LeadingEDGEADVICE & INFORMATION TO HElp YOu MANAgE YOuR busINEss

SUMMER 2015

tEaMwoRkthe key to Modern Business Success

2 | SUMMER 2015

Leading EDGE

SubScription updateComplete this form and fax to Susan Wahrhaftig at Kreischer Miller at(215) 672-8224. You can also email to swahrhaftig@kmco.com.Please update your subscription list as follows: (Copy this form as necessary for multiple requests.)

Change of address — see below Add the following new subscriber Discontinue sending Leading Edge

Name: ________________________________________________________________

Title: ________________________________________________________________

Company: ________________________________________________________________

Address: ________________________________________________________________

City: ___________________________________ State: ___________Zip: _________

Phone: ___________________________________ Fax: _________________________

Email: ________________________________________________________________

Kreischer Miller is a leading independent accounting, tax and advisory firm that has served the Greater Philadelphia area since 1975. We’ve built our firm to respond to the unique needs of private companies, helping you smoothly transition through growth phases, business cycles, and ownership changes. The companies we work with quickly adapt and respond to changing market opportunities and challenges. That’s why we have built our firm to be responsive, decisive, and forward-thinking. We’re up to the challenge—always looking at the road ahead, not in the rear-view mirror.

sERVICEs• Audit&Accounting• TaxStrategies• BusinessAdvisory• TechnologySolutions• HumanCapitalResources

INDusTRIEs• Manufacturing• Distribution• Construction• RealEstate• MediaServices• Not-For-Proft• Investment• GovernmentContracting• ProfessionalServices• Long-TermCare

sECIAlTY AREAs• Family-OwnedBusinesses• EmployeeBenefitPlans• EntrepreneurialServices

KREISCHERMILLER100WitmerRoad,Suite350 Horsham,PA19044215.441.4600www.kmco.com

Welcome to the summer issue of Leading Edge magazine. No matter what industry you are in or how your business is structured, success requires a significant amount of effort from a variety of people with different backgrounds and expertise, all engaged in and focused on a common set of goals. That makes effective team-building one of the most important skills for any business owner or executive.

While there is no team-building method that is applicable to every situation, there are common traits that virtually all successful teams share. Our cover story takes a look at the ingredients for building and maintaining winning teams: setting ground rules, maintaining focus and cohesion, cultivating a productive company culture, and motivating team members through defined goals and accountability.

Also in this issue, Kreischer Miller’s advisers offer insight on:• Sources of capital for a growing business• Using life insurance in closely-held companies• Private annuities in family business buyoutsThis issue also features an article on ways to find, nurture, and motivate a high-

performance sales team. While some may disagree, your sales force is the engine that moves your company forward. They are your boots on the ground, making face-to-face contact with your target audience and driving revenue for the organization. That’s why successful recruitment and retention strategies are so critical to your bottom-line success. Our article offers tips from three top sales consultants for creating and growing a dynamic, thriving sales team.

As you consider what is best for you and your business, please know we are here to help.

Kreischer Miller is committed to providing you with valuable information to assist you and your business. Please share any suggestions, comments and ideas for future articles with me at (215) 441-4600 or schristian@kmco.com. We appreciate your continued confidence in us and welcome any feedback on how we can better meet your needs.

Stephen W. Christian

LEADING EDGE | 3

Leading EDGE contents

features _______________________

departments __________________

Volume 15, Issue 4, summer 2015

4 Team first Theingredientsforbuildingandmaintainingwinningteamsinbusiness

13 stoking the engine Howtofind,nurture,andmotivate

ahigh-performancesalesteam

15 Doing business in portugal

9 sources of capital for a growing business

10 using life insurance in closely held companies

11 using private annuities in family business

18 bits & pieces

“The days of being a lone wolf are getting rarer and rarer.

Any organization is going to have people who depend on each other,

and coordinating that work is essential to building trust.”

LEADING EDGE | 5

TEAM FIRSTThe ingredients for building and maintaining

winning teams in business

by Erik Cassano

continued on following page

Business is never conducted in a vacuum.

No matter what industry you’re in or how your organization is set up, it takes a large amount of effort from a variety of people with different backgrounds

and different areas of expertise, all engaged in and focused on a common set of goals to succeed.

That makes effective team-building among the most important skills that any manager or executive can possess.

“Unless you are a solo performer, like an artist, songwriter, or stockbroker, work gets done in teams,” says Josh Leibner, founder and president of Strategic Commitment Group, a New Jersey-based business consulting firm. “Manufacturing, design work, research and development, banking — all of it gets done in teams. The days of being a lone wolf are getting rarer and rarer. Any organization is going to have people who depend on each other, and coordinating that work is essential to building trust.”

