The robots aren’t coming — they’re already here. Companies are achieving productivity gains by using software robots to perform routine, rules-based service processes. Done right, the combined efforts of robots and humans can provide a triple win: value for the shareholders, customers, and employees.
In this webinar, Mary Lacity, Walton Professor of Information Systems and director of the Blockchain Center of Excellence at the University of Arkansas, discusses how companies can achieve that triple win by thinking strategically, starting right, and institutionalizing fast.
In this webinar, you’ll learn:
Some of the hazards along the way toward effective automation
The differences between robotic process automation and cognitive automation
The action principles for success, such as why you should measure the productivity of the combined human-digital team
What’s ahead: integrating service automation technologies
A private-label product is made by a third-party company but sold under a specific retailer's brand. The practice is far from a foreign concept to many retailers. Many consumers are unaware of its prevalence, but it's a common practice in today's shopping environment.
For instance, if you've been to Coscto, you may be familiar with the Kirkland brand, which consists of items from clothes to food. Kirkland Signature generates about one-quarter of Costco Wholesale's sales and is known as a private-label brand. Amazon also has an extensive list of private-label brands you might never have realized existed.
According to the Private Label Manufacturers Association, "Private label market share has reached nearly 25 percent of unit sales in the U.S. and is expanding faster than national brands." The technique is only growing, and many businesses can benefit from it – on either end of the deal. Here's everything you need to know about private labeling.
What is private labeling?
"Private labeling is selling products a business makes under another company's or business's brand," said Sara Nesbitt, CEO of Coastal Carolina Soap Co., who has three private-label accounts. "It is a fabulous way for a brand to put their products in people's hands. For the business carrying these products, private labeling allows them to sell products they have no way of manufacturing themselves with their unique brand on them."
Private labeling can also describe the practice of taking an ingredient or component supplied and produced by a secondary company and using it to benefit another brand's product, often without explicit attribution, added Rob Terenzi, co-founder of Vega Coffee. Most private-labeled products are sold at a lower cost.
How does it work?
Private-label manufacturers secure deals with individuals or brands to sell their products under the manufacturer's name with no attribution. The products can be sold independently or in support of other products.
For example, Vega Coffee's coffee is purchased by ice cream manufacturers as an ingredient and by other coffee brands to be sold in their marketing and packaging materials. Even though the brand doesn't receive recognition, it experiences increased sales volume, helping it lower costs across consumer-facing product lines and paying its farmers for their contributions, said Terenzi.
He added that this is a mutually beneficial agreement, as the distributing business can leverage the social impact of Vega Coffee. "In other words, while XYZ brand of coffee may not mention Vega Coffee in their marketing, they will say that their coffee benefits farmers in Latin America, thereby driving more sales through their built-in audience."
Private labeling works best for products that improve the value of other products, like Vega Coffee does for its ice cream manufacturer.
If you want to start selling a recent product with no prior experience, private labeling is a great way to start. Consumers will be more willing to purchase your merchandise through larger manufacturers than through a business that has made no previous transactions, but your product must be able sell itself without special promotions or brand advertising.
However, if you're looking to build your brand, don't rely too heavily on private labeling, as you will not be credited for your products. The technique is better suited for individuals looking to experiment with production rather than starting a well-known and respected business.
Choosing the right private-label manufacturer
Before choosing a manufacturer, you should conduct research on your target customers so you're familiar with their purchasing patterns and form the best proposal to potential private-label brands. Attend networking events, trade shows, etc. to improve your products, make contacts and gauge competition. You might also consider patenting your idea to prevent competitors from creating similar products.
When deciding which private-label manufacturer to invest their product in, many companies or individuals choose Amazon. However, you should also consider various manufacturers specific to your products. Take Vega Coffee, for instance: It secured deals with ice cream manufacturers and other coffee brands rather than turning to a broad marketplace.
The PLMA hosts trade shows where you can find potential partners. Of course, you can find countless other options through a simple Google search.
We've all heard the story: A major company scrambling to right the ship after a security breach. In the wake of regular large-scale data breaches, formal apologies and widespread password resets are becoming the norm. With even the big players falling prey to cyberthreats, where does that leave today's small businesses (SMBs)?
