OFDealer April 2010

Have You Determinedthe

Futureof Your

Business?Page 11

Employee Assessments:The View from 10,000 Feet

Social Networking:Are you LinkedIn?

Merchants Office Furniture, Denver Dealer, Celebrates 70 Years and CountingIn Denver, the father and daughter team of Richard and Jynx Sanders at Merchants

Office Furniture are celebrating the 70th anniversary of the dealership Richard’s

grandfather, Marvin Sanders, founded in 1940.

The dealership operates out of a 22,000 sq. ft. showroom and headquarters location

not far from the city’s central business district and offers a mix of mid-market new

furniture and used product.

At a time when sales of any kind have been tough to find for many dealers, business

at Merchants has been “reasonably good,” Richard reports, with customers

responding enthusiastically to the dealership’s value-driven business model.

Richard is also quick to credit Jynx’s efforts as resident “salesperson extraordinaire”

for much of the dealership’s recent success. “In addition to managing our web site,

Jynx has been a tireless networker since joining Merchants in January 2008, with

membership in several local community organizations and leads groups,” he says.

America Supports You Update: More Care Packages On Their Way to the Troops, Thanks to San Diego DealerLast year, we reported on the outstanding efforts of Darles Wilde, CEO of ABI Office

Furniture in San Diego. Darles and her fellow volunteers at the America Supports

You non-profit spent part of their Thanksgiving holiday putting together some 150

care packages destined for Army and Marine soldiers serving in Iraq and

Afghanistan.

The need is still there, of course, and so are Darles and her team. Last month, they

sent out another 119 care packages. The contents are nothing too special: plenty

of travel-sized sunscreen and lip balm, candy and other snacks, books and

magazines, even some toothbrushes, razors and shaving cream. But they come

with a whole lot more.

“This is a program that demonstrates to the young men and women serving far

away from home that we recognize and appreciate their sacrifices on our behalf,”

says Darles. “Many of our military personnel have no families or are from families

that cannot afford this kind of support and our packages are the only mail that they

receive. We have received some acknowledgement and know that we definitely

make a difference!”

The latest shipment went straight to the front line, Darles reports. She and her team

actually delayed packing and shipping by a week so that recipients would be in

shape to receive goods, as they had been in an active battle space and on the move.

continued on page 3

newsThis Is Not theYear to GiveNeoCon a Miss

Just about two months from now, the doors willopen at Chicago’s Merchandise Mart for the 2010NeoCon World's Trade Fair. If you haven’t yet decidedto attend, do yourself and your dealership a hugefavor and do it. Now.

Sure it’s expensive at a time when every dollar isprecious. And even though you certainly don’t haveto attend all three days, it still takes valuable timeaway from the business.

But consider the downside of staying home this year.

By most accounts, we are (hopefully) in the finalstages of a lengthy downturn that has broughtprofound changes to the office furniture industry.

Most of us are still trying to figure out what exactlythose changes might mean and right now, there area whole lot more questions than answers.

When are we likely to get back to pre-recessionsales levels? What will be the key growth driversonce business does begin to turn around in earnest?How will we need to change our basic valueproposition and products and services mix torespond to the new needs and priorities ofcustomers in the environment that’s emerging?

There are few places more likely to help you findanswers to those questions and others like themthan at the industry’s annual gathering of the clansin Chicago.

That’s why your attendance at this year’sNeoCon—and later this year, at the OFDA’s ownDealer Strategies Conference as well—is soimportant. The stakes for your business are just toohigh not to go.

Either you put in the effort now to learn as much asyou can about what’s happening and figure out whatyou need to do to adapt to new market conditionsor you keep doing what you’ve always been doingand get left behind. It’s that simple.

If you’re serious about the long-time viability of yourbusiness, it’s not really much of a choice, is it? Seeyou at the Mart!

Simon DeGrootEditor in ChiefOFDealer

APRIL 2010 OFDEALER PAGE 2

Dealer News } continued from page 2


Darles’ program, Operation America Cares, is sponsored by the

U.S. Department of Defense and the U.S. Postal Service as part

of Operation America Supports You. If you’d like to add your

own efforts to this worthy cause, Darles would love to hear from

you. Just drop her an e-mail at [email protected] to

get started.

Corporate Environments of Georgia Sponsors Furniture FundraiserLife for some folks in need in Atlanta is about to get just a little

easier, thanks to the generosity of Corporate Environments of

Georgia, who this year was among the sponsors of Chairish the

Future, an annual fundraiser in support of the Furniture Bank of

Metro Atlanta.

Some 200 friends of the Furniture Bank, members of the A&D

community and clients and business partners of the

Atlanta-based Knoll dealer turned out for a gala event

highlighted by an auction of children's play sets designed by

local interior design firms, as well as chairs designed and

painted by local artists.

The event raised an impressive $56,000, with all proceeds going

to support the Furniture Bank’s efforts to distribute essential

home furnishings to individuals and families in need in the metro

Atlanta area.

Clients include individuals and families moving out of homeless-

ness, fleeing domestic violence and living with HIV/AIDS.

“The Furniture Bank is certainly a worthy cause that’s definitely

close to home for Corporate Environments, since we’re in the

furniture business ourselves,” said sales associate Tracy

Bennett, who coordinated the dealership’s involvement in the

event.

“We were very pleased with the turnout, everyone had a lot of

fun and we’re already looking forward to more of the same next

year,” she added.

In Tampa, Florida Business Interiors, HaworthDealer, Hosts Eco-Friendly Trade ShowThere aren’t too many dealers these days who don’t tout their

commitment to the “green office” movement as a key part of

who they are and what they do. But few of them can boast the

passion and innovative thinking that were very much in evidence

at the Tampa branch of Florida Business Interiors (FBI) last

month.

For the second year running, FBI hosted ECO.expo, an event

that showcased the latest green products from a broad mix of

manufacturers and service providers and offered an opportunity

for organizations such as the U.S. Green Building Council and

American Institute of Architects to present their own green story.

FBI worked on the event in cooperation with the Urban

Charrette, a local sustainability-oriented non-profit, to kick off

Tampa’s week-long Eco.Lution celebration of green.

On display: close to 50 exhibitors who attracted some 275

attendees, including members of the local A & D community,

facility managers, commercial real estate brokers and local

design schools, as well as the general public.

