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CEO Coaching International Congratulates 4-Year Client ShelfGenie on Successful Exit

MIAMI, Fla., Oct. 15, 2020 – CEO Coaching International, the leading firm coaching over 330 of the world’s top growth-focused entrepreneurs, congratulates its client Andy Pittman, CEO of ShelfGenie, for closing a transformational sale with Neighborly, the world’s largest parent company of 27 home service brands and more than 4,300 franchises in nine countries.

“As part of our organization’s Noble Purpose, our ShelfGenie franchise owners are committed to turning the frustration and pain points homeowners have throughout their homes into sources of joy and comfort,” said Pittman. “It is through this dedication to our customers that we are projected to experience a record year in 2020 despite the challenges of an ongoing pandemic, setting us up for continued success in the years to come. I know that joining the Neighborly network will only maximize our potential to achieve that success, so I expect great things are in store for our franchise owners and their clients.”

As a result of the acquisition, ShelfGenie will now benefit from new tools for growth and enhanced exposure to Neighborly’s 10 million customers who rely on Neighborly brands for all of their various home service needs.

“ShelfGenie’s high-quality service offerings and proven commitment to customer service make this brand an excellent complement to our existing portfolio of home service brands, providing an ideal opportunity for continued growth not only of the ShelfGenie franchise network but of the Neighborly organization at-large,” commented Mike Bidwell, president and CEO of Neighborly.

“We’re very proud to help ShelfGenie celebrate this extraordinary milestone,” commented Mark Moses, CEO and Founding Partner of CEO Coaching International. Andy and his team have achieved incredible EBITDA growth since starting coaching four years ago, and will no doubt continue to do so. This new partnership will only propel their growth even further.”

“Since we began franchising ShelfGenie 12 years ago, our goals have always revolved around franchise profitability and continued growth,” commented Barry J. Falcon, Board Chairman and co-founder of ShelfGenie. “Now under the Neighborly umbrella, our chances of exceeding those goals are better than ever before. Through the continued leadership of Andy Pittman and now Mike Bidwell, the future looks bright for the entire ShelfGenie system.”

About ShelfGenie

ShelfGenie was founded in 2000 in Richmond, Virginia, under the original name of Shelf Conversions. Since its 2008 rebranding and adoption of the franchise business model, the company has since grown its network to more than 50 franchise locations spanning 275 territories across the United States and Canada. Their expansion has been fueled by local franchisees. Their local franchisees are passionate members of their communities.

About Neighborly

Neighborly® is the world’s largest home services franchisor of 27 service brands and more than 4,300 franchises serving 10 million+ customers in nine countries, focused on repairing, maintaining and enhancing homes and businesses. The company operates online platforms that connect consumers to service providers in their local communities that meet their rigorous standards as a franchisor across 18 service categories at Neighborly.com in the United States and Neighbourly.ca in Canada.

About CEO Coaching International

CEO Coaching International works with the world’s top entrepreneurs, CEOs, and companies to dramatically grow their business, develop their people, and elevate their overall performance. Known globally for its success in coaching growth-focused entrepreneurs to meaningful exits, CEO Coaching International has coached more than 600 CEOs and entrepreneurs in more than 40 countries. Every coach at CEO Coaching International is a former CEO or President that has made big happen. The firm’s coaches have led double-digit sales and profit growth in businesses ranging in size from startups to over $1 billion, and many are founders that have led their companies through successful eight and nine figure exits. CEOs and entrepreneurs working with CEO Coaching International for three years or more have experienced an average EBITDA CAGR of 66.4% during their time as a client, more than five times the national average. For more information, please visit: https://www.ceocoachinginternational.com

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Mitigating Risk In Challenging Environments

Colonel Lee Van Arsdale (then Major, first row, right) led the Delta assault troop that captured Manual Noriega, Panama’s ‘de facto’ dictator, as part of Operation Just Cause in 1989. The troop poses in front of Noreiga’s home after his capture.”

Risk comes in so many different flavors that it makes Baskin Robbins’ ice cream flavors envious. There’s risk from competitors, insider threats, hostile foreign governments, natural disasters, supply chain vulnerabilities, reputational risk, and now a nasty virus. To me, the most significant risk is that which involves human life. For any leader of an organization that puts its people in harm’s way, there can be no greater factor in decision making. In the midst of a pandemic, most leaders now find themselves in this situation to some extent. Go back to work? Stay at home? Keep the people safe and lose the business? Risk people’s health in an attempt to salvage the business? Try and find a sweet spot; if one exists at all?