LEADING EDGE | 5

6 | SUMMER 2015

continued from previous page

There is no team-building method that is applicable in every situation. The essential components, skills, and personalities necessary for success depend on the nature of the task, the size of the company, the motivating factors in play, and a host of other variables. But there are common traits that virtually all successful teams — and all successful team-builders — share.

“You have to develop an understanding of what your team needs in order to be successful,” Leibner says. “You need to know what structure they need, what resources they need, and what motivates the people on your team. It’s more complicated than it maybe sounds, because teams are comprised of individuals, and each person has different buttons to push. As the leader, you have to manipulate the controls to steer the team toward the overarching goal.”

Setting the ground rulesLeibner says every team has to answer three fundamental questions before the group can function as a team and any work gets done.

1. What are we here to accomplish? 2. How will we measure success? 3. How will we interact?The answers identify the goals, the

standards, and the player roles.“You must have a reason for being,”

Leibner says. “And it has to be a compelling reason that engages everyone on the team. You can be organized as a small management group working on a narrow-scope project, or leading an entire company. In all cases, having that bold, compelling mission is essential.”

On the second point, measuring success means developing clear, specific, and measurable objectives.

“That might seem self-evident, but it’s remarkable how often you can ask members of a team what defines success and the wide range of responses you can get. And that’s not a good thing. The objectives have to help ensure understanding and alignment.”

The answers to the first two questions are mission statements that need to be clearly communicated. The third answer is less about mission statements and more about management tactics.

It’s an ongoing task to define and manage the interpersonal dynamics of a team. It involves defining roles, having a chain of command, identifying areas of expertise, and continuing to ensure that the right questions and right decisions find their way to the right people.

“It’s an ongoing management task that includes prioritization, maintaining team focus, and dealing with the inevitable setbacks that always seem to creep up,” Leibner says. “There is also what I’ll call a ‘spirit’ factor at work. How you manage the group tasks and individual work flow will go a long way toward determining the morale of your team.”

Hand in hand with that is the enforcement of accountability — ensuring that not only is the work getting done, but that the work is getting done by the people who are supposed to get it done. As important — or perhaps even more important — than making sure you have no slackers on your team, you have to make sure overly eager or overly aggressive team members aren’t overstepping the bounds of their authority.

“Task management and mood management are very much related,” Leibner says. “That falls on the manager to ask — Who owns a given task? Who has the authority to make decisions and who needs to be informed about something but might not have decision-making power in that area?”

Performing regular maintenanceMaintaining the focus and cohesion of a team should be done as part of regular meetings. Much as with the style of management, the form and frequency of team meetings depend on the type of team and the scope of the project.

“Some meetings are more about large-scale strategic updates, whereas some are more tactical or about removing roadblocks,” Leibner says.

He says he generally puts meetings into three buckets. Wide-angle meetings to discuss long-term strategic decisions are usually not necessary more than quarterly, or every six months. These meetings may involve executives above the team, such as members of top management who want to be briefed on the team’s progress and offer their input.

LEADING EDGE | 7

The next meeting tier is weekly or twice-monthly updates. These are less strategic, involving smaller-scale decisions on the direction of the project or task at hand, and smaller-scale resource allocation affecting the next few weeks or month.

The third meeting tier is the least formal — usually daily huddles. These meetings are almost entirely tactical, dealing with the removal of minor roadblocks to progress and individual concerns, and celebrating incremental accomplishments.

“That’s when you try to nip things in the bud,” Leibner says. “If there are communication breakdowns, if one person isn’t delivering what they promised and it’s creating tension, if someone feels undermined or like their work isn’t being recognized, that’s when you want to air those things out so they can be addressed before it festers and becomes a bigger problem.”

The role of company cultureThe effectiveness of a team can be profoundly impacted by the environment in which it operates, and you can’t overlook the role of your company’s culture as a driving force in how effectively your people operate in a group setting.

Every business has a culture, whether it’s by design, or something that simply developed over time. The companies with a designed culture built around set principles are generally healthier than those that just let a culture develop without structure.

“Having a productive atmosphere for team building is heavily dependent on the culture you create within your walls,” says Byron Hebert, director in charge of entrepreneurial advisory services at PKF Texas. “Best-laid plans can end up ruined if you don’t have a healthy operating environment — consultants like to say that culture eats strategy for breakfast — and if you just let your culture take root without cultivation, it can develop in ways you don’t want.”