“Putting together an event of this size is a lot of work, but it’s

more than worth it,” commented Kevin Baker, president of FBI’s

Tampa division. “Hosting ECO.expo really makes a statement

about our own commitment to sustainability and generated a

tremendous amount of positive local press coverage.”

In addition to its role as ECO.expo sponsors, FBI has its own

LEED AP-certified designer on staff and is currently seeking

LEED certification for its Tampa operation, no small undertaking

given its location in a building that dates back to 1886.

“When FBI opened in Tampa back in 2007, we were looking for

a signature event that would give us visibility in the community,”

Kevin explains. “Hosting ECO.expo does all that and more. It

not only sets us apart from our competition as leaders in the

sustainability movement but there are at least two projects we

can point to that came about through our participation.”

Understandably, perhaps, Kevin and his team are already hard

at work planning for an even bigger and better ECO.expo next

year.

mailto:[email protected]

http://www.ecisolutions.com/Hired


BIFMA February Numbers: Orders Off SixPercent; Shipments Down 15 PercentThe Business and Institutional Furniture Manufacturers Asso-ciation (BIFMA) released its market statistics for February earlierthis month and they showed encouraging signs of modestindustry improvement.

February’s 6% drop in orders (versus January's 15% decline)marked the smallest monthly percentage decline since October2008.

While February faced a modestly easier prior year comparison(-32% in February 2009 versus -25% in January 2009), on a twoyear stack, February was modestly improved relative to January,analyst Budd Bugatch noted.

Importantly, Bugatch said, the prior year comparison will easefurther in March and April (-34% and -38%, respectively) andwill not be tougher than -30% until November.

Consistent with the 15% order decline reported in the previousmonth, February shipments fell 15%, Bugatch noted.

“Net-net, the February statistics were encouraging, andconsistent with our view that the industry is approaching ameaningful trough,” Bugatch said. “While the industry's keyeconomic drivers remain mixed, signs of improvement havebegun to emerge. Corporate profits are up year-over-year, drivenby benefits from cost cutting and patches of revenue growth.Companies have de-leveraged their balance sheets, andbusiness confidence continues to stair-step higher. While theunemployment rate remains elevated, the economy has begunto add jobs, albeit at a modest pace.”

Bugatch said weakness in commercial construction is likely toremain a drag on project-related business for the foreseeablefuture and pointed to the current high national vacancy rate(17% in the fourth quarter of last year) as an indicator that theinitial recovery may be driven more by absorption of existingspace, and be less dependent on new office construction.

At the same time, Bugatch welcomed the continuing positivetrend line for the American Institute of Architects’ Architect'sBilling Index.

The Index, which tends to lead non-residential construction by9 to 12 months, improved to 44.8 in February, up from 42.5 inthe previous month. While Bugatch recognized February marked

the index's 25th consecutive month below 50 (the line ofdemarcation between expansion and contraction), he said it issignificantly improved relative to its trough of 33.9 in January2009.

NYC Market Outlook BrightensOffice leasing and investment sales activity both jumped sharplyin Manhattan in the first three months of the year, signaling arenewed confidence among corporate tenants and buyers thatthe economy is strengthening, according to research byCushman & Wakefield Inc. that was reported earlier this monthby Crain's New York Business magazine.

New leasing activity totaled 5.7 million square feet for the quarterended March 31, an 84% surge from the hugely depressedyear-ago period. First-quarter leasing was also up 14% from thefourth quarter of 2009.

Meanwhile, investment sales activity for transactions worth $10million or more soared to $3.3 billion, triple the measly $1.1billion worth of deals that closed a year earlier, Crain’s reported.In fact, the first quarter total is nearly equal to the $3.5 billion oftransactions of that size logged in all of last year. Indeed, eightdeals in that price range have either closed or are undercontract, compared with seven such transactions in 2009.

Despite all the positive signs, however, overall vacanciescontinue to rise and rents are still falling. In the first quarter,overall vacancy hit 11.6%, up from 9.6% in the year-ago periodand 11.1% in the fourth quarter of 2009. Part of that rise invacancies is owed to Cushman recently adding to its database11 Times Square, a new 1.1 million-square-foot tower that hasyet to sign a single tenant.

Overall asking rents fell to $55.38 a square foot, their lowestpoint in three years. That's down 24% from their peak of $72.97in the third quarter of 2008. Effective rents, which take intoaccount months of free rent and other landlord incentives, aredown even more steeply from the peak.

Downtown's performance bucked the trend of increased leasingactivity. In that market, leasing activity fell to 755,000 squarefeet, down 18% from the year-ago period. There were also nodeals where rents surpassed $50 a square foot or where theamount of space leased was over 100,000 square feet.

continued on page 6

Industry News } continued from page 5


Mike Paar Named Vice President ofGovernment Sales of Exemplis CorporationExemplis Corporation announced today that Mike Paar hasjoined the company as Vice President of Government Sales in anew position responsible for federal, state and local governmentsales reporting to Rod Ganiard, Executive Vice President.

Mike Paar brings a wealth of leadership experience to Exemplis.Paar has been in the contract furniture industry for over 30 yearsand has worked extensively with the U.S. General ServicesAdministration as well as state and local governments. For thepast nine years he was Vice President of Government andEducation Sales for The HON Company.

Prior to joining The HON Company, Mike managed governmentsales for Kimball Lodging Group, a division of KimballInternational. He holds his Bachelor of Arts in Economics fromthe University of Northern Iowa, and is certified as a MasterHotel Supplier by the American Hotel & Lodging Association.

Mike serves on the Government Affairs Board of OFDA - theOffice Furniture Dealers Alliance – where he works with dealersand other manufacturers to address industry issues within thegovernment marketplace.

“It’s a great pleasure to welcome Mike to the SitOnIt and Ideonteam,” said Rod Ganiard. “Mike fits with our performance-driven culture and his comprehensive understanding of

government markets and customers supports our aggressivegrowth agenda. Mike is a strong team player and is going tomake a big contribution towards the achievement of ourcorporate goals.”

“I am very excited about the opportunity to join the Exemplisteam and help them grow,” said Paar. “Exemplis has a solidrecord of profitable growth. I’m impressed by theircollaborative and customer focused culture. They have adistinctive business model and a clear and focused vision ofthe future I’m eager to contribute to.”

