Is manufacturing meaningful? Are employees destined to feel like the cogs they install? Or can a company successfully show employees that they matter to the bigger picture?
One summer during college I got a job as a research assistant. I was hired to perform sociology field work at a manufacturing plant and to take notes on the employees’ satisfaction with their work. I was assigned to Golden Artist Colors, a paint factory in upstate New York.
An all-staff meeting happened to be held on my first day. The workers gathered in the break room and the new employees (mostly college kids on summer break) introduced themselves. Each said his or her name and hometown, and stated his or her favorite hue. One new employee, an art student, said she liked Payne’s gray best and the seasoned employees all chuckled knowingly. The president of the company said, “The artists always like Payne’s gray best, because it’s really blue.” The veterans nodded and smiled.
Wait! I thought. Why does everyone know that? Is everyone an artist but me?
No, they weren’t artists. Instead, everyone working at the factory, from the president to the workers hand-filling buckets of gesso, had a fascinating philosophy about the company. They weren’t making paint. They were making art. Photographs and prints of works made with the company’s products hung on the walls. Employees were encouraged to take home samples to try out. Every employee – eventually, even I – could name professional artists who used the products in their work.
I visited nearly everywhere in the plant: the manufacturing floor, filling room, marketing workshop, formulation lab, and rooms where employees hand-painted each color sample chart and paint-jar label. I interviewed as many people as I could about their jobs. Nearly everyone truly enjoyed working at the company, because they believed that making paint was making art, and art changes the world.
The company successfully fostered a sense that the employees’ work meant something. Paint wasn’t just paint; it was possibility, beauty, creativity. All it took was time and focus by the management team. The hard costs seemed minimal – some extra product, a few minutes’ extra worth of time in a staff meeting – and resulted in extraordinary staff loyalty, cutting down on turnover. The real trick was in the world view. Management encouraged employees to feel proud of their work at every opportunity.
Why isn’t everyone using this model? I still don’t know. It seems so simple: find the company’s greater purpose, and put employees’ work into that context.
To find the company’s greater purpose, look at the company as you would a Monet. Stand back from the pointillist details until a picture emerges. If you sell cheese, are you supporting mom-and-pop cheesemakers? Investing in organics? Enhancing sustainability? If you are a lawyer, are you helping to support investment in cutting-edge technologies? Protecting families? Creating a fresh start? What is the greater story, and how does it fit into the world?
Now that the picture is clear, make sure that every employee knows his or her role in creating it. Bringing in clients or customers to explain how the company helped their business shows workers how their labor changed things for the better, and at a minimal cost to the company. If workers get feedback that their work is useful and helpful, they are likely to become more invested in the company’s success. Implementing this process can set the company apart from its competitors in two key ways: by increasing employee satisfaction, and by sharply defining its mission.
In stepping back from the day-to-day of production and looking at the bigger picture, I saw firsthand the art of meaningful manufacturing. It took time and effort, but each dot and detail fostered a sense of greater purpose, leading to enhanced employee satisfaction.
Increasingly, our communication takes place online – via pixel and text and upload. I’m sure all have heard this a million times, but I add my voice to the analog multitude:communicate discreetly. Oh goodness me, please, please communicate discreetly.
From examples as costly and major as the implosion of mega-conglomerate-law-firm Dewey & LeBoeuf, to the Twitter debacle of Justine Sacco, we all have to watch what we say and how we say it. Our written words, whether in email or otherwise, will live forever.
Justine Sacco: if it’s funny to you, is it offensive to someone else? Remember Justine Sacco? She posted a snarky racist tweet on the way to meet her family in South Africa. When she got on the plane, she had 170 Twitter followers. For eleven hours, she was offline. When she disembarked in Cape Town, her tweet had been re-tweeted bazillions of times, she had brought shame on her family, and she had been fired from her job. Her best friend deleted her account, but it made no difference – the damage had been done.
Dewey LeBoeuf: emails hastened their demise. This mega-conglomerate-law-firm, the unhappy marriage of Dewey Ballantine and LeBoeuf, Lamb, Greene & MacRae, failed for so many reasons it’s hard to count them all. However, indiscreet communication was key to its failure. Some key partners sent insulting or crude emails naming others and suffered no adverse consequences; other partners learned via email that their colleagues received sizable financial guarantees which were unrelated to actual earnings. Still other emails reflected that marketing information on earnings were grossly inflated, and financial information and invoices were falsified. This led to a loss of confidence in management, and may have led some lawyers to leak information to the media. It also contributed to defections, instability, and layoffs, and ultimately to bankruptcy. Worse yet, the Manhattan District Attorney filed criminal charges against the firm’s chairman, executive director, and chief financial officer of falsifying business records, conspiracy, securities fraud, and other charges. The incriminating emails were at least part of the information upon which charges were based. As of the time of this writing, the jury was deadlocked on many of those charges.
If you’re a person, a huge business, or anywhere in between, discreet communication is key. Email can be forwarded and searched. Tweets and posts can be searched. Failure to practice discretion can negatively affect an ongoing dispute or a future dispute. It can affect your personal life. Anyone can be a media story for all the wrong reasons.