Putting people in harm’s way is usually thought of in terms of war zones, but now the workplace itself can meet this definition. With this in mind, I offer the following thoughts on how to reduce and mitigate risk, based on my time as a Soldier commanding troops in combat and as the CEO of a private security company that protected US government people and property in active combat areas.

Plan. A good strategic plan is the starting point for virtually everything a company does, including risk mitigation. Most people are familiar with Field Marshal von Moltke’s observation that “No plan of operations extends with certainty beyond the first encounter with the enemy’s main strength,” often paraphrased to variations of “no plan survives the first shot.” Mike Tyson weighed in with “everybody has a plan until they get hit in the mouth.” Many people point to these philosophical luminaries as a reason for not planning. I would maintain that when the first contact is made, a sound plan keeps everyone focused on the main objectives and provides the framework for achieving these objectives in the midst of a crisis.

A strategic plan should be relevant to every member of the organization. For that reason, I don’t favor outsourcing it to a third party but rather involve every key element of the company in its creation and maintenance. Very often the plan itself can prove to be less useful than is the actual process of planning. A strategic plan should be viewed as a common foundation for the organizational goals, with the understanding that life will intervene. The plan should be updated at least quarterly, again involving key players. Many strategic plans, if they exist at all, live on a shelf gathering dust (or the digital equivalent thereof). Keeping the planning process active means that the plan won’t atrophy, and when a black swan appears, the organization that has been routinely planning will be far better equipped to deal with it.

A useful technique for making and updating a plan is a “what-if” drill. A regularly scheduled “what-if” drill will make sure that the most dangerous risks are addressed and planned for accordingly. The CEO should personally conduct this drill with the top leadership team, but it can be done at every level of an organization. What if a critical component of our supply chain is interrupted, who does what? What if we have a natural disaster, who does what? Or the worst case, what if someone dies, who does what? All these types of considerations should be addressed beforehand, and then if one of them does occur, everyone knows what to do. An added benefit is this is a great way to on-board new people in key positions.

A final word on planning: Do not fall in love with the plan. Unknowns will most certainly intervene and a good plan will account for that. The organization with well exercised planning muscles will fare much better than one trying to react on a de-facto basis.

Recruit. A good plan is only as good as the people executing it. Recruiting is one of the most critical, and most difficult, aspects of running an organization. Some outsource and some have an organic recruiting capability. More often than not, however, as soon as a vacancy occurs, it’s critical and has to be filled RIGHT AWAY! This urgency can lead to a truncated search that ends in a less than ideal result. I’ve seen this happen too often for it to not be considered the norm in several organizations. The time, money, effort, and angst spent in hiring the wrong person, and then ultimately replacing that person, could be so much better spent in conducting a more thorough assessment and vetting process in the first place. Yes, it often takes longer in the short term, but the long-term benefits far outweigh any inconveniences.

This all ties back to the planning process. A hiring plan embedded in the strategic plan will identify upcoming personnel needs before they become urgent. This also allows competing departments, all of whom want to make new hires simultaneously, to know beforehand what the hiring triggers and revenue requirements are.

Train. Once the right person has been hired, it is imperative for the organization to determine whether or not any training is required on hiring. The security company I worked for sent all our people through a rigorous training program before they could deploy overseas to work. Most of these recruits had impressive military backgrounds, but you can never assume that someone who had certain abilities yesterday will have them today. In some cases, the security contract mandated training, in others it didn’t, but we absorbed the costs required to train ALL of our deployed personnel. We owed them, and everyone with whom they worked, that much.

In terms of risk, providing initial or refreshment training is obvious. What may not be as obvious, and this ties in directly with recruiting, is what sort of risk do the employees pose themselves? Someone with a great record in the military or law enforcement compiled that record with a different infrastructure and chain of command versus the corporate world. A proper training program, incorporating stressors unique to the organization and position, will help to identify a problem before it occurs.

Another aspect of training is an ongoing professional development program, one that identifies future leaders and grooms them accordingly. Putting a high potential person in a position of responsibility too early or without proper oversight can create a risk to the organization that is often overlooked.

Equip. Providing the proper equipment to the workforce is an obvious necessity but one that usually isn’t associated with risk, except for the employee whose job description puts them in danger. With the COVID pandemic, every job description now puts everyone at risk, even those who work at home. As such, it becomes the organization’s responsibility to articulate and enforce prudent countermeasures. The CEO or primary decision maker is in an unenviable position, attempting to balance worker health with fiscal health. Those who are working off a good plan, with properly vetted and well-trained people, will find this daunting task easier than their colleagues who have neither.

