The ROI Podcast provides professionals from all industries with actionable insight from world-renowned faculty members at Indiana University's Kelley School of Business. Learn not only from award-winning faculty but business experts who are disrupting their respective industries. The ROI Podcast equips you and your organization with the knowledge to keep a competitive edge over the competition.
Episodes
Monday Nov 26, 2018
Monday Nov 26, 2018
On this episode, we are giving you a preview of what to expect as we countdown the last days of 2018.
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Do you have a question? Looking to get help on a business decision? Know a great guest for our show? Email roipod@iupui.edu so we can help your organization make better business decisions.
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Ready to take your next step? Check out if a Kelley MBA is right for you: https://bit.ly/35aeAfZ
Monday Nov 19, 2018
Monday Nov 19, 2018
It's never easy letting a team member go. Yet as leaders, we carry that responsibility to protect our organization and help protect our company culture. Whether from a Human Resources violation or lack of personal performance, we must work through the tough question, when is it time to let a team member go? On this week's episode, we conclude this two-part series with the Lead Pastor of ITOWN Church, Dave Sumrall who helps us answer that really tough question.
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Do you have a question? Looking to get help on a business decision? Know a great guest for our show? Email roipod@iupui.edu so we can help your organization make better business decisions.
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Ready to take your next step? Check out if a Kelley MBA is right for you: https://bit.ly/35aeAfZ
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Show Notes:
MATT:
It’s a conversation no one wants to be a part of – “we’re sorry, but we’re going to have to let you go.” Though it’s not an easy discussion to lead, it’s a necessary one to ensure our organization continues in the right direction. On this episode we’re wrapping up this two-part series with the Lead Pastor of ITOWN Church, Dave Sumrall, who’s helping us answer the tough question, when is it time to let a team member go? Let’s get to the podcast…
||ROI MUSIC PLAYS||
MATT:
Welcome to another episode of The ROI Podcast presented by the Indiana University Kelley School of Business. I’m your host Matt Martella alongside Associate Dean Phil Powell – where we work hard to help organizations make better business decisions. If you’re new to the show, welcome to the Kelley family. Our weekly podcast offers 3-5 take-a-ways for organizational development. And to our loyal audience, thank you for your continued support. We are honored you spend this time with us each week. We would love to hear from you! Send us your questions to roipod, that’s roipod@iupui.edu.
Last week, we asked the question, when to hire a new employee? Dave Sumrall, took us inside his organization – giving us his insight on when they decide to hire a new staff member. If you missed last week’s episode, be sure to go back and listen. This week, we’re going to the other side of the HR spectrum to answer the tough question, when is it time to let a team member go?
PHIL:
One of the hardest conversations any leader has to lead is one of termination. Even when an employee clearly needs to move on, it weighs heavy on any manager because – despite popular belief, we are all human. And most of the time, firing an individual becomes the last resort for the leadership team. So when is it time?
MATT:
As we know, leadership always starts with ourselves. So, in order to answer the question when is it time to let someone go, we must clearly understand our processes throughout our organization so we have a baseline to move from.
Dave Sumrall: I think that the key to that is to never get disconnected from the people who are impacted. I think it's easy to lose your way as the senior leader when you get too disconnected from the process - it's why when you watch the show, "Undercover Boss", every C-level executive or business owner that goes out and experiences the hands-on impact of the customer and the employees at the ground level, come back and makes organizational and systematic changes. It's when we get removed from the process, as pastors, when we only stay in the green room, never shake hands with the people, we're never in the hospital, we're never involved in the messiness of people's lives, that we start creating policies and procedures and culture that doesn't meet the needs of people. I would say to every high-level executive of any business organization to always find ways to get out of the office and stay connected to the ground level, the grassroots, folks that the organization impacts, because you get real, raw customer feedback, and you can make real-time changes to systems and procedures that can very easily grow irrelevant for the people you're trying to reach.
PHIL:
(Talk about developing empathy; importance of not being “hard”; relationship development with staff)
MATT:
Going back to last week’s episode, we need to look through the same filter we do when asking when to hire a new team member – we have to use our clearly defined culture. Going back to a clip from last week, Dave said:
Dave Sumrall: One of the phrases that we have is, "culture has to be caught, it can't be taught". Those new employees will clearly stick out like a sore thumb when they don't embrace it. Then they have to make a choice, "Am I just going to do what the culture is? Am I going to be that? Or, am I going to move on and find another place to work?" And then those that don't have it clearly can see that they're going to have to make a choice - be like everyone else and embrace the culture and honor it, or remove themselves from the organization cuz it doesn't work.
PHIL:
If we have the right culture, it will act as our protection from always having the tough conversation of firing an individual. Most of the time, a strong culture, that’s defended by the leadership inside an organization will weed people out on its own, as Dave said. Not only will we notice that person is not fitting in, but that individual will feel it too and have to make some tough decisions on their own – am I going to be a part of this or not?
MATT:
But what happens when we do have that team member who fits the culture, but misses the mark? How do we know when we need to let them go? First, we need try to come alongside them, and try our best to coach them through this.
Dave Sumrall: The worst thing you can have is someone where they don't understand that they're not succeeding, or they don't understand that they don't embrace the culture, in their mind, they're doing everything they know how to do, and they're embracing the culture. Those are the most difficult conversations to have. For organizational leader or department head, that has to be constant, difficult conversations of, "Hey, here's where you were off, and here's why", just practical examples. We like to embrace that shoulder-to-shoulder, while we're in the midst of setting up this tent or setting up parking cones, "Hey, I noticed this, can you speak to that." "Hey, that conversation was a little rough that you had just 5 minutes ago" - we're kind of addressing it in the moment, but with a lot of grace, it's not, "let's go to coffee, let me sit down, let me have this very confrontational conversation", because you can make it a lot lighter. I think a lot of leadership momentum in a person's life, because it's not as confrontational, they don't have this big wall up, they're not trying to defend themselves and defend their actions. I think through constant shoulder to shoulder conversations, you can create this dialogue that allows you the opportunity to speak into people's lives, holding them to the standard of culture and performance. Then when they don't meet those expectations, you just be faithful to continue having the conversations and eventually, they just get tired of getting talked to. Typically, even those that are a bit self-deceived will come around and they'll begin to see, "Okay, you're still talking to me about this, and obviously, I feel like I'm doing what I'm supposed to, but I'm not making you happy, I'm not meeting your expectations". So in the rare cases when we have to let someone go, like I said, it's never a surprise.
PHIL:
And the key to effective shoulder-to-shoulder conversations starts with building a relationship on trust early on.
Dave Sumrall: The best thing is to build a relationship. For us, I would like to believe that from team members who burn out, who just serve, who are good team members, all the way up to high-level staff members, that there's somebody over them, in relationship with them, so that the conversation can be trusted. It will be a sensitive conversation if there's no relational foundation, cuz I have to know that you're for me before you start to really speak into my life. We really try, from the very beginning, to be faithful with that, let's have good relationships - let's build community, let's make sure that this person knows that I trust them - so that if I have to talk to a team leader or a team member who seems to be burned out and is obviously not finding success, that they're not saying, "Hey, you don't have that room to speak into my life, who are you to say there's a great reputation so that conversation can flow naturally, and if that relationship isn't there, I can tell managers, leaders, make sure you build that relationship with that person and let them talk about their life, let them describe what they're feeling and what they're sensing before correcting because I think that that foundation of relationship can make that conversation so much smoother, because their hearts are open. When their hearts are open, then you lead with questions: why do you feel that way, what's going on, tell me what emotions you're processing, versus, saying, "Hey, you're failing, and I can tell you're terrible, and you need this or that". Just asking questions and drawing it out of people is a great leadership tactic that once the trust is built, then they'll be honest in that conversation. I think the other thing is you have the conversation really early - you need to be intuitive as a leader to the needs of the people beneath you, and how well they're doing, and call that out early: "Hey, I know things haven't been going well lately, and I want to know where you're at." I do that a lot with our team, in fact, just the other day, I called a guy and said, "Hey, we've had some tough conversations, I need to know where you're at, how are you feeling? What's going on? I care about you, I want you to be successful." When you establish that foundation, then people are a lot more open to suggestions and to leadership and guidance when they're navigating those emotionally fragile moments of burn-out.
MATT:
The next thing we need to check, before deciding when to let that person go, is for burnout. Have they been working really hard and making no progress?
Dave Sumrall: I think that too much of culture, things burn out from working too hard - I don't think that's true. I think burnout comes from working hard and making no progress. We have to make sure that people are winning, and that they feel like they're winning. In fact, when we see a person that looks like they're drowning a little bit - you can always see it in their eyes, the eyes truly are the window to the soul - you can look into a person's eyes and see the condition of their soul. We monitor that very closely in our organization. We also know that when someone is having constant leadership conversations, we're doing a lot of shoulder to shoulder conversations, that they're probably struggling. We're faithful to have that conversation too, "How do you feel about this? Where are you at? How's your motivation doing?" and as people start to show signs of burnout, it usually means that either they're in the wrong role, or they have too much on their plate. We'll cut back people's levels of responsibilities so that they can feel like they're winning, cuz they need a few good, "Hey, you did that, and it worked out great." versus, "you dropped the ball here, you missed that detail, you missed this over here." - too much of that for too long, it doesn't matter if you're working 20 hours or 80 hours a week, that's going to grind at you pretty hard. In ministry sometimes, it's kind of a job that's never done, because even as you're counseling and helping people, there's always somebody else that's hurting, always somebody else to visit, so we have to make sure that we protect that day off really strong, that we keep people - we call it - in their lane. We keep them in their gift mix, or in a place that they're passionate about, because if someone's passionate, and they feel like they're winning, they're never going to burn out, no matter how hard they work. As long as they're taking at least a day - like Scripture says, "Take a Sabbath" - they take one day off. When people start to violate those things, we can see that they start to get tired and will either shift their role, take away their responsibilities, will send them on vacation, we'll make sure that we monitor it closely. If people can't get into a healthy pattern or rhythm, typically, it's because they're not supposed to be on the team, and we help them make that transition as well.
PHIL:
(Toxicity of burnout inside the organization)
MATT:
Finally, after we’ve built a relationship on trust that shows we care about them, we have many shoulder-to-shoulder conversations to help coach them, we’ve tried to help find their passion and win to combat burnout out – yet have no success, then it’s time we have that tough conversation and let that person go.
