Happy Holidays from all of us at TEC

We've enjoyed working with everyone and having the opportunity to meet many successful people in 2010. We wish all of you a happy holiday season and best wishes as we move forward into 2011.

May your family, business and personal achievements be some of the best ever. We look forward to seeing and connecting with all of you in the New Year.

Best wishes,
TEC

Strategic Planning: Look Ahead

What to expect in 2011 and beyond.
By Harry Dennis for BizTimes Milwaukee

His name is Mark Parrott, and he’s a business and personal financial planner and gifted TEC/Vistage speaker from Long Island, N.Y.

He spoke to my own TEC group recently and left us with much food for thought about what to expect in 2011 and beyond. I’m going to paraphrase the highlights.

The bottom line: If we want to succeed, we can’t sit on the sidelines. Success won’t come to us. We have to go after it. Here are tips for understanding what “it” is.

The spending mix

One-third of our country’s consumptive wealth is generated by the government, but two-thirds is generated by consumer spending. Consumer spending maxes out at around age 49. After that, it declines rather precipitously.

The number of people reaching that age, and even age 65, will be growing for the next 10 years or so. The baby boom is history. The traditional sources of consumer spending, the largest spending segment in our economy, is declining, with no end in sight.

Higher taxes likely will continue to erode this spending base. By the way, which of these age groups – 30, 50, or 60 – spends the most produces the most, earns the most, and invests the most? According to the Bureau of Labor Statistics, the answer is 50, with a mean around age 49.

The population mix

The U.S. birth rate, excluding births from illegal immigrants, has now fallen perilously close to where it will be difficult for the American population as we know it to grow as it has in the past to solve the economic needs of future generations. This has been true in Europe for some time, and Japan too. 

It’s not just growth, however. Look at China and India. It’s the quality of that growth – the ability of future generations to be productive and, therefore, consumptive economically. For quality growth, also look at Brazil.

Why is this important to know? Namely, it means that our historically tried and tested consumptive base – the 49 year olds – won’t be around to help us out much 50 years from now. Again, a notable exception in the U.S. is the Hispanic population, which is growing, and which is contributing to our consumptive economic base.

Taxation

What do you think? Should we expect higher or lower top federal income tax rates in the future? What are the implications?

You might be surprised to know that since 1913, top income tax rates have ranged from about 10 to a high of 90 percent during World War II. Today, they’re at around 39 percent.

Unless the economy double dips into another recession, in all probability, tax rates will be increasing again. The impact? A dampening effect on consumption, the bellweather of our economy.

Similarly, the inheritance tax is likely to bounce back to at least 50 percent. This, too, will indirectly affect spending attitudes and behavior.

Add to this liquidity issues at the state level. In Wisconsin, our budget crisis has reached epidemic levels. Regardless of promised spending cuts in Madison, inevitable tax hikes are bound to occur.

Responding to the mega-trends

As business people, especially entrepreneurs, we can capitalize on the mega-trends that seem to be working against us. To do so, we must be willing to anticipate the changes that are coming and adjust our business game plans to our advantage.

I invite you to use your imagination and the knowledge of your business to charter a direction in 2011 that will benefit you and your investments.

Products/services for an aging population

1. Low-cost home health and alternative care products.
2. Vacation alternatives.
3. Low-cost entertainment venues.
4. Devices that help those with disabilities.
5. Home delivery services.
6. Low-cost long-term care.
7. Short-term investment alternatives.
8. Retirement planning or death planning services.

Products/services in “other” categories

1. B-to-B relationships in economically stable and net positive population growth countries.
2. Hispanic food products.
3. Low-cost housing materials and content products.
4. Language translation media.
5. Child care assistance.
6. Minority worker placement services.
7. Tax-advantaged/deferral investment programs.
8. Alternative energy/green products & services.

How many more can you name, given our mega-trend demographic and tax climate directions? The consumer will remain king, unless our country falls into anarchy or some other unacceptable non-democratic alternative. But that’s unlikely.

One of the characteristics that makes us unique in the United States is that we have a solid history of overcoming presumptive impossible challenges. Our ingenuity and creativity have never failed us.