New VP of Sales for National Office Furniture

Kimball International has announced theappointment of Robert E. “Bob” Rohlman tothe position of vice president of sales forNational Office Furniture.

Rohlman will assume the position and dutiespreviously held by Kevin McCoy, who wasrecently promoted to general manager of theNational Office Furniture brand.

Rohlman, 49, has over 25 years of experience in the officefurniture industry, including eleven years with National in adivision manager role.

Strategic Planning and Risk/Opportunity AnalysisStrategic Planning and Risk/Opportunity Analysis

Merger/AcquisitionMerger/Acquisition

Executive CounselingExecutive Counseling

Succession Planning and Exit StrategySuccession Planning and Exit Strategy

Valuation and Maximizing Owner ValueValuation and Maximizing Owner Value

William E. Kuhn & AssociatesWilliam E. Kuhn & AssociatesWilliam E. Kuhn & Associates [email protected] [email protected] [email protected] 303303303---322322322---823382338233

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Teknion Announces New SeatingAgreement with GirsbergerTeknion Corporation has entered into an agreement withGirsberger Industries Inc. to market, sell and support the Swissfurniture company’s seating products in North and South America.

Teknion will introduce several new seating lines designedand engineered by Girsberger in 2010. The first productswill launch in April with additional Girsberger-designedseating products due to be showcased at the upcomingNeoCon World’s Trade Fair.

New Showroom Space for Bretford at Merchandise MartBretford Manufacturing has moved into a new showroom(#355) at Chicago’s Merchandise Mart, just in time for theupcoming NeoCon World’s Trade Fair. The new showroomis located on the same floor as Bretford’s former space.

“Our new showroom will focus on training room solutionsfor higher education and corporate environments, whichis where a majority of our products are used in the contractmarket,” explained Bretford CEO Chris Petrick.

Global Total Office Introduces BRIDGES Work TablesGlobal Total Office has introduced BRIDGES, a versatile newline of work tables designed to enhance communication andcollaboration. BRIDGES tables and components work in

unison to addressthe needs ofvarious environ-ments, fromteam-orientedopen concepts toprivate offices,boardrooms ortraining rooms.The line alsoincludes a varietyof side tables,privacy screensand accessoryitems and isavailable in a widevariety of finishesand colors.

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The office furniture industry may be going through some of itsmost challenging times in recent history, but there are stillopportunities out there and powerful new resources available tohelp dealers weather the storm and start gearing up to make themost of the recovery when it comes.

That was the message that came through loud and clear lastmonth at the 2010 National Conference of the WorkPlace Furnishings dealer organization (WPF).

“These are tough times and we certainly should notunderestimate the difficulties we face but there is still much to bethankful for and many ways we can strengthen our dealershipsand move forward to find new opportunities,” WPF president andCEO Greg Nemchick told the group.

In addition to a much-expanded educational program and thetraditional one-on-one meetings between WPF dealers and theirsupplier partners, this year’s conference saw the introduction ofseveral new programs and services from WPF. They included:

u A new business development program by which WPF hassent its members over 830 new leads during the past sixmonths

u A new online hiring tool that tests the aptitude of potentialjob candidates in key areas of dealer operations such assales, design and project management

u New strategic alliances with PoweredByOI, an innovativetechnology company that offers a new approach tomanaging key dealer business processes, and CorporateWorkplace Services, a nationwide network of serviceproviders for out of market installation and otherfurniture-related services.

u An expanded selection of vertical market and specialtyproduct marketing pieces, targeting the most importantgrowth areas in the market today.

Also at the meeting, WPF members honored their Dealer andManufacturer of the Year. The Dealer of the Year Award, named inhonor of former WPF president Dennis J. Insogna, went to CreativeOffice Pavilion, Portland, Maine, while Manufacturer of the Yearhonors went to Safco Products Company, New Hope, Minnesota.

In addition, the group presented its highest honor, the Nathan M.Loth Award, to WPF legal counsel Irv Katzman, who is retiring thisyear after over 35 years of service to the organization.

WPF VP of marketing Vic Maffe; Mark St. Clair of Creative Office Pavilion, Dealer of the Year; Nathan M. Loth Award winner Irv Katzman; KevinJordan of Safco Products, Supplier of the Year; WPF president and CEO Greg Nemchick, and Terry Wilson and Ron Redding, both of Safco.

Focus is on Growth and Opportunities at 2010 WorkPlace Furnishings Conference


New Jersey Treasury Agrees that DEPTCOR Must Halt ‘Pass-Through’ SalesIn response to a January 8 letter from OFDA’s attorney in NewJersey, the acting director of the state’s Division of Purchase andProperty has agreed that the Department of Corrections’ DEPTCORunit must cease all “pass-through” sales of articles and supplies,including furniture products, to state departments and agencies.

Such sales are inconsistent with New Jersey’s statute (N.J.S.A.30:4-95), which mandates that items sold by DEPTCOR bemanufactured, produced or assembled by its inmate work force.

OFDA and its New Jersey members contend that DEPTCOR hasbeen selling significant volumes of “pass-through” furniture itemsto state departments and agencies that do not meet the clearrequirements of N.J.S.A. 30:4-95.

After an internal investigation, the New Jersey Department ofCorrections agreed that such practices should be stopped andrecognized a Purchase Bureau contract cannot override this statute.

OFDA is continuing to work with legislators and the newly electedgovernor and his administration to challenge New Jersey’sdysfunctional procurement system as it applies to the sale of officefurniture and its installation in that state (see last month’s OFDealer).

Most industry dealers and manufacturers that also have stategovernment business in other states highlight that New Jersey isthe worst in terms of doing business.

Please contact Chris Bates, OFDA president with questions orcomments at [email protected] or 703-549-9040, x 100 .

OFDA Dealer Financial and OperationsBenchmarking – A Key Tool in Today’s MarketEach year OFDA distributes its Dealer Financial and OperationsComparison benchmarking survey to dealers around the country.

Dealers who complete the survey receive a detailed report on theresults, which provide specific P&L, balance sheet and productivitybenchmarks that are broken out by dealer and market size, dealerprofitability, and other relevant comparison factors.