For those who work at home now, we have found that a host of other issues have surfaced, all of which provide a form of risk to the company. Incidents of substance abuse, domestic violence, and related problems have risen since the widespread stay at home orders. Organizational leaders must do more than an occasional Zoom call to ensure the overall health of their team. Avoiding a virus is important but so is maintaining health in all other aspects. So, while a leader can no longer lead in the presence of the entire team, their responsibilities become even more critical.

Lead. This brings us to the final, and I would argue most important, aspect of risk mitigation, that of leadership. I won’t attempt to replicate the thousands of excellent books on the subject in a couple of paragraphs. What I will do is emphasize as strongly as possible the absolute imperative of positive leadership in identifying, planning for, and addressing every form of risk that poses a threat to the organization. The centerpiece of positive leadership is integrity. Subordinates must have the certain knowledge that they can trust their leader to always do what is right by them and the organizational needs. A great leader leads from the decisive point, in person when required, but primarily by establishing an organizational climate that is legal, moral, and ethical. A great leader is also infused with a sense of selfless service and ensures their subordinates are kept well informed. My own leadership style is to treat everyone the way that I want to be treated, to remain calm in stressful times, and to maintain a sense of humor. These traits aren’t universally shared by leaders, but the healthy organizational climate is.

An organization with strong leaders at every level doesn’t simply happen, and once achieved it has to be continuously nurtured. This is the organization that can most effectively deal with a black swan like a worldwide pandemic.

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Dunkinҳ Bob Rosenberg: ӓuccess Can Be The Greatest Impediment To Future Success

Few CEOs can claim the kind of longevity that Bob Rosenberg can. In 1963, William Rosenberg, who opened the first Dunkin’ Donuts shop in 1950 on the Southern Artery in Quincy, Massachu­setts, tapped his son, Robert, at the tender age of 25, to lead the family business, which comprised a portfolio of eight small food service divisions, including Dunkin’ Donuts, and had annual revenues of $6 million and earnings of $93,000.

“Up until that point in my life, the only thing I had managed were a couple of donut shops—replacing managers for their summer vacations—and a short stint supervising a cafeteria,” the octogenarian recalls in his new book, Around the Corner to Around the World: A Dozen Lessons I Learned Running Dunkin’ Donuts (HarperCollins Leadership, October 13, 2020.

It was a crash course in leadership and, with some not insignificant bumps along the way—including nearly getting fired by his board for poor performance—Rosenberg managed to lead the franchise from 100 shops and $10 million in sales when he took over to 6,500 outlets, including Baskin Robbins Ice Cream Shops, and nearly $2.5 billion in sales in 1998 the year he retired.

During the early days of his tenure, the most important lesson he gleaned was “the para­mount role leadership plays in the success of any entity,” he writes. “Be it the United States government, a company, or even a family unit, influ­ence flows from the top down. If the leadership shows itself incom­petent or of poor character, it cannot be fixed from the middle or the bottom. It can only be remedied with a replacement at the top.”

Rosenberg shares this and a host of other lessons in management and governance—he served on the boards of SONIC Drive-In and Domino’s Pizza—in his memoir chronicling 50 years of a 70-year-old brand. In the following interview with Chief Executive, Rosenberg explains how leaders can evaluate their own trustworthiness, why they should stay mum about innovation until it’s ready for prime time and why short-term pressure from investors often puts CEOs in “the most excruciating place.”

Over the course of your career, you had to manage your way through plenty of crises. Does anything you went through compare to what CEOs are coping with now? What lessons might be applicable?

I would say that in the 35 years I ran the business, there were three or four what I would call near-death experiences. They weren’t pandemics, but they were close. And I did come away with a view as to how to best deal with it.

The first thing I learned about crisis is to be prepared. Every board I’ve served on, we would have at least one meeting a year where we would do risk assessment and we would sit with the management of the company, including Dunkin’, and we would look at what could possibly go wrong, what could befall the company, and we’d get prepared. For example, for a food service business, a health scare can be cataclysmic, so we would talk about that — or someone hacking your consumer data, or huge problems with weather if it affected a large portion of the chain. So we would decide in advance who would be in charge of handling that particular problem, who would talk to the press, who would talk to the health official if it was a health issue, etc. So we were prepared.