Dave Sumrall: At ITOWN, when it's time for someone to go, it's not a surprise to anybody involved. That's kind of the rule of thumb we use is that it should never be a surprise. Sometimes you have people on the team, they know that they don't fit in the culture, they know that they're feeling expectations, and basically, by the time you have the conversation with them of, "We think it's time to go a different direction", they're saying, "Oh thank God, I really wanted to quit anyway, but didn't have the guts to," or, "I was about to quit," or sometimes they do go ahead and quit. I've always been told to hire slow and fire fast, and I wish I had been a little more faithful to that. There are a couple of times where I felt like we needed positions filled and jumped the gun on people that probably shouldn't have been a part of the team, and ended up creating a little bit of heartache. Or there were times that there were cultural things wrong within the team and I just convinced myself that it wasn't a big deal because I didn't want to have the confrontational conversations that would make things difficult and felt like it would be awkward. I didn't' have confrontation as often and as frequently as I probably should have. I would say that it's been my greatest regret is the times that I knew I needed to make a change, but I drug my feet in doing it, because it just costs us time organizationally - we could've been healthier, we could've been growing, we could've identified the right people, but we couldn't, because we had the wrong people in place. I knew we had the wrong people, and just kept convincing myself that somehow it would all work out, when in reality, God was waiting on me to be faithful with the leadership He'd given me to have the tough conversations and allow them the opportunity to move or to grow… Now we're just faithful to have those conversations and faithful to manage those staff that are here. Early on, when we find somebody that seems like they have lots of potential, but we see some of these warning signs, we just call those things out early, and are faithful to have those conversations of, "Hey, I'd really like for this to work, but I see there's a little bit of inflexibility, I see there's a little bit of pride, and I've tried to teach you a couple of things, and you seem to always have the answers, and you don't have a lot of honesty there in your own life and self-awareness." We're faithful to talk about that now before they ever get on the team, and I think we save ourselves a lot of heartache.
||ROI Music Plays||
MATT:
So let’s recap… one of the toughest conversations to have as a leader is letting a team member go. No matter if it’s immediate termination or one that follows extensive coaching, it’s never easy. Just like last week, our foundation to knowing when it’s time to let a team member go stems from our culture. A clearly defined and defended culture will do most of the hard work for us – as in, it will weed out people who do not fit. They will feel it and have to decide if they’re going to embrace the culture or move on. But what happens when they do fit the culture but are not performing well? The first way to answer when to let that person go is by building a relationship early on rooted in trust and personal care. If they don’t trust you, they will have a hard time receiving some coaching. Once trust is established and we have leadership conversations, we don’t coach face-to-face, rather we go shoulder-to-shoulder. Whether casually in the hall, on the way to lunch, or working on a project together, use that time to mention what they can do better. This addresses the problem in the moment yet is a softer approach to a “come into my office” meeting. Next, we need to address and identify burnout – Can you see it in their eyes? Are we having constant leadership conversations? If burnout is the case, it’s up to us to help them find the right role, take off responsibility so they can win, or give some time off to help recalibrate their heart and mind. Finally, once we are confident we’ve done all we can do as leaders, now is the time to let that team member go. Even though it’s a tough conversation to have, here’s some good news, this conversation will not be a surprise to anyone involved. When we get to this point, both you as a leader and the team member involved will see it coming.
This has been another episode of the ROI Podcast presented by the Indiana University Kelley School of Business. I’m your host Matt Martella alongside Associate Dean Phil Powell, where we work hard to help organizations make better business decisions. Thanks for listening.
Monday Nov 12, 2018
Monday Nov 12, 2018
An organization cannot grow without a strong team working together. And as leaders, we are the ones charged to build and maintain that winning workforce. However, the question we wrestle with is not IF we should hire an employee, rather it is WHEN we should hire an employee. On this two-part series, we sat down with the Lead Pastor of ITOWN Church, Dave Sumrall who shares his executive wisdom to help us answer the question, when do I hire a new team member?
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Do you have a question? Looking to get help on a business decision? Know a great guest for our show? Email roipod@iupui.edu so we can help your organization make better business decisions.
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Ready to take your next step? Check out if a Kelley MBA is right for you: https://bit.ly/35aeAfZ
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SHOW NOTES:
MATT:
Where there is competition, there are winners and there are losers. As leaders, we don’t just like to win, we need to win. And we know that the three keys to success are a clear strategy, determination, and having the right team of people. But the question with onboarding talent is not if we build our team, it’s when. On this two-part episode, the lead pastor of itown church, Dave Sumrall helps us tackle two really tough questions – when do we hire a new team member and when is it time to let a person go. Let’s get to the podcast…
||ROI Music Plays||
MATT:
Welcome to another episode of the ROI Podcast presented by the Indiana University Kelley School of Business, I’m your host Matt Martella alongside Associate Dean, Phil Powell – where we work hard to help organizations make better business decisions. We’re so honored you’re spending time with us today because we know an organization is only as good as its leadership. If you’re new to the show, welcome to the Kelley Family. We put out a weekly podcast that offers 3 to 5 practical tips you can apply to your leadership right away. And to our loyal listeners, thank you so much for your support. We would love to hear from you. Send us an email to roi-pod, that’s roipod@iupui.edu so we can answer any questions you may have about business.
A big question many of us leaders ask is when do I pull the trigger to hire a new team member or when is it time to let that person go? On this two-part episode, we’re going to give you the tools to make that decision for yourself – with confidence. We sat down with the lead pastor of itown church, Dave Sumrall who leads a non-profit organization with 32 staff members, over 1,000 volunteers, and 8 locations all over the state of Indiana, including 4 correctional facility campuses. As non-profit organizations put less focus on monetary gain than for profit entities, it can be tough to know when you can afford a new employee or if your organization can survive without an individual if you were to let them go.
Dave Sumrall: I would say the biggest challenge that we face as a non-profit is we don't pay everybody to do everything. We're an organization that operates every weekend with nearly a thousand team members that we don't pay. Our workforce is unpaid, which in some respects, is a huge disadvantage because you can't just pay people to go get a bunch of stuff done. But we like to see it as an advantage because people don't have to be there - they're there by choice. So the difference in all of that is at the end of the day, it's vision - it's casting the vision and helping people understand their sense of being a part of something greater than themselves, and the fact that we genuinely care about them as a person as well. Then another thing that's extremely unique compared to a for-profit company is that from a financial standpoint, we only do business "two days out of the week", because we have services on Saturday and Sunday. In essence, everything happens on Saturday and Sunday that drives the financial model of our church. All of our financial model is based on people just giving out of the generosity of their heart, seeing the difference that we're making as a church, and believing in that difference, and trusting us with their finances. All of what we do financially, spiritually, culturally, relationally, it all is fueled out of those two days - you'd be hard-pressed to have a retail-store open for a day and a half out of the week to drive all of the sales of the company and be successful.
PHIL:
Non-profit organizations also possess a greater challenge than for profit companies because, as Dave said, they must have a strong volunteer force bought into the organization’s culture.
Dave Sumrall: That's probably been the greatest challenge as the church grows is continuing to make sure everybody understands what we rally around, why we rally around it, why it matters, and keep that culture and focus incredibly pure. At the same time, people are our most valuable asset as well because people buying into the vision and having their lives changed is what fuels the continued growth, cuz in a church setting, found people find people. Culture isn't something that we shoot for, it's something that we are.
PHIL:
And so, before we decide when to hire or when to let a team member go, we have to clearly define our company’s culture. If you want to know how to reinvent your culture, check out last week’s episode with Lee Cockerell, the former Executive Vice President of Operations for Walt Disney World Resorts.
Dave Sumrall: Culture isn't something so much that's spoken, it's something that's incredibly felt in a church environment. You can tell when cultures feel off, and we always are very diligent to drill down, "Why does it feel off" - it's always because an attitude or an opinion or a prospective is off. So we monitor it just by talking about it all the time, keeping it fresh and clear in front of the team, and then having constant conversations about why does this feel off, and why does this feel right? Let's drill down what that means and why that conversation and the motivation behind it was wrong. Maybe the outcome seems right, but at the end of the day, it's a little bit more legalistic, it doesn't feel like who we are. We boil it down to just the very simple values of loving God, loving people, having a spirit of excellence, and making sure that we do everything in an attitude of fun, that we actually get to enjoy it. When we think through that filter, then it makes it really easy to navigate church life.
PHIL:
Once we have our culture clearly established, now we can begin to decide when to hire or when to let go of a team member in our organization.
Dave Sumrall: One of the phrases that we have is, "culture has to be caught, it can't be taught". It can't just be a set of rules, it has to be something, like I said, you become. It takes time being in the right culture to be molded by it. In some cases, we have hired from the outside, and we'll give them a period of time when they're coming from a different system or a culture into our stream to adapt to it. Some people make that transition very nicely, and other people, they don't catch the culture, and because we understand the culture is the most important thing, we never sacrifice it for a person that has potential or ability. I would say with organizations that are fighting for that new culture within a new person, making sure that from the top-down, everybody underrates it and embraces it, those new employees will clearly stick out like a sore thumb when they don't embrace it - then they have to make a hard choice. It's not something that happens behind the scenes, it's something that's very obvious to everyone.
MATT:
So let’s answer the first question, when do we hire a team member into our organization? The first thing we need to do is define our personal strengths, and recognize our weaknesses as a leader.
Dave Sumrall: As a pastor of the church, there are a few things that I'd do: I set culture, I set the vision, God speaks to me and I get to set the direction for the church or where we're launching our next campus or what sermons we're speaking on the weekends, those are my responsibility, and in so many cases, only I can do so many of those jobs. A number of people can do the accounting, there's someone else that God's called to lead students, and there's somebody else that's called to lead worship - I don't have any ability in that area. When it comes to all those others jobs - like we talked about before - as the organization grows, you have to identify where the greatest need is, organizationally, that would keep me from doing what God's called me to uniquely do. Every pastor, every C-level executive, every entrepreneur is different in what they want their focus to be, and where their strengths lie. I've always embraced the philosophy of just staffing my weaknesses - I'm not going to spend all my life trying to get good at the things I'm bad at, I'm going to let other people do those things, and I'll just do what God is uniquely gifted me to do, what my strengths are. I think that works in every single organization, and for every high-level leader, that's a different set of strengths - everybody has unique gifts.
PHIL:
(Talk about leaders trying to get better at what they’re not good at – instead strengthen your strengths)
MATT:
The next way to answer when to hire a new staff member is create a budget floor and ceiling for salaries.
Dave Sumrall: We operate based on a budgetary process that says we won't exceed 35% of our income on salaries. We have that as a ceiling that we're always operating under, so that's our first guideline that we have to look at. Then we also understand that there's a number that could be too low, and I don't know what that percentage is, there were years that we've been in the low 20's percentage-wise, but the church was in some cases understaffed. When that's the case, you have too many people doing too many jobs, details are dropped, and people are overworked. Sometimes, even when we are fully staffed, if we're under that 35%, if we find something that is a great leader of leaders, we'll bring them on, because we know that they're a game changer in the organization. At every season of growth for an organization, there are different things that you need, like now that we're at the size we're at, we needed a motion graphics designer. Well, that's not something you need at a church of a couple hundred, you need to pay the pastor. When you get to 500, you need a worship leader. There are different benchmarks that you hit along the way on the size of the organization too that have unique positions. Depending on the industry, obviously there are unique things that you need as you continue to grow, and figuring out what those are, to take your company or your business to that next level, to differentiate. I know that we don't often talk about it because we're all on the same team when it comes to The Kingdom, but when it comes to market-share, you have to identify what's your market niche, what's going to differentiate you from the competition, and lean into those things - staff that team specifically to make sure that you're poised for growth.
PHIL:
(Budgets create safety and clarity)
MATT:
Finally, once we have our budget, in order to answer the question when to hire a new team member into our organization, we must decide the attributes our future employees must possess to be successful.