Members of OFDA also receive at no charge a custom profile oftheir businesses’ revenue, expense and profitability aligned with themost relevant industry benchmarks for comparison with theirbusiness situation.

In today’s difficult market, securing full knowledge of how yourbusiness performance and structure stack up versus thecompetition is more important than ever.

OFDA’s DFC is a valuable diagnostic tool for dealers of sizes,whether aligned with a major systems manufacturer or not. Itsline-item P&L focus generates the level of detail essential forunderstanding the evolution of your business and determiningwhich high-impact management actions will improve profitability.

The more dealers participate, the more they individually andcollectively benefit from this valuable industry resource. Visitwww.ofdanet.org and follow the link to OFDA’s DFC survey for fulldetails on the survey or click the ad below to participate.

Billie Zidek [email protected] can answer any questions you mayhave regarding this widely respected benchmarking program.

How Does Your Dealership Compare?Compare your company’s financial performance to the

industry’s best players by participating in the OFDA’s free online

To participate, click this ad or call 800.542.6672

Participating dealers can compare revenue & expense structure, and profitability with:

Top 10% of most profitable dealers

Dealers with comparable total revenues

Dealers in markets of similar size

Aligned vs. non-aligned dealers

Dealers with equivalent service revenue shares

And, receive a FREE custom report aligning your data with relevant benchmarks for easy use in improving performance!

Dealer Financial Comparison & Benchmarking Guide Survey


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Strategic planning and leadership developmenthave a direct correlation to the success of abusiness. A third component—succession planningor, more appropriately, succession manage-ment—also directly impacts business performance.

All three of these areas require that you addressthe skills and qualities that your business has andthat your business will need in the future—gettingthe right skills in the right place at the right time.

This was brought home to me two years ago at astrategic planning retreat I was facilitating. The clientprincipal—a highly enlightened visionary andoutstanding leader—surprised us all by suddenlyasking his team of managers a series of questions:“Who wants my job in the future? Why? And if not,why not? Are you prepared to take it today? Whatadditional leadership qualities and skills do youneed to take my position?”

This resulted in a half-day discussion and proved tobe the most important part of the two-day planningretreat.

The team had been performing well. However, whenthose questions were raised, the calmness,

openness, yet probing approach by the presidentbrought the managers to the realization that at somepoint in time, each of them could succeed in onesignificant way or another.

Within a little over a year, the team’s performancemoved to the next level and became absolutelyoutstanding in terms of growth, market power,profits and leadership. That same period sawseveral internal career transitions.

The managers became a highly motivated andcommitted team, who grew and developed withadditional responsibilities and challenges and whowere rewarded with bonuses (and stock options forsome) for their performance. Watching the presidentand his team perform has been one of my mostsatisfying business experiences.

As the owner and principal of your dealership, haveyou come to terms with the fact that one of yourprimary responsibilities is the development andcultivation of the future leaders of your organization?

Do you have a program of succession managementfor your dealership and an exit strategy for yourself?

continued on page 13

Have You DeterminedtheFuture

of YourBusiness?

By Bill Kuhn

Bill Kuhn, principal ofWilliam E. Kuhn &

Associates, is a notedindustry consultant, writer,and speaker with over 35

years of industryexperience. In addition to

his contributions toOFDealer, he also authors a

regular column inINDEPENDENT DEALER, our

companion publication onthe office products side of

the industrywww.idealercentral.com.

His topic for the JuneINDEPENDENT DEALER:business valuation For

more information, contactBill by phone:

303-322-8233, fax:303-331-9032, or e-mail:

[email protected].

http://www.idealercentral.com


PRODUCED BY

JUNE 14–16 THE MERCHANDISE MART CHICAGO NEOCON.COM

http://www.neocon.com

Cover } continued from page 11


Time is CriticalWith today’s economy and industry challenges, including the unknown ofwhen recovery will occur, planning your business perpetuation or exitstrategy is as important to your dealership as any of the other compellingissues currently consuming your time.

Fighting the second severe industry recession within a decade has createdopportunities for some, but illiquidity and risks to survival for many others.This has brought dealers face-to-face with tough and unanticipatedsuccession issues or exit strategies.

Action in the present is required to position you, your key people, and yourdealership. If you want to sell to an outside party, you should be positioningyourself now to meet the criteria of a likely buyer.

If you want to transition to new ownership and leadership from amongcurrent managers, you should be evaluating options for structuring amutually attractive deal as well as ensuring that the full range ofcompetencies needed for success is being developed by your successors.

If you want to hold on for the foreseeable future or indefinitely, you mustidentify the skills and qualities and the corporate reserves (i.e., cash) thatyou will require to ensure perpetuity.

Timing is CriticalIn his book, A Guide to Perpetuating Your Business, financial consultantDickson Buxton writes that while some companies have been built by a steadysuccession of leaders, most companies are not perpetuated; they are sold,wound down, or liquidated.

Not planning ahead means you won’t be in the driver’s seat when you’reready to move on and you may not end up with the financial outcome youanticipate.

Building an exit strategy, choosing successors, and perpetuating yourbusiness may necessitate the most important decisions you’ll ever make.

The right decisions mean the rewards for the passion and toil you have spentin building a business can continue to return to you and your family, yourcustomers and employees, and your community for years to come.

Sadly, research studies reveal that while companies believe in the necessityfor succession planning, very few have a plan.

And yet, I am continually asked: What’s the potential and future for mybusiness? Should I tough it out or should I acquire, be acquired, merge,transfer ownership—and when?

Call it what you like—exit strategy, leadership development, ownershipsuccession, business perpetuation—the key is to make this a componentin your planning process.

