Dash to the Finish Line - Ensuring a Successful Transition Starts Now

You’re out on a walk on a peaceful summer morning. There is a cool breeze blowing off the Mississippi, and you’re soaking up the early morning sunshine. The soothing lapping of the water on the rocks is suddenly interrupted by a steady thump, thump, thump of a running animal pounding the pavement behind you. The thumping keeps getting closer and closer, harder and harder, until suddenly you can hear the breathless panting of the grizzly bear running you down from behind. Just before you take off in a panicked sprint, praying for dear life, you turn around only to see this guy drop a quick wave as he lumbers by on his early morning run. That’s right, no grizzly, just me.

To say I’m not a graceful runner is an understatement. While I may not be much of a runner, I am stubborn, competitive and determined. I also enjoy a good challenge, so when I saw the Warrior Dash was coming to Afton, MN this year, I didn’t hesitate to sign up. After months of training and prep work, race day was here. The first 200 yards went as planned, and then came the first unexpected obstacle. That’s right; this one was not on the list. We had to run from the bottom of the ski hill all the way to the top. And then back down. And repeat again, and again. I don’t know how many hills and wrenches were thrown my way that day, but I’ll bet my thighs could tell you.

Regardless, I managed to power through and finish the race within two minutes of my goal. Did it go as planned? Not exactly. Did I consider it a success? Absolutely. I had mentally and physically prepared to finish the race, and that’s what I did.  Even though it wasn’t perfect, all of that preparation paid off and I was able to cross the finish line. After the first hill, I had to adapt and switch gears. In a perfect world, unexpected hills and twists would never happen. In the real world, you need to be practical and realize that things won’t always go as planned. If that sounds a lot like running a business, it’s because it works the same way.

I’d guess that when you took on the challenge of starting your business, you had a general goal in mind on where you wanted it to go. That goal probably didn’t include working every day for the rest of your life. By being flexible and creative, you persevered to get where you are today. As you’ve had to switch gears, it can be easy to forget to do so in other areas too. What does your final game plan look like? Are you so caught up in the day to day that you haven’t spent any time on your exit strategy?

Succession planning is a talent and organizational improvement initiative that enables an organization to grow and thrive now and in the future. Having a clear picture of the future of your business will allow steps to be taken now to ensure the future success and direction of the company. Your business can neither succeed nor grow without a clear understanding of how the business will continue after the departure of key leaders of the business, including yourself. Not only is it imperative for the long-term success of your business, but I’d assume you want to make sure you’ll be getting paid for your investment when you retire.

Succession planning isn’t limited to retirements only. Think of your critical employees, yourself included, and how your business would be affected by their loss. A life insurance guy would talk end of the world type stuff, but let’s consider more likely scenarios – disability, retirement, moving away, joining a competitor. Life and Disability policies are available for two risks, but for the others it’s critical that a backup plan be established that includes cross-training your employees. Good planning is good business, and failing to do so could put your future and the future of your business in jeopardy. Succession planning should be part of a broader enterprise risk management plan. That’s right, not just insurance risk management, but a holistic approach to address those risks you can’t insure for. If your broker isn’t helping you with this already, it’s time to find someone that will.

Flying by the seat of your pants has a time and a place for certain things. Solidifying your future plans and protecting your business does not make the list. If you haven’t already done so, now is a great time to start as you make your dash to the finish line – your retirement.

 

Andy Bertram CPCU, ARM-E

651-800-6173

abertram@cobrown.com

Tracking Employee Performance and Man Points

Inspired this past weekend by my boys, I decided that it was a good time to
restock my supply of man points. While no one significant event comes to mind, I’m sure I’ve done
enough things since getting married that would get me close to the break even mark. I had an 8 foot
diameter tree stump in the middle of my backyard, and it had been taunting me since I moved in last
summer. This stump had outstayed its welcome, and it was time for it to go.