Culture plays a key role in defining organizational goals and organizational

structure, as well as the type of people you bring aboard to operate in that structure.

“Culture determines whether you’re going to be a flat organization that values collaboration and will put processes in place to enable those things to happen,” Hebert says. “Teams flourish when roadblocks are removed and collaboration is encouraged, but that doesn’t just happen. It’s something that has to be mandated and overseen by management.”

If you know what type of organization you want to have and are taking steps to make sure it exists, laying that groundwork helps ensure that you’re hiring people who can thrive in that type of environment and who can fit together to form operational and project teams that are greater than the sum of their parts.

continued on following page

8 | SUMMER 2015

“If, for instance, you’re hiring someone who thrives in an organization that has a lot of structure, who needs a strong authority figure, you don’t want to put them in an environment where there is low structure,” Hebert says. “That’s how culture creates a cascading effect that influences the effectiveness of team-building. You have to know the type of organization you are building before you decide who best fits within it.”

A sense of purposeCulture lays the foundation of a great team, and talented people form the engine that drives the team toward a successful conclusion. But every engine needs fuel, which comes in the form of motivation.

As Leibner said, teams need defined goals and accountability, both of which are central to strong morale. Apart from that, the leaders within an organization need to know what motivates individual members of a team to perform at their best. Those motivating factors can vary depending on an individual’s personality, life situation, and career goals, among other factors. But there are some universal rewards that nearly every team member considers motivating.

Money and material rewards are not necessarily high on the list, particularly for younger employees.

“I subscribe to the three primary motivators as outlined by business author Daniel Pink,” Leibner says. “Some people are motivated by autonomy, or a desire to have more control over their lives. Some are motivated by mastery, or a desire to continuously improve. And some people are motivated by a sense of purpose, that they’re serving a cause greater than

themselves. I think a lot of motivation comes down to determining who on your team is motivated by which of those three factors.”

Younger employees, those between 20 and 40, were raised in a world that has become increasingly global and socially conscious, and as such, are often motivated by the above factors even more than their older counterparts.

“They’re used to fast-changing environments where there are many opportunities to learn, grow, and achieve that sense of purpose,” Hebert says. “If you want to hire, groom, and keep younger employees, you have to give them what they’re looking for — a challenging environment and a path to growth. That’s the only way they’re going to flourish at your company.”

That means an ability to quickly ascend from team member to team leader. That’s not to say you should automatically promote younger employees just to keep them, but the pathway should be there for young associates who show the promise and work ethic you’re looking for.

“If you challenge them, and they trust you to keep challenging them, you’re not giving them a reason to leave,” Hebert says. “You have to give them something to climb. Maybe some climb it and others can’t cut it, but the hill has to be there.”

As for money’s role in team-member motivation, it’s certainly a factor. But dollar signs aren’t the make or break that will determine whether you can construct and maintain great teams that produce great results.

You should view monetary compensation as a basic need. If you’re not paying competitive salaries, you’re not attracting qualified interview candidates. But it’s a long jump from there to a great

organization with a team-first culture — and money isn’t going to help you make that jump.

“If you’re paying the market rate, I’d say an increase in pay is probably about third or fourth on the list of why people leave for another job,” Hebert says. “More important is the work environment you provide and the question of whether you adequately challenge your people. If you’re not providing that, then money might come into play a bit more.”

Other trapsIn addition to individual motivating factors, other stumbling blocks can arise, and leadership has to remain vigilant about removing them. Hebert identifies out-of-touch leadership and inconsistent workload among the other issues that can undermine the success of a team.

“If leadership isn’t advancing with the pace and abilities of the staff, that can be disheartening in a team dynamic,” Hebert says. “That can certainly cause poor attitudes to creep in.”

Workload is difficult to get right all the time. Workflow is often dependent on external factors, including resource availability and the cooperation of customers and clients. But it still requires as much sanding and polishing as possible.

“It’s like any other problem you might encounter within a team,” Hebert says. “Maybe you can’t fix it outright, but your team wants to see that you acknowledge the problem and are working on it. If they see a path to fixing the problem, they’ll be a lot more understanding. If they don’t see a path, or don’t see any empathy from management, it will, in turn, pave their path out of the company.” lE

continued from previous page

LEADING EDGE | 9

Michael A. Coakley Director Audit & Accounting

The growth stage of a privately-held business

can include any number of activities, including new product development, purchase of new machinery and equipment, expansion of an existing facility, opening of a new facility, or even the acquisition of another business. The common denominator among all of these is the significant investment of capital required to successfully accomplish them. Of course, for most businesses, the capital available to deploy on the expansion project is generally limited.

