How Leaders Can Be Prepared for the Unknown

Chris Curran: Growth Igniters Radio, Episode 5: How Leaders Can be Prepared for the Unknown.

This episode is brought to you by Business Advancement Incorporated, enabling successful leaders and companies to accelerate to their next level of growth. On the web at www.businessadvance.com.

And now… here’s Pam and Scott.

Pam Harper: Thanks, Chris. Hi, I’m Pam Harper, founding partner and CEO of Business Advancement Incorporated. Right across from me is my business partner and husband Scott Harper.

Scott Harper: Hi, Pam. It’s wonderful to be here. I’d like to remind people that the purpose of Growth Igniters Radio is to spark new insights, inspiration and immediately useful ideas for leaders to take themselves and their company to their next level of success.

Pam, what’s up for today?

Pam Harper: Preparing for the unknown.

Scott Harper: You mean you don’t know what’s up for today?

Pam Harper: I do, actually… One of the most fundamental issues facing anyone who is leading a company through transformational growth, which is a lot of the people that we speak with and work with − especially mid-sized entrepreneurial companies − is acknowledging that there is an incredible amount that we don’t know. The number of unknowns − I don’t think we can fathom them. We have to be ready to deal with whatever the world throws our way.

Scott Harper: That’s absolutely true. There are so many things in the business environment that are changing rapidly − technology and regulation and things that are here …

Pam Harper: Like the weather.

Scott Harper: … like the weather or all kinds of stuff − things that we can’t really anticipate but we need to be prepared for somehow. We need all of the expert perspectives we can get on that.

Pam Harper: Exactly, and that’s why we’re delighted to have Barbara Weltman with us today. As a leading authority on tax, on finance, she is an expert in helping business leaders adapt to the constantly evolving business environment. She’s also published over a dozen books from major publishers, including several JK Lasser guides, and she’s received numerous honors, including being named to the list of 100 small business influencers for multiple years. She’s a top business influencer.

Barbara, welcome.

Barbara Weltman: My pleasure to be with you today.

Pam Harper: Barbara, before we get in to specifics, I want to talk about the concept of being able to prepare for the unknown. In my own book, Preventing Strategic Gridlock, I mentioned that we need to develop and maintain a keep-adjusting mindset. What do you think about that?

Barbara Weltman: That’s absolutely true. One of the good things is in small business, owners have control and can be more nimble, perhaps, than even large companies that are entrenched in what they’re doing and have to go through committee, whereas small business can respond to changes, developments, opportunities and challenges on the fly.

Pam Harper: What about the mid-sized companies though?

Barbara Weltman: Mid-sized companies are in the middle − they face some of the abilities that small businesses have to be more adaptive and yet they still have to deal with committees.

Pam Harper: That’s true. I think that’s a lot of why we keep saying you have to get into this mindset of keep-adjusting. Keep adjusting, because you’ll never know what’s going to come at you − opportunities, crises, all of these.

One of the things that I was particularly taken with − I’ve seen some of the things you’ve written about − is being able to know the unknown. We have to be able to figure it out somehow. There were a few things that you were talking about.

Scott Harper: … Before you can adjust to something, you have to be aware of it…

Pam Harper: Exactly. Can you talk to us about this − one of them I think was virtual currency?

Barbara Weltman: That is a rather new development, and I think that all business owners have to decide what they’re going to do about it. We hear a lot in the media about bitcoin and other electronic payments − virtual currency. Many consumers are looking to use their virtual currency to pay for goods and services, and it’s really up to small and mid-sized companies to decide whether they want to accept this medium of payment.

Obviously, on the one hand, the more types of payment options you offer the consumer or your business customer, the more likely you are to attract a wider audience. Not only accepting credit cards and checks and cash, but also electronic payment deepens the pot of potential customers. On the other hand, there are risks and certain responsibilities when it comes to bitcoin.

Bitcoin fluctuates in value, so you’re going to have to decide where you’re going to go to set the value. And adapting to certain merchant processing with respect to bitcoin − you can’t use your local bank ,for example, as you would perhaps for your credit card processing to do the bitcoin processing. There’s more entailed there ,and then if you’d like, we could even talk about some tax responsibilities with respect to bitcoin.