Where to BeginBegin by answering three critical questions:

Where is the business going? Answering this question means spelling out your purpose, articulating awell-defined vision and defining the direction your company will take, which


Benefits of Having a Succession Plan

Dealers frequently overlook the verysignificant benefits of an exit or businessperpetuation strategy that can be put in placenow to ensure a highly successful transitionto new management or ownership in thefuture, whatever the circumstances. Asuccession plan:

n Ensures the perpetuation of yourbusiness

n Meets your obligations to employees,other owners, family, customers, yourcommunity, and other organizationsincluding creditors, manufacturers andlenders

n Paves the way for continued qualityownership and management (includingmanagement retention)

n Safeguards against unforeseen eventssuch as the death or disability of anowner or an unexpected opportunity tosell to an outside party

n Becomes a vehicle for leadershipdevelopment and the transfer orexpansion of responsibilities

n Identifies talent and future leaders

n Assures the best individuals will beselected ahead of time

n Typically enhances the value of yourcompany

n Provides the vehicle (such as an ESOP)for owner retirement

n Provides for an orderly approach totransfer of ownership within the family,management, or outsiders

n Is the vehicle and exit strategy forexisting owners

n Provides an added comfort level to yourbanker and to your major manufacturerwho wants or requires its key dealers tohave an exit strategy



ties directly to your strategic businessplan. Your answer also emphasizes theimportance of professionally managingthe business for either managementsuccession or an outright sale.

What is the value—the worth—ofyour dealership today and what isyour targeted optimal value?

For example, what would be the value

you project at the time of your

anticipated departure? Answering this

question requires a realistic valuation,

using some of the guidelines the IRS

spells out, including its Revenue Ruling

59-60 that specifies the factors to

consider when determining the

appropriate value of a company in a

closely held corporation. Too often,

dealer principals hold unrealistic

expectations of the value of their

company right up to the time they wish

to sell or retire, and then are shocked by

the results of a professional valuation.

Gaining a realistic understanding of the

true value of your business allows you to

make better decisions now about how to

increase your company’s value and

position it more favorably for the future.

Some dealers set their exit plan based

upon a point in time (e.g., age 65); others

base it upon a dollar amount they want

to realize at the time of their departure.

There is always the possibility of an

unplanned departure due to health

issues, including anxiety or “burnout.”

family problems or unexpected financial

challenges.You don’t always get to

choose when you leave; however,

succession planning minimizes the

negative consequences of unforeseen

events. Dealers should be re-valuing

their company on an annual basis and

have it as an integral part of an owner’s

business plan.continued on page 15

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One Dealer’s Approach to Valuation“Once we began the process of valuation,we saw the benefits of doing a valuationannually as well as projecting our valuethree years into the future.

We not only evaluate our tangible assetsand profitability, we also look at thegoodwill intangibles, including ourpersonnel strength, customer accountbase, product/service mix, and anyunique or competitive advantages thatmight be viewed as a strategic fit to apotential buyer.

On that basis, we determine what ourprice to an outside buyer might be. Ourvalue has become an integral part of ourstrategic plan with a specific goal of thecompany’s worth for each coming year.”

http://www.NationalOfficeFurniture.com



Who has or may have the skills andabilities to get your business whereyou want it to be?

Answering this question requires anassessment of your employees’ existingleadership and managerial qualities,behavior and performance and evaluatingcharacteristics including awareness,self-confidence, the desire to achieve, asense of urgency and the abilities toinspire, empower, establish trust, earnrespect and execute.

Family members should understand thatopportunity will be afforded only tostrongly qualified professionals, whetherfamily or non-family, and taking intoconsideration what is required for theperpetuation of the company.

This is an aspect of succession planningthat too few families adequately address.Business is too tough and complex todayto run it with anything but the best talentyou can find, and the best talent will rarelybe attracted to or remain with an operationthat compromises success for the sake ofthe family. You must be willing to ask anyfamily member, “Why should anyone beled by you?”

Steps in the Succession Planning ProcessSuccession planning is a complexprocess. These steps should be helpful asyou develop the plan. Plans and appro-aches vary depending upon the dealer.

1. Acknowledge the need forsuccession planning and committo the process.

Committing to the process means settingaside the time and energy required. It’s alot more than the general thoughts a dealerprincipal may have, such as, “I plan to turnit over to my kids.”

The increased complexity of a dealershiptoday and the skills required for successmake it all the more important to develop

a formalized plan. Obvious perhaps, butlack of emotional commitment oftenderails the plan. Even if you don’t seeyourself leaving for 20 years, successionplanning will benefit your business.

2. Set criteria and objectives forbusiness perpetuation(management succession) or for asale (ownership succession).

For example:

4 Provide for perpetuation of theorganization, including adequatecorporate reserves, and increase invalue.

4 Plan for income continuity andoptimum payout to owners, enhancingownership value over a buyout period.

4 Develop a positioning plan tomaximize future shareholder value thatwill make ownership highly attractive.

4 Base management succession andownership on performance.

4 Provide an orderly transition ofmanagement and ownershipsuccession, minimizing organizationdisruption.

3. Commit the succession plan towriting including responsibilitiesand time frames.

The plan should include details ofownership transfer, valuation of thebusiness, and the assessment, selection,and development of future leaders andowners.

4. Focus on leadershipdevelopment.

To enhance value, commit to learning,development, and understanding.

Succession planning is not merelyidentifying promising employees and theslots that each might fill. Unfortunately, thisis the focus of many dealers.

Instead, the focus should be on dev-elopmental activities, combining training


One Dealer’s Way to AddressAbilities for the Future

“I was ready to move on, relinquishmy presidency and ultimately myownership, to be able to pursueinterests I have always wanted, aswell as freeing up time for extensivetravel.

I’ve been fortunate in havingtalented family and non-familymanagers, but I wasn’t sure whowould be the best to take over thebusiness.

Before identifying my replacement,I gave my key managers additionalresponsibilities that, for some, werea radical departure from what theyhad been doing.

With outside help from consultantsand advisors, we developed pro-grams for preserving wealth and forleader- ship training along withvarious tools for measuring perf-ormance, behavior and peer review.

Considering family issues, thisprocess has not been easy and thetransition has taken more thanthree years.

Nevertheless, selections weremade including my replacementand replacements for other keypositions. The final transition ofownership is not finalized; howeverI now have time to begin pursuingmy other interests and personalgoals.”



and real-life exposure. Stretch your staffby increasingly challenging roles andassignments. Successful examples I’veseen include broadening roles, switchingroles, dropping some functions, takingon others (sometimes unrelated).

5. Identify your successors.

For years, I followed the basic premise—espoused by many—of identifyingsuccessors early in the process,followed by their development.

There are times when this may berequired, but my experience has nowshown that the best result typicallyoccurs when the focus begins withdevelopment.

In due time, the role to be filled by asuccessor, and the qualifications andstrengths required in a potentialsuccessor, will become a key staffingdecision for which you are prepared.

