flowers in pots, make the pots stand out, perhaps the pot can be a different shape or a brighter color than your competition. If you make industrial products, create a distinguishing feature such as the shape and color. Your objective is to make your product more innovative than your competitor’s so it will stand out in the market.

Create Product Roadmaps

Technology companies at the very front end of the innovation process are continually updating their product roadmaps, always searching for new ways to improve their products and services. The search could be done by their own R&D organization, by partnering with startups, or by simply buying key technology components. All the companies that make mobile phones – Apple, LG, Samsung, etc. – have roadmaps that span years into the future. When you buy that phone in the store, you are getting a product that was conceived at least 18 months before.

Do you have product or service roadmaps? Once you identify what features or functions you can change, determine how much investment you need and an approximate ROI. If the financials make sense, then figure out how long it will take you to implement that change. Focus a small team to produce the new features and functions. Build on the first change, making your product or service roadmap into a guide for years to come. Consistent review and updating of the roadmap must be on your management agenda.

Value-Add Services

Product and service companies are often one and the same. The service often takes the lead role in creating value, especially when the product is a commodity. There are hundreds of examples all around you – just look for them! Enterprise Car Rental will “pick you up.” You buy an iPhone from Apple, and then you need iTunes and the app store to go with it. A local store or restaurant gift card is a service that helps you give a gift and helps the store with cash flow and more customers.

Are you creating new value-added services? Just like a product roadmap, services improve your connection to the customer, create repeat business, and generate new revenue streams. The internet makes services easier and more affordable to offer services than ever before. For example, if you sell or rent industrial equipment, connect your equipment to the internet to track usage, then sell customers monitoring services and predictive maintenance plans. Think about the information you have about your customers or the industries you serve and leverage that information to develop a value-added service.

DataKey Difference: Strategy is directly connected to tactical planning to ensure successful implementation. Generate inspiration towards a profitable and sustainable future for your company through innovation.  DataKey has the tools and experience your company needs to create effective strategies to help you creative innovative products and services, specifically tailored to your company’s industry, products and customers. With DataKey as part of your team, make innovation a top priority and start building towards your potential today.

DataKey Featured in 2013 Westchester Economic Development Guide

DataKey in the 2013 Westchester Economic Development GuideDataKey Consulting was featured on Page 14 of the 2013 Westchester Economic Development Guide presented in partnership by the Business Council of Westchester, Westchester County Executive’s Office, and Westchester County Office of Economic Development.

DataKey President Ted Miller commented on the crucial importance of infrastructure – both the brick-and-mortar variety and the intangible networks of personal connections – towards building a strong business community.  Lucky for local business owners, Westchester has both in spades!

Read more in the full article here (PDF).

13 CEO Tips for 2013 from DataKey’s Expert Business Panel

Key AdvisorsAt a dynamic panel hosted by DataKey Consulting on December 11th, local area experts raised concerns about key factors that Westchester businesses need to consider when planning for a successful 2013.  Here are the 13 tips you need to know for the coming year:

1.       Now is the time to renegotiate your lease.

As Westchester occupancy rates continue to fall and lease rates drop, tenants have the negotiating power, which means property owners are willing to negotiate.  Take advantage while the market is in your favor.

2.       “Action hubs” are replacing the corporate campus.

A sleek corporate campus is no longer enough.  Companies need to provide amenities to employees to stay competitive, and to do this cost effectively, they’re seeking out mixed-use spaces with easy access to gyms, restaurants, culture, shopping, and transportation right in one place.  Is your business poised to capitalize on this trend?

3.       If you haven’t heard of Silicon Alley, you will.

Move over, Silicon Valley.  New York is the new hot spot for technology, so expect major growth in this sector in 2013.  As the financial services industry licks its wounds, technology and biotech companies are taking the reins.

4.       All companies with 50+ employees MUST provide health insurance by Jan 1st 2014.

In accordance with new regulations, employers with 50 or more full-time employees must offer affordable health coverage to those employees to avoid a possible tax penalty.  If you don’t already offer health care to employees, don’t get blindsided when the law goes into effect – you’ve got 365 days to prepare, so use them wisely.

5.       Think you have a lot of exempt employees?  Think again.

Many business owners don’t realize that non-exempt employees are eligible for overtime.  If your employee works over 8 hours in a day, NY state law says you’re technically liable for paying overtime, even if they don’t work over 40 hours that week.  In addition, many more employees are classified as non-exempt than you might realize.  Re-familiarize yourself with the labor laws to protect yourself.