Scott Harper: Barbara, with bitcoin, you say it’s not like just bringing in credit cards or even dealing with foreign currency. How is it different?

Barbara Weltman: If you as a merchant accept bitcoin, what are you going to do with it? You’re going to have to either buy goods and services with it or somehow convert it to cash and, as I said, with fluctuation you might have receive payment [that’s variable]. Let’s say just in round numbers, you might have received payment for $1,000 worth of goods or services you provided, and then you go to convert it to cash and it may only be worth $900. It’s not exactly the same as accepting a credit card or a check.

Pam Harper: It makes it a little bit more difficult than when you’re talking about estimating your revenue, doesn’t it, because it fluctuates. There’s a certain amount of risk that goes into this. How can a leadership team − Let’s say we’re talking about a mid-sized company − and we’re doing a lot of work with some mid-sized-client types − How can we help them to assess that risk? What could we do to help them figure their way through that?

Scott Harper: Versus the rewards of going to bitcoin.

Barbara Weltman: I think you’re going to have be looking for a reliable bitcoin exchange. There are a number of websites out there that are bitcoin exchanges, and some have gone under already. You’re going to want to find one that is well-established, has been around [a while] as reliable, and perhaps you could check out what some of the big boys are doing, and which bitcoin exchange they may be using to follow suit. That would be my first step.

Pam Harper: That’s a first step − there’s a second step?

Barbara Weltman: Yes. The second step is to decide how much you want to publicize the availability of this, because you’re maybe discouraging some more standard means of payment. Maybe you prefer to receive payment by credit card, because then you have credit card protections and you are sellers, and your consumers have those protections as well, and that may be preferable. I don’t know; I think it’s a bigger question in terms of your marketing and how you publicize your bitcoin acceptance.

Pam Harper: The other thing that I was thinking about was that to a certain extent, there’s a cultural aspect to this, as to whether a company or a leadership team decides that this is a method that they want to adopt, because there are many different pieces to this. Would you say that’s true?

Barbara Weltman: Certainly. I think this is also a generational thing that millennials may be more into this and more accepting of this, versus boomers like me who find this kind of technology and this notion risky and unfamiliar. With that said, I think that with education, anybody can become informed about what this is. Again, I think you’re right that not everybody is going to be interested in this.

Scott Harper: Speaking to people about virtual currency, we hear a lot of different opinions. Some say, “We should look into that.” Other say, “This is still very foggy and strange and not really jelled yet.” What should a company who is thinking about virtual currency do to assess this − Is it the right time to make that plunge to get into it? What are the benefits of doing it versus the risks?

Barbara Weltman: At this point, I tend to agree with you that there really are a lot of unknowns, [e.g.] that the overall marketplace has not gotten rid of a lot of the bad apples yet, and that there are still some questionable players. It gives bitcoin a bad name. With the government coming out this past year − the IRS coming out for the first time deciding to treat bitcoin as property and not as currency, that’s a very big statement there that they’re going to treat it as a property. So you could perhaps have to report gain or loss when bitcoin you receive is then used going forward, whether it’s translated into cash or used to make purchases − so that’s a fact to consider.

Then maybe for all businesses that are thinking about it, maybe this is just the time to put it on your radar and keep an eye on what’s going on. Maybe it’s not the right time for everybody to make a decision about it. It may makes sense to just monitor what’s going on in the bitcoin arena and perhaps table it to review, and to circle back in third quarter, let’s say, or 2016.

Pam Harper: Staying aware of what the developments are is really an important thing to do in this particular case of the unknown.

Scott Harper: Barbara, is there a resource that we can direct people to online where they can learn more about virtual currency, and the positives and negatives of it?

Barbara Weltman: They can just Google bitcoin and find a lot of resources about what’s going on with respect to bitcoin. For the IRS rules on bitcoin, you can just search the IRS website, www.IRS.gov, for “virtual currency” and find the specific rules there related to virtual currency of all kinds.

Pam Harper: That’s a good place to start, and in fact we will have that under Resources on the page featuring this Episode 5.