Keep in mind that any good planincludes not only those being groomedfor succession, but also the people whowill replace them.

Identify the qualifications for yourpotential successor and clearly definethe role to be filled.

Assess and profile the strengths andfurther development needs of anypotential candidate.

Look closely at where your talent lies;leadership talent is often overlooked orthe wrong people are identified ashaving the talent.

When identifying successors, prof-essional advisors and others can— andshould—assist in determining whetherpotential candidates have theexperience, skills, and vision to lead thecompany into the future.

6. Discuss succession with thosedirectly affected.

Often, succession planning is shroudedin secrecy, hindering the process due to

lack of communication and confusionabout the company’s direction.

Key players need to know where theystand and what is expected of them.Openness, honesty, and dialogue areessential components. Rumors can runrampant; it is equally important tocommunicate with the entire staff aboutthe purpose, vision, and direction of thecompany.

7. Continually monitor and rewardperformance.

Measure progress regularly, and includean ongoing evaluation of the successorswho have been selected.

Ascertain whether the right people aremoving into the right positions at theright time.

Determine which jobs within yourorganization are most critical to achievethe vision and direction you desire, andidentify any shortcomings in yourleadership development and successionmanagement.

Objectives, priorities and staff changeover time; the plan should be flexibleenough to adjust to conditions that mayarise.

Those who lead—and will lead—wantrewards, both financial andnon-financial. They are motivated bychallenge, added responsibility, andempowerment. The best ones want tocontinually learn more about leadershipand management. But more importantly,they are motivated and will stay withyour company because they know theyhave an important stake in the future ofyour organization.

The future is often closer than we think.Act now to create the future you want.The more focused the effort, the moreyou stand to gain from you businessnow and at the time of your expecteddeparture.

One Dealer’s (Very Successful) Credo for Succession PlanningAs owners, we:

1. Have committed to the need forsuccession planning.

2. Will inform other key managers—potential future owners—about ourintentions and their roles in thesuccession planning process.

3. Will develop a written plan includingresponsibilities and time frames. Theplan will include details of ownershiptransfer, valuation of the business,assessing, selecting and developingleaders and estate planning of currentowners.

4. Will set goals and develop a positioningplan to maximize future shareholdervalue to make ownership highlyattractive.

5. Will seek advice and counsel of outsideconsultants, attorneys and CPAs.

6. Will communicate the plan to keymanagers and family members.

7. Will have open dialog with identifiedsuccessors to discuss anxieties,aspirations, as well as intellectual andemotional concerns they may have.This will include our evaluation of theinterest, commitment and “passion” ofeach identified successor.

8. Will establish leadership training anddevelopment programs for each futureleader.

9. Will communicate with other managersand our entire staff regarding ourpurpose and vision for the company.

10. Will incorporate aspects of thesuccession plan into our business andfinancial plans.

The television newsroom is a unique work environment. To besuccessful, producers must combine the split second timingof many cameras with anchors and reporters while engagingeditors, fact checkers and graphic artists to generate aflawless broadcast. It’s an environment that places apremium on the need to support collaboration on a grandscale, while still recognizing the need for privacy to write,design or edit.

Balancing those two requirements and creating a look that also showcased a modern, progressive aesthetic was the challenge Cincinnati Kimball Office select dealerOstermanCron found itself facing recently, when it learnedthrough a networking connection that a local newsroom waslooking for new furnishings.

WXIX, Fox 19 needed an office solution that provided sufficientworkspace, could accommodate several monitors, was sleekenough to be viewed on high-definition television and encour-aged lively discussion while still allowing for some form privacy.

“Working in a newsroom is a unique office environment becausethere’s both a collaborative need and the need to work privately,”said Steven Ackermann, news director at WXIX. “These twothings can go back and forth often in a matter of minutes.Furnishings must accommodate multi-tasking because that’swhat the people are doing and we have to have sharedworkspace. Every desk is used by at least two and in some casesthree people throughout the day.”

After a brief discussion, partner and co-founder Keith Cron,principle of OstermanCron, was invited to tour the newsroom toget a better idea of what the station was looking for.

“I have never seen an environment with such a high energy level,”said Cron. “There were people having discussion while others right next to them tried to focus on writing. Everyone was moving and there were a whole lot of different activities going on.”According to Cron, the dealership faced three main challenges

to overcome in order for theproject to be successful:

1. Creating a space that was functional for collaborativeand individual work.

2. Incorporating large monitors and above averageamounts of technology that would be used by a teaminto the layout.

3. Visual considerations and attractiveness of thefurnishings for broadcast on the air.

Within minutes of his visit, Cron seized on Kimball Office’scollaborative desking system, Hum. Minds at Work., as thefoundation of his solution.

In order to showcase the capabilities of Hum, Cron and a KimballOffice rep invited a team of five representatives from the stationto his showroom.

“Trying out the system, the FOX team reenacted their dailyroutines; simulating group meetings, collaborative efforts, seatingarrangements and private time,” said Cron.

“Hum’s unique design allowed for various levels of interactionand permitted each member of the newsroom staff to have theirown space and maintain visual and audible communication with



PR JECTPROFILEOpenCollaborationPersonal Privacy

CombineBy Alicia Ellis

Project Profile } continued from page 17


fellow team members, without worrying about distractions orinterruptions,” he explained. “Raised terraces give people themeans to organize work, the ‘See Me’ screens with openworkpattern filter distractions without isolation, and ‘Meet Me’ spacescreate a natural collaboration point for teammates.”

Also a plus for Cron and his team was Hum’s wire managementtrough and the ability to position large monitors on the top of theterrace. “We were able to create a great looking environment thatwas fully functional,” he said.

A color specialist was called in to help develop a color schemethat would meet broadcasting needs yet not distract fromreporting activities. “After a lot of back and forth, the blue wavepattern was chosen by a vote of 3-2 for the ‘See Me’ panels andcoordinated accessories,” said Cron.

Less than two days was needed to completely install the projectwhich included 21 workstations and 21 chairs.