Last Tuesday, my colleague John Capizzi, Principal of Internal Audit Services, Inc. International and I presented to the Diversified Real Estate Investor Group (or DIG) at the London Grill, on unexpected internal business losses – otherwise known as internal fraud or theft. Here are a few of the highlights.
If you experience a business loss, it may be due to inattention or expectation. Perhaps a business owner trusts others to handle his books and records for him so he can concentrate on other things – like the back nine at Bala Golf Club. But a small business owner depends on that business’s profitability not only for income now, but also for his retirement – so why delegate it to someone else? An owner may be complacent or absent, causing employees to believe there are no repercussions if they take from the business. An owner’s attention may also be diverted because of an internal power struggle, an emergency, or a shift in management. That’s no excuse for not watching your business’s profitability closely.
The owner may also expect to lose money in the short term. Think about a business that’s expanding into a new product line. An owner will expect to see money being spent on new equipment, furniture, attorneys’ fees, employees, accountants, and supplies, and may expect to see a loss in the short term. That loss may be accelerated by employees who pad bills, issue phantom invoices, or slip their own phone bills in with the business’s bills.
How can you protect against internal loss? Just a few ideas: Be vigilant. Open business bank account statements. Double-check figures. Spot-check invoices on a monthly basis. Most importantly, make your employees feel appreciated and acknowledged.
If you have questions about business loss or suspect internal theft, call Bloom & Bloom.
I can’t believe it’s been a year since Bloom & Bloom opened for business. It’s been a great year. From starting up at the South Philly Co-op Workspace, to booking new clients, to presenting on real estate topics, to working with businesses, it’s been an adventure.
We look forward to continuing our business, and to continuing to help our clients, new and old. Give us a call, send us an email, and let us know how we can help your business bloom!
A great big THANK YOU to Paul Rosso and the staff of WWDB-AM TALK 860 for taking the time to interview me on conservatorship under Pennsylvania’s Act 135 of 2008 (and other topics) on his radio show Real Estate Today with Paul Rosso. The interview can be downloaded here: http://retodayshow.com/download/real-estate-today-show-april-26-2015/ (last visited April 28, 2015).
Bloom & Bloom believes in disseminating knowledge. That’s why we like public speaking on small business and real estate topics. If your group needs a speaker, reach out – perhaps we can help.
Nella’s upcoming speaking engagements include:
- “Philadelphia’s Distressed Properties: What are My Investment Options?”
- April 15, 2015 at 6:30 pm, Johnny Utah’s (461 N. 3rd Street), for DIG/HAPCO
- April 22, 2015 at 6:30 pm, 2424 E. York Street, for the Philadelphia Neighborhood Development Association
- “Distressed Properties in Philadelphia,” Real Estate Today with Paul Rosso
- Air date is April 26, 2015 at 11:00 am on WWDB Talk Radio, 860 AM (will be available for rebroadcast)
- “I had a great month but I can’t pay my bills. What now?” – with John Capizzi of Internal Audit Services, Inc.
- June 2, 2015 at 6:30 pm, London Grill (2301 Fairmount Avenue), for the Homeowners’ Association of Philadelphia
- “Starting Up a New Business: What Everyone Should Know,” – with Timothy Carroll of Drucker & Scaccetti
- June 3, 2015 at 5:30 pm, location TBD, for Girl Develop It
- “Sheriff Sales in Philadelphia”
- October 1, 2015, location TBD, for for the Homeowners’ Association of Philadelphia
More events to come – keep checking our site.
We’re pleased to announce that Bloom & Bloom, LLC has moved to Center City Philadelphia! We are now located at 1528 Walnut Street, Suite 910, Philadelphia, PA 19102. We’ll miss South Philly and the South Philly Co-op Workspace. But continuing in the fine tradition of coworking, Bloom & Bloom is sharing an office with the Center City Proprietors Association.
Feel free to reach out at (267) 630-2466. Let us know how we can help your business bloom.
Previously in this blog, I profiled the Philadelphia Land Bank. Since that post, the Land Bank’s progress has continued apace. The Land Bank’s strategic plan was approved by City Council in December of 2014 and a Board of Directors has been appointed. More recently, the Land Bank issued its first Request for Proposals for the development of a contiguous group of available properties on the 1600 block of North Bodine Street. Nonetheless, the Land Bank remains controversial. Recent competing articles in Philadelphia Magazine online highlight the differences of opinion regarding the Land Bank.
The January 9, 2015 article “INSIDE TAKE: The Land Bank Is A Bad Idea,” by Jay McCalla (available at http://www.phillymag.com/citified/2015/01/09/land-bank-bad-idea-insider/) (last visited Feb. 2, 2015), argued that the Land Bank is nothing more than redundant bureaucracy and is dependent on City Council for its success. McCalla is the former Deputy Managing Director of Operations for the Neighborhood Transformation Initiative. McCalla argues in part that, since his former organization was considered underfunded with $300 million, the Land Bank’s budget ($4 million in this fiscal year) is insufficient to carry out its purposes in acquiring privately-owned tax-delinquent properties, sorting them, assessing them, or disposing of them “at a pace to have any effect at all on abandonment levels.” He argues that the Land Bank will duplicate the current efforts of the Redevelopment Authority, Philadelphia Housing Development Corporation, and Department of Public Property. He also points out that City Council’s members must approve all transfers of properties into the Land Bank from their districts to preserve councilmanic prerogative, arguing that “this guarantees that development will remain politically driven.” In short, McCalla argues that the Land Bank is folly.