With that, we’re going to take a quick break, and when we come back, we’ll talk more with Barbara Weltman about another unknown to be prepared for − natural disasters. Stay with us…

Scott Harper: You’re listening to Growth Igniters Radio with Pam Harper and Scott Harper, brought to you by Business Advancement Incorporated, − enabling successful companies to accelerate to the next level of innovation and growth. For advanced notice of new episodes, exclusive offers and quarterly Harper reports, go to growthignitersradio.com and click the “join-our-community” button in the upper right corner.

Pam Harper: Welcome back to Growth Igniters Radio with Pam Harper, that’s me, and Scott Harper. We’re talking with Barbara Weltman, a leading authority on tax law and financial issues, and an expert on helping small and mid-sized businesses deal with the unknown.

Barbara, how can people find you?

Barbara Weltman: People can find me at www.barbaraweltman.com. I offer a lot of resources to small and mid-sized companies for free, including my Idea of the Day and my monthly newsletter, “Big Ideas for Small Business.”

Pam Harper: That’s wonderful. With that, let’s go back to what we were talking about, which is how leaders can deal with the unknown. This is an unknown that I think we’re all getting pretty familiar with right now − at least up in the northeast where we are − and that is natural disasters, like snowstorms, hurricanes… you name it.

Barbara, what can you tell us about this?

Barbara Weltman: Natural disasters happen anytime, anywhere − that’s why they are disastrous. And they’re natural; we can’t really predict when they’re going to happen. But what we do know is that the unprepared businesses may not recover, and they may in fact go out of business. Even knowing that, many businesses lack a business preparedness plan. They don’t think in advance, “What if…”

As you mentioned, we’re talking about snow that puts businesses on hold, transportation systems may be down − how have businesses thought ahead to enable their staff to work from home to continue to be productive. Obviously, it wouldn’t work for a restaurant or a retail store, but it work for an office.

I think that thinking ahead − thinking back on disasters that we’ve all experienced − covering the what ifs, writing it down, educating your staff about it and even practicing in terms of certain natural disasters. What happens if there’s, unfortunately, workplace violence − what happens if there’s an intruder, what happens if the government gives instructions to stay in place? Do we have water and other facilities to enable us to do that wisely?

I think there are a lot of things that we can get ready for. If the unthinkable happens, we at least are prepared to the extent that we can be.

Pam Harper: So there are categories of disasters that you can almost begin to prepare for. You can’t know exactly but you can know well this type of category, this type of weather category, or this type of other situation you’re referring to.

Barbara Weltman: Think about Ferguson, Missouri and the riots that happened, and think about what happened to the businesses there − many of which were destroyed from the riot. I’m from New York originally; think about the 9/11 disaster − it can happen from many instances. And it can be not necessarily a global type of disaster but something minimal, like a power outage, like in the summers when there are energy cutbacks because of extreme usage. What do you do? Are you prepared for that? Can you handle that?

For example, you have a business that’s dependent on refrigeration and you have a power outage. Are their back-up systems in place to handle the refrigeration? There are all kinds of modest types of disasters that we could experience. Think of just technology. Your internet goes down − are you prepared for operating if you put everything in the cloud?

Pam Harper: That’s true.

I think one of the things that we see a lot is people beginning to put these plans into place and then they don’t update them. Do you see this, too?

Barbara Weltman: Yes. Or they don’t practice. I had worked for a while with the Red Cross and business preparedness planning. They taught a group of 6 people how to do CPR. Then they had a drill in the business cafeteria, and half of the people who were trained froze and couldn’t do what they were supposed to do − so it’s practice, too. We all remember the old fire drills when we were in school, and that’s basically what we want to do.

Scott Harper: This sounds like something that really has to flow from the top. If leadership takes seriously preparing for disasters or unanticipated events and trains people, and then make sure that they’re prepared, that they’re updating, that they’re doing all these things. It’s a cultural thing really, don’t you think?

Barbara Weltman: Absolutely, and you have to look at who’s in your company, who your staff is, and are there people that are going to need special assistance. I recall being involved when there was the East Coast power outage, and I was on the fourth floor in a business meeting and somebody was wheelchair bound, and we had to carry that person down 4 flights of stairs. I think you have to think about all of these potential issues. As you say, part of it is cultural − who is in your company culture.