In spite of these mega-trends, I see nothing imminent to alter our ability to overcome any challenge put before us. Until next month, let your imagination start working in your business today for tomorrow.

How are you able to keep up with your inbox? [POLL]

Different weeks bring many surprises that can load up your inbox. We want to hear how executives typically like to respond to business emails.

Take our poll and let us know how you handle the overload of emails in the comments field below. What tips do you have for keeping up?

Hedge your bets now for inflation ahead

By Dennis Ellmaurer for BizTimes Media

Economist Brian Beaulieu spoke to a combined meeting of my three TEC groups recently. The title of his presentation was, "Recovery: 2011 and Beyond."

Beaulieu attracts a fair amount of attention within the TEC community, in light of his accurate prediction that a significant recession would befall us in 2008. He started telling TEC groups about the impending problem in 2003. He also advised our members what they should be doing about it in advance.

With certain caveats, Beaulieu's presentation was much more optimistic. 2011 will be a good year. 2012 and 2013, as well. 2014 could be another problem. But it was the "what to do about it" part that was the most interesting.

Beaulieu is predicting inflation. Long-term, steady and prolonged - 5 to 6 percent range inflation. Others are now becoming increasingly concerned about the prospects of inflation. Beaulieu has been talking about it for several years. OK. What to do about it?

Beaulieu advised our TEC members that now was the time to buy assets, productive assets and real property. He told members to borrow money at the current remarkably low (by historical standards) rates. He said to lock in as much long-term money as possible.

He told our TEC members "Borrow as much money as you can now. Borrow so much money that you can't sleep at night. Then, borrow more - enough so your spouse can't sleep either."

One of my members who heard Beaulieu a couple of years earlier had been keeping track of a $2 million property that was in foreclosure. The day after the Beaulieu session, my member's real estate broker called him to say the property was going up for auction at a sheriff's sale the following morning.

There were two bidders at the sheriff's auction. The other guy dropped out after the opening bid. Much to his surprise... and the amazement of his wife…my member bought the property at a totally ridiculous discount from the original asking price.

Was Beaulieu right in his inflation forecast? Only time will tell. In the meantime, my member and his wife should have many sleepless nights in their new home. Good for them.

One hint: How much gold would you have to own to keep you awake at night?

Technology: Cyber Safety

Be proactive to protect your company. 
By Harry S. Dennis, III for BizTimes Media
Imagine that someone hacked into your customer database and stole sensitive information, including credit card numbers. The consequences would be enormous and could include legal costs, lost productivity and your reputation.

My thanks to Mike Foster, Vistage/TEC speaker from The Foster Institute, for his insights about IT security and his five strategies that can reduce the threat or vulnerability of your firm to a serious breach.

1.    Work station currency

Unexpectedly, all of your work stations can simultaneously be attacked by the same virus, worm, malware or spyware. Everything shuts down.

It happened to us at TEC. Thankfully, our outside computer consultant was able to quickly respond and fix the problem.

Here are questions to ask your IT pro:

Are you current with Microsoft “important updates,” “software optional updates,” and “hardware optional updates?”

Do you use Windows Server Update services which automatically deploy updates to all your work stations? The patches can be deployed, one at a time, to make sure they don’t interfere with any applications you are running.

What about your personal computer? Go to MicroSoft.com and select “Security and updates.” Never respond to any unsolicited pop-up offering updates, since these may be malware.

Today’s hackers are also attacking applications, as well as operating systems. When was the last time you or your IT professional installed patches to your Adobe Acrobat Reader?

2.     Anti-virus/anti-spyware

How about this situation? You go to your bank’s website and enter your username and password. Unknowingly, you have spyware on your system. Every keystroke is now in the hands of hackers.

To prevent this from happening, ask your IT pros if they’re using a centralized anti-virus/anti-spyware tool and updating it – get this – several times a day.

You should also scan each work station and your primary server daily because anti-spyware won’t always detect malicious spyware when it initially shows up. Some malware actually mutates to avoid detection. You might not catch it until after it penetrates your hard drive.