Dave Sumrall: Well there's a few things on staff that we embrace - when it comes to people just having the right culture. Like I said, we want to be in love in God, we want to love people, we want to have excellence, and we want to have fun. But under that, there's this subset of values that we look for, like the top one would be humility. We have to have some confrontational conversations with people, cuz everybody makes mistakes, and everybody fails. We have to constantly correct and train - somebody having a humble approach towards it, and not really drawing people to themselves, but drawing people to the vision, that's very very important.Of course, teachability is incredibly important for us, and I love how Craig Groeschel defines teachability is "the ability to learn which you think you already know." I love our staff to always be learning, and in those teachable moments.I don't want them to be defensive, I don't want them to try and protect their decisions - I want them to be open-hearted, open-handed, and listen. Even for our staff, some of the best ideas that we've ever had come from people who serve on our teams - we can even be taught by the people around us. I want them to always be teachable, and then I want them to be honest: there's nothing more annoying than having to correct a problem only to dance around the subject for three days, cuz nobody will take responsibility for who is actually to blame, and the truth is kind of fuzzy of who said what, who did what, and whose fault it really was. I tell our team all the time I really don't care whose fault it was, I need to fix the problem. I just need you to be honest with me, did you make the mistake? Did you not make the phone call? Did you not have that conversation like I asked you to have?" It's okay if it didn't happen, we just need to know where we're at - we need clarity in what we're actually talking about. Then I have to have flexibility from our team - somebody that's incredibly rigid and inflexible, when they get very territorial and they want to silo the organization and have their little area that they're in charge of, that's really prohibitive. When I see somebody where, "Hey, if I need you to stay five minutes later, I need you to come ten minutes earlier", that lack of flexibility can really jam up the culture because we work as a team, and I think we have to be really flexible. Then, obviously, people have to be resilient - if you're not resilient in any organization, if you can't take correction and come back from it, if you can't have a failure and come back from it, then eventually, especially in ministry, it's a very difficult industry to be a part of, cuz you're dealing with people's lives, and everybody makes mistakes, we need them to be resilient. If we don't seize those attributes and qualities in people, we know it's just a matter of time before they're no longer with us. We value those at a very high level when we see them.We try to make sure that all of that flushes out before they ever come out on the team, and as they're doing all that, we can again see, do they have the heart for the house, do they embody the culture, do they understand the vision, is this something that they're making sacrifices to be a part of it? Those are all things that are necessary in order to really be successful.
PHIL:
(The importance of identifying specific traits)
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MATT:
So let’s recap… organizational leaders may not struggle with if to hire a new team member, but more so when to bring them on board. As Dave said, the key starts with a clearly stated and defended culture within your organization because culture acts as your litmus test to when you should hire. Once you start answering that question, now comes the plan. The first step to knowing when to hire a new employee is to identify our personal strengths and recognize our weaknesses. Remember, we’re concentrating on building our talents rather than putting all our effort into improving all our shortcomings. Our weakness then becomes hiring criteria for future employees. Next, we need to set guidelines for our organization that protects us from spending too much or too little on the right help. That comes in the form of budgets. For itown, they do not exceed 35% of their organizational income on salaries, yet they also understand they cannot operate if they only spend 20% either because details are missed, people carry too much responsibility and everyone is overworked. Finally, its vitally important that as organizational leaders, you define the characteristics of what makes a great team member in your company. This helps to specifically identify traits for your future team, which in turn protects the culture and keeps your organization operating at maximum efficiency.
Be sure to tune in next week as we continue this two-part podcast where Dave Sumrall helps us answer the next tough question, when do we let a team member go. This has been another episode of the ROI Podcast presented by the Indiana University Kelley School of Business. I’m your host Matt Martella alongside Associate Dean Phil Powell where we help organizations make better business decisions. We’ll see you next week.
Monday Nov 05, 2018
Monday Nov 05, 2018
Sitting in the executive suite, trying to answer, "how do we change our organization's culture?" can cause paralyzing stress. Multiply that by 40,000 employees and a brand reputation recognized globally and the stakes are even higher. Yet, Walt Disney World's former Executive Vice President of Operations Lee Cockerell accomplished that very task. And on this episode, he takes us behind the magic, revealing his secrets that kept the Magic Kingdom, internationally competitive.
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Do you have a question? Looking to get help on a business decision? Know a great guest for our show? Email roipod@iupui.edu so we can help your organization make better business decisions.
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Ready to take your next step? Check out if a Kelley MBA is right for you: https://bit.ly/35aeAfZ
Monday Oct 29, 2018
Monday Oct 29, 2018
As we conclude this second of a two-part series on our country's healthcare system, we explore what changes are currently underway. And more importantly, how they will impact both doctors and patients. Department Chair of Health Policy and Management at the IU Fairbanks School of Public Health, Nir Menachemi shows us what these changes look like and how his team's innovation already saves millions of dollars in waste.
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Do you have a question? Looking to get help on a business decision? Know a great guest for our show? Email roipod@iupui.edu so we can help your organization make better business decisions.
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Ready to take your next step? Check out if a Kelley MBA is right for you: https://bit.ly/35aeAfZ
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SHOW NOTES:
MATT:
On the last episode, we sat down with the Department Chair of Health Policy and Management at the IU Fairbanks School of Public Health, Nir Menachemi, who took us inside why healthcare in the United States is so high, yet still has a low rank amongst other developed nations. Using the nursery rhyme, Humpty Dumpty, Nir showcased how, as a country, we’re pretty good and putting Humpty Dumpty back together, however we fail to explore why or even help prevent him from climbing the wall in the first place. If you missed last week’s podcast, I highly recommend you go back and listen because this week’s episode is picking up where we left off.
Let’s get to the podcast…
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MATT:
Welcome to another episode of the ROI Podcast presented by the Indiana University Kelley School of Business, I’m your host Matt Martella alongside Associate Dean Phil Powell. And today we’re going to conclude this two part podcast by exploring what changes are on the way inside our healthcare system that will affect both doctors and patients. But before we dive into this week’s content, we just want to say thank you for tuning in today. We work hard to put out a weekly podcast that helps organizations make better business decisions. For those tuning in for the first time, we want to say welcome to the Kelley Family. We’re honored you’re taking the time to see what we’re all about. If you have any questions, suggestions for a topic you would like us to explore, or just recommend a guest for our show, send us an email to ROI-pod, that’s roipod@iupui.edu. And for those who are enjoying our podcast, it would mean the world to us if you could leave us a review on your favorite podcasting app. Your reviews help our show grow.
So last week, Nir Menachemi said as a country we spend, on average, $10,000 per person in the United States on healthcare. The focus on that spending is being able to put a sick person back together. Yet, access to great care is only 10% of our overall healthy well-being. We fail to address or even prevent people from getting sick in the first place.
Nir Menachemi: The healthcare system is a misnomer, and I focused on the term "healthcare" because we really have a "sickcare" system. We also don't have the "systemness" associated with the term “healthcare system”. Systems, and I think of the best analogy as the digestive system, it's a whole bunch of things working together towards one common goal. Our healthcare system doesn't work well inherently together across all these different settings.
PHIL:
He also used the term “fee-for-service” as a way to describe how doctors see patients. A patient is sick, they go see a doctor, the doctor fixes them and the doctor collects a fee from the insurance company. There are little to no incentives for prevention. As Nir also said, it can be perverse at times because the sicker a patient is the more money that can be generated for the healthcare provider under our current “fee-for-service” mentality. Leaving a lot of room for poor decisions to be made that ultimately affect us, the patient.
Nir Menachemi: You ask someone in elementary school and they'll tell you it's your diet and exercise, and those are all those health behaviors that that in the 15 minute clinical encounter with your doctor, even though they know that's what's the most important, they just don't get a chance to focus on it, in part because that's not how the healthcare system gets financed. Reimbursement is for fixing you when you go wrong, not for when counseling you on what to do to prevent you from getting sick in the first place.
MATT:
So what can be done to change this mentality inside our current healthcare system? The first thing to understand is the culture of how we view healthcare as a country has to change. And here’s the good news, it’s already changing.
Nir Menachemi: Right now, we're in the midst of a literal revolutionary change to how we reimburse healthcare in this country. For the last 7 or 8 years, we have been transitioning off of this fee-for-service mentality and on to what's called value-based healthcare. Leading the charge is CMS, which includes Medicare, Medicaid, and the big governmental payers of healthcare, and they're basically recognizing that we're at this crossroads right now. We cannot afford as a nation to continue spending as much as we do, and worse, we have an aging population that's going to go onto Medicare, the Baby Boomers. Mathematically, we just don't have enough money in the system to not focus on prevention anymore.
PHIL:
According to the US Census Bureau, there are roughly 76.4 million baby boomers that are starting to enter the latter years of life. And if we look at the industry data available, by 2020 the baby boomers are expected to double the cost of Medicare and Medicaid. And this “value-based” healthcare could give us the answer to not only an aging baby boomer generation ready to retire, but also how we can better our healthcare system. It starts with changing how physician offices are incentivized.
Nir Menachemi: Value-based says rather than focus on fee-for-service, where the incentive is to increase the number of patients that you see, value-based purchasing are a collection of different payment mechanisms to physicians and hospitals that says, "let's see if we can incentivize value". Value is basically the ratio between cost and quality, so you can improve the value of something by either reducing the costs or by improving the quality. The way they're incentivizing value includes a full gradiation of different approaches. One of the lowest approaches involves what's called pay-for-performance - that says to a doctor or a hospital, if you achieve certain benchmarks amongst your patients in terms of either mortality rates, adherence rates to certain things, or the quality of the care that you provide reaches a certain benchmark, we'll give you a bonus. Pay-for-performance is a very low-level way to change fee-for-service to start being more value-focused. Pay-for-performance also includes the concepts of no pay for no performance, and that also includes not reimbursing for certain things that should've never occurred in the first place. Certain types of nosocomial infections, these are infections that occur within the hospital as a result of being exposed to the hospital environment. That should not occur, and if that happens, CMS is saying they’re not paying for it. Likewise, the whole idea of CMS not paying for hospital re-admissions - so if you are a hospitalized patient, and you go home, you should not be re-hospitalized in the next 30 days. CMS says that if that occurs, they're docking the pay of the hospital that first discharges [a] patient before they should've been let go. All the way on the other end of the continuum is something called accountable care, and accountable care says rather than paying you per person, per issue, per disease, per fix, it re-conceptualizes payment to be, an insurance company might assign a hospital company 20 or 50,000 patient, and say, "you are responsible for all the care that these patients need for the next year, and we're going to pay you a fixed amount per patient, per month." Once you accept that contract, you are responsible for keeping them healthy. If they all get really sick and come to you, that doesn't change how much you're going to make, you're going to have to expend more resources to tend to their needs. If you're, however, able to figure out a way to keep them healthy and keep their disease at bay so that they're not over-utilizing unnecessary care, you'll get to keep more at the end of every month because those individuals would not have used your resources that you've made available to them. That really begins shifting the way doctors and hospitals think about what their role is. Under accountable care, where you have what's called this capitated rate, this per-member, per-month fee that you collect - it starts getting you motivated as a provider to say, "How can I prevent this person from needing this expensive procedure?" You are now suddenly spending much more time on things that previously did not generate you revenue, but instead, is averting the bad outcome for the patient. That's in your interest, under accountable care, as a provider, it's in the interest of the insurance company who doesn't want runaway costs that continue to happen. It's also in the interest of the patient who does not want the complication soon in their future. As a nation, we're learning how to find the right combination of financial incentives to bring everyone onto the same boat rowing in the same direction, because previously fee-for-service was not in anyone's best interest, per se, when thinking about everyone together.
MATT:
The second thing to understand is this change will not come easy because as organizational leaders, we know how hard culture change can be just inside our company – let alone an entire industry.