The second lesson I learned is that you put together a very small select team of experts — could be insiders or outsiders — who have experience with and could add value to identifying the nature of the problem and its response. Then you lead the rest of the organization on a day-to-day basis to run the business—because the business has to be run, customers have to be served, product has to be delivered. You can’t have everybody engaged in the crisis.

And the third thing I learned was about communication. As the CEO, for anything that’s an existential threat to the business, you’re going to be involved in the task force that’s engaged in solving that problem. You also have to be able to continuously communicate to all constituencies, particularly your own staff because their lives might be at stake. They may not be engaged in the day to day business of fixing the problem, but their lives are up in the air in terms of its outcome and you have to be authentic, you have to communicate continuously and you have to be really caring about your followership.

Let me give you an example. In 1989, the company got struck with a hostile takeover attempt that, as it turned out, could have very much threatened the existence of the business. It was the ’80s, when there were a lot of hostile takeovers and a creditor from Canada came in and bought up a portion of the company. We formed a team of four people and left the rest of the organization to run the business. We had always utilized the system of what I call management by walking around and basically that’s what we did. We walked around and we kept the team apprised of where we were at, what was going on, how we were managing through the crisis. Ultimately we found a white knight—at one minute to midnight—to buy the company and save it from the hostile predator, this Canadian guy who then lost his empire in the banking crisis of 1990, by the way, and was forced into retirement. Had we lost to them, I suspect the whole chain and all the franchisees and all their futures and their families would have gone along with it. By the way, I am absolutely astounded to hear people say [about the pandemic], “Oh, we never expected this.” I mean, if companies like Domino’s, Sonic had Dunkin’ Donuts are doing risk assessments, I would suspect that the United States government would have been prepared and done risk assessments as well.

We’re in an era of a lot more visibility and transparency today, thanks to the internet and social media – do you think it’s easier or harder to foster trust in that environment? Is it more complicated now that CEOs have to pay attention to a lot more stakeholders than just investors?

I wish that had always been the case instead of the primacy of only being interested in shareholder return. I’m a great believer in the new movement by the 187 Business Roundtable members and what they’re trying to do—it’s delicate, it’s hard to do, but I think it’s essential now that the world is so interconnected and business is so much a part of people’s lives. I think we do bear responsibility.

I would say that trust is really the same [today], and I have four tests to evaluate trustworthiness: First, are your public and private conversations the same? If they are, then fundamentally, you should be prepared to go on to six o’clock news and talk about it. I may sound naive, but I believe that.

The second is competence, which is not the same thing as never making a mistake because as a CEO, you’re going to make mistakes, but you’re really held to the standard of being able to live up to the standards of your job. You’ve made certain promises about goals and how you’re going to run the business and if you deliver consistently against those promises, you’re competent. I often use the example of Ted Williams, he was the best hitter in baseball, but he only batted .400. You can make some mistakes as you go in business, but you have to deliver on the real things that people are counting on you for—that’s competence. I made a lot of mistakes, but basically over the years, we did deliver on a major promises to all of our constituents.

The third thing is reliability. You have the ability to make promises and deliver on those promises, but when you can’t, because existential things occur, you don’t ignore it, you go back, you make new offers, you try to get new conditions of satisfaction.

The last element is care. Care means not treating people in a transactional sense of what can you do for me. It’s fundamentally that you care for people’s well-being, and you really sincerely come from that position. So I guess my answer is to be authentic and to be able to stand in front of people. If you utilize those standards then I think it applies even with all the social media.

You talk a bit about investor pressure in the book—CEOs are definitely feeling caught between that rock and hard place today, trying to balance the demand for quarterly numbers with the need to invest for the long term. What would your advice be?

That is the most excruciating place to be—and I understand it very well. I think of Clay Christensen’s language about planting saplings for the future and you’ve got to water them and then eliminate those that don’t grow. It is a balancing act.

I think a lot of it has to do with how aggressive you set your earnings per share goals. If you don’t leave enough room to do some planting early on, you’re in trouble. I had great success in the first year of my first five years of the business, taking a small family business and going public and not making mistakes. But the second era was cataclysmic. I ran into a sophomore slump, set the wrong objective, tried to keep growing us at 50% compounded, which was madness, changed the mission of the business from a focus on coffee and donuts to a franchise business, and I really had to get my comeuppance and throttle back those objectives to something much more realistic. I did a lot more planning and set my goals on growing at 10%–15%, which allowed me to keep experimenting and putting the hooks in the water for the future. Not everything worked, in fact, a lot of things didn’t work, but enough did so that we kept our rate of growth up. So picking that objective, not being so stringent that the promise is unachievable is it is one of the ways that we did that. So we had enough ability in the core business to grow and still invest rather substantially.