6.       Know the laws if you have 10, 25, 50, or 100+ employees.

Different laws apply depending on how big your business is, and small/medium/large is not a valid classification.  Visit www.dol.gov/elaws/FirstStep.htm to understand which laws apply to your business and how the regulations change as your business grows.

7.       All employees must acknowledge receipt of a wage theft protection letter.  Have yours?

The Wage Theft Prevention Act requires that employers give written notice of wage rates to all employees by February 1st of each year, including the employee’s rates of pay (including overtime), pay frequency (by the hour, shift, day, week, commission, etc.), regular payday, and other information.  If you’re not already doing this, now is the time to start!

8.       Big Brother really is watching.

Government agencies are adding tens of thousands of auditors to focus on small and medium-sized businesses and ensure compliance with new legislation, not the least of which are the Obama health care bills.  Be proactive about making sure you’re following the new rules to avoid finding yourself in the hot seat.

9.       Like your tough managers?  They may need to soften up if the anti-workplace-bullying act passes.

The Healthy Workplace Bill was introduced to more precisely define an abusive work environment and give bullied workers – particularly those that are not protected under anti-discrimination laws – legal redress against bullying.  If your employees are toeing the line on bullying behavior, be proactive in addressing the situation before you become liable for their behavior.

10.   Tax requirements may expand depending on where you do work.

If you generate income outside of NY state, pretty soon you may have to pay income taxes on those wages.  In fact, laws about out-of-state revenue have been on the books for years, but many states were not enforcing them until the recent budget crises.  To be safe, make sure your accountant is paying attention to where your revenues originate, not just where your company is based.

11.   Surprise!  Taxes are going up in 2013.

We avoided the Fiscal Cliff, but the bad news is that the wealthiest earners in America (households making over $450,000) are looking at a tax rate increase, and those making $300,000 or more are losing some deductions and exemptions.  But even if your personal income tax isn’t going up, you’ll most likely be affected by payroll tax increases that are set to hit nearly every wage earner in the country.

12.   Be glad you’re not in Europe.

The silver lining: even with taxes going up, we’re still paying some of the lowest tax rates of all developed countries in the world.  In the long haul, countries without a strong middle class simply don’t make it.  Here in Westchester, we’ve built the foundation for lasting prosperity.

13.   Never lose focus on your fundamental business profit model.

There is no question, the business climate will remain tough in 2013. The economy remains in a precarious state with high unemployment, there’s an ever widening budget deficit, and the Obama administration has not exactly earned a reputation as business-friendly.  But regardless of all that, the responsibility of the business owner is to focus on what can be controlled. There are many ways to improve bottom line profits, and as CEO, you own keeping your eye on your fundamental business profit model.  Here’s to a bright and prosperous 2013!

Download “13 CEO Tips For 2013” (PDF)

Based on Discussion from DataKey’s 12/11/12 Key Advisors
Featured Panel of Experts

 ChrisOCallaghan Chris O’Callaghan, Managing Director, Jones Lang LaSalleWestchester Real Estate Trends & What They Mean for Your BusinessChris has more than 25 years of experience in commercial real estate and has negotiated some of the most significant real estate transactions in the region involving major companies.  He has negotiated lease and sale transactions valued at $500,000,000 involving over 15,000,000 square feet.  Prior to joining Jones Lang LaSalle, Chris served as a senior director with Cushman & Wakefield Inc. and is also the Immediate Past Chairman of the Board of The Business Council of Westchester County. 
 GregChartier Greg Chartier, PhD, Principal, The Office of Gregory J ChartierTechniques & Skills for Effective ManagementGreg is the Principal of The Office of Gregory J Chartier, a Human Resources Consulting firm, and a well-known management consultant, educator and speaker.  His practice specializes in the areas of Management Training and HR management/outsourcing for firms of less than 250 employees.  Through his management experience at multiple major firms including Pfizer, Chase, The Bank of New York and Johnson & Johnson, Greg has developed a simple training philosophy: management is a skill and you can be a better manager by developing your skills. 
 TonyJustic Anthony Justic, Partner, Maier Markey and Justic LLPSmart Financial Management for the New EconomyAnthony Justic is an audit, accounting and financial consulting partner at Maier Markey and Justic LLP.  Since 1987 Tony has been instrumental in growing his firm from 3 employees to 90 and has built expertise across a wide variety of industries, including manufacturing, distribution, marketing and PR, catering, not-for-profit, healthcare, and legal services.  In 2012, he oversaw the successful merger of an information technology company into Maier Markey and Justic LLP. 
 TedMiller FACILITATED BY: Ted Miller, Founder & President, DataKey Consulting, LLCOver 20 years of National and International Management ExperiencePrior to founding DataKey, Ted held senior positions in worldwide service, marketing, engineering, operations and strategic planning at Fortune 500 companies. As the vice president and general manager of an international technology manufacturing company, he led a $150 million division to being ranked third in the world in customer satisfaction and expanded new business regions in China and Malaysia. Furthermore, Ted has a unique ability to translate those years of best-practice, operational expertise into practical and immediate customized applications for client specific needs.