Burning this stump into oblivion looked better on paper than in practice.  My fire hardly turned the stump black. Dynamite would have worked well, but the city doesn’t appreciate that sort of fun.  This tree was probably around when the Vikings landed here, so it’s taken on the worst nature could throw at it and was probably laughing at my feeble attempt to take it out.  Enter plan b): it was time to man up and rent a stump grinder. I could have gone with the Cadillac of stump grinders, but instead fought the stump for eight hours with the more primitive, manual grinder. That’s right, eight hours of abuse to my body so I could earn some of those man points back.

That got me wondering. Did I earn a hundred man points? A thousand? Several thousand?
How do I track that, and how do I know where I stand? For something as important as this, it may be
necessary to keep some sort of tally so I don’t ever fall behind.  Then I started thinking about those of you who are running a business. Hopefully you see your employees working hard every day. Maybe you see them taking an unexpected or extra break that was not approved, perhaps for a smoke. Was it a onetime deal, or does it happen quite frequently?

I’ve heard from many business owners that they are considering cracking down on these non-approved breaks for many different reasons. Well there’s a simple reason that sticks out in my head – money.  If your employees are taking extra breaks throughout the day, you’re not getting what you paid for.  Let’s say you pay an employee $20/hour, 40 hours/week. Instead of working the 40 hours you are paying the employee for, you are actually only getting 35 hours of service due to these extra breaks or other distractions from the job. At $20/hour, 52 weeks/year, you are losing $5,200 per year on just that one employee alone.  And that doesn't even include what you are paying in benefits.  When was the last time you saw those costs go down?  I thought so.

My buddies seem to keep track of my man points, though sometimes I think they shortchange me a bit.  Lucky for you, you can keep track of your employee performance to make sure you're getting your money's worth.  How often do you do performance reviews?  What does your review process look like?  Are there incentives to improve performance such as bonuses, extra vacation days, you name it?  I suppose if you were getting an extra $5,200 out of your employees that you didn't get last year, a $100 performance bonus gift card or extra day of vacation is probably a win-win situation.

Just like your financial planner will give you updates on your stocks, mutual funds, and other investments, it's time you do the same with your company's biggest investment - human capital. 

Good luck!

Andy Bertram CPCU, ARM-E
C.O. Brown
651-800-6173
abertram@cobrown.com

Untangling Your Fishing Line - Delegating in Your Business

My family and I went on our first family vacation this weekend.  By family vacation, I mean a work trip with some family time squeezed in there as well.  Since my two little men are now well on their way to the age of four, I knew it was time for them to start collecting some man points.  While I’m not sure how many man points I’ve accumulated over the years, I know I’m fairly certain I’m still in positive territory.  Since it’s never too early to start, I wanted to make sure that they had a solid bank of man points at an early age.  It’s a precautionary thing just in case they have a moment of weakness and drink pink cocktails or go clothes shopping with their girlfriends when they get a little older.

As part of their christening, I did what any proud father would do – took them to Fleet Farm to pick out their first fishing pole.  Now from my recollection of fishing with my dad, I remember having a knack for creating the most unimaginable rats’ nests ever.  Whether it was operator error or a problem with the reel, I’d like to place blame solely on the equipment.  With that in mind, I found every “cool” open faced reel I could locate.  It didn’t matter.  Hunter found a mini Star Wars kiddie combo, and Jack found the Spiderman equivalent, each with the dreaded closed face reel.  While my memory isn’t clear, I probably had nightmares that night about fishing line wrapped and tangled and knotted and looped and the worst possible rats’ nest you could imagine.