For example, when we were growing new distribution, we didn’t go wherever a franchisee wanted us to put a store. We were very much intent on building our brand, we thought that had tremendous value and benefit. So we would put 75% of our new stores in markets where we could have, or were soon to have, at least at 26 weeks, 150 gross rating points, because our business was very responsive to mass media advertising. But 25% would be put in other markets that could grow within three to five years to that standard. And sometimes we’d have to help out and advertise before we got there and we’d have to expense that. One of the tricks I found is to try not to capitalize an awful lot of R&D because, number one, if you keep capitalizing it, when it comes time to admit that it didn’t work, you’ve got a massive write-off and it’s embarrassing.

The second thing is, and I’ve tried to do this in the companies where I was on the board, do not talk about a lot of the experimentation to the public until you’re ready to go prime time and roll it out because it has a life of its own. Before you know, it, every analyst in the world is asking you about something that’s speculative that you may have to pull the plug on. So if you can help it, if it’s not transformational, try to keep it inside the company. And wherever possible, try to expense R&D rather than capitalize it, because it makes it easier to pick the winners and cut the losers faster.

Speaking of loss, how did you feel about losing the “Donuts” from the brand?

[Dave Hoffmann, CEO of Dunkin’ Brands] called me as they were about to do it. And I totally wholeheartedly subscribed to it. In fact, I told him that we had considered the very same thing in 1992, and we did a position study, but the company had been sold to a large English company, and they had just spent $325 million to buy us and then another almost $30 million to buy 500 Mr. Donut shops—so we decided not to change it right then. But it was an idea that we had been kicking around for a while and they pulled the trigger, I think it was exactly the right move. It’s really what the brand represents and they can do a lot more with that over time.

What’s the best way for a CEO to determine if a company is franchiseable?

Not every business is. The first way to tell if a business is scalable is to look at return on investment at the unit level. When you open up a chain and you’re bringing other people into the system, if the return on investment isn’t high enough, businesses will open in a bell shaped curve. And the tail, if it’s too long and too heavy, will threaten the whole existence of the business. So I propose a 15% minimum ROI at the unit level, and that is my cardinal metric. So, after fees, after you develop it and test it awhile, does it have that capability to deliver a strong enough ROI?

You talk about the mistakes you made and lessons learned – if you could go back and do one thing differently in you career, what would it be?

I understood from business school the importance of strategy, and I understood the importance of execution and the need for a team. what I didn’t understand at 25 that I learned at 35, that success can sometimes bet the greatest impediment to future success. And that you really have to stay open, humble, listen twice as much as you talk and gain advice from other people and be thoughtful. So what they were now calling in today’s lexicon, emotional intelligence, that came over a lifetime of errors and kicking stones. And it’s still going on for me to this very day. So I didn’t come to the job with that at age 25, unfortunately, but as I made mistakes and slowly but surely learned, I hopefully became less arrogant.

In David Halberstam’s Best and the Brightest, he talks about the countries waging the Vietnamese war, and how we, the U.S., weren’t going into the towns, the hamlets, talking to the community leaders, getting the facts. The Viet Cong, they were winning the hearts and minds of people and our “best and brightest” were relying on body counts and third-hand data sent to them from far away. They were suffering from hubris. I sat in that chair and I thought, Oh my God, Halberstam is talking about me. That was a transformational moment. It’s something I never forgot.

The post Dunkin’s Bob Rosenberg: “Success Can Be The Greatest Impediment To Future Success” appeared first on ChiefExecutive.net.


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5 Tips for Studying in Quito, Ecuador

Traveling all the way to Ecuador requires a lot of preparation. If your purpose of travel is academic, then it becomes all the more essential. South American topography, climatic conditions, cultural variations, languages, and lifestyles are not as popularly understood as those of North America and Europe, as a result of which we might find […]

License and Republishing: The views expressed in this article 5 Tips for Studying in Quito, Ecuador are those of the author Sophie Ireland alone and not the CEOWORLD magazine.