Build Competitive Advantage – Trend Advantage Part 3

Introducing DataKey’s Trend Advantage article series – learn how to recognize and capitalize on marketplace trends to accelerate your business!  [Part 1] | [Part 2] | [Part 3]

Clarifying a vision of the future is intended to ignite the creative minds of your R&D engineers, marketing and new product development teams. Companies that act now to analyze future mega trends are able build competitive advantage. Trend Advantage is a process to assess mega trends that are just starting to build today, and to design actions so that your company can profit over the long term. The entire process is based on three steps as shown below. This is the third in a series of articles that explains the steps in greater detail.

Turning Marketplace Trends Into Competitive Innovation

You will want to encourage the ideation process by helping your team to find the gaps from where your company is today and put the plans in place to create the vision you describe. A structure for your idea will help to focus the brainstorming – and ultimately selection – process for specific projects that represent the best business opportunities.

Initial Brainstorm

Bring your creative thought leaders together into a room and review the vision for the future in all the areas that apply to your business. Review and discuss the vision so that each person has a good understanding of the mega trends and the rationale that drives the vision. The objective of the brainstorming activity is to ultimately design near-term actions that will allow the company to take advantage of the vast change that is inevitable. This goal is often achieved over a series of workshops mixed with additional research, formation of sub-teams, and team expansion.

Evaluate Ideas

After your initial investigation, you may have multiple topic areas to explore further. Brainstorming and planning begins with the future market needs.  Focus on the mega trends and vision in each topic area and complete the grid below to help you determine which ideas are most viable. An example based on automobile connectivity and infotainment is provided in the table below.

Automobile Connectivity and Infotainment
What is important in the
Market in 2015 – 2020?
Ÿ Drivers are distracted in the car, not safeŸ
Gen Y Drivers want always-on connectivityŸ
Passengers want access to entertainment, like at home
Business and Technology Challenges Ÿ Cars are not connected to the internetŸ
Few automotive manufactures have adopted service models like the ones we typically offer
Laws / Rules / Standards
/ Expected Behavior
Ÿ Upcoming laws for electric vehicle efficiencyŸ
Expectations for driver safety and control
Competition (Who / What) Ÿ Other automotive suppliersŸ Google, Amazon, Apple, entertainment services
Strategic Alignment and Opportunity Ÿ Aligned with growth strategy in Automotive marketŸ
Aligned with growth strategy in services
New Business, R&D Topics Ÿ Infotainment services for automotive passengers delivered via the internet

In-Depth Exploration

In the above example, the team has successfully narrowed the market vision to the new business or R&D topic “infotainment services for automotive passengers delivered via the internet.” Once that is accomplished, they can then shift the focus to the traditional business planning using PEST, eScan, SWOT and business strategy tools for further refinement and planning.  The business planning may include a look at the industry focusing on topics such as:

  • Current State and Projected Industry Outlook
  • Major Challenges/Threats
  • Regulatory / Political Impact on Industry
  • Current Consumer Trends
  • Current Technology Trends
  • Emerging New Products / Leading Companies
  • Ecosystem: Potential Partnerships / Alliances.

DataKey Difference: Strategy is directly connected to tactical planning throughout the organization to ensure successful implementation. Generate inspiration towards a profitable and sustainable future for your company.  DataKey has the tools and experience your company needs to create effective strategies to interpret and evaluate mega trends, specifically tailored to your company’s industry, products and services. With DataKey as part of your team, take your long-term strategy off the back-burner and start building towards your potential today.

Ready to learn more?  Read the rest of the series [Part 1] | [Part 2] | [Part 3] or contact DataKey today!