Scott Harper: You can break the sorts of things that one has to be prepared for down into categories, from infrastructure, to IT and so on. Is there a resource that people can go to, or a template, for disaster preparedness plans that someone can refer to and use as a starting point?

Barbara Weltman: There are many that you can use. Some that I like − I like the SBA’s emergency preparedness guide, and also the Institute for Business & Home Safety has a toolkit that you can use for disaster preparedness planning.

Scott Harper: One other question − “be prepared.” I used to be a boy scout, and one of the things I saw sometimes was if we went out camping, there’ed be some people who would go out and they just wouldn’t have enough. They wouldn’t have enough food. They wouldn’t have enough shelter, and they were in hard trouble. There were other people, though, who went out so loaded down with stuff that they could barely move. They were too prepared, perhaps.

How does a leadership team balance being prepared in a reasonable way with going overboard and burdening down the company, especially if it’s a small company that’s under resourced? How do you strike that balance?

Barbara Weltman: I think that going through the guides that you can get online from various resources really serves as a good roadmap, and they do indicate what kinds of supplies, for example, that you would need to keep on hand. For example, it’s great to tell everybody to have flashlights, but you better make sure you have batteries for them. Another thing they tell everybody − it’s great if you could give each employee a whistle. In case of emergency, you have a whistle people can find you. Little things like that are not necessarily very costly, but will go a long way in making your staff safe in case of disaster.

Pam Harper: Good points. We’re going to take another quick break, and when we come back, we’ll talk more with Barbara Weltman about a third unknown that business leaders need to be prepared for, hack attacks. Stay with us.

Scott Harper: You’re listening to Growth Igniters Radio with Pam Harper and Scott Harper, brought to you by Business Advancement Incorporated on the web at busiadvance.com. It’s great to have you with us and if you like what you’re hearing, spread the word. Go to your social media communities on LinkedIn, Twitter, Facebook, whatever you use. Tell them all about us using #growthigniters and be sure to subscribe to the Growth Igniters Radio series on iTune or Stitcher so you won’t miss a single episode.

Pam Harper: Welcome back to Growth Igniters radio with Pam Harper and Scott Harper. We’re talking with Barbara Weltman, a leading authority on tax, on financial issues and an expert on helping small and mid-sized companies deal with whatever in the world comes their way.

Barbara, how can people find you and your books?

Barbara Weltman: People can find me at www.barbaraweltman.com. I link to Amazon, and you can find all my books, including the latest JK Lasser Small Business Taxes 2015. There’s a free online supplement available through my website.

Pam Harper: Excellent resource. In the last 2 segments, we’ve been talking about some known − how can we put this now − known unknowns. We’re getting to know them − virtual currency and natural disasters. Here’s a third one that’s making the news: hack attacks. Too many business leaders unfortunately, are getting to know this. Barbara, what are your thoughts about how leaders can get ready for such an unknown?

Barbara Weltman: You can only do what you can do. Obviously, hackers are going to get through. We’ve seen major companies be exposed to attack, but we want to do whatever we can do to protect ourselves, to protect our important information, our client information, our employee information, our intellectual property. A lot of it is just common sense. A lot of it may require bringing in experts to guide us and make sure that we have whatever safety that we can put in place, firewalls and enhanced passwords and limitations on employee access to company information, etc.

Then I think we also might want to think about insurance perhaps, making sure that if we are violated that we have coverage to comply with the law and inform customers who may have had their personal information exposed. We want to protect ourselves to whatever extent we can.

Pam Harper: That’s natural. How often should a company have an update of this kind of [this kind of] information?

Barbara Weltman: Oh my goodness. Technology changes all the time and every time, we do something to protect ourselves to a new threat out there.

One of the issues that I think that businesses should consider is whether or not they want to store customer credit card information. Obviously, storing that information if you’re hacked then triggers legal responsibilities in terms of notification, and perhaps compensating for any subsequent financial damage that customers may experience, versus not storing that information and requesting that each time you deal with the customer.