So where can a business obtain the additional capital needed to fund its growth plans? The following are some sources of externally-derived funding available to privately-held companies:

Commercial banks – Likely the most common source of capital is debt financing obtained from a commercial bank. This can take the form of short-term working capital loans or longer duration term loans collateralized by some of the company’s assets.

Depending on the strength of the company’s financial position and/or its relationship with its current bank, the company often needs only to ask its lender for the additional loan or increase in credit facility, especially in today’s low interest, high credit availability environment.

Commercial finance companies – These non-bank lenders provide long-term debt financing similar to that of banks, and are often interested in specific projects such as equipment purchases or long-term plant expansions.

Factoring – Another form of non-bank financing, a factor provides a company with an advance on its accounts receivable, with the balance less a discount or fee paid upon collection of the receivable from the customer. In effect, the company receives most of the cash from a sales transaction almost immediately, improving its working capital position and ability to fund other projects.

Investment banks – If the current ownership is willing to relinquish some of its control

in exchange for a capital infusion for the company, investment banks can assist with a private placement of equity. In such a transaction, the investment bank locates institutional or individual investors who purchase equity in the company in a privately-arranged deal.

Some potential sources of funding can actually be derived from the resources of the business. They include:

Retained earnings – A business can look internally to its own stockholders’ equity. By foregoing or reducing the payment of a dividend or distribution, the owners are leaving money in the business to be reinvested.

Employees – A company can consider setting up an

Sources of Capital For a Growing Business

employee stock ownership plan (ESOP). Through an ESOP, employees can purchase shares in the company, or receive them as compensation, both of which improves the cash position of the company and provides equity financing. Added benefits of the ESOP are the production efficiencies often experienced by businesses that are employee-owned, as well as the overall pride felt within the organization.

Suppliers – Extending the terms on the amounts owed to suppliers – for example, from 30 days to 60 days – may provide the temporary boost in capital needed for a project.

Lastly, here are a few additional sources of capital that a growing company can consider:

Federal, state and local agencies – There are loan programs run by the U.S. Small Business Administration and various state and local economic development offices that may be available to companies that meet certain criteria.

Peer-to-peer lending – A relatively new kid on the block, peer-to-peer lending is an online source of crowdfunding that continues to gain in popularity. While it may not be a practical solution right now due to project size limits and other restrictions, the concept doesn’t seem to be going away any time soon. It may be worth keeping an eye on crowdfunding for future developments or refinements that might make it a more viable alternative. LE

10 | SUMMER 2015

Using Life Insurance in Closely-Held Companies

Allison J. shoemaker Manager Tax strategies

It is important for individual shareholders in closely-held

companies to plan for future liquidity needs, which may include funding buy-sell agreements, paying estate taxes (family succession planning), and “key man” coverage for the owner or other valuable company executives. Life insurance can be an effective way to plan for these needs.

Funding buy-sell agreements via life insurance policies can be achieved by the co-owners purchasing policies on the life of the other co-owner(s). The beneficiary of the policy must be the co-owner purchasing the policy. Upon the death of a co-owner, the beneficiary would be permitted to use the policy’s proceeds to purchase the deceased co-owner’s stock. The buy-sell agreement usually states the valuation of the stock purchase price in the agreement. One issue with the cross-insurance arrangement,

however, is that the insurance premiums are paid by the co-owners personally, rather than by the company.

Another method of funding a buy-sell agreement would be to have the company take out policies on the co-owners. Upon the death of a co-owner, the company would redeem his or her stock. This method allows the premiums and purchase price to come from corporate funds, rather than personal funds. However, the insurance premiums would not be deductible by the company and depending on the type of entity, there can be different tax traps by having the company as the beneficiary.

If ownership will not transfer via a purchase but rather an inheritance, the current owner may want to provide funds for a beneficiary to be able to continue the company. The cost of estate and inheritance taxes may cause the company to be sold if there is no cash to pay for these taxes.

If the company stock is inherited by family of the sole or controlling owner, then split-dollar life insurance policies can be used to assist in paying the estate taxes. This allows the company to loan money to the owner for the payments of the premiums. There is interest that needs to be paid on the amount of the loan or imputed into the employee’s wages with the arrangement.

Upon the death of the owner, the company receives an amount equal to the cumulative premium payments with the balance of the policy payable to a personal beneficiary of the owner. The payment of the policy directly to the personal beneficiary removes the life insurance from the owner’s estate and assists the beneficiary in paying the estate and inheritances taxes.