With the rods ready and our bags packed, we headed up to the resort to relax and catch some fish.  My boys have the attention span of, you guessed it, a couple of three year olds, so I wasn’t sure how long they’d last out on the boat.  When we got to our first spot, it wasn’t more than five minutes in that we had our first tangle.  Hunter’s pole was a mess, so I spent some time cleaning that up.  The next thing I know, Jack’s line was tangled around the back of the boat, and repeat the process.  I had my line in the water for a little bit, but not too long.  The fish weren’t biting there, so we packed up and moved to another spot.  After what seemed like milliseconds, I was already untangling some more lines.  I’m not sure why I thought I may actually get some fishing in.  I remember being a kid myself and wreaking havoc on my dad’s poles, leaving him no time to fish. 

If you’re a business owner, many of your days, weeks, and months are probably spent untangling the fishing lines in your business.  There are a lot of important things that can help you succeed and grow that you probably want to do, but somewhere in between the idea and actually following through another rats’ nest came your way to untangle.  Have you put off a long-term business model and set goals to work towards?  Did you plan on attending some of your industry’s top trade shows but instead had to put them off?  Maybe on the safety and risk management side you recognize the need to implement a culture of safety to reduce your workers compensation costs and boost morale.  Risk management sometimes can be the toughest thing to devote time to because your ROI may take a year or more to materialize, and with other coals on the fire it often gets pushed back.

One of the toughest things in business and personal life can be delegating some of these less important tasks to someone else.  Do you have someone in your business who may be equipped to untangle some of those lines you’ve been dealing with?  If you don’t, could you train them?  Correct me if I’m wrong, but I’m going to take a wild guess and assume that you didn’t hire someone you didn’t think you could trust.  If that’s the case, stop hesitating and start delegating.  You’ll appreciate your newfound time, and you’ll probably find yourself enjoying your time at work a lot more doing the things you want to be doing. 

We all know that no one can do certain things as well as we can.  Some things though can be done by someone else close to our perfection, and that’s usually okay.  The things that really need our expertise should get our undivided attention, but prioritizing is a good place to start.  By letting go a bit, putting your trust in your employees and delegating those less important tasks to them, you’ve now given your business another chance to succeed.

So think about your business and your personal life.  What types of rats’ nests are you dealing with that would be better off being handled by someone else?  If you were to hand off one or two of these time consuming, menial tasks to someone else today, think of the things you could accomplish.  If you don’t, you’re risking not reaching your full potential in the future, missing those opportunities to grow and improve your profitability.  You aren’t in business to fail, so stop running it that way.

In today’s day and age, you’re either growing or you’re dying.  Start focusing on what really matters, and don’t get caught up in the day to day.  If you haven’t already, today is looking like a great day to start delegating. 

 

A big thanks to the MSBOA for putting together a great conference this past weekend.  And by the way, Jack did manage to catch his first smallmouth bass and wanted me to put it on the wall.  I think that’s worth a few man points.

 

Andy Bertram CPCU, ARM-E

abertram@cobrown.com

651-800-6173

An Ode to the Fake ID: Identity Theft, Data Breach and Cyber Liability

I’ve lived in either Wisconsin or Minnesota my entire life.  However, during different periods in college I actually grew up in Oregon and South Dakota as well.  I couldn’t tell you the names of the towns in either state that I purportedly lived in now, but I sure knew them back then.  I also knew the liquor stores and bars that weren’t real careful when they checked IDs (with the exception of one fateful day when I had to give up my Oregon residency and take up South Dakota).

It seemed in college there was always a guy who could hook you up with a bad fake ID for the right price.  No one was ever hurt while we were out having a good time, and they served their purpose for a few years.  Was it illegal?  Absolutely, and it was also very dumb for a guy majoring in Criminal Justice with full intentions of becoming a peace officer.   I’m not going to talk right now about the importance of training your bouncers, checking IDs or liquor liability.  What I am going to scratch the surface on is the up and coming threat of data breach, identity theft and cyber liability.