Nir Menachemi: It's very stressful for physicians, for hospitals, and for all the players where the rules are changing, mainly because these entities and individuals have never really been trained to think this way. You rarely learn in medical school how to keep someone healthy - you are focused much more on how to fix them when they are broken. Hospitals have never really developed the cultures, structures, or infrastructures to deal with people who are healthy. In fact, it's scary to all those individuals because under accountable care, for example, you are responsible for say, the population of patients that you are "at-risk" for - the reason why we use the term "at-risk" is because if they all get sick, it hurts you financially, not the insurance company, because you signed up for that per-person, per-month payment. How do you engage a population that doesn't walk through your clinic doors? How do you think about things to keep them healthy and managing their risk factors so that they don't get sick when the entire history of your business and conceptualization is about, "wait for them to show up in my waiting room, and then fix them". This involves lots of things that healthcare just hasn't been doing well, that we have developed much better outside of healthcare. I always think about how Delta, the airline, gets my loyalty based on status that they give me, and I sometimes scratch my head and find myself in Atlanta on a layover just because I'm so loyal to the airline, and what I feel like I get is a glass of wine and a bag of peanuts, but nevertheless, I am intensely loyal and play the game of I do what they want me to do, and they do what I want them to do for me. I love the upgrades, sitting in the VIP rooms, being able to have my luggage come out first, and all the things that they're rewarding me for my business. All the different hotel chains have figured out how to engage consumers. Healthcare organizations are now trying to figure out how to incentivize the patients that they are at-risk for to engage in the behaviors that makes everyone win. That is scary, in part because it requires business skills, healthcare skills, grounding in marketing, grounding in informational technology - because you need to leverage a lot of data that's available to you - it requires skills in strategy-making and operations, which operations really focuses on quality improvement, which again, plays into value. These are not the average things that physicians, for example, feel well-grounded in.
PHIL:
A baked in teamwork, as Nir said of allowing a sort of “self-governing” body so to speak create checks and balances across multiple health networks in order to receive reimbursement for providing valuable care to patients. Nir also said that a lot of physician offices are becoming part of a larger health network, like Community Health Networks as an example. He says this also helps in managing responsibility of a population under this new value-based care.
Nir Menachemi: When you are an accountable care organization, contracting with CMS, let's say, for Medicare-covered lives, and you get 80,000 assigned to you, you as the accountable care organization needs to be able to provide every last service that this patient is going to need in your market. You need to cover all the different specialties, emergencies, primary cares, hospitals, rehabs, nursing homes, anything that this patient is going to need. You have to band together into these larger consortiums, either formally or informally. You could be acquired and literally be a subsidiary of this larger group, or you can contract with them to be business partners to share these responsibility and the care that this person needs. Either way, whether it's formal or less formal, you are now, as a group of providers, expected to coordinate what you all do for that patient better. For example, if someone gets their hip replaced, that might require a whole bunch of out-patient care prior, an in-patient stay, then more post-in-patient care, and maybe some nursing and rehab. Then, there might be some home health associated with it after the patient is home and still needing some kind of services. If you, as the entity collectively, are all responsible for it, you are going to start saying, "Wait, physical therapist, you guys are doing things that are not evidence-based, and that's taking money away from our shared hive that we were each going to get a piece of". Or, if the group determines that the orthopedic surgeons were doing things that were not consistent with some of the best guidelines, someone might say, "Wait a second, we have no money left over because one of the team members that's responsible for the entire continuum care that this person needs is inconsistent with best practices."
MATT:
And finally, the third understanding about how healthcare is changing is to see it in action.
Nir Menachemi: My group here at the Fairbanks School of Public Health has been working on lots of different population-health management strategies, developing them in conjunction with partners: we work with Eskenazi Health, IU Health, and other health systems throughout the region and country. One of the innovations that we were recently recognized with as being the first place winners of the Inject Tech Competition here at the Life Sciences Summit in Indiana was an algorithm that is designed to improve and identify individuals who come to primary care clinics who might be in need of social services by clinicians, such as social workers, dietitians, mental health counselors, or medical legal partnership providers. We developed this machine-learning algorithm that's running live at Eskenazi Health right now, and basically it helps identify in the morning, with the entire roster of patients coming in today, it helps identifying based on every bit of information that's available to us - which includes all the info embedded in the electronic health record of that patient - all of the information available to us through the Health Information Exchange in Indiana - sometimes referred to as either the Indiana network for Patient Care, or commercially as the Indiana Health Information Exchange, IHIE - all the information that's available to us based on a zip code of where the patient lives, and we have either zip code level data, or in some cases even smaller census-track level data, of things like crime rates, how far they are from a food desert, whether or not there are sidewalks in the neighborhood, what the unemployment rate is, and we take all this information that is assembled from the POLIS Center, the Regenstrief Institute, the electronic health records, and all these sort of different partners that we have on campus, and we predict what the probability is of you, the patient, are of needing either a social worker, dietician, etc. That allows folks in the clinic to then match the neediest patients to the limited providers that are available to help with those needs. Going back to the original thing that I said, the vast majority of our health is a function of our behaviors, and our behaviors are a function of our life circumstance. If you're a diabetic who happens to live in the highest crime area and in a food desert, exercising and eating right is not an option for you. You need help with that, and let's just put this context, a teen with diabetes: mom's not letting him run around outside if it's a high crime area, she's not letting them walk back and forth from school if there are no sidewalks, she's not able to get the diet that this kid needs to get his disease under control because there is no place to buy that kind of food. And by the way, even if there was, it's unaffordable because the “healthiest" food is typically the most expensive. So, if we can have a dietician intervene during that kid's diabetic check-up, and instead of trying not to wait for that diabetic kid to have complications that he will then have to deal with, maybe we can proactively figure out a way to help that family cope with that kid's disease, given their life circumstances. Social workers know how to do that, nutritionist [as well], all of these ancillary "wrap-around" service providers know how to do that. Our algorithm figured out a way to optimize the use of those providers in such a way that we can address the behavioral and environmental conditions that are exacerbating people's health. What we found was - and this article just came out in the current issue of Health Affairs, it's been getting a lot of attention nationally both in the media and social media - that using this algorithm and these wrap-around service providers is able to save millions of dollars in averted unnecessary emergency room visits and hospitalizations for some of the patients that are most vulnerable to having their health exacerbated. This is just scratching the service of what's possible, but this was an innovation of leveraging big data, new artificial intelligent approaches to computation and identifying people at risk, and more importantly, deploys resources that we already have in the community that are just not being orchestrated for the end goal of better health for everyone. Doctors and nurses can do what they do best, social workers and dieticians can do what they do best, and patients embedded in their environments and communities are engaged in such a way that's consistent with their life situation. Everybody hopefully wins, and again, is rowing in the same direction towards the shared goal of improved health for the individual.
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MATT:
So let’s recap. Last week we explored the problems inside our healthcare system, as a country. This week we went into what changes are already taking place and what we can expect as doctors and patients. First, how we view healthcare needs to continue to change. Baby boomers are reaching retirement and our current system cannot support them. But the good news is, we’re starting to see the change take effect. Value-based healthcare offers ways to give patients superior care by focusing on prevention and doctors more incentives to keep people healthy. The second thing to know is change will not come easy. As leaders, a culture shift takes time – especially across an entire industry. Healthcare providers are currently at work figuring out how these changes will be made. And finally, the third thing to know about this change is we can see it at work, right here in Indianapolis. Nir and his team have created a computer algorithm that pairs a patients highest needs with the right specialist. Whether that be a nutritionist, social worker, physician, or counselor, this program is already saving millions of dollars in unnecessary procedures – creating a win-win for both health providers and patients.
This has been another episode of the ROI Podcast presented by the Indiana University Kelley School of Business – where we work hard to help organizations make better business decisions. I’m your host Matt Martella alongside Associate Dean Phil Powell – we’ll see you next week.
Monday Oct 22, 2018
Monday Oct 22, 2018
As a country, we're pretty good at putting Humpty Dumpty back together, yet we fail to explore why or even help prevent him from climbing the wall in the first place. On this first of a two part podcast, we're exploring the hiccups within the US healthcare system and how it affects our most valuable asset, our own health.
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Do you have a question? Looking to get help on a business decision? Know a great guest for our show? Email roipod@iupui.edu so we can help your organization make better business decisions.
----
Ready to take your next step? Check out if a Kelley MBA is right for you: https://bit.ly/35aeAfZ
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Show Notes:
MATT:
As organizational leaders, we are responsible for a wide variety of assets that include company profits, team members, physical office spaces, or the company as a whole – yet we forget about our most valuable asset, our health. We know that a lot of weight rests on our shoulders and we do not have the luxury, most of the time, to take off work due to poor health. On this first of a two-part podcast, we’re taking a look at our U-S health system to uncover its flaws and understand what changes are being made that will affect both doctors and patients. Especially with the Baby Boomers about to reach retirement.
Nir Menachemi: We cannot afford as a nation to continue spending as much as we do, and worse, we have an aging population that's going to go onto Medicare, the Baby Boomers. Mathematically, we just don't have enough money in the system to not focus on prevention anymore.
Let’s get to the podcast…
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MATT:
Welcome to another episode of the ROI Podcast presented by the Indiana University Kelley School of Business, I’m your host Matt Martella alongside Associate Dean Phil Powell. On this two-part series, we’re taking a look into the current healthcare system in America and what changes are on the way that could affect both doctors and patients – ultimately allowing us to protect our most valuable assest as leaders, our health. Before we dive into the content, I just want to say thank you to everyone who has been sharing our podcast on social media. It’s an honor that you find our content valuable for not just yourselves, but for your friends and family too. If you could do us a huge favor, we would love it if you could go to your favorite podcasting app and leave us a review because that helps our show grow. And for those of you tuning in for the first time, we just want to say welcome to the Kelley family. We work hard to help organizations make better business decisions through our weekly podcasts because we know the organization is only as good as its leadership. So, if you would like for us to explore a topic, have any questions we could answer, or would like to recommend a guest for our show, shoot us an email to ROI-pod, that’s roipod@iupui.edu.
On today’s episode, we sat down with one of Kelley’s Business of Medicine professors, Nir Menachemi, who helps us unpack the confusing healthcare system we have here in America and unveils some shocking truths about where we rank among the world’s healthcare systems. And on next week’s episode, Nir will help us understand what changes are being made and how they will affect us and our families in the future. In a recent entry in the Journal of American Medical Association, published in early 2018, the United States spends almost twice as much in medical care than any other country around the globe. That makes sense, we’re a leading economic nation, we have a large population, and the price of healthcare in this country is expensive. But here’s what’s shocking – though we spend way more than any other country, according to this study, the U-S has the lowest life expectancy and the highest infant mortality rates out of every country. Why?
PHIL:
Before we have Nir answer that, let’s put some dollars and cents to show how much we’re actually spending. According to that same journal entry, in 2016, the U-S spent 17.8 percent of its entire gross domestic product, or GDP which translates to $3.31 trillion. That’s 3 with 12 zeros after it, for those trying to picture the scale. The closest country, on the highest end of that spectrum, spent 12.4 percent of their GDP. Yet, that does not translate into twice the quality of care. So where’s the breakdown?