Many businesses are dependent on owners or other key executives and the unexpected death of a key person can have a traumatic

effect on the operation of the business. Therefore, the use of life insurance proceeds can be critical to the continued success of the company. Life insurance is owned and payable to the company to support the replacement of the key person.

A split-dollar arrangement may also be used to fund key-man life insurance. In this case, the key person would own the policy and the company would receive the death benefit. If the employee survives until retirement, the company would no longer require the life insurance policy and could relinquish its rights to the policy.

These are just some of the life insurance planning options available. The rules of the Internal Revenue Code and Regulations can be complex and if they are not followed properly, unintended problems may arise. It is important to have tax accounting, legal, and financial advice to structure these transactions properly. LE

LEADING EDGE | 11

Harry F. Murphy Director Tax strategies

In general, a private annuity is a transaction between two

parties where neither is an insurance company. There may be several reasons to set up a private annuity. This article will focus on private annuities as an estate planning tool for closely-held business owners who would like to sell their businesses.

In essence, a private annuity is a deferred payment sale and involves a taxable transaction. There are three types: a life annuity, a stated term annuity, or a maximum payout amount.

The life annuity is the most prevalent. A life annuity payment usually stops at the death of the seller, but it may

also cover the seller’s spouse. When a closely-held

business owner would like to retire and needs additional funds for retirement, using a private annuity has merit, especially if one of the buyers is from the next generation and already works for the company. It would also apply for key executives who are not family members but are interested in purchasing the business.

The business owner could sell his or her ownership interest to the buyer in exchange for a private annuity. The annuity income payout is based on the fair market value of the entity and the applicable Internal Revenue

Using Private Annuities in Family Businesses

12 | SUMMER 2015

Service annuity tables and rules are used to determine the payment amounts. The payments are generally higher over the payment period versus an outright installment sale. If the annuitant outlives his life expectancy, the purchaser must continue to make payment for the life of the annuitant or until the agreed upon payout is made.

How is the private annuity taxed? The transaction shifts the future appreciation of the business to the purchaser and out of the seller’s estate for federal estate and most state death taxes. Each payment received by the annuitant has, in part, a tax free return of basis, a capital gain portion, and a portion as ordinary income. Once the annuitant (seller) recovers his sale price, the remaining payments are subject to ordinary income tax rates.

A member of the DuPont family is frequently used to illustrate private annuities. A DuPont transferred property with a fair market value of $13 million to a family-controlled

holding company in exchange for payments to himself and his spouse for $900,000 until the death of the survivor. Mr. DuPont lived another 30 years, far beyond his life expectancy, and received $27 million. By the time of his death, the value of the transferred property was more than $500 million and Mr. DuPont was successful in removing hundreds of millions of dollars from his estate.

It must be mentioned that IRS regulations limit the use of their tables mentioned above if the transferor suffers from a terminal illness. A transferor having general infirmities, but not from a specific incurable life-threatening illness, is not deemed to be terminally ill under the rules. The IRS may rebut this, but only by showing clear and convincing evidence. If the IRS cannot show this and the transferor survives 18 months and one day, then the transferor has successfully

reduced his estate.In sum, private annuities

are a tool that should be considered in the buyout of a business interest. The major advantages are estate tax savings and a possible lifetime income stream to the transferor. However, the transferee has a number of potential risks. None of the payments can be deducted as interest. There is a risk that the property purchased will not produce sufficient income to meet the annuity payments. And the major risk is that the transferor will live longer than his or her life expectancy. LE

continued from previous page

LEADING EDGE | 13

Your other employees might disagree, but your sales force is the engine

that moves your company forward. Of course your topnotch product and service developers, support people, marketers, and others provide the drive, tools, and direction to get your offerings to market — not to mention a skilled and involved leadership team — but your salespeople are your infantry. They are your boots (or wingtip loafers) on the ground, the folks who make face-to-face, or at least phone-to-phone, contact with your valuable audience, get their feedback and a good read on the marketplace, and drive dollars to the cash register.

That’s why recruiting, nurturing, and motivating these performers are so critical to your bottom-line success. And it’s the reason we’ve recruited three top sales consultants to share their wisdom and provide tips for putting together and growing a dynamic, thriving team.

Assessing potentialEstablishing a productive and mutually profitable relationship with your sales professionals begins with the interview process. Find top talent by looking for energy, drive, ambition, and enthusiasm of job applicants eager to soak up the challenges and new experiences that your position provides.