“The station was extremely pleased with the results,” said Cron.“There is a new atmosphere in the newsroom and a progressiveimage to go along with it. We have earned their trust and beenrewarded for our efforts with great recommendations and evenmore work from them. We were able to understand their needsand give them a solution to suit all their needs.”

http://www.phoenixsafeusa.com


In most organizations, personnel costsusually come in among the largest budgetline items. Given the array and urgency ofbusiness challenges facing today’s CEOs,organizations need their leaders, mana-gers, and people aligned and workingtogether at the highest levels ofperformance.

Employee assessments can give org-anizations and managers consistent,in-depth, and objective information abouttheir people. This construct includes theemployee’s:

n Fit with organizational culture, job,manager and team

n Knowledge, skills, jobperformance and developmentalneeds

n Preferred learning andcommunication style

n Integrity, reliability, work ethic andattitude towards substance abuse

n Response to conflict, stress,frustration and likelihood ofaggression

Information uncovered from assessmentshelps leaders and managers rely less on

gut instinct and empowers them to makesmarter people decisions based uponobjective criteria. Specific benefitsinclude:

n Selecting people most likely tosucceed in a job

n Accelerating time for people tobecome fully productive in a newrole

n Improving alignment andcommunication betweenmanagers and employees

n Reducing workforce conflict andimproving employee satisfaction

n Maximizing each employee’scontribution to the organization

n Reducing employee absenteeismand turnover

n Reducing frequency and cost oftheft

n Increasing sales performance andcustomer loyalty

n Enabling strategic workforcemanagement and successionplanning

n Increasing overall workforcecapability, productivity, and agility

Although an HR department may managethe day-to-day administration of anassessment program, these initiativesthrive in the organization when sponsoredby senior leaders who are committed tobuilding and retaining a highly productive,performance oriented workforce.

Assessments immediately reveal muchmore consistent, in-depth, and objectiveinformation about employees than mostmanagers could uncover on their own.

Many factors inhibit organizations andmanagers from acquiring both enoughinformation and the right informationabout their employees to make the bestpossible decisions for the organizationand the individual. There are three reasonsfor this:

1. Employees have a tendency toembellish their qualifications.

According to the Society of HumanResource Management (SHRM), 53%of resumes they reviewed contained


EmployeeAssessments

The View from 10,000 FeetBy Tom Davis

Employee Assessments } continued from page 19


false information. And others who don’t embellish theirresumes may lie during a job interview. The workplace is full ofpeople vying either to get hired or to get promoted to the nextlevel. In a game with relatively high-stakes, many people willignore the risks of lying in order to compete for a position.

2. Managers have a tendency to “filter and scrub” employeeperformance reviews.

In our litigious culture, few former employers will provide anegative reference about a job candidate. Even performancereviews are filtered through an employee’s immediatesupervisor, who, though well intentioned, may be less than fullyobjective.

We’ve known supervisors who felt threatened by rising stars,and who downplayed their subordinates’ talents, accomplish-ments and potential. And we’ve seen those who, fearing they’dlose a good employee to a promotion, quietly sabotaged theirown people’s upward mobility.

3. People are just plain difficult to read.

Employee behavior is often compared to an iceberg—about90% of our behaviors are explained by factors that, on thesurface, cannot be easily observed or understood in ameaningful context. Without advanced training in psychology,many of these behaviors are difficult—if not impossible—todetect, and the manager is at a disadvantage.

Valid assessments can uncover truthful information about theemployee in a very cost and time effective manner.

What if your employees came with an instruction manual?Think about the cost of your organization’s last few hires. Asidefrom salary and benefits, there’s the cost of advertising for thejob, the investment in training, and the price of getting a newworker up to speed.

An organization wouldn’t spend $40,000, $50,000 or more on apiece of equipment without a careful understanding of what theequipment can do, a rigorous selection process, proper training,documentation, guarantees, and warrantees. Before youpurchase equipment, you want to know how it works andwhether it’s right for you. Before you operate that equipment,you’ll probably want to look at a user’s manual.

Yet, every day we see businesses hire and deploy employeeswith little or no thought to helping managers understand howthese employees work and whether they are a good fit.

Organizations don’t seem to appreciate that employeeassessments can serve as a valuable “user’s manual” formanagers to get the most from their people. For this reason, webelieve anyone who manages people or runs a business shouldknow about the value of employee assessments.

If your organization is like most, your most valuable assets areyour people. You invest a lot in them, and they give a lot back.They’re the company’s public face, its lifeblood. Of course, youneed to know them… but that is easier said than done.

Common applications of employee assessments

1. Screeningn Good pre-hire assessments will quickly screen out applicants

who lack the fundamental qualifications and behaviors theemployer is seeking.

n Some skills assessments fall into this category, as doassessments that provide insight into an applicant’s workethic, reliability, integrity, propensity for substance abuse andattitudes toward theft—including property, data and time.

n Pre-hire assessments should be cost-effective, easy toadminister and provide immediate results.

2. Selectingn Assessments are commonly used to better evaluate

prospective employees, or current employees who are beingconsidered for promotion or redeployment.

n Selection assessments often support other related activitiessuch as resume reviews and interviews. For example, theassessment can highlight areas into which a manager shouldprobe during the interview, thus setting up the manager toultimately make a better hiring decision.

n Selection assessments can also help organizations identifyhigh-potential candidates and place them on specializedcareer tracks.

Next month we will discuss various types of employee assess-ments and the use of assessments once you hire someone.

Tom Davis is Senior Consultant for Comprehensive Search. Prior to that he held executive leadership positions with dealerships in Centraland South Florida representing manufacturers such as Steelcase, Knoll, The HON Company, Kimball Office and National Office Furniture.Davis can be reached at 888.801.6550 or via email at [email protected]

Comprehensive Search is the endorsed Search firm of the Office Furniture Dealers Alliance. They represent assessment products of ProfilesInternational who contributed to this article.


S A V E T H E D A T E

OFDA 2010C O N F E R E N C E

October 9-12

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LinkedIn is a social media networking site that was launched in2003 but has really taken off in the past few years. There arecurrently in excess of 60 million users utilizing LinkedInworldwide. It is often referred to as the resume for the 21stcentury, but it is much more than that and can be a valuableresource for your business.

Because users fill out a profile that includes employment andeducational histories, LinkedIn is often useful when looking forpotential new employees but it can also be used to promotebusiness through participation in industry-related groups anddiscussions.