While our guy in college may not have been very sophisticated, today’s identity thieves are and have gotten very good at what they do.  It seems just about every week we hear about a large data breach – Target before Christmas and Ebay more recently.  What we don’t often hear about is some of the attacks on small or medium sized businesses.  78% of small and medium sized businesses experienced a data breach in the past two years.  Every year, cybercriminals steal $1 billion from these businesses in the U.S. and Europe.  And of those that suffer a major data loss, 72% shut down within 24 months.

Not all of these data losses were the result of a data breach.  Some were the result of poor backup procedures, but many of them were.  And unfortunately for you, their guy is a lot more sophisticated than our guy was in college.  With our world being more interconnected than ever, there are more and more ways where they can steal your information.  Point of sale computers.  Credit card machines.  Online databases.  Physical breach of confidential records in storage.  Employment records.  Hacking into your computer or mainframe.  Your smart phone.  Online payment systems.  The list goes on.

So how do you fare?  What are your true exposures?  For most people, when they hear data breach they only think of cyber liability.  Cyber liability is very important for many businesses, but it’s also important to understand what your coverage actually entails.  While many businesses may not have a true cyber liability exposure, they still face the possibility that confidential information could be compromised.  It could be by a current employee in good standing.  It could be someone breaking into your business.  Disgruntled employee.  Or it could be someone you know and trust and would never expect.  Regardless of who is a suspect, it is a very real threat to businesses today.

While the cyber liability may not apply in these situations, data breach does and could be used to cover a claim.  It’s important for you to know that coverage is available, it covers a huge exposure, and not all things are created equal.  Even if you do not have the online presence that many businesses do today, you still could fall victim to one of these very sophisticated, 21^st century criminals.  It’s important to know what your policy does and does not cover.

Identity theft is a much more lucrative business than selling fake IDs to college kids, and it’s here to stay.  The best thing you can do is take steps to prevent a breach, and in case it does happen, making sure you have the coverage you need to ensure your business’s survival.  Good luck!

Andy Bertram CPCU, ARM-E
abertram@cobrown.com
651-800-6173

What's In a Name?

I used to work at an ice cream factory, and the difference between Lick’n Good, Zurheide’s, and Old Wisconsin vanilla ice cream was nothing more than the packaging we put it in and the price we charged.  I’m firmly convinced the coffee companies do the same thing.  To prove my theory, I experimented several years ago with some of my old roommates.

I love a good cup of coffee.  There’s just something about waking up to that sweet aroma that gets me going every day.  I think Folgers was onto something.  To the dismay of my wife and friends, I also enjoy a bad cup of coffee.  Have you ever had reheated coffee?  Broke down and made a cup of instant “coffee”?  Enjoyed a cup after it’s been sitting on the burner all day?  Yes, yes, and yes for this guy.  Even so, I can still tell the difference between a good cup and a bad cup.

In our house, we’d burn through a can of coffee about every week and a half.  I was adamant that the generic Columbian roast tasted just like the name brand.  Since we all split the cost, I bought the generic one time and never heard the end of it.  It “didn’t taste right” and “just wasn’t as good”.  After that fiasco, we went back to the name brand coffee and all was good in the world.  Or so they thought.  Somewhere between opening the new can and the end of that new can, I bought the generic brand and filled the brand name can back to the top.  And as I heard, you would never believe how good the “brand name” coffee tasted in comparison to the stuff I bought!

Let’s switch gears to you business.  If you produce a product or offer a service similar to your competitors, why do your customers buy from you instead? Have you won awards?  Are you known for providing the best widget or building the best home?  If you’re a trucker, do you have a top notch safety record and history of being reliable and always delivering on time? With all the similar options available, why should I buy from you?

Often, it’s your name and reputation.  If you’ve taken over an existing company, they have been molded and crafted for generations.  Or if you are a startup, yours are still fairly fresh in comparison.  It takes a long time to build a solid name for yourself or business, but it can take just an instant to take all that goodwill away.  What have you done to protect your name or your image?  If you’ve lost that good name, what would it do to your revenue?