“I look for intellectual curiosity,” says Christopher Hollins, vice president and general manager of American Express OPEN’s Top Client Group, in describing his ideal sales candidates.

Hollins, who oversees a team of more than 100 client managers, has had ample experience seeking, finding, and growing teams of top business-to-business sales professionals.

“I also like to see people who are comfortable in their own skin, who ask thoughtful questions and exhibit financial

knowledge, irrespective of the industry,” he says.

A collaborative nature is another must-have characteristic, says Hollins. He says that, for example, at American Express, a good salesperson with a team attitude would be able to recognize when one client might need the products and services that another salesperson can provide and make good use of the opportunity.

“Everyone has a basket of knowledge, and not everyone’s basket is the same,” he says.

By being open to pooling their talents and product offerings, team members can be better client resources, to the benefit of all.

When it comes to performance expectations, the new employee should encounter no surprises, as those expectations should have been covered in

Stoking the engine

How to find, nurture, and motivate a high-performance sales team

14 | SUMMER 2015

the job interviews, says David Mattson, a bestselling business author and president and CEO of the global sales training and consulting firm Sandler Training. With all expectations outlined upfront, there’s no chance for resentment to set in when the subject of results is discussed during performance reviews.

He advises his clients to find those who earn top marks for the background and personality traits revealed in what he refers to as the SEARCH model.

• skills• Experience• Attitude• Results• Cognitive skills• Habits

“It’s important to plan that first meeting and draw up a set of objective interview questions that will generate insight into the applicant’s SEARCH traits,” says Mattson. “Be sure to ask the same questions of each candidate and initiate the same dialogue so that you can make fair comparisons.”

Measuring behaviorFor salespeople, it can be demoralizing to be given a sales goal right off the bat, especially in situations where the products or services going to market are big-ticket items at the end of long sales cycles. Not every day, every week, or perhaps even every month, is going to result in sales numbers that can be tabulated and credited to your salesperson’s paycheck and reputation.

So don’t give new salespeople a set sales goal, says Mattson, at least not at first.

“Manage behaviors instead of results,” he says.

What did it mean when your new salesperson brought in goose eggs last month? That she’s not even trying?

Or that she’s made a bunch of valuable contacts and is on the verge of closing at least one impressive deal but she hasn’t signed a contract yet? It can be very hard to track success with no insight into your sales employees’ daily work habits — the story behind the story — says Mattson.

“If you’re measuring results, you might have to wait a year or more before you know their level of effectiveness,” he says. “But if you measure habits and set weekly goals for the number of phone calls that get made or meetings set up or referrals they seek or networking events they attend, this can be easily measured and discussed.”

With these kinds of goals being tracked, you can celebrate their accomplishments every month.

For American Express’s Hollins, employers can easily track these daily behaviors via the sales-tracking software Salesforce.com.

“I spend a lot of time looking at how their pipeline is filling,” says Hollins, who adds that he gives special attention to his people’s notes in the program because they contain a greater degree of detail and additional insight into employees’ work thoughts and processes. If you can gauge activity on a day-to-day basis, says Hollins, there are no surprises when a sales manager tracks billing at the end of the month or quarter.

Scott Edinger looks for sales professionals who can initiate a discussion rather than pitch business. Edinger, founder of Edinger Consulting Group, provides sales guidance to major corporate clients. He’s also the author of Harvard Business Review articles and two business books, The Hidden Leader and The Inspired Leader.

“A sales pitch is a one-way communication,” he says. “Your goal should be to engage the prospective client into a dialogue, a conversation.”

A glib tongue has little or nothing to do with this engagement, he says.

“We have this image that developing business is about being charismatic and extroverted,” says Edinger, who adds that those characteristics sometimes do lend themselves to success. But that isn’t the only route.

“In reality, it takes skill, practice, and mindset,” he says. “It takes intellect and real interest.”

That might not be as sexy as charisma and a bottomless expense account, but it’s genuine. And when you’re hiring, remember this, says Edinger: “Some people’s best sales presentation is during the job interview.”

Recognizing successThis seems like the easy part. Salespeople who do well get promotions and commission-fattened paychecks. That’s simple enough. But smart sales managers continuously motivate their people, even before concrete results are achieved.

As Mattson says, it’s important to celebrate the bite-size accomplishments that put your salespeople on the road to greater success.

Hollins prefers that his people operate in small, easily managed teams of about eight employees so that no one falls off the radar screen. That makes it easier to acknowledge even small milestones and to spot those who need more assistance — or a nudge in the right direction.