There are 28 million small businesses in the U.S., and approximately 90 percent don't have specific systems and processes in place to protect customer and company data. Unsurprisingly, this makes SMBs incredibly popular targets for cyberattacks, and these attacks cause 60 percent of affected SMBs to go out of business within six months. Not only can a cyberthreat cause serious financial harm – the average small business with a compromised bank account loses $32,000 – but a breach can permanently damage a company's reputation.
October was National Cybersecurity Awareness Month, which makes now a good time for your business to think about its security systems and strategies. Taking cyberthreats seriously means understanding how your business assets are likely to be targeted and putting systems in place to detect a breach as soon as it happens. Reacting quickly and effectively to limit the impact is key.
The biggest cybersecurity threats
You've almost certainly received a phishing email: If you were lucky, you recognized it as something suspicious and deleted it. How do these annoying and dangerous inbox infiltrators work? Essentially, phishing emails masquerade as legitimate correspondence to get you to divulge personal information. Most often, these emails direct you to a fake website or ask you to download a file.
Phishing emails are among the most common ways attackers find entry to your company's systems. More than 90 percent of cyberattacks worldwide originate from these types of emails. And the practice is picking up steam: Instances of phishing rose 46 percent between the end of 2017 and the second quarter of 2018.
Other cyberthreats to be aware of are malware and ransomware. Malware is any malicious software written to harm, while ransomware is a type of malware that goes a step further by taking over your computer systems and denying access to data. As its name suggests, ransomware effectively holds your resources hostage. The cyberattackers usually say you can get your data back – at a price, which is often paid in cryptocurrency or by credit card – but this "agreement" is not always honored, and there's little you can do if data isn't handed back. Ransomware is most often delivered as a phishing email attachment, making these fake correspondences particularly hazardous.
The third threat to SMBs is a data breach through hacking. This is the directed attack where hackers make their way into a secure network by circumventing security. They sometimes break into systems using complex tactics like you've seen in the movies, but more often than not, they get in by using existing usernames and passwords. Because so many people reuse passwords or employ incredibly simple ones, hackers stroll in right through the digital front door. For this reason, it's important to educate both employees and customers about optimal login habits and the importance of complex passwords.
Protecting your small business
While this can all sound like science fiction, malware is booming: In the first quarter of 2018, 1.9 million new mobile malware threats were detected. The good news is that security for your business is achievable. Here are four steps you should take.
1. Designate a cybersecurity point person and empower them to implement solutions from a trusted security partner. Even if you don't have a dedicated IT person on staff, it's important to appoint someone within the company who is knowledgeable about cybersecurity. Without a point person, it's too easy for this crucial consideration to be overlooked.
Leverage the power of best-in-class cybersecurity solutions, like those offered by McAfee, to protect your data. In companies without effective security measures, threats remain in the system for almost a year, on average, before they are detected.
2. Establish a security perimeter around your crucial systems via multifactor authentication. Data should be password-protected, and an additional form of authentication is also advisable. A one-time PIN, like the code that many popular social media sites send to your phone when you log on from a new device, is a good example. There are plenty of identity access management companies out there that provide simple and affordable solutions.
3. Provide training to employees about how to recognize suspicious emails and phishing attacks. Hackers are becoming more creative, and the differences between legitimate and phishing emails are often subtle.
4. Regularly back up your network. Once you've confirmed your system is healthy and you've established your security solutions and protocols, perform regular backups. Before downloading any files, make sure they are scanned for safety.
In the event of a breach
By doing the above, the likelihood of a breach is minimized, but it can still happen. It's almost impossible, for example, to protect yourself completely against an employee who decides to go rogue and copy data. How you respond to a threat could decide the fate of your business.
What should you do? In the immediate, stay calm, and look to the protocols you previously established. These procedures were designed to limit damage and provide a quick response. Check on your last reliable backup and make sure it remains secure. Contact your security partner immediately and ask their help in responding to the threat.
If customer data has been compromised, informing them of the breach is your next step. Let customers know exactly what your company is doing to resolve the issue and don't beat around the bush.
Whatever concern your customers express when learning of the threat, it's preferable to the organizational shame of hiding a breach and having it uncovered later. Give customers information about how they can protect their data going forward and how your company plans to do this better in the future.