Ryan Braun.  ENRON.  Anthony Weiner.  AIG.  Alex Rodriguez.  Pete Rose.  Exxon.  Washington Mutual.  Martha Stewart.  The Dixie Chicks.  What is the first thing that comes to your mind as you read these names?  1) Cheater.  2) Fraud.  3) Sexting.  4) Bailout.  5) Cheater.  6) Disgraced Gambler.  7) Exxon Valdez environmental disaster.  8) Fraud.  9) Insider Trading.  10) Unpatriotic has-beens. 

I’ll bet you didn’t even consider all of their accomplishments or their history prior to the one day that sticks in your mind.  And that’s the point.  There are a lot of thriving companies out there who have built a solid reputation over the years.  Luckily for Exxon, they eventually recovered after years and years of PR work and trying to rebuild their reputation.  I’ll bet it wasn’t easy, especially with how the oil companies are vilified in today’s society.

Think about your current situation.  What would a poor decision, mistake, or bad PR do to your company?  If you don’t have a PR recovery plan in place, it’s probably time to start thinking about it.  Good planning is good business, and it would be foolish not to consider the impact that unexpected bad press could do to your business.  You buy insurance on your building to protect it in case it would be destroyed, and this isn’t very probable.  Bad press is more likely, and it could cause you to lose significant revenue including possible failure of your business.   

I was born with it.  It defines who I am, and my dad and those before him made it strong.  It takes a lifetime and generations to build a solid name, and seconds to lose it.  The Bertram name does not have a price tag.  So I’m going to keep it how I got it, as solid as it came.  It’s my last name.   Can the same be said about yours?

Andy Bertram CPCU, ARM-E

Risk Advisor

C.O. Brown

651-800-6173

abertram@cobrown.com

"The Entitlement Generation" and Keeping Good Employees

The best defense is a good offense.  Most of us have heard that phrase used in one way or another.  It originally applied to military combat, but it’s become cliché in the sports world today.  It's simple - by staying actively engaged in pursuing your competition, you’ll spend less time defending yourself.

Your business isn’t in a combat zone, but this phrase can apply to one of the biggest risks facing it today – your employees. I have the same conversation with business owners like you just about every day.  Their business has a solid core of employees in their 40’s and 50’s, but they’re having a tough time attracting younger talent.  Those they do do find are often unreliable and do not have the work ethic of their more experienced employees.  Let’s dissect this a little further.

The millennial generation is a far cry from our baby boomers parents.  Our well-intentioned parents worked hard so we could be better off than they were growing up, but it has led to some unintended consequences.  We should almost be referred to as the “entitlement generation” because it seems many of our peers feel entitled to just about everything these days. 

In our parents’ quest to give us a better life, many in our generation did not learn the value of working hard because things they wanted were simply handed to them.  Whether it’s free healthcare or free tuition, they have become accustomed to getting something for nothing.  They've sadly become the quintessential basement dwellers of their parents’ homes, staying on their parents’ health plan until they turn 26 because they don't have a real job, and playing video games in all of their spare waking hours instead of trying to find a way to get out on their own.

For those of us millennials whose parents taught us the value of hard work, this is baffling.  Chances are if you’re reading this blog, you aren't living in your parents' basement.  While it presents additional opportunities for those of us willing to work hard, it also causes some issues when we get into positions of running a business and needing to hire reliable employees.  That brings me back to my original point – the best defense is a good offense.

All things considered, it usually costs a lot more to hire a new employee than it is to retain a good one.  Whether it’s money for job posting, training, and lost productivity while that new employee gets to the same level as the former employee (plus many others), it won’t be cheap.  Did I forget to mention that this person who you have just hired may fall into the “entitlement generation” category?  And if they do, guess what you’ll be doing in a few weeks or months… (see above).  Sometimes you have to hire because of growth or opportunity, but I’ll save that for another day.

