Parker, Smith & Feek

This week saw an abrupt change in the weather here in Seattle. Long gone are the 90 degree temperatures of summer and we have now settled down into the low 60’s that indicate that winter is just around the corner. Financial and economic reports over the last month have also brought new perspective to where our economy may be headed.

While news of slowing job growth has been alarming for most, I always try to look for the positive. A key indicator of global economic activity, and believe me when I say this, is the use of shipping containers.

There has been a sharp upturn in the use of shipping containers in 2010 as reported by Moller-Maersk and DP World, two of the world’s leading container companies. The upturn in traffic of goods to and from developed and emerging economies has been exceptionally strong and a surprise to shipping analysts. This indicates that international trade is on the rise, money is changing hands and there is demand for these goods.

With so much gloom around as we head into winter, we get consumed by the negative and forget to look at the positive.

One thing that I have seen over the last 18 months is that when it comes to wellness, every company is different. One wellness challenge or initiative may work for one company, but not achieve the desired results for another.

The key is to adapt each initiative and challenge to fit with your own company’s culture and resources. It also helps to empower your employees to use their creative side, and their talents that may not be necessarily related to their job function.

I have one client that has amazingly talented singer and video editor within their committee, and to launch their programs they produce these high quality videos to get there staff energized. While not every company has those skills many companies have other skills that can be equally impressive; Graphic designers, musicians or even budding actors that could roam the office hallways to promote an upcoming wellness event.

If you use and appreciate their talents, they too will feel energized and become your leading wellness cheerleaders.

Among the daily emails that urge you to act, there is the occasional message that causes you to think. I had this experience when I read the invitation for the annual potluck luncheon for employees that have been with our firm for 10 years or more. Ten years. A decade. While I have been in the over-10 club for more than a decade, the invitation really caught my attention this year and particularly when it was pointed out to me that 67 of my colleagues were also in the club. That translates to 37% of our workforce! Now, while I didn’t do any research to confirm this, this seemed to be a very high percentage, and as one of the owners of the firm, and an enthusiastic promoter of our business, I was quite proud of this statistic. I did conduct a quick internet search to see what the average job tenure was in the U.S. In a report by the Employee Benefit Research Institute, as of 2008, workers over the age of 25 had been in their current job for just 5.1 years. Even more interesting was that this figure is almost unchanged from the average tenure in 1983, which was 5.0 years.

So a decade on the job IS a big deal. Why then, have more than a third of us stayed at Parker, Smith & Feek for 10 years or more? Is it the money? Well sure, our pay is important but I suspect there are really multiple reasons and many of those unique to the individual. The one reason I think all of the 10-year club would agree is important to their careers is the stability and predictability of our company and its culture. We are continuously transitioning our leadership and ownership to younger generations with the singular purpose of perpetuating our firm for years to come. We will be celebrating our 75th anniversary in 2012 and have every reason to believe that we will be here for milestone celebrations in the future.

I’m sure our Human Resources folks could cite a variety of statistics to demonstrate the advantages of a long-tenured workforce, but common sense says it’s just good for business. We have the obvious savings in recruiting and training but the real benefit is the opportunity we have to develop long term relationships with our clients. They benefit from the expertise that aggregates in career employees and can quickly develop trust and confidence in our advice and counsel.

Our employees receive a nice service award for their 10 year anniversary. They in turn give to Parker, Smith & Feek a greater gift - the experience and knowledge they share each day with their clients and each other.

I just finished reading Michael Lewis’ “The Big Short”, which deals with the fascinating and ultimately devastating details of the subprime mortgage trading industry and how it brought our financial system to its knees. Lewis describes how financial institutions created and sold worthless derivatives simply because they could make a lot of money doing it – at the expense of their investors and inevitably many of their own organizations. They were fueled by greed and hubris, with little thought or concern for anything else.

This reminds me of a lesson I learned early in my career at PS&F. Our number one core value is “Focus on client objectives.” This was made clear to me in a discussion I had with my predecessor, Vic Parker. Young, energetic, and full of ideas, I approached Vic one day with a number of suggestions to improve efficiency within our company. Vic listened patiently and then asked one question – ‘how will this improve client service?” Based on my obvious pause and empty expression, Vic knew I had not given that any thought. I was focused only on reducing cost and improving bottom line. I quickly learned that everything I did needed to be viewed through the core values of our organization. If it didn’t fulfill a value, it wasn’t done.