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From Bubble Bursts to Recessions, This CEO Advises How to Overcome Time Without Business

As a career-long serial entrepreneur, I’m used to leading through uncertainty. My first technology start-up crashed during the dotcom bubble burst and I financially turned around a company during the Great Recession. We’ve been through unpredictable times before, but 2020 is a particularly turbulent year for entrepreneurs and small businesses. With a pandemic, an upcoming […]

License and Republishing: The views expressed in this article From Bubble Bursts to Recessions, This CEO Advises How to Overcome Time Without Business are those of the author Lyron Bentovim alone and not the CEOWORLD magazine.


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Best Islands to Visit in Greece, 2020

Europe as a continent is world-famous for top-notch destinations, astounding sights, people, and of course food. With so many beautiful nations to set feet upon, Greece rules the roost with its iconic places and limitless options for sightseeing. As a country, Greece needs no formal introduction! The beautiful nation is packed with over 60 islands […]

License and Republishing: The views expressed in this article Best Islands to Visit in Greece, 2020 are those of the author Sophie Ireland alone and not the CEOWORLD magazine.


https://coo.systems/best-islands-to-visit-in-greece-2020/

Top 10 oldest hotels in the United States

How would you feel staying in a hotel, founded back to the 1800s? Rooms filled with history, stairs that have been used by the soldiers of the War of the 1812 or balconies that former American Presidents had political conversations with their partners while drinking a hot cup of tea. Here are some of the […]

License and Republishing: The views expressed in this article Top 10 oldest hotels in the United States are those of the author Maria Gourtsilidou alone and not the CEOWORLD magazine. You can’t reproduce, republish, or reprint it without the express permission of the CEOWORLD magazine.


https://coo.systems/top-10-oldest-hotels-in-the-united-states/

The top three immigration issues impacting workforce strategy

With the business toll from the pandemic continuing to mount, CEOs have shifted strategies to meet the new market. In some cases, this means a total reinvention – but in many, it means assessing the workforce and adapting to the new reality. Foreign workers make up a sizable percentage of the U.S. employment pool. As […]

License and Republishing: The views expressed in this article The top three immigration issues impacting workforce strategy are those of the author Phil Curtis alone and not the CEOWORLD magazine. You can’t reproduce, republish, or reprint it without the express permission of the CEOWORLD magazine.


https://coo.systems/the-top-three-immigration-issues-impacting-workforce-strategy/

When Should You Tear Down Your Founderҳ Legacy?

“Could Walt Disney be next?”

This question was asked by Hollywood’s Deadline news site. While it’s hard to imagine angry crowds tearing down the beloved “Partners” statue featuring Walt and Mickey Mouse at Disneyland when you can’t even sneak into the theme park wearing a Cinderella costume, it’s much easier to imagine the corporation voting to, as they say at Imagineering, “plus” an existing attraction so “the new concept is inclusive—one that all of our guests can connect with and be inspired by.”

Is Walt Disney himself inclusive?

I mean, he was the man behind Song of the South and the Jim Crow crow in the classic animated film Dumbo. There are even accusations, aired by NPR last year, that Mickey Mouse is “layered with markers of blackface.”

Critics within the theme park industry are now calling for bigger changes at Disneyland and other attractions. As Cynthia Sharpe, a principal at Thinkwell Group, wrote in a July 15 blog post, “Reworking ‘Splash Mountain’ is also an absolute rabbit hole because once your eyes are opened to the ways…racism pervades narrative tropes and beloved experiences, it’s overwhelming.” Racism, she says, “is everywhere.”

And if Walt Disney goes down, there are other icons of America’s most popular attractions lining up to be next.

• Milton Hershey: Here’s another wildly successful CEO with a sculpture adorning the entrance to a theme park. Should Hersheypark’s 3.3 million annual guests have to pay homage to someone who restricted enrollment in his famous school to “poor, white, orphan boys?” It wasn’t until 1968 that the school was integrated.

• Henry Ford: There is a statue of the founder of The Ford Motor Company outside The Henry Ford Museum and its adjacent Ford Rouge Factory Tour. Nearly 2 million guests are exposed to a bronze image of the same man described by The Washington Post as having a “dark legacy of…anti-Semitism.”

• Dolly Parton: Near the popular Dollywood theme park in East Tennessee is a sculpture of a young Dolly playing a guitar. However, this is the same musician who, according to some critics, is guilty of “white appropriation” when she introduced disco into her music. In a 1986 interview with New York Magazine, disco pioneer and former Black Panther Nile Rodgers said hearing Dolly Parton sing disco “was disgusting to me.” And as ridiculous as this sounds considering Dolly and Nile actually performed together at a benefit concert last year, let’s remember that Dollywood is co-owned by the same company that manages the attractions at Stone Mountain Park Georgia featuring what Slate calls “the mother of all Confederate monuments.”