Beth McConnell’s January 22, 2015 response opposing McCalla’s article, “Land Bank Defeatism Solves Nothing” (available athttp://www.phillymag.com/citified/2015/01/22/land-bank-fight-blight-defeatism/) (last visited Feb. 2, 2015), provides an interesting counterpoint. McConnell is the Policy Director for the Philadelphia Association of Community Development Corporations. Her view is, in part, that the Land Bank is not simply another bureaucratic agency to hold land, but is instead a new tool to quickly and efficiently access abandoned and tax-delinquent properties throughout the City, whether privately or publicly owned. Once in the Land Bank, the properties could be held and transferred out – in particular to owners who propose to use the property to serve a public purpose or implement communities’ plans. McConnell also argues that the Land Bank can and will work together with City Council to transfer properties into the Land Bank, and that Philadelphia’s property values are skyrocketing, even in neighborhoods considered undesirable just a few years ago. In McConnell’s view, the Land Bank is poised to take on both new and old tasks in a streamlined way.
Clearly the Land Bank exists; clearly it is gaining inventory. Just as clearly, though, the success of the Land Bank depends on factors outside its control – most pressingly, quickly increasing the volume of its inventory. Such a large problem makes the Land Bank look to some like a big risk that may not pay off.
What’s my opinion? I think it will succeed, but not overnight. It’ll take City Council and City voters to gain trust in the process and the agency. My question is: will we give the Land Bank enough time to thrive?
For more information about the Land Bank or other Philadelphia real estate issues, contact us.
Since 2000, tax abatements on Philadelphia real estate have been available to owners or developers of commercial or residential real estate who make improvements to real property in Philadelphia. Many abatements permit an applicant to exempt the tax otherwise due on the improvements for up to ten years. When an abatement is in place, the owner or developer pays taxes only on the original value of the property, and not the value of the property as improved. Tax abatement has been a controversial issue, but studies examining Philadelphia’s tax abatements have mainly shown it to positively affect the City’s finances. So, how do abatements benefit Philadelphia?
- Abatements incentivize development. Construction costs in Philadelphia are relatively high, but returns on costs are relatively low. Consequently, real estate investors are less likely to choose Philadelphia over more competitive – and nearby – markets. A tax abatement alleviates the discrepancy and helps to make Philadelphia an attractive option for investment and development. In fact, a recent report estimated that, if not for the ten year tax abatement, nearly half of all recent developments in Philadelphia would never have occurred.
- Abatements create jobs. One study estimated that over 2,000 construction jobs exist in the City due to abatements – and this number doesn’t include architects, engineers, or other construction-related jobs.
- Abatements attract new homeowners. Newly-built homes are sold with abatements, making Philadelphia an increasingly attractive city for homeowners. Those homeowners pay City wage taxes, contributing to the tax base. And new home sales generate transfer taxes, which go into City coffers.
- Abatements benefit owners of existing properties. A homeowner may be able to show that improvements to an existing home qualify for an abatement. In that instance, for the duration of the abatement, the homeowner will pay taxes on the property as though the improvement had not been made. This encourages homeowners to make substantial improvements to their properties.
- Abatements return abandoned real estate into active and tax-productive use. If a property is abandoned, vacant, or empty, it generates no tax revenue at all, and is a drain on the City’s resources. A developer who purchases the property and demolishes the existing structure will pay taxes on the value of the land (if not the improvements), and a subsequent buyer will continue to pay taxes on that land. The buyer will also presumably maintain the property, so the City need not waste money on doing so.
So, why is there a debate? Because abatements underfund Philadelphia’s schools.Philadelphia’s public schools, which are largely funded by property taxes, remain in near-crisis mode, with no real plan to close the budget gap. As of the date of this post, is a councilmanic bill in process which would require owners to pay taxes to the School District that would otherwise be abated. However, Kevin Gillen and John Westrum, in their case-study of the Brewerytown Square development, calculate that implementation of the bill will generate less than 1% of the School District’s budget deficit. They also calculate that this amount is far less than estimated taxes generated by the abatements, such as increased wage taxes, sales taxes, real estate transfer taxes, and taxes associated with new construction projects.
The benefits of Philadelphia’s tax abatements outweigh the burdens. The tax incentives to develop real estate were greater than the relative high costs to develop, which in turn led to an increase in Philadelphia jobs, Philadelphia homeowners, and Philadelphia taxes. It also led to a decrease of abandoned, blighted, and tax-delinquent Philadelphia land. And even existing homeowners could take advantage of abatements to improve their homes. In short, the abatements helped businesses, families, and the City bloom.