While no one can guarantee your company won't suffer a cyberattack, putting the right security measures in place can get your small business as close as possible to complete safety.
Having the right cybersecurity measures in place can make all the difference when it comes to protecting your small business. Learn how Dell's security solutions can prepare your business to face any threat.
It has been a year since the #MeToo movement went viral. Since then, the Equal Employment Opportunity Commission (EEOC) has experienced a 13.6% increase in the number of sexual harassment charges it has received. The EEOC’s counterpart state agencies have seen even greater increases. While some business leaders have seized this moment to make important changes in how they address harassment in their workplaces, others do not yet see the urgency in addressing the problem. In fact, in a meeting we had last month with a group of senior HR directors, some of the most urgent questions were: “How do I make my CEO pay attention to this issue?” and “How do I convince my CEO that we need to invest sufficient resources in preventing harassment?”
In June 2016, the EEOC issued a first-of-its-kind report on harassment in the workplace. The suggestions and tips in that report still stand, but the past year has shown us just how difficult it is for HR directors, general counsel, compliance officers, and D&I directors to make the business case for harassment prevention to their leadership. Many of the people in these roles know—as we do—that stopping and preventing workplace harassment is not only a moral imperative, it is also sound corporate strategy.
In the past fiscal year the filing of sexual harassment cases by the EEOC more than doubled, and monetary damages paid by employers increased from $47 million to $70 million in EEOC cases. These statistics do not include the costs of sexual harassment cases brought by private plaintiff attorneys or other forms of harassment investigated or litigated by the EEOC or private attorneys, such as harassment as a result of race, national origin, religion, disability, or age. Adding the costs of these cases further increases the financial liability for companies that fail to prevent harassment.
Damage awards and litigation costs are not the only financial consequences of corporate failure to stop and prevent workplace harassment, though. Employees who are harassed, as well as those who work with harassed employees, suffer adverse physical and mental health consequences, resulting in absenteeism and higher medical costs. Harassment reduces the productivity of both harassed employees and the unit in which the harassment occurs. Harassed employees may leave if they are able to, and employees who witness unchecked harassment may also leave. Because almost 70% of harassment incidents are never reported to the employer, talented and highly-skilled employees may leave without employers knowing that their business has suffered as a result of workplace harassment.
Reputational harm can also be devastating to an employer’s business. Companies in which it is known (even without media coverage) that harassment occurs in their workplaces are less likely to attract talented employees and may lose customers and clients. If workplace harassment becomes public, the harm to the company’s reputation may be significant and long lasting.
For example, numerous companies — from Wynn Resorts to Fox News to Mike Isabella’s restaurant conglomerate to Uber — have seen stock prices, advertising revenue, sales numbers, and consumer loyalty fall as a result of negative harassment-related publicity. Boards of directors have faced shareholder derivative suits for failing to investigate and correct allegations of harassment. Some businesses, like Fidelity, have taken critical steps to correct and prevent harassment as soon as they have learned about it. Our hope is that other organizations and companies will begin to take proactive steps, before they find themselves in the press.
Unfortunately, as we heard at the HR meeting, many employers have still failed to implement the best and most effective measures to prevent workplace harassment. Traditional training that is focused on legal definitions and prohibitions of unlawful conduct is necessary but insufficient to prevent large judgments against a company and to prevent future misconduct. Written policies are often overly legalistic, not disseminated effectively, and poorly implemented. Typical corporate reporting and investigative policies and procedures lack crucial components that would make them most effective. Harassers, especially “superstars” within an organization, are often protected rather than punished, and individuals who report the misconduct of those employees may suffer unlawful retaliation. As a result, employees may be afraid to come forward and corporate leaders are unaware of the full extent of harassment in their workplaces.
To stop harassment effectively and to prevent its recurrence, employers need to create a culture of respect and inclusivity, where people feel safe when reporting misconduct, and where there are clear and immediate consequences for having engaged in harassment. Managers need to be taught skills regarding how to respond to harassing behavior in its infancy, before it rises to the level of illegal conduct, and how to respond when an employee makes a complaint. Non-supervisory employees need to be told what behavior is unacceptable in the workplace, and they must be taught skills on how to intervene when they observe harassing behavior. Leaders need to clearly and repeatedly set forth their values and expectations and hold people accountable when they contravene those expectations.