If you haven't already, now's the time to go on the offensive to keep your employees happy.  What type of benefits are you currently offering?  Are there any incentive programs?  Wellness?  What other perks are available for your workers?  Are you doing more than your competitors?  When was the last time you offered a raise or a bonus for a job well done?  All things considered, wouldn’t it be less expensive to do one or two of these things a year than to try and replace your best workers?

You and I show up every day because we either love what we do, enjoy our work environment, or we are working hard for a greater cause.  Be it our family, ourselves or a future opportunity, we’re here because we want to be.  Put yourself in your employees' shoes – what gets them up in the morning and excited to come to work for you?  If you can’t answer that question honestly, then it’s time for a gut check. 


Go on the offensive to keep your employees happy, and save yourself the added headaches and expenses that comes with replacing them.  It's a worthy investment in the future of your business.


Andy Bertram
Risk Advisor
abertram@cobrown.com
651-800-6173

Don't Be "That Guy"

On February 14, 2013, I was “that guy”.  You know who I’m talking about.  It was pouring rain, 33 degrees and flirting with freezing.  I had a five hour drive ahead of me that was looking like eight, needed to be home in six hours, and I was on a mission to make up some lost time after a late start.  A little earlier in the trip I noticed that my tires had lost a little grip on the road, but being invincible that didn’t deter me.  I just let off the gas and watched the speedometer drop about five ticks lower than normal.  No big deal.

After getting off the state highway and onto I-94, it only made sense to make up for some lost time.  I was west bound and down, passing cars left and right.  Now I was in full “that guy” mode.  You know, that guy you all wish would either a) wind up parked on the side of the road with blue and red lights flashing behind it; b) down at the bottom of a ditch, far enough to not drive out but not bad enough to get hurt; or c) all of the above. 

It just so happened that somewhere between Mauston and Osseo the temperature dropped a few degrees.  My car doesn’t have a temperature gauge, so I first noticed the temperature drop when we were flying backwards down the interstate at about 60 MPH.  I suppose the rain turning into snow was a dead giveaway, but I didn’t really notice it until we were parked safely at the bottom of the aforementioned ditch.

So all of those who were rooting for option “c”, they got their wish.  The WI state patrol is thicker than mud in the Mississippi, so we had a trooper there within seconds for a very unpleasant experience.  I got the last laugh though and somehow managed to drive the car out of the ditch without getting a “too fast for conditions” ticket.  Me = 1, other drivers = 1, state patrol = 0.  We’ll call it a draw.

If you’re like me on most days, it seems like “that guy” who flies by you on the interstate always gets away.   The same goes with insurance as well.  Fraud amounts to roughly 10% of all property and casualty claims paid in the U.S. each year.  Whether it’s stretching out a work comp injury, adding some fluff to a property claim, or exaggerating damage from an auto accident, all of these add up throughout the year.  Many people consider these things harmless and find ways to justify it to themselves.  In reality it’s illegal, and the costs are getting passed on to you and me.  Believe it or not, the insurance companies are not charity organizations.  They are there to make a profit, and if their costs are going up they will look to their policyholders to make up the difference.

When was the last time that you heard about someone getting caught?  Well I came across this example today and thought I’d share.  http://www.insurancejournal.com/news/midwest/2014/04/23/327127.htm.  In a nutshell, an Ohio woman was ordered to repay more than $32,000 in connection with working while collecting workplace injury benefits.  She got her hand caught in the cookie jar, and she could wind up spending some time in the big house as well.  She’s not the first and certainly won’t be the last to cheat the system, but it’s nice to see that every once in awhile the bad guys get caught. 

“That guy” will keep getting away with it unless we all work together to put an end to the problem.  So the next time you hear of someone who may be playing the system, stretching a claim or double dipping, speak up.  Insurance fraud affects us all, and we all wind up paying for it in the end. 

Andy Bertram CPCU, ARM-E

Risk Advisor
C.O. Brown
Phone: 651-800-6173
abertram@cobrown.com