You can help your people succeed by nurturing your performers and keeping morale high and your sales team running like a finely tuned engine. If you do all of those things, your salespeople will move your company constantly forward, always in the lead and well ahead of the competition. LE

LEADING EDGE | 15

Five tips for doing business in Portugal

16 | SUMMER 2015

Portugal is a stable, developed country, but with a recent history that closely mimics that of a developing nation.

For 41 years, Portugal was ruled by the Estado Novo, an authoritarian regime, the conservative policies of which hampered the growth of the Portuguese economy. The Estado Novo was overthrown in the Carnation Revolution of 1974, but the political turmoil hindered progress even further, and the country declined into a period of negative economic growth. What could be considered the “modern” era of Portuguese business and economic policy didn’t begin until the country was admitted to the European Union in 1986.

Portugal has made up ground in recent decades, with a vast increase in its standard of living, but it still grapples with the residual effects of decades of upheaval and stunted economic growth, which has a trickle-down effect to the business culture and climate of the country.

If you’re thinking about conducting business or running a company in Portugal, here are some things to keep in mind.

Kletr / Shutterstock.com

Thinking about doing business in Portugal? Hereare some tips to keep in mind.

LEADING EDGE | 17

The management style is hierarchical.Those who supervise others are

generally given a great deal of power and respect, but in return, they are expected to act in a compassionate and relatable manner toward those under them. The key phrase is “authoritative but not authoritarian.”

Because of the expectation of authoritative management, Portuguese employees thrive when given clear, precise instructions and will follow those instructions with little or no debate. A minimal-structure management style could be interpreted as weak or unclear and could lead to frustration for both manager and employee.

Decisions aren’t made in formal meetings.The concept of a brainstorming

session is not widely embraced in Portugal. Ideas are exchanged and developed in less-formal gatherings that occur outside of formally organized meetings. Once a meeting is scheduled, it often serves as a

means of informing a larger audience of an idea that is ready for approval. If action is taken during the meeting, it might be merely to ratify the idea or decision as-is.

If something ends up on the meeting table that isn’t ready for final approval, don’t expect those present to come to a decision on the spot. They will likely want to take the information and discuss it with colleagues who aren’t present. Businesspeople used to meetings that produce definite outcomes may have to adjust their expectations and demonstrate more patience.

punctuality isn’t demanded.In a meeting or less-formal business gathering, showing up on time is

considered a sign of respect and good intentions, but failing to show up on time isn’t necessarily considered the opposite. Anticipate the possibility that tardy Portuguese counterparts could keep the meeting held up for some time.

Once a meeting begins, the agenda will generally be viewed as a guideline as opposed to a rule. The subject matter can

meander, as the Portuguese, for the most part, value the flow of a conversation over maintaining a rigid meeting structure.

The role of women in business is evolving.Portugal has a conservative and

traditional culture, which is still highly paternalistic. However, recent decades have brought a noticeable movement toward the involvement of women in business.

Most of the rules that would apply anywhere else apply in Portugal: Show respect to female counterparts, do not be condescending and do not make inappropriate remarks or advances of a sexual or nonsexual nature.

However, there are some traditions to which Portuguese men — particularly older men — may still adhere. If a Portuguese businessman refuses to let a woman pay for a lunch or dinner, try to view it as a cultural difference, not as a patronizing act. If a woman is still uncomfortable with the idea of her Portuguese male counterpart picking up the tab, those reservations should be communicated prior to the meal.

business formal dress is preferred.While companies in the U.S. and

other Western countries have veered toward more casual offices, with jeans and golf shirts accepted as part of everyday attire, Portuguese business culture still mandates jackets, collared shirts and ties for men, and business suits with skirts for women. Some businesses have adopted a “casual Friday” policy, but it’s still relatively rare.

4

3

1

25

18 | SUMMER 2015

VOLUNTARy BENEFITSWith the implementation of the Affordable Care Act, employers are increasingly offering voluntary benefits to their employees.

Voluntary benefits include accident insurance, disability income, pet insurance, critical illness, and auto/homeowners coverage — and employers can offer these at no cost to themselves, with the employee picking up the entire cost.

Employers gain the benefit of cost control and of being more attractive to potential employees. Employees gain access to a wider range of benefits and the ability to choose products that best meet their needs. In addition, the cost of these benefits is often lower than employees could find on their own, and benefits can often be purchased through payroll on a pre-tax basis.

OPPORTUNITIES IN CUBANew regulations published early this year by the Office of Foreign Assets Control greatly ease travel to Cuba and create new business opportunities for the U.S.