Nir Menachemi: We know that for any population, the drivers of what makes them sick or healthy are a function of, first and foremost, the behaviors that they engage in. That includes their nutrition, exercise, and also include the level of education they have. These are all behaviors that someone can engage in, and in some cases, people do not have the option, given their life circumstance, to engage in some of those behaviors. Our best research and science underpinning health suggests that as much as 50% of someone's health is a function of these behaviors that they are engaging in on a day-in and day-out kind of fashion. Another 20% of their health is a function of the environment that they live in. By environment, we're talking about the quality of the existential requirements of life. First and foremost, you need air - we're talking about the quality of the air. If you're in a high pollution area, for example, you'd be chronically exposed to poor air quality. After air, we need water - you can look to Flint, Michigan to see what happened for example, when the quality of water goes south, it has huge repercussions in terms of health conditions that are then manifesting themselves in the population there. The next important thing is the quality of the food that we eat, and the last thing in our environment is the quality of our shelter. You can think about exposure to lead in children in lower quality shelters, or asbestos within buildings or homes where exposure to that in our shelter could have serious implications to our health. Between behaviors and environment, we just covered 70% of things that explains people's health and their outcomes after they're diagnosed with a disease. Another 20%, which brings us to a total of 90, are genetic factors. By in large, I describe genetic factors as the "lottery of life" - this is what you get when you are born, that is the hand you are dealt, and that's going to potentially pre-dispose you to different conditions, ailments, or situations that affect your health. By in large, as much as the whole field of genomics and genetic manipulation and intervention is exciting - there's almost the Star Trek kind of feel to it - there's very little that we can do for the vast majority of people given what their genetics are. The amount that we are able to do, and are proud of, in science represents a fraction of 1% of all the things that might be possible one day. So here we have 90% of health is a function of things that has nothing to do with accessing the healthcare system, or even going to the doctor in the first place. The last 10%, based on well-cited and well-supported research, is access to care. And yet, access to care in the minds of almost everyone is the make-or-break for what's going to decide your health. That's just plain and simply not true. I don't what to say that access to say isn't important, it absolutely is, especially once you are sick, but in terms of what's going to prevent you from being sick in the first place, or delay the amount of time before you develop your illness, it's all those other things. The US spends more per person on healthcare than any other country in the world. In fact, I'll make it more dramatic, more than any other country in the history of the world. The most recent estimates suggest that we spend on average $10,000 per person in the United States per year on healthcare… These are high-income, mostly European countries, who spend significantly less than us. When you look at our report card in terms of how we do versus them, they beat us on almost every metric. In fact, there are almost no metrics that the United States does better on, despite our higher spending. One of the reasons that might be is that when you take our $10,000 per person that we spend - and remember, those breakouts on what the size our health helps to determine who's going to be healthy and who's outcomes are going to be best - we spend 88% of our dollars on that 10% access to care piece. We spend relatively little or nothing, something like 4%, on health behaviors, which as we discussed, explain 50% of the outcomes of people and populations in terms of their health. We have this lopsided focus on putting our money towards sick care, as opposed to preventative care. I always joke that it's like our healthcare system is focused on Humpty Dumpty - as everyone is well aware, he fell off the wall, and got to be put back together again. All of our resources are focused on figuring out how to put Humpty Dumpty back together again. If you have a heart attack - and by the way, the United States does relatively well on heart attack mortality - that's very akin to putting Humpty Dumpty back together again: you're sick, we know how to fix you. But we do relatively poorly on the world's stage in preventing heart attacks in the first place, even though we know what causes them.
PHIL:
I love Nir’s example of Humpty Dumpty as a reflection of our current healthcare system. You know the old nursery rhyme – humpty dumpty sat on a wall, humpty dumpty had a great fall, all the king’s horses and all the king’s men, couldn’t put humpty back together again – except as a country, we are able to put humpty back together again. The only problem is, we never address why humpty was on the wall in the first place. If we could prevent him from climbing the wall from the beginning, we would not need to put him back together.
MATT:
And if we follow the money trail, like Nir said, it’s evident we pride ourselves to be able to put sick people back together. I want to reiterate what Nir shared, 10% of our healthcare needs come from access to care – though it’s important, it’s a small sliver compared to the rest of what keeps us healthy. Yet, how we spend our money is completely backwards. We put 88% of total health spending into a 10% slice, while we only spend 5% into the majority of what keeps us healthy in the first place. That completely contradicts what healthcare is – prevention. So number one, in order for us to protect our most valuable resource, our health, we need to recognize we have a serious problem in the United States. If any business in this country spent two times more than all of its competition, yet was still at the bottom of the list in performance, as business leaders we know that organization would crumble, investors would step in and restructure processes, or every decision maker would be let go. So how did we let this happen?
Nir Menachemi: Not surprisingly, your listeners will be very familiar with the old adage of "it's always about the money". When you think about the traditional way that we have been paying for health services, it's always been fee-for-service - that means someone is sick, they go to the doctor, the doctor fixes them, collects a fee from the insurance company. The incentives there are not about prevention, there are actually perverse. The sicker the patients are, and the more problems they have, the more money that can be generated for the physician or the provider under a fee-for-service mentality. That has also contributed to a lot of the practices and the unnecessary spending and utilization that occurs.
PHIL:
What the journal entry also brought to light is compared to the rest of the world, Americans use close to the same amount of health services as other major world powers. So where’s the breakdown? When we take a step back, what’s clear is weak business leadership and decisions made within health organizations. Remember, doctors and physicians go to school to help people, they don’t focus much on the business side of healthcare. So, what can be done?
MATT:
The second way we can protect our most valuable asset, which remember, is our health, is to improve business practices and leadership inside our health industries. Because there are sweeping changes coming through our lawmaking process that will completely change how we approach healthcare as a nation – we will get more into that on next week’s episode.
Nir Menachemi: It's been so delightful to work with the physicians in the Business of Medicine MBA program - you can take almost any one of them that has graduated in the last X number of years, and get the anecdotes of how they have been able to transform their practices and organizations. Even if they're still on the quest of doing so, talk to them about their confidence in being able to navigate these "treacherous waters" that no one else understands. When you go to medical school, you learn, intensely, how to focus on the individual patient in front of you - you don't figure out or you're never trained how to think about the larger picture, like the community or population you're responsible for, or all of the customers of the organization. Where do you learn that? You really learn that in either business school or public health school on how to think about the organization or the population. I think it's a transformative experience to be re-trained to think at a unit larger than the individual. We know that focusing on the population, or focusing on the organization, is where a lot of the low-hanging fruits to improve health outcomes are. At the end of the day, without physicians, I don't think this could be done, period.
PHIL:
At the end of the day, the health industry is a business – there’s a cash flow and budget to keep hospital rooms stocked and the lights on, there’s marketing strategies to incentives new clients to walk through doctors’ doors, and tough business decisions that need to be made from owners or executives of health institutes. As Nir said, many of these disciplines are not taught in medical school. So for those physicians looking for help to sharpen their skills as organizational leaders, I highly recommend you check into an MBA program that’s geared toward healthcare professionals – which the Kelley School of Business offers. Because not only will you be able to gain valuable organizational development skills, you can walk into meetings armed with the knowledge to make tough business decisions that will help cut unnecessary spending while offering great care to patients. Not to mention, when these changes, which we’ll dive into next week, take effect. You’ll be able to stay ahead of the curve and lead your team to success.
Nir Menachemi: Because what's absolutely critical and something that my own research and observations has found time and time again, that the leadership of that conglomerate has to have strong physician presence. It cannot be by administrators, suits, or by insurance companies, it's got to be strong physician leadership in that decision-making, or at least, strongly influencing the decision-making that occurs at that level. We know that because unlike administrators or insurance companies, physicians are in the trenches, seeing exactly what's going on in and are interacting with patients on a day-in, day-out basis, and more importantly, patients trust physicians. When I am sick, I want to see a doctor, and I want to know what she has to say. I don't really want to hear what the CEO of her hospital currently has to say about my condition. I'm just trusting that in the background, the organization is going to be doing all the things that I want and that are important for me. Sadly, and I'll bring my dad back into this, as a primary care physician who's now retired, he never had an interest, and frankly, never had an opportunity, and was self-selected to not care about the business and leadership side of organizations. He wanted to see patients in the clinic, and that's what he did, for forty years. I don't think physicians have that luxury anymore because the demands on them are to be experts in the exam room or the surgical suite, also engaged in organizational decision-making, and then in leadership by walking around with their colleagues, helping them understand why this decision is critical for everyone's best interest. Without physicians in that role, and physicians need training and to beef up their business in leadership skills to be able to do that effectively, we're not going to move as quickly towards the panacea that I think everyone needs us to be at.
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MATT:
So let’s recap... on this first of a two part podcast, Nir helps us understand why our health system needs work so we can ultimately know how to protect our most valuable asset, our health. He said that 90% of our healthy well-being happens outside of the doctors’ office. Yet 88% of our entire health spending goes to 10% of our well-being – that is fixing a person AFTER they’re broken. Our current, “fee-for-service” healthcare model is fairly good at putting Humpty Dumpty back together, but we fail to understand why he climbed the wall in the first place. It incentivizes doctors to only treat people after they have an issue instead of working toward preventing people from having to see the doctor from the beginning. The first way we can work to protect our most valuable asset, our health is to recognize that we have a serious problem with our current system. As a country, we spend almost twice the amount in healthcare, yet we fall to the bottom in the quality of care, compared to other countries around the world. The second way we can start protecting our health is to improve the business practices and leadership within our healthcare organizations. Remember, doctors are focused and trained on how to care for a patient, which leaves room for growth on how to create the best organizational practices. There are incredible educational programs out there, like the Kelley Business of Medicine MBA, to help doctors bridge that gap. And as we’ll get into next week, this is not an easy fix because it involves changing the entire culture behind our current healthcare model that’s been around for decades.
Be sure to come back next week, where we continue our conversation on how to protect our most valuable asset, our health. Nir will help us explore what changes are underway and how they will affect not only the doctors providing the care, but also us as patients. This has been another episode of the ROI Podcast presented by the Indiana University Kelley School of Business. I’m your host Matt Martella alongside Associate Dean Phil Powell where we work hard to help organizations make better business decisions. We’ll see you next week.
Monday Oct 15, 2018
Monday Oct 15, 2018
Thirty city blocks, 12,000 potential jobs, and a blank, urban canvas long for a community revival. Thanks to Ambrose Property Group, lead by President Aasif Bade, that urban resurgence is on its way. The projected $1.4 billion development received its name Friday - Waterside; creating an opportunity for another district to make its mark on this great city. On this episode, we sat down with Bade who spoke about how any commercial real estate company can create success within their own community.
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Do you have a question? Looking to get help on a business decision? Know a great guest for our show? Email roipod@iupui.edu so we can help your organization make better business decisions.
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Ready to take your next step? Check out if a Kelley MBA is right for you: https://bit.ly/35aeAfZ
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Show Notes:
MATT:
A city skyline cannot exist without a property to build on, a design to construct, or a vision to bring to life. Here in Indy, 30 city blocks of blank canvas space exists on the city’s southwest side, ready to welcome a development that will last for generations to come – adding another dimension to Indy’s skyline. So how can a commercial real estate company most effectively create success? Ambrose Property Group shows us how - Let’s get to the podcast…
||ROI MUSIC PLAYS||
MATT:
Welcome to another episode of the ROI Podcast presented by the Indiana University Kelley School of Business, I'm your host Matt Martella alongside Associate Dean Phil Powell. If this is your first time tuning in to the ROI Podcast, we are glad to have you. We put out a weekly episode that helps organizations make better business decisions. For those of you who enjoy our show, it would be such an honor to us if you could head to your favorite podcasting app and leave us a review. And finally, if you would like to get a hold of us, send us an email to ROI-pod, that’s roipod@iupui.edu.