Vic clearly saw what Jim Collins and Jerry Porras later described in their wonderful book, “Built to Last”, as “the tyranny of the or”: “you can either have a great culture or make money; you can provide exceptional client service or manage your expenses.” Collins and Porras maintain that the best companies change ‘or’ to ‘and’, and that each objective exists in harmony. You will never sacrifice one to achieve another, and in fact, to do so should be culturally impossible, because your business operations are driven by your values.

The philosophy of the founders of PS&F embraced Collins and Porras’ concept. Parker Smith & Feek is a privately held, employee owned firm because we feel that’s the best structure in which to align those values. Our shareholders are invested in this business and its long term success. Further, we compensate everyone here with a salary, as opposed to the standard form of compensation in our industry, commissions. We do that in order to reward driving client value – not selling stuff.

Our approach to business is not unique by any means. In fact, a great joy of mine is interacting with many of our fine clients every day and watching them apply these same principals within their companies. Core values and business success are not mutually exclusive in America today, despite what has happened on Wall Street.

If you follow technology trends you have probably heard how “cloud computing” is going to take over the world. Cloud computing is an exciting concept that is changing the computer industry, but because it has been with us so long and in so many forms it is difficult to differentiate from what we are already doing and how it might truly change systems already in place.

The most basic definition of cloud computing is a system where applications run outside of your local infrastructure. For those who want to take a trip in the way back machine, the concept brings a label of “new” to a return to the terminal / mainframe models that existed in the 1970’s, however this time the mainframe is a server living on the internet. The definitions start to blur a little when we talk about a server that a company owns themselves and makes available at a hosting facility versus a server cluster that is owned by a third-party.

Regardless of the definition we are using, cloud computing was around long before the internet. In the early eighties there were software applications and messaging systems running on computer bulletin board systems, so hosting data on a cloud is a concept core to computing for decades. However, what used to be limited to messaging and relatively simple applications have gone far beyond that today. Now we have hosted phone services with VOIP devices that connect to a server appliance over TCP/IP, either internally or at a third party facility. From a consumer perspective nearly everyone with a personal computer has a cloud-based email, calendaring and contact application (Gmail, Hotmail, Yahoo Mail) that they use regularly. There are hosted versions of major applications like Word and Excel such as Google Apps and Microsoft Live that have freed individuals from having to install nearly anything on whatever device they use at home. Heck, there are even cloud based versions of Photoshop and Movie Maker, though few people actually use them. And yes, there are cloud business applications such as Customer Relationship Management software, agency management systems, or even help desk management.

From a consumer stand-point, cloud applications have already invaded our day to day lives. Devices like the iPad are examples of how a computer with nothing more than a screen and a web browser can give nearly all of the functionality of a personal computer by simply having a web browser. Interestingly, even in the iPad example there is the option of installing local applications because sometimes having a local app is better than something on a web site. One of the primary motivators for running a local piece of software rather than an application in the cloud is based on some of the inherent limitations to what can be done today. While you could play a game, edit a photo and manage songs by letting them live on a distant server farm the experience is slow and missing significant features from an application on your local device. Even though cloud software has been around for decades and there are devices that seem to be centered on cloud computing, even on these systems we continue to use local programs for core day to day applications.

Cloud hosted data has long since invaded the business world as well and with an equal mix of success and failure. Nearly every company out there uses a cloud based spam / virus filtering software. Most companies support access to cloud based text messaging services. Many companies allow their staff access to applications like LinkedIn and Twitter, which are cloud based communication and networking systems. However, these systems are successful because they hit on the core benefits of letting data live on the internet:

• Fewer staff needed to maintain the product.
• Excellent off-site support.
• Do not need to maintain internal servers for application.
• Guaranteed up-time of the product.
• Outstanding choice for apps that depend on internet connectivity.

Unfortunately, depending on the need, the disadvantages can often outweigh these benefits:

• Products run slower than internally hosted software.
• Due to internet connectivity, they are usually unavailable more often.
• Less capable at extending capabilities to internal programs or customization.
• Key business application software licenses are often more costly.
• Not an ideal choice if security is a concern.

Any upcoming project, whether it is evaluating your Microsoft Office licenses, considering a new phone system, or looking at various agency management systems will include considering options that live on a fluffy white thing in the sky. The key is to really dig deep and talk to companies that have tried versions both on Earth and in the air to see what the real-world differences are. We always speak with the staff that use the application on a day to day basis as well as the corporate decisions makers and get their sense of the differences. No matter where data is hosted we just try to keep our eyes open to all of the available options and match it against corporate needs. In other words, the terminology might be new but cloud computing options are just like any other technology decision.