The most important thing is to make sure your profile is completeand you have a photo of yourself. In your profile include detailson your company (i.e. expertise, services, products, etc). This ishow people and groups can find you on LinkedIn. A photo is veryimportant. Someone might know you but if you don’t have aphoto they may not be able to confirm it is you when making aconnection.

Getting Started on LinkedInThe first step is to sign up. This is very simple by going towww.LinkedIn.com. You will now need to build your professionalprofile. Note your company may not be listed at this time, butyou can input it manually. LinkedIn will then ask if you want tosearch your email contacts to find people you may know. Thiscan be done during sign up or later on. If you wish to do it later,simply click “Skip this Step”. The system will send you an emailto confirm who you are and to activate your account.

Once your account is activated you can update your profile bylogging into your account. As mentioned before, the first thingyou should do is add a photo of yourself. The information shouldbe as complete as possible with current and past positions. Alsomake sure to add in your education, company or vendor websites and Twitter accounts, if you have them.

After you complete your personal profile you will want to build acompany profile. This is done by going to the “More” tab, andthen selecting “Companies” from the drop down menu. When

the new page appears, click on “Add a Company”. As with yourpersonal profile, make sure that you make this as complete aspossible adding (i.e., expertise, services, products, etc).

Building your network is the first step and can be achieved in afew ways.

1. Connect with people you know or have worked with in the past

2. Connect with people within your industry

3. Join groups including school alumni, trade or industry sites

By increasing the number of people in your network you are notonly connected to them but also to the people they know throughdegrees of connection. Whenever someone accepts yourconnection request, they become your 1st degree contact. Thusyour connection’s connections become 2nd degree connectionsand even further your connections’ connection’s connections are3rd degree connections. You can also have “Group” connections.Regardless, your relationship is distinguished to the right of anyperson’s name and also on their profile.

When you ask to connect with someone, you are given severaloptions to choose from relative to your knowledge of the person.


Are you By Kama Weinberger

http://www.LinkedIn.com

LinkedIn } continued from page 22


They include:

n Colleague

n Classmate

n We’ve done business together

n Friend

n Group Member

You can choose from the above options to connect withsomeone, but you must be able to back up your connection withsupport documentation from your profile.

For example, if you say you want to connect with someonebecause they are a former classmate, you will be asked to selectfrom a dropdown menu that lists your education and whichschool you went to with that person for verification purposes.

You can also choose the “Other” connection category, which willprompt you for the person’s email address, or you can select “Idon’t know” but beware of connecting with too many people thatyou don’t know or who you are only acquainted with. Linkedinonly allows a certain number of requests to people you don’tknow before they will take away your rights to unsolicitedcontacts. A better way to reach those second or third degreeconnections is to request an introduction through your first levelcontact.

LinkedIn always suggests people you may know and want toconnect with on your home page. Under the suggestion, you canclick “See More” to get even more possibilities. I wouldrecommend going through these every few weeks.

Ask for recommendations

Recommendations are an important element of Linkedin andallow your connections to comment on the type of person youare, how well you worked together on a particular project or howyou performed in a position. Don’t be afraid to ask people in yournetwork for recommendations. This is very beneficial when tryingto get new business. Many people who are searching forpotential service providers look at the recommendations thatpeople give.

LinkedIn makes it very easy to ask for a recommendation. Simplygo to the “Profile” tab, and then click on “Recommendations”from the drop down menu. When the new page appears, simplyclick on “Request Recommendation.” You can send outrecommendation request for a particular job or up to 200 peoplein your network.

Joining GroupsAs mentioned above, joining groups is a great way to build yournetwork and share your company’s expertise. A search bar willallow you to type in the names or people or groups to connectwith. Almost every organization has a group on LinkedIn—OFDA,IFMA, IIDA, etc.

Interact with these groups as much as possible. As a member ofa group, you can share news, create discussions, send privatemessages and post jobs. If someone asks a question and youhave an answer, post it.

If you have an area of expertise and there isn’t a group, form one.It is a great way to get your company’s name out there. It is alsoa good way to share and gain valuable information. You can evenstart your own group; I stated the group “Social Media for OfficeFurniture Dealerships” that now has 150 members and OFDA hasits own group with more than 600 members.

Ways to Promote Your CompanyThe easiest way to do this is by updating your status. This is verysimple to do under “Network Updates” on the home page. If youare working on a new project share it. If you have come across anew product or article share it. You can also share thisinformation with the groups you belong.

Additionally, you can share presentations and completed projectphotos on your profile. This can be done easily by going to the“More” tab and “Application Directory” on the drop down menu.LinkedIn offers two presentation applications, GooglePresentation and SlideShare Presentations which are as easy asuploading a PDF file. Getting your company expertise out thereis the best way to promote your company on LinkedIn.


LinkedIn } continued from page 23


Connecting Your Other SocialMedia Platforms with LinkedInLinkedIn makes it easy to connect your other social mediaplatforms. Your status updates can also be sent to Twitter simplyby checking the button next to “Share”. Additionally, you can add

a Tweet application to yourhome and profile page,which can be found underthe application directory.With the Blog Link orWordPress application youcan add your blog to yourLinkedIn profile. Wheneveryou add to your blog it willautomatically show up onyour LinkedIn page. Theseare ways to interlink yoursocial media marketingcampaigns.

Who and When?You may ask who in your company should be managing yourLinkedIn account. While you should probably update and checkyour own personal accounts, anyone who is handling your socialmedia marketing can certainly manage a company listing.Updates can be made on a daily basis or at the least a couple oftimes a week. By integrating your social media campaigns, i.e.,Twitter, Facebook, Blog, etc., this can be a one step process.

LinkedIn can be a valuable tool in your social media marketingcampaign. Every week people will view your profile to gaininformation about you and your company. Using the tools tointegrate Twitter and Blogging into your profile can simplify thesocial media process and get information to more potentialcustomers.

Kama Weinberger is a NCIDQ certified Interior

Designer and President / CEO of Q+E Design

Source & Q+E Furniture Solutions with

locations in Denver, San Francisco and

Phoenix. She has always been a bit of a tech

geek looking at new and innovated ways to

market her business and simplify her day to

day work process. For more information, check

out Kama’s latest linkedIn group “Social Media

for Office Furniture Dealerships” or follow her

on Twitter at Furnituregodess.

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Documents

OFDealer April 2010