Now, I have two confessions to make. First, I have never tried to sneak into Disneyland wearing a Cinderella costume. And second, I do not think the sculpture of Walt (or Milton, Henry and Dolly) should be removed. However, when facing peaceful protestors marching down Main Street USA, I think I might be reluctant to defend my decision.

And that’s the challenge facing leaders today. CEOs need a set of common guiding principles as to when they should tear down a sculpture, cancel a brand, change an experience or even rename their company. If racism is everywhere as those protesting proclaim, then how do you know when and where to stop?

Remember that rabbit hole mentioned earlier? Well, this is a serious issue for leaders. If The New York Times is talking about why we should take down the Thomas Jefferson Memorial in Washington, D.C., then I think any corporate founder, brand or experience is fair game. Without a few guiding principles, it’s a slippery slope from Splash Mountain to tearing down the legacy of Walt Disney and removing the sculpture of Walt and Mickey welcoming millions of guests in Anaheim, Orlando, Tokyo and Paris.

There are three things that can help guide you when facing those who would tear down your company’s legacy. And if you don’t think the consequences are serious, just talk with the former executives of SeaWorld who were slow to respond to Blackfish and the critics who tore down the company’s founder Shamu. So, whether you are facing angry critics seeking to put you out of business, woke advertisers or even a board wringing its hands, here are three principles that can guide leaders today:

1. Know your history: If you don’t know the history of your founder or organization, take the time to study it personally. While leaders can be assisted by historians, curators and experts, this is not something that should be delegated. You must personally make the effort to travel back in time so you can understand the lessons from the past. You need to identify the most important legacy of your founder. And then you must share those lessons by being transparent about your company’s history. The perfect legacy doesn’t exist, but the only way you can defend, curate, connect or even reframe your legacy is to know the facts.

2. Share your vision: This is about the future. Where your organization is going is far more important than where it has been. Of course, this requires actually having a vision, which is more difficult than it sounds. However, once you have a vision, then the path is usually clear on how to connect the most important parts of your company’s legacy to support that vision.

3. Make a decision: Finally, even though it’s important to time travel to the past and future, we live in the present. You must make a decision today about whether to tear down your legacy. This is not something you can just ignore and hope for the best. If you don’t make a decision, someday that decision will be made for you. In other words, once you’ve studied the history of your founder, there’s really only one question you need to answer. Do the most important parts of that legacy connect and align with the current vision of your company? If the answer is “yes,” then defend that founder and your own legacy with all your strength. If the answer is “no,” then tear that legacy down.

While researching this topic, I called the only sculptor I know. Ivan Schwarz is the CEO and Founder of StudioEIS. This Brooklyn studio’s work can be seen at the National Museum of African American History and Culture, the National Constitution Center and the San Francisco 49ers Museum. A sculpture they created of Henry Ford is on display in Washington D.C.’s National Harbor.

Or at least it still was when I wrote this.

“Tearing down sculptures is nothing new,” Ivan said. “It’s been going on for thousands of years and one of the first acts of our own American revolution in 1776 was tearing down a statue of King George III in New York City.” In fact, Ivan made a statue of revolutionaries tearing down the English King’s statue for the Museum of the American Revolution in Philadelphia. Ivan even made a trip through Eastern Europe after the Soviet Union fell to document fallen statues of Lenin and other communist leaders. When I asked him about when a sculpture of a founder should be removed, he answered by pointing me to a speech in 2017 by the then Mayor of New Orleans Mitch Landrieu when the city removed several Confederate statues.

Mayor Landrieu said he chose to remove these statues because they were an “inaccurate recitation of our full past…an affront to our present…and a bad prescription for our future.”

The post When Should You Tear Down Your Founder’s Legacy? appeared first on ChiefExecutive.net.


https://coo.systems/when-should-you-tear-down-your-founders-legacy/

VictimsҠRights In FCPA Settlementחhen Is Final Truly Final?