In this Podcast Doug Pullman, a member of the Parker, Smith & Feek marketing team, describes the planning and process this top 100 broker went through to prepare for their launch into the world of Facebook, Twitter, Linkedin and blogging. Doug discusses the very deliberate and measured approach the brokerage took, the importance of getting not only support but participation by senior management, and how success is tied to having a unified and comprehensive strategy.

Doug explains that the agency goal was to use social networking to help customers and prospects build a personal and emotional connection with the broker. They knew that they needed to be where 25% of their customer base was – the social web. His advice to other agencies wanting to tap into the opportunity the social web offers: take it slow, learn from others, and add your own voice. - From Insurance Journal

Join us for a Webinar on August 26, 1:00 – 2:00 PM Eastern

Reserve your seat now at: https://www1.gotomeeting.com/register/973143289

By August the regulatory agencies will have released additional guidance on a variety of health reform issues and employers will be approaching the deadline for implementing the first of the changes effective for plan years beginning after September 23rd. This will be a perfect time to review health reform’s impact on employer plans and help employers begin to strategize for later health reform changes.

• Plan design issues
• Employer mandate and penalties
• Review any recently issued rules and regulations

Our presenter for this webinar will be Bob Radecki, President, Benefit Comply, LLC. Bob has more than 25 years experience in the HR and employee benefits industry helping employers deal with difficult benefit and compliance matters. Previously, Bob founded and served as President of A.E. Roberts Company, a nationally recognized compliance consulting and training firm. He has served as the principal HIPAA consultant to a number of health insurance companies, and is recognized as a leading expert on a variety of benefit compliance issues including COBRA, FMLA, Health Reform and more. Bob has been the featured speaker at numerous industry events and conferences, and has published a number of articles concerning various compliance issues.

After registering you will receive a confirmation email containing information about joining the Webinar.

I was having lunch with a client recently and we were talking about how tough the economy is today. Given all these challenges, I asked, “What makes you happy, what gives you a sense of fulfillment?” She said, “it’s all about making a difference in the lives of our customers, our community and our employees”. She gave me a current example. She is the wellness champion in their company and she believes their efforts to promote healthy lifestyles among their employees has saved lives.

Irrespective of the challenges we all face in business (and in life) we still have the power to make a difference. That was a huge motivation to Parker, Smith & Feek in launching our own company wellness initiative three years ago. In case you’re not familiar with the wellness concept, it is using the workplace to actively promote and educate healthy lifestyles. We’ve gotten traction and had some fun and success, but still fully half of our employees don’t participate in this voluntary program.

Clearly, it doesn’t resonate with everyone and I know some wonder why we bring this issue into the workplace. My answer is simple: First, we care about the health and well being of our staff, and if we can change a few lives (and I believe we have already) it will be well worth it. Second, a big part of our business is consulting on employer provided health benefits. Wellness, we feel, is a key strategy to managing the cost of healthcare on a long term basis. How can we consult on what we don’t do ourselves?

Of Steven Covey’s famous Seven Habits of Highly Effective People, my favorite habit has always been, “Begin with the end in mind.” Perhaps the greatest legacy any business can have isn’t the products or services they provide, but how they give back to their employees, their families, and their community, and in the process make their part of the world a little better.

Late last week we finished our latest Wellness challenge. Employees were challenged to complete 6 out of 14 activities such as, losing 5% body weight; lowering our BMI to 25 or lower; participating in one of the local community walking/running events; having our annual physical or dental exam. There were smaller but just as challenging tasks such as drinking 8 glasses of water 5 days per week; exercising 30 minutes a day or sleeping for 8 hours at least 4 days each week.

75 employees completed the 6 week challenge, with some departments adding their own internal challenges.  Two creative ideas that encouraged participation included a “Chairiot” race around the office and a “No eating out for lunch” challenge.

The level of participation was outstanding; now we have to wait for the next exciting wellness challenge!

Yesterday (Thursday 7/22/2010) Congress passed, and the President has signed, The Unemployment Compensation Extension Act of 2010 (H.R.4213). The Act does not include an extension of the COBRA subsidy. Without the extension individuals terminated after May 31, 2010 are not eligible for the COBRA subsidy. Eligible individuals, whose COBRA event was an involuntary termination prior to that date, are still eligible for the subsidy for up to 15 months.

Some legislators are attempting to bring forward separate legislation to extend the COBRA subsidy so stay tuned. However, political interest in another extension seems to be diminishing as the economy continues to improve , albeit slowly.