Last year, the Indy Start released an article that names Indianapolis the 2nd most resurgent city in the country – and that was according to realtor.com. The average home price in Indianapolis is just under $310,000. That’s a 20% increase since 2012. The city has also seen a 10% increase in population.
PHIL:
And according to our own Kelley Faculty and Economists, Kyle Anderson, he stated in his economic forecast that the Indianapolis-Carmel-Anderson economy added almost 25,000 jobs – a 2.3% increase since 2016 with signs of strong growth. According to Kyle, the blend of the low cost of living and the growing number of startups are the major factors why this urban resurgence is number 2 in the country. So as we work to acquire more corporations within our downtown environment, it’s up to the commercial real estate industry to get ahead of this growth because it’s those office spaces and apartment complexes that will support the ever increasing demand.
MATT:
On this episode, we sat down with the President of Ambrose Property Group, Aasif Bade – a Kelley Business School grad and commercial real estate expert who manages an impressive property portfolio that includes the old GM stamping plant on the city’s west side. Aasif shares the three keys for his real estate success.
Aasif Bade: We literally started the business in the height of the recession. We were able to capture some great opportunities in the real estate market at literally the bottom - this building we're sitting in today was purchased in 2011, it's right on the circle in downtown Indianapolis. What differentiates Ambrose from the beginning is the cultural mindset to, number one, focus on our customers, employees, and everyone that's involved with our business, and have a one-to-one people-focused mindset. Number two, we're always conscious of the environment: we operate from a community aspect. Number three, we remember what's happened. Some of the basic economic lessons we learned in the Kelley School of Business [are] not to get ahead of ourselves and remain cautious… every day, every decision we make, we recognize there's ups and downs in the economy, and while we've been successful doing business deals during the downturn, we recognize that it will probably happen all over again in the near future.
PHIL:
(Aasif’s accomplishments, his presence in Indianapolis, any other thoughts)
MATT:
As commercial real estate leaders, or those looking to get into commercial real estate, the first key to success is, it’s all about timing.
Aasif Bade: We've probably made these mistakes too, the two are buying/selling too early and buying/selling too late. I know that sounds like a simple answer to your complicated question, but ultimately, real estate is all about timing. There's a lot of factors that impact everything, but we've benefited from incredible timing that I by no means had control over. While our firm had a hunch, we didn't know, we just happened to get into the business at the right time, and I don't know if I would recommend to my 26-year-old self to do it all over again or not, it's worked out okay, but it's all about timing.
PHIL:
And it’s the timing that allowed Ambrose Property Group to purchase the old GM stamping plant.
- History of the plant
- Employed 6,500 people during its peak
- 120 acres of land – or 30 city blocks
- What it means to the city
- The GM plant carries deep history with the city of Indianapolis
MATT:
The second key for commercial real estate leaders to success is to respect the city and the history of your property.
Aasif Bade: Indianapolis has had a great run over the last fifty years. Our city has been a model around the country for public, private, philanthropic partnerships, everyone here works very well together. We've had great mayors and governors of both parties, great leaders in the public sector and the philanthropic world all work together, and I think we have a reputation around the country for that. People like to do business here and come here to be in this community. With respect to the GM stamping plant. We try to recognize and appreciate the history of that site. It has been primarily a manufacturing employment center for well over 100 years. That speaks to us because we think about the families and generations of people that have worked on that site - they earned a living and literally there's been generation after generation that's done that. A lot of the neighbors in that neighborhood and adjacent ones [have had] families have worked on that site, and [perhaps going as far back as] great-grandparents who did the same. I learned an acronym a very long time ago from one of my mentors, and I probably use it daily: STEP - See The People/See The Properties. I especially use that one when we are over-analyzing some type of project - there's a lot of times where I say we should just go for a walk to the GM plant. After going through 20 pages of design documents, I'd rather just go touch it, see it, and feel it. We're in real estate, it's a visual business. I heard a saying this morning that downtown is a state of mind, and in a lot of ways, we're in the people business and place business. A lot of that is state of mind and much more subjective than objective. I think seeing the people and properties are important - sometimes drawings on paper or in conference rooms get you so far. I encourage myself and others to get out of the office and explore that state of mind.
PHIL:
- Aasif’s projected project cost: $1.3 Billion
- Plans to invest $550-million into site over next 15 years
- Plan includes some 2.7 million square-feet of residential, office, commercial, hotel and retail assets
- He estimates 12,000 permanent job creations when fully developed
- See the People/See the Properties – give your reaction
- Why it’s important for city
- Why it’s important for people
- How it can affect your image as a property owner if done wrong
MATT:
Once we understand that it’s all about timing, educate ourselves about our property so we can embrace a deep respect for our property’s history within the city, the third key for commercial real estate success is to involve the community throughout the development process.
Aasif Bade: Our goal is to engage with the community, neighbors, other organizations, the public at large, and public enterprises. We feel a huge weight of responsibility on what will happen there, and we also recognize that just like in the past 100 years, we know may not be around for the next 100 years, and we're just trying to handle it properly for the years that we're directly responsible for it. As you may be able to tell, the GM stamping plant is an enormous project and it's really important. A lot of focus is usually placed on the numbers, the dollars, how big it is, how long the project will last, how many square feet it'll be...the moment for me that crystallizes it and gets me sentimental is number one, having been born and raised in Indianapolis, it's a big point of pride to me to be able to be the owner and developer of that, shaping 30-35 city blocks of downtown Indianapolis… having conversations with folks today who live within eyesight of that property who inherited their home from their parents and also whose family worked at the GM stamping plant. They wanted us to develop it and they encouraged us to continue the pursuit even after 8 years of going after it and not getting it multiple times. They wanted to engage with us and they gave us recommendations of what they thought should go there. That engagement with real people who don't own any part of the development, yet have so much more ownership over it from a state of mind perspective than I ever will, having that relationship and encouragement is what gets me excited as opposed to the physical assets. It goes back to passion. I like to talk to people, to see things develop, have relationships, and have an impact with the community at large. That relationship with those folks, having hired someone on purpose on my staff in this office whose sole job is to engage with the community, report back to the team, and always be in touch with the community, we think that's how the community will continue to get better and how it's gotten to the point it has because of so many people that came before us doing the same thing over the number of decades.
PHIL:
- Comment on “these people don’t own any part of property, yet have so much more ownership from a state of mind perspective.”
- It’s importance to tie the community together
- Why owners should not ignore the people who have more “state of mind ownership” then they do
- However, also understand everyone cannot be made happy – yet we can be respectful
MATT:
So let’s recap… Ambrose Property Group, led by Aasif Bade, not only started a successful commercial real estate enterprise in the midst of a terrible recession, but also acquired a major piece of Indianapolis history through their recent purchase of the old GM Stamping plant on the city’s southwest side. Through Aasif’s real estate journey, he gave us three keys for his company’s success that us as leaders can embrace to better our organizations. The first key, it’s all about timing. Not only was the timing in his favor when he founded Ambrose Property Group, it was also timing that allowed his company to seal the deal with the old GM plant. It may have taken over eight years and multiple offers, but the timing in which he made them paid off. The second key is to understand the history of your property and embrace a deep respect for the people who have more of a “state of mind” ownership of your land. For Aasif, his property gave generations of families the jobs necessary for their success. As he works with developers, he constantly reminds himself, “see the people/see the city,” of that history to better shape the Indianapolis skyline. Finally, the third key is to involve the community inside developmental planning. It’s impossible to make everyone happy, however it’s the people who will work on your sites, live on your sites, and even travel for leisure to your sites. Allowing the community to have input on your development gives them a major share in feeling like they own that property, which in turn gives them a sense of pride that will one day etch your company’s building inside the minds of families for generations to come.
This has been another episode of the ROI Podcast presented by the Indiana University Kelley School of Business. I’m your host Matt Martella, alongside Associate Dean Phil Powell – where we work hard to bring you a weekly podcast that helps organizations make better business decisions. We’ll see you next week.
Monday Oct 08, 2018
Monday Oct 08, 2018
As podcast popularity explodes, a new study from the Interactive Advertising Bureau and Edison Research shows that 65% of podcast listeners are likely to buy a product after hearing an ad within a podcast. However, if we also start our own podcasts, as organizational leaders, we can have an even larger footprint within our respective markets. On this episode, we're sitting down with the Co-Founder of Podchaser, a company dedicated to centralizing podcast content from around the globe, who is helping us unpack how we can leverage the podcast medium to our advantage.
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Do you have a question? Looking to get help on a business decision? Know a great guest for our show? Email roipod@iupui.edu so we can help your organization make better business decisions.
----
Ready to take your next step? Check out if a Kelley MBA is right for you: https://bit.ly/35aeAfZ
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Show Notes:
MATT:
How we ingest media is ever changing. Just as CDs and DVDs are becoming over-shadowed by streaming content, radio stations fight the same war with podcasts. As consumers, we long for content we can enjoy, but we want to enjoy it on OUR time. With podcast popularity skyrocketing, how can our organizations get ahead of the curve and use them to our advantage? Let’s get to the podcast…
||ROI PODCAST MUSIC||
MATT:
Welcome to another episode of the ROI Podcast presented by the Indiana University Kelley School of Business. I’m your host Matt Martella alongside Associate Dean, Phil Powell. If this is your first time tuning in, we just want to say thanks for checking us out. We work hard to put out a weekly show that helps organizations make better business decisions. If you have a topic you would like for us to discuss, questions we could answer, or a guest you want to hear from – send us an email to ROI-pod, that’s R-O-I-P-O-D-at-IUPUI-dot-edu.
PHIL:
Did you know, according to Apple, there are currently over 550,000 active podcasts around the globe? These shows have produced over 18.5 million episodes. So for you that have subscribed, we are so honored you chose us. And according to a study done by both Nielson and Edison Research, 64% of Americans, 180 million people, are familiar with the term “podcast” and 44% of the U-S population, or about 124 million people, have ever listened to a podcast at least once. What was once seen as an underground radio scene has evolved into a major industry. Yet, there is still so much room for growth in this medium.
MATT:
So in honor of International Podcast Day, we sat down with Co-Founder of Podchaser, Cole Raven, a company dedicated to centralizing the podcast content from around the globe. Cole’s helping us unpack why every organization should embrace podcasting – whether it’s buying ad time on a show or creating our own podcast as a company. It all starts with seeing the shift from following a radio network to following an industry leader.
Cole Raven: Something that has been a bit of a craze recently has been the ketogenic diet. There are, for example, entire podcasts built around just that with hundreds of episodes. If you really want to dig that deep into something like that and regarding radio shows, there are still the same radio shows that have now transitioned over to podcasting, which are still providing the same general format. But what I'm seeing is that you find professors at schools, or you find industry experts on a specific topic talk about things like diet and weightless or fashion or anything. And instead of following a radio network, you're following an influencer or industry leader. You're seeing the same shift with people on Instagram and YouTube - they're supplementing their brand with podcasting on a very specific niche topic, which is why you can find a podcast about anything. So once you understand that and see the shift then I think that you can think of new ways to leverage the medium.