In 2019 alone, the DOJ and the Securities and Exchange Commission (“SEC”) entered into 14 negotiated corporate resolutions and collected $2.6 billion in fines and penalties, with two enforcement actions comprising 70 percent of this amount and resulting in the two largest corporate resolutions in FCPA history. Companies settle cases for many reasons, but perhaps one of the most important ones is a desire for finality. Settling with the DOJ, however, may not be the ultimate final resolution that a company seeks or desires. For example, non-U.S. authorities may come knocking and public companies may be the target of civil class action suits. Additionally, and as illustrated by recent cases, potential claims by “victims” in an FCPA case should be added to the list of possible continuing issues.

Statutory Background

The Mandatory Victims’ Rights Act (“MVRA”), 18 U.S.C. § 3663A, requires that those convicted of certain federal crimes make payments to victims of their crimes as an element of their sentence. Further, the Crime Victims’ Rights Act (“CVRA”), 18 U.S.C. § 3771, provides a statutory bill of rights for victims of federal crimes. Victims under these statutes include corporations, companies, associations, firms, partnerships, societies, and joint stock companies, as well as individuals. An individual or corporation may apply and seek restitution for losses they suffer as a result of violations of law involving fraud or deceit.

Expanded View of FCPA Victims

In 2016, the hedge fund Och-Ziff settled with the DOJ and the SEC by admitting to violations of the FCPA’s anti-bribery provisions and paying a total of $412 million, of which $213 million was a criminal penalty. Three years later, in 2019, the U.S. District Court for the Eastern District of New York ordered that a group of Och-Ziff’s former investors qualified as victims under the MVRA. Even though the investors were related to Och Ziff, the court found that the investors were victims because they were not parties to the bribery. This was a novel and unexpected decision, particularly because the DOJ had originally determined that these investors were not victims under the MVRA.

The judge requested that the investors, government, and Och-Ziff provide assessments regarding restitution calculation. As you can imagine, there are differing opinions regarding the appropriate restitution amounts. The investors requested $421.8 million in restitution, the DOJ proposed $151 million in losses, and Och-Ziff stated the losses equal to $37 million. At a status conference held on July 23, 2020, Och-Ziff, the identified group of former investors, and the DOJ announced a proposed agreement on a restitution amount of $136 million. All parties agreed that an exhaustive search had been completed and the investors identified in this case are realistically the full list of victims. The judge’s final decision and a formal settlement agreement are pending and are being closely watched by all, especially attorneys who are thinking broadly about who a victim in other FCPA cases might be, or equally, how attorneys can protect their clients from additional losses after having settled with DOJ and the SEC.

Victims May Not Be State-Owned Companies

Similar to the DOJ’s position in Och-Ziff, the DOJ also believes that state-owned corporations are not afforded the right to restitution under the CVRA because they do not fall within the parameters of “person” as defined by the CVRA. Even so, unsurprisingly, given the potential dollars involved, state-owned entities have sought relief in the courts.

In April 2020, in U.S. v. Ortega, the third-party claimant, PDVSA, filed a Motion for Victim Status and Restitution, which the U.S. government has opposed by stating that PDVSA does not qualify as a victim and was complicit in the bribery and money laundering schemes. The government’s position is that complicity precludes PDVSA from being treated as a victim under CVRA and MVRA. The DOJ also argued that “person” does not include the sovereign, which means that PDVSA, as a Venezuelan state-owned entity, could not recoup under these statutes. PDVSA has argued that since corporate victims are eligible under the statutes, it should not matter that its sole shareholder is Venezuela.

Although the Court in U.S. v. Ortega, has not issued its ruling, in May 2020, the Eleventh Circuit in In re: Empresa Publica De Hidrocarburos Del Ecuador affirmed the district court’s decision that PetroEcuador did not qualify as a victim under the CVRA and MVRA because several of its employees had been involved in the underlying bribery scheme. The court denied restitution concluding that, because the entity was a state-owned instrumentality, it did not benefit from the protections of the statute as a victim.

Conclusion

Any entity considering entering into a FCPA resolution with the DOJ needs to be aware of potential victim rights issues and think comprehensively about possible claims. Negotiating a favorable DOJ view of who might be a victim is essential, although not foolproof as illustrated by the Och-Ziff case.

With such huge financial incentives, just about any person or entity connected with a project or deal involved in an FCPA resolution will be motivated to think about how they can present themselves as a victim. There is likely to be a great deal of creative thinking, and settling parties need to be equally thoughtful and creative on how to protect themselves from these arguments.

The post Victims’ Rights In FCPA Settlement—When Is Final Truly Final? appeared first on ChiefExecutive.net.


https://coo.systems/victims-rights-in-fcpa-settlement-when-is-final-truly-final/

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