While amendments to the Cuba Assets Control Regulations do not mean Cuba is wide open for business, there are potential opportunities for U.S. businesses, particularly those in telecommunications, banking, agriculture, construction, travel, and importing/exporting. However, businesses looking to expand their reach into Cuba must be cautious, as the embargo is still in effect.

The new regulations, among other things, allow financing for private entrepreneurs. Because Americans will find it easier to travel to Cuba, they will have increased opportunities to market, negotiate, deliver, and sell products, services, and equipment to entrepreneurs there.

&bits pieces

PAyING EMPLOyEES TO VOLUNTEERVolunteer Time Off (VTO) policies are on the rise among businesses that are committed to corporate social responsibility, according to volunteermatch.org.

About 20 percent of companies say they give workers a bank of paid time off dedicated specifically to volunteering in the community, according to a 2013 survey by the Society for Human Resource Management. That’s up from 15 percent in 2009. VTO is separate from paid time off banks and from any companywide volunteer activities.

Companies that offer these policies are finding that not only do they benefit employees and the organizations they are volunteering for, but the company itself benefits as it helps recruit engaged, committed people in a competitive marketplace. Studies have also found that giving employees paid time off to volunteer increases loyalty and positive feelings about your business.

In addition, beyond the benefits to you and your employees, your community gains much-needed time and talent at a time when many charitable organizations are struggling to find the resources to meet the needs they are in business to serve.

So next time you’re thinking about writing a check to charity, or fretting that you’re unable to donate financially as much as you’d like to, think again. While charities can always use your money, the donation of your employees’ time might turn out to be a greater gift for everyone involved.

LEADING EDGE | 19

Kreischer Miller is a member of the Leading Edge Alliance. Members are leaders in many key markets, including:

AlabamaAlbaniaAfghanistanArgentinaAtlantaAustraliaAzerbaijanBahrainBaltimoreBangladeshBelgiumBoliviaBostonBrazilBritish Virgin IslandsBuffaloBulgariaCayman IslandsChattanoogaChicagoChileChinaCincinnatiClevelandColombiaCroatiaCyprusCzech RepublicDallasDaytonDenverDominican RepublicEcuadorEgyptEl SalvadorFinlandFort LauderdaleGhanaGermanyGreeceGuatemalaHarrisburg, PAHartfordHong KongHonoluluHoustonHungary

IndiaIndianaIndonesiaIowaIrelandIsraelItalyJordanKansasKazakhstanKenyaKnoxvilleKoreaKuwaitLas VegasLatviaLebanonLexingtonLondonLos AngelesLuxembourgMacedoniaMadison, WIMalaysiaMaltaMauritiusMemphisMexicoMiamiMichiganMinneapolis/St. PaulMissouriMoldovaMontenegroMontrealMoroccoNashvilleNebraskaNetherlandsNew OrleansNew JerseyNew YorkNew ZealandNorth CarolinaNorwayOrange County, CAOregon

Pakistan PalestinePanamaParaguayParisPeruPhiladelphiaPhoenixPhilippinesPittsburghPolandProvidencePuerto RicoRichmondRenoRomaniaRussian FederationSan FranciscoSaudi ArabiaScotlandSeattleSenegalSerbiaSingaporeSlovakiaSloveniaSouth CarolinaSpain SwedenSwitzerlandTaiwanThailandTokyoTorontoTucsonTunisiaTurkeyUkraineUnited Arab EmiratesUgandaUruguayU.S. Virgin IslandsVenezuelaWashington, D.C.VietnamVirginiaWest Virginia

TheLeadingEdgeAllianceis an

international network of independently-owned

accounting and consulting firms. Membership

inTheLEAgivesusaccesstotheresourcesof

a multibillion dollar global professional services

organization that provides technical resources,

industry specialization, professional training

and education, and peer-to-peer networking

opportunities—nationally and globally, around

the corner and around the world.

OuraffiliationwithTheLEAenablesusto

expand our capabilities and provide a greater

depth and breadth of advice and services to

ourclients.Thebottomline?Ourclientsbenefit

from the size and scope of a large multinational

firm with the high-touch, high-quality service of

a local firm.

LeadingEdgeAllianceFastFacts

•190leadingaccountingandconsultingfirms

•102countries

•586officesworldwide

•2,056partners

•16,640professionalstaff

• $2.9billionintotalrevenues

ADDREss sERVICE REQuEsTED

100 WITMER ROAD, sTE. 350HORsHAM, pA 19044