PHIL:
And what better way to leverage this medium than thinking about how listeners take in podcast content. This is a very intimate space. Think about it. Those who listen either wear headphones or plug into their car stereo system. Audiences are engaged – they listen with purpose and intention. As Cole said, because shows are extremely niche, audience members come excited about an episode. So how can we leverage this? It starts with advertisements – like radio we want to buy commercial time. According to the Interactive Advertising Bureau and Edison Research, 65% of listeners are likely to buy a product after hearing an ad in a podcast.
MATT:
So the first thing our organizations can do in order to take advantage of the podcast medium is get in early on advertisements.
Cole Raven: I think the first step would be to understand how far podcasting has come over the last four, even three years. Just the awareness for the term podcasting or the number of people who have listened to a podcast in the last month has grown by double-digit percentages in the last few years. It's gone from in the teens to now nearly 30% of people listen to podcasts, or say they listen to podcasts on a regular basis. So once you understand that and see the shift then I think that you can think of new ways to leverage the medium. But I think that as industry leaders become more aware of the impact podcasting is having and how they can reach niche audiences because through Podchaser or through other means if you search for a very specific topic on something you want to learn about, you can find something on it. Somebody in the world of podcasting has talked about what you want to learn about. And you'll be able to find it in podcast form. I think awareness of the growth and also awareness for just the depth of knowledge that podcasting has to offer.
MATT:
I’m not one for buying into commercials – in fact, commercials almost turn me away from products because they’re almost too good to be true. I like knowing data, I like hearing why a product works, or I want to make a connection with a brand. For me, recently, the only times I’ve bought a product through ads were those on podcasts. In fact, I recently bought a leadership book because I heard the author speak as a guest on a leadership podcast that I follow. Not only was I engaged with the conversation, I was moved to buy the book. So as part of the 65% likely to buy a product from podcast ads, this is huge for businesses.
PHIL:
But this has to be done in the right ways. Your example is great – here is a show that you listen to for personal growth, you gained knowledge you were seeking, and they offered a product to go to the next level, which you bought. So as organizational leaders, we have to be strategic in how we market in this medium. It’s all about finding the right niche audience to cater to. We have to find the shows who have an audience that fit our demographic clients. However, if we offer a product for everyone, then trying to get ad time on the major podcast networks may be a better option. And if you jump on early enough, you may be the lead sponsor for a show. For example, the incredibly popular show Serial is sponsored by MailChimp, who’s 19-second ads have become as recognizable as the show itself. With so many diverse and growing shows, there’s a great demand for advertisement – which helps get your product out at a much lower price.
Cole Raven: If you look at podcasting as a whole compared to radio as a whole - the cost to reach people through podcasting is right now, a tenth of the price of radio. Mostly just because a lack of awareness. It's such a new thing and especially the big organizations are less likely to adopt it until they see evidence that it works. But you see major brands advertising on podcasts - basically taking it over. You hear the same ads on every single podcast. They wouldn't have been doing that for the last 3 years if it hadn't worked really well.
MATT:
This is just one, and the most obvious way, to take advantage of the podcast medium. The second way, and the way we’re going to really unpack, is to create your own show as an organization. We’re going to explore three take-a-ways on why your organization needs to start podcasting. The first reason why your company needs to start podcasting is to help your market learn more about your company and gain a deeper understanding of your industry.
Cole Raven: You can use podcasts for more than just an advertising platform. If you want to get into podcasting, you don't have to pay $15-$20 CPM to advertise on one of the major podcasts. You can start your own and it's not that expensive. All you need is a microphone and some editing software and maybe pay somebody to outsource that. There are plenty of services out there that do that and as long as you have a clear goal and a vision for what you want to get out of it, that's absolutely essential. Don't just make a podcast for the sake of making a podcast. There are too many of those out there. But if you have a clear goal and a vision for what you want to get out of it then there's really no downside. It's just a supplement to all the other marketing and media that you're putting out there because people want to consume content in different ways. Now we've started to see major brands like eBay has their own podcast, McAfee has their own podcast. All these big brands have their own podcasts because they see it as a way to reach their audience in a more organic way because the stories they're telling on their podcasts aren't just selling the eBay brand, necessarily. It's telling the story how a mom and pop shop owner has transitioned from a brick and mortar business to an eBay business. It's telling real stories of real people instead of just advertising at people. So I would say, if you get into podcasting, it shouldn't, at all, be about you or your brand. It should be 100% about the guests that you have on or about some very valuable piece of content that you can deliver, for free, to your audience that they're really going to enjoy and engage with. And that's something that you can share that's going to get like, it's going to get shares, it's going to get in front of your audience simply because it's valuable and not just another billboard.
PHIL:
(Talks about our purpose of podcasting – our why)
MATT:
The second reason why your organization should start a podcast is to have a reason to connect with other major leaders within your industry.
Cole Raven: So when you say, I have a podcast do you want to be on it, people know what that means. People didn't know what that meant 5 or 10 years ago. They thought, oh boy, I'm going to interview in this guy's garage. But now, it's a serious thing if you're going to be on somebodies' podcast. That's almost an honor now. If you work for a business or an organization and you're a part of the marketing department or PR, whatever, I think it's a great decision to make a podcast because you can connect with people outside of your organization. If you want to use it as a new sales channel or sales funnel you can, as the VP of Sales for a company, use that as an opportunity to reach out to another organization and say, hey, do you want to be on my podcast and talk about SEO or talk about new ways that you're team has been effective in cold calling - you know just different things. Not only is that creating really good content that is going to help people find you online, it's now you've built a relationship with that person you just interviewed. Maybe you had no other reason to reach out to them before, but now you have a great reason. Now you have a reason to talk to them and it's more than just a cold outreach. It's offering them an opportunity to do something to help them too instead of just helping yourself.
PHIL:
This is one of our bread and butters to podcasting. We love our guests that we host, who do offer incredible insight into their industry. And we love the access we’re able to have – so leverage this time wisely. (TALK ABOUT WHAT IT MEANS FOR YOU TO HAVE THIS ACCESS)
MATT:
The third reason why every organization should start a podcast is to engage your employees.
Cole Raven: I think it's a great decision to make a podcast because you can… connect with people within your organization in a new way. Where these companies like Sales Force, they've got thousands and thousands of employees. It gives, maybe the marketing or PR management a way to engage their employees in a different way. Like, having a podcast about the culture of the company. They could bring them in their office and talk about that.
PHIL:
This becomes an easy way to speak about your company culture in the same verbiage and allows your employees to have a connection with your organization’s leadership, on their time. It also creates actionable talking points for managers with their team members – keeping the company, especially as they grow, on the same track.
||ROI MUSIC PLAYS||
MATT:
So let’s recap. Podcasting has exploded in popularity over the past few years – giving organizations an opportunity to grow as well. The most obvious way is to pay for advertisement space on popular shows. With 65% of listeners likely to buy a product from a podcast, according to the Interactive Advertising Bureau and Edison Research, this seems like a no brainer. However, your organization can also gain more benefits by starting your own podcast. Many major companies like eBay and McAfee use these mediums to create organic connections with their market by telling personal stories, not overly promoting their brand with success. First, this allows your market access to education about your organization or industry. With a microphone and editing software, the cost for podcasting is next to none. Just remember, your episodes need to be all about your guest or a valuable piece of information people can walk away with – not a platform for your brand promotion. Second, podcasts allow us access to high level guests, industry leaders, or government officials we would not be able to get otherwise. This gives them a way to get their message out while giving us an opportunity have their attention and build a relationship. Finally, this can also be a great way to engage our own employees. Whether it’s building our culture, educating them on our vision, or keeping everyone up to speed, podcasts are on demand – so we don’t have the headache of trying to schedule everyone into a meeting at the same time. It also allows our managers to have talking points with their team – increasing their influence and leadership within the organization.
If you’ve enjoyed our podcast, let us know! Be sure to leave us a review on your favorite app. If you would like to get a hold of us, send us an email at ROI-POD, that’s R-O-I-P-O-D-at-IUPUI-dot-EDU. This has been another episode of the ROI Podcast presented by the Indiana University Kelley School of Business. I’m your host, Matt Martella alongside Associate Dean, Phil Powell where we work hard to put out a weekly episode that helps organizations make better business decisions. We’ll see you next week.
Monday Oct 01, 2018
Monday Oct 01, 2018
Back in June of this year, Associate Dean of the Kelley School of Business in Indianapolis, Phil Powell sat down with Gov. Eric Holcomb to discuss the tech growth, here in the Hoosier State. On this episode, we're talking with Phil about his experience inside the Governor's Mansion and revisiting that previous episode.
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Do you have a question? Looking to get help on a business decision? Know a great guest for our show? Email roipod@iupui.edu so we can help your organization make better business decisions.
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Ready to take your next step? Check out if a Kelley MBA is right for you: https://bit.ly/35aeAfZ
Monday Sep 24, 2018
Monday Sep 24, 2018
How many times have you had the thought, "that would make a great business?" If you're on the verge of starting a business or need a "kick" of motivation, this episode is for you. There's starting a business, and then there's starting a business right. On this episode, we sat down with two entrepreneurs from Realync who share 5 tips from their own startup journey that proved successful.
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Do you have a question? Looking to get help on a business decision? Know a great guest for our show? Email roipod@iupui.edu so we can help your organization make better business decisions.
----
Ready to take your next step? Check out if a Kelley MBA is right for you: https://bit.ly/35aeAfZ
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Show Notes
MATT:
Each company has a starting point. No matter what organization, one person had an idea and turned it into a success story. Some rose to the top, while others fell into the shadows. On this episode, we’re sitting down with two entrepreneurs who pulled back the curtain of their organization and gave us a front row seat into their startup process to help our new business become a legacy. Let’s get to the podcast…
||ROI MUSIC||
MATT:
Welcome to another episode of the ROI Podcast presented by the Indiana University Kelley School of Business. I’m your host, Matt Martella alongside the Associate Dean of Academic Programs, Phil Powell. For those of you joining us for the first time, we just want to say welcome to the show. We put out a weekly episode that helps organizations make better business decisions. And if you could do us a huge favor, we would be honored if you would hit that subscribe button. That way you can get the latest content the moment it’s released.
Also, if you would like for us to discuss a topic, leave a comment, or recommend a guest for our show, we would love to hear from you. Just send us an email at roipod@iupui.edu.
How many times have we had an idea and thought, “that could make a great business?” Or how many times have we thought about branching off and starting our own company? Well for those of us who are looking where to start, today’s episode is for you.
PHIL:
Many times, an idea may seem too basic or we have the, “of course that idea’s been done” thought run through our head. Yet, a lot of the time, those are the ideas that launch successful businesses. According to the Bureau of Labor statistics, the number of established companies, less than a 1 year old, is the highest it’s been since the 2008 financial collapse. The job creation these young companies create are increasing, and overall more companies are entering the economy than there are exiting. According to the Small Business Administration, companies with fewer than 500 employees provided 64% of the new jobs in our economy. So it’s clear to see that these ideas not only have the potential of creating a solution to a consumer’s problem, but they are crucial to sustaining a strong U-S economy.