In its report, the EEOC issued a roadmap for such a proactive harassment prevention program. Sixteen months — and thousands of sexual harassment claims later — it’s clear how desperately such a roadmap is needed. Walking down this road will not just keep employees safe. It will also help businesses avoid the financial and reputational damage that comes with ignoring harassment prevention.
Youngme Moon, Mihir Desai, and Felix Oberholzer-Gee discuss how much Uber is worth as it prepares to go public, before debating China’s controversial Social Credit system. They also share their After Hours picks for the week.
HBR Presents is a network of podcasts curated by HBR editors, bringing you the best business ideas from the leading minds in management. The views and opinions expressed are solely those of the authors and do not necessarily reflect the official policy or position of Harvard Business Review or its affiliates.
“When are you thinking of retiring?” I am used to this question by now. It usually comes up an hour into a meeting with a client prospect for our investment company, often after a shuffling of papers and downward glances. “And what is your plan for succession at the company?”
At first, I used to be surprised. Did I look that old? I’d reply that I had no near-term plans to retire and that we had a very strong team of younger executives, including the current president, whom I had designated as my eventual CEO replacement. Then I cycled through a range of reactions: annoyance with the inquiry; concern that women are still not considered as “committed” as men, even when we’re CEO; and wanting to better understand why people felt compelled to ask me about retirement.
It turns out that I am not the only one who’s wondered about this. I informally surveyed 280 business leaders, all over 55 years old, the majority of whom work for small to mid-sized firms in the U.S. I found that 30% had been asked about retirement, primarily by clients or prospects. Both men and women were queried about retirement, generally starting by age 60, across all industry groups. Many said they believed the question was seeking reassurance.
The fact is that CEOs tend to be the face of their organizations, especially at small to mid-sized companies, where they may work with the most important clients, and when they are the founder. Prospects may have been drawn to the company specifically because they heard about the CEO. So it is entirely reasonable that customers planning their future with you would want to know about any upcoming retirement plans.
CEOs have to anticipate this concern and be proactive in addressing it. The growth of your business may depend on how well you can ensure clients that the company will be fine under your successor’s leadership. The further away you are from retirement, the longer you can handle that client’s needs; but the closer you are to departure, the more you need to convince them that your colleagues are as good, if not better, than you. (And if you’re nowhere near retirement, you should simply state that you love your job, have numerous initiatives underway, and look forward to fulfilling them in collaboration with colleagues and clients.)
Failing to communicate succession plans clearly with clients, workforce, and shareholders can result in internal chaos, loss of current and future business, and decline in stock value. As CEO, it’s your duty to be mindful about client concerns and carefully consider your tenure, transfer of responsibility, retirement timing, and appropriate communication. Failing to do this may put your firm and your ultimate successor at risk.
Here’s an action plan that may help:
If you are the CEO of a small to mid-sized company, you need to begin thinking about your own transition many years before retirement. That includes deciding when you will retire and at what pace you will divest your current responsibilities.
From there, you can decide whom to move tasks to, whether you have the right people in place, and, if not, how to attract and train the next generation of leaders. Only at that point can you begin to implement these reassignments.
With this plan in place, you’ll have a more thorough response to any questions about when you will retire and who will succeed you. When it comes to timeline, you can always offer a range (4-6 years from now, for example) or explain that you intend to be fully active for many more years than that.
What clients want to hear next is reassurance about the team you have in place to take on more of your responsibilities. Reinforce how much confidence you have in your people. Within a year of your retirement, introduce your core team to prospects and clients, and highlight their achievements with the firm. Many CEOs prefer gradual transitions, and this requires thoughtfully explaining which roles you will retain for the longest period of time. That way, your team fully understands and can articulate these plans to others. Since more than one person may be in contention for the CEO role, try to clarify that choice as soon as possible, to avoid internal stress and bitterness.
Client prospects care when you’re going to retire. That’s a nod to your reputation. But it requires a careful and honest description of both how long you can provide your expertise and how well you have assembled, led, and nurtured a management team with even better skills than you could offer. You don’t have to wait for the question to come up before speaking to this.