The most important tactic your IT team can use is to immunize work stations and make it harder for spyware to grab hold upon initial penetration. Symantec/Norton, MacAfee, Trend Micro, and Microsoft’s free security essentials all offer satisfactory protection. Let your IT pro make the call on this.

3.    Firewall networks and work stations

Without getting into great detail, every work station needs its own firewall. This is because viruses and other spyware intruders can penetrate networks via a CD, USB memory stick, or laptop that an employee is using outside of work.

That’s why your network needs one or more hardware firewalls and each work station needs its own software firewall. Windows XP has a simple firewall, and Windows 7 has a better one if properly configured. The main point here is that to ignore the protection that firewalls offer is simply business-foolish and costly.

4.    Password policies and procedures

Do you have an informal “sticky-note” password practice in your business? It’s easy to spot. Employees attach little sticky notes that serve as cheat sheets for log-ins and passwords onto monitors or cubicle corners.

Worse yet, is there a PW list that floats around the office, virtually accessible to anyone within reach? Or a list on your work stations that outlines PWs and their application or ownership?

It may seem harmless on the surface, but putting that information in the wrong hands can be catastrophic. Customers, vendors, disgruntled employees and contract cleaning workers can share the information with others who have no legitimate need to know.

The solution? Have mandatory restrictions on how passwords are used and insist that employees change passwords every 90 days. Your IT pro can build in these requirements and specify the desired length of passwords (at least eight characters recommended).

Yes, it makes the employee’s life more difficult, but it may save a crash or spyware intervention with far more costly consequences for the company and its users.

5.    Lock your server room

This sounds like an afterthought, but the last thing you need is a hacker who breaks into your server and hacks into your system before you’re aware of what has happened.

These simple steps usually suffice: locking the door with limited access via a padded key system, using a wall air conditioner to keep the room cool, inside door hinges, and replacing suspended ceilings with impenetrable fireproof structures.

Better safe than sorry(and miserable)

We may as well expect tighter regulations that protect business stakeholder privacy. The failure to take adequate protective IT measures can result in severe business penalties, embarrassment and unforeseen financial liability.

The time to act is now, before it happens. Until next month, make sure you’re IT secure.

How to keep your employees motivated

In order to run a successful business it requires a team of successful employees to work together to grow the company. Outside of looking at the success of the business, it’s also important to pay attention to the individual success of your employees. If not given proper recognition, the successful company could all of a sudden flop because enough attention wasn’t given to those needed to make the company grow.

Let’s take a look at some important goals your employees would like to see recognized:

• Equity: To be respected and to be treated fairly in areas such as pay, benefits, and job security.
• Achievement: To be proud of one’s job, accomplishments, and employer.
• Camaraderie: To have good, productive relationships with fellow employees.

To ensure your employees are dedicated to the success of the company, it’s important to make sure management is achieving all of these goals for their staff.
How are you making your management staff accountable and giving them the proper training to do so? Here are some tips to follow and make sure all employees are aware of:

1. Inspire your employees with a reason for being there.
• As employees, it’s important to know there is a purpose for working for a specific company. If they aren’t feeling as if there is any inspiring goals or incentives for being at the company, they will surely look elsewhere.
2. Give recognition.
•  Who doesn’t like to be credited for a worthy achievement? Make sure you take the time to give your employees the recognition they deserve and notify your team of their success.
3. Be a voice for your team.
• Your team members count on you to ensure you have their success in mind. They need to know you’re being their voice to upper management to give them proper recognition. Take your team out to lunch to get to know how they feel about their position and career.
4.  Allow opportunities for learning.
• Nobody can ever learn enough. Give your team members opportunities to gain outside learning and personal development. You’ll be amazed at how appreciative your staff will be with receiving the opportunity to attend a specific conference.

How are you working with your management staff to ensure they are properly given feedback and additional opportunities? What has been the most successful for you to keep your employees motivated? 

What is the main goal your company or department is looking to accomplish through employee performance reviews?

The main goal behind performance reviews can vary from company to company and department to department. Some companies evaluate their employees to make promotion and termination decisions. While others are really seeking to provide employees with ongoing feedback to encourage and motivate desired performance. Employee performance reviews are also a great way to gain helpful insight into how each team member perceives their job and the company overall.