MATT:
So the question becomes, where do we start? How do we take this idea from conception to the market? We sat down with two bright minds from RealYNC, a real time video platform that instantly connects real estate professionals with prospects to tour a space. Co-founder and CEO Matt Weirich and Director of Operations Jordan Easley took us through their hard-fought entrepreneurial journey. Here’s Matt Weirich:
Matt Weirich: I knew ultimately my end goal somewhere in my life would be start a business, have a company of my own. So I was always thinking in snippets of ideas and opportunities. When I was moving from Purdue up to Chicago, I looked at 40 different places to live, in person, drove up there 6 weekends in a row to look at properties. And half of them, I would walk in, turn around and walk out within seconds. I instantly knew I wasn't going to be living there. Very frustrating process, very broken process and so, I started looking at the process very critically. What could of been done differently, what I could of done, had or used to streamline that. And it just so happened that May of 2011 was when Facetime came out. I just put two and two together. I would have absolutely had my agent walk me through those properties virtually, while sitting on campus at Purdue. I could have knock out half of my trips to Chicago. It was one of those light bulb moments where I saw a gap in the market, saw an opportunity, started shooting a few things around. I talked to some agents and brokers that were in my network already. Started asking them about this sort of experience with clients, if they felt that pain point as an agent. Started talking to some of my friends on the consumer side of it as well and just identifying those initial triggers. Is this an opportunity beyond just myself? Is this impacting our industry? Is this impacting just my demographic? How big is this and how far does it go? I kind of sat on the idea for a little bit. About 2 years while I was a consultant. Eventually I just saw that pain point reiterated time and time again. Especially as a consultant. We were traveling on the road Monday through Thursday, Monday through Friday every single week for the job. One of the hardest things I saw my colleagues go through was trying to find a place to live because they couldn't physically be there. Finally, it got to the point I could not stop thinking about the idea. I knew that if I tried to go for it alone, it probably would not get to where it needed to be. At a work event, I started to talk to my then colleagues, my now co-founder of the business. He instantly clicked with the idea and we were in my apartment the next weekend, whiteboarding and figuring out the business plan.
PHIL:
For those of us unfamiliar with RealYNC, they provide live and edited real estate tours all through a mobile device or computer. Basically, you can tour an apartment or house anywhere in the world. An apartment agent or real estate agent, using their own phone, walks you through the property – saving the client time or resources, especially if they live far away. As Matt said, the idea started from an annoyance, a pain point as he calls it of having to add many miles, spend money to travel, and find himself disappointed each time he found nothing.
MATT:
Matt even admits this business idea seems like something a million people could have thought of and started, but they didn’t. He was annoyed with how he was shopping for housing, so he made a solution that’s now become a successful business. So, the first key take-a-way when bringing your business idea to life is to embrace the reality that your idea is not too simple.
Matt Weirich: The number one question I got when I was building this company was, "why wouldn't someone just pull out Facetime?" It's a free solution, it's on their phone already and that was always the question in the back of my mind. Is there enough of an opportunity here that people will pay for it and pay for a built for real estate solution. There are so many constraints with Facetime. It's only one-to-one, it's apple only. As soon as it's done it's gone. It's reliant on memory. All of our live tours are saved and recorded through the cloud.
PHIL:
Here’s a big differentiator that sets Matt apart from many others. He did not let the discouragement of, “why can’t someone just use Facetime?” stop him. In fact, used those questions to help improve upon his initial concept by dreaming of things like, “well what if when you jump on a video call, the user can save that video to watch later? What if anyone with any phone or device could watch? What if multiple people wanted to jump on at the same time?” Etc. Instead of us letting others tell us why our idea won’t work or why it’s already done, use their criticism to our advantage. Inside those push-backs lie the keys to differentiation – and differentiation leads to a successful business solution.
MATT:
The second key take-a-way to bring your business idea to life is to really take your time and do extensive research.
Matt Weirich: Our first investor in the business, he actually cut us a check, no strings attached, before anything was formed and gave us the advice of, "don't build anything. Go out, go to conferences, go to focus groups - just talk to your target audience before you build anything." Understand the personas, understand the needs and the opportunities. And really, that's what we did for the first 10 to 12 months before we even thought about building a product. We speced things out. Speced out what the product would be, what the messaging would be, go-to-market strategy, all of that. But ultimately it was listening to the market and figuring out what this company needed to be to have a valid market opportunity and a chance at surviving. Once we go to a point where we were very confident in what we needed to build and what would drive value for our end customers, we brought on a technical member of the team, built out an MVP, minimal viable product just enough to get in the hands of some test users and really hit the ground running from there. So it was ultimately the upfront research we did, the market analysis, doing the focus groups and the surveys and just getting in front of both sides of the market. The consumers and the agents and real estate professionals. That was ultimately what gave us comfort in knowing that there was a valid opportunity here.
PHIL:
We need to remember that creating a business takes a lot of time. We have to embrace that truth. So, if we’re going to be in the trenches for the long haul, we better make sure we know who were reaching. And more importantly, we want to know what the consumer really needs – not what WE think they need. This part of the startup is like building the foundation to the house. Though the aesthetics are not pleasing nor does it show a home’s character, without it, every piece of wood, brick, curtain, and furnishings crumble like a house of cards in a summer’s breeze. We cannot underestimate this step in the process.
MATT:
Once we embrace the idea that our idea is not too simple, then take extensive time to research, the third key take-a-way for bringing our business idea to life is to drown out the noise.
Matt Weirich: That was one thing early on in Chicago when we started our business that I felt like there was a lot of noise. I feel like there were a lot of people in Chicago in particular that were playing start-up, playing entrepreneurs were clearly not going to go anywhere but they were just so many events, so many places to be, so many scenes to be in that ultimately it was a distraction. And that’s quieter here in Indianapolis. There’s still great ecosystems, and meetups and coworking spaces where you can be in community with those other people going through the same seasons, but it’s focused on hard work, it’s focused on results, it’s focused on growing and actually building value. Like I said, early on in the process, we were going to all these hang outs and entrepreneurial events and trying to be in the scene, which was fun but it was distracting. Ultimately, looking back it just pulled us away from stuff that we could have been working on, could have been doing and could have been listening to the market and building product and things like that. Focus on the customer, focus on your clients, your market and just listen to them. They will show you the path that you need to be on. They will tell you what your product needs to be, what it needs to do. Their opinion is ultimately that values most. Not even investors and all that. It's your end customer. That's who you need to be listening to.
PHIL:
We must keep the real thing, the real thing. Entrepreneurship is all about creating a solution to a problem through a new business. We cannot lose sight of our company. There will be times throughout the journey our focus will try to shift. Whether it’s from mentors who check in once a week, startup hang out groups, or investors trying to steer the direction of the company. I’m not saying to avoid all these things, hide in a closet and don’t see sunlight until we have a finished product. What we need to do is understand our why. Remember why we decided to start, why the world needs our solution, and why we’re putting this much work into creating this solution. Our why becomes our anchor and protection when the noise comes which acts as a filter to every decision we make. Simon Sinek offers an incredible Ted Talk on this – if you have not listened to it, I highly recommend it.
MATT:
Once we drown out the noise around us and stay focused on our conceptual business idea, the fourth key take-a-way to creating a successful startup is to hone in on a super specific market segment at the start.
Matt Weirich: Sitting where I am and looking back and reflecting, we wasted a lot of time. We were chasing every shinny object and we didn't really hone in on a particular market, a particular segment where we may have been seeing success, but we could also have success here, we could also have success here. So that lack of focus early on probably held us back from some strong initial growth because we were all over the place. Especially in the real estate industry where you got commercial and multiple parts of commercial, with retail, industrial, all of that. You've got residential sales, you've got multi-family student living, senior living, there are so many different segments of the real estate industry that our platform works perfectly for, but they all take different go-to-market strategies. What really got us to where we are today was honing in on the product market fit where we had a true B to B opportunity and the product was proving successful quicker. And honing in on that success is what really expanded our growth.
Jordan Easley: Being very very focused, and understanding if I'm going to build a product, sometimes that paralysis that you mentioned Matt, might come from, "I'm trying to go after too many things all at once." So by segmenting your market, you're going to market one way to all of these people. You're not going to have to big, total addressable market. That number's probably not going to be as big if you hone in your specific market segmentation, but you're going to be able to market to them, you're going to be able to speak their language in the sales process more effectively. You're going to build a product more specific to their use case. You're not going to be trying to build integrations with 20 different industries, you're going to be building it for one and you're going to be an expert in that. Once you own that one market segment, you can go to a peripheral segment where you can tweak a little bit of the marketing or product or the sales process to fit that adjacent market. Again, Scott Maxwell, highly recommend that.
PHIL:
Because we’re so passionate about our idea, we can easily think of a million ways why every individual on the planet could use our product. Yet, this is dangerous because the reality is, our initial product only addresses the solution to a very specific market segment. Focusing on that group, instead of a super broad approach, like Matt and Jordan said, will allow us to master our solution and guide us on where to expand.
MATT:
We’ve gone through the process and now we are off the ground running as a business. Our idea is not too simple, we’ve taken time to do our research, we’ve silenced the noise around our organization, we’ve identified and honed in on our super specific market segment, and now the 5th and final key, and most important take-a-way to bringing your business idea to life is to persevere.
Matt Weirich: Hands down, the biggest lesson I've learned through all this is persevere. You mentioned the highs, the lows, the roller coaster that is the entrepreneurial journey, it never ends. No matter how good or how bad it is, it's going to get better and it's also going to get worse. It's never going to change. There were plenty of opportunities we could have thrown in the towel, gone in and done something else. Perseverance is ultimately why I believe so many of the big businesses that have been featured as incredible startups and all of that are here today. The thing that I really see consistently, time and time again in Midwest built companies is hardiness and the value of actually providing value. The investors in the Midwest, they want to see revenue they want to see companies that are growing with expanding contracts and not just fluff and word of mouth and promises.
PHIL:
(Comment on perseverance and give closing remarks)
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MATT:
So let’s recap, ideas can start from a million different problems. For Matt, his was the annoyance of driving hundreds of miles to look at properties, only to be disappointed. They may seem super basic, but we have to remember that our ideas are not too simple. Once we lock that down in our minds, we need to turn criticism of why it won’t work or why something already exists into questions our product could answer. Look at the flaws to the current solution in the market and figure out how our idea could fix those issues. Second, it’s extremely important to slow down and take our time by doing extensive market research. From focus groups, to meetings with industry professionals, take time to really know what the market needs. Third, once we start moving the ball down the field, we have to drown out the noise. Knowing why we’re starting this business or idea helps to silence the distractions. This will identify who to bring in and who to walk away from; what conference or hang out to explore and which ones to pay no attention to – because at the end of the day, we’re trying to build a business and we dictate how it comes to fruition. Fourth, once we get our idea going, it’s important to hone in on a super specific market segment. It’s easy for us to answer why the whole world could use it, but the reality is the whole world is not ready for it. Mastering how we market to a specific segment makes widening our reach a whole lot easier in the long run. And finally, the 5th and most important key take-a-way to bringing your business to life is get ready to persevere. The entrepreneurial journey is a roller coaster. There’s guaranteed to be highs and guaranteed to be lows. We wear many hats as this grows and hit major setbacks. However, what separates companies who make it and those that don’t is the willingness to push through. This will take years, and quite frankly, will take the life of your organization because even well-established companies still hit major setbacks.
If you enjoy our podcast, we would love your help. When you get a chance, head over to iTunes and leave us a review. And if you want us to explore a business topic, have questions you would like answered, or want to recommend a guest, shoot us an email at roipod@iupui.edu. This has been another episode of the ROI Podcast presented by the Indiana University Kelley School of Business. I’m your host Matt Martella alongside Phil Powell – we work to help organizations make better business decisions. We’ll see you next week.