You have to consider those kinds of issues, and then as I mentioned, perhaps working with the consultant, it’s worth the investment to find out your exposure and what steps you can take. Make it part of an annual review to make sure that you remain current with whatever protections are available out there.

Scott Harper: I’m thinking about this issue and the examples, like the Sony hack around the movie [“The Interview”] just recently out, or the insurance company I was reading about yesterday in the journal that had millions of Social Security numbers taken [because] their files were not encrypted. People can almost feel like it’s overwhelming − there’s too much to think about − but there have to be some really simple things that anybody of any business size can think about, do almost in an afternoon or less. What do you think?

Barbara Weltman: I think that there are some minimal steps that businesses should take. Many of the attacks that smaller companies experience are internal, or from former employees, or disgruntled employees. I think you have to monitor access and continually change and upgrade passwords, and limit the ability of employees to use company computers, because they may bring in outside problems. When they do personal things on company computers, they expose the company to all kinds of outside problems.

Scott Harper: Viruses, things like that…

Barbara Weltman: Virus, malware and such. You want to certainly create a company policy for employee usage of company computers and, again, do the minimal in terms of password protection. Make sure that company laptops and tablets and phones, all have password protection because you’d be astounded with the number of laptops that are left at the airports every year.

Pam Harper: That’s true. To certain extent, this is a tough issue for leaders to balance, because in some of the companies that we’ve spoken with, there is a very open culture − “we don’t want to seem overly restrictive.” Do you have any thoughts as far as what you would advise? How do you deal with a company, and I know of at least two, where they would not want their employees feeling like, “We’re coming down on you”?

Scott Harper: “Breathing down your neck,” and yet they have to prudent.

Barbara Weltman: I think it’s balancing act. I think you’re precisely right. Of course, a good communication with your staff about why you’re doing certain things, and explaining the situation goes a long way towards ameliorating any kind of bad feelings that would otherwise result from stricter policies.

Pam Harper: It comes down to open communication ultimately − helping people to understand no matter what it is that you’re putting into place to protect your company, people have to understand what the benefits are, what the risks are, and that they’re part of the team in keeping the company safe.

Scott Harper: That if you’re putting the plans into place to protect the company, you’re also putting in the plans to protect them as well.

Barbara Weltman: Absolutely. Just think about it this way. If the company has to divert resources to deal with hack attacks, those are resources that could otherwise be applied towards raises and fringe benefits.

Pam Harper: There you go − the benefits, the benefits.

Any last thoughts about hack attacks? This is just such a huge topic − all of these really are − but specifically on hack attacks.

Barbara Weltman: I think this is something that you can’t be ostrich about − that you do have to face the reality that there are bad people out there that are going to try to get your information, and perhaps disrupt your business. It can put you offline. It can pollute your list. It can do all kinds of bad things to you, and you have to recognize it and be proactive in addressing potential problems.

Pam Harper: This is no matter how sophisticated your company is, absolutely.

Barbara Weltman: Exactly.

Scott Harper: Barbara, is there a resource that we can point people at that can give them a feeling for how to protect their IT resources and how to go about starting that?

Barbara Weltman: There are a number of resources online; verizonenterprize.com has a list of actions that you can take to protect your data. There are other resources that you can find to try to protect yourself;, to the extent that you can, from any kind of bad actions that occur through the internet.

Pam Harper: Barbara, any last thoughts about preparing for the unknown − how leaders can prepare for the unknown?

Barbara Weltman: I think that you do need to budget for the resources that you need to address potential issues, whether it’s resources for added insurance, such as business continuation coverage or cyber insurance, or bringing in consultants, or training your staff. You have to budget accordingly, and make sure that you direct enough resources to address all the potential issues that you face.
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Pam Harper: Well said. Thank you, Barbara, so much for sharing your expertise with us. We hope you’ll come back. There’s a lot to all these issues.

Barbara Weltman: My pleasure.

Pam Harper: Our listeners would definitely want to know about this.

With that, join us next Wednesday when our guest will be Dan Janal, one of the Founding Fathers of Internet Marketing and Publicity, and an expert in building thought leadership and personal branding. We’ll be talking to Dan about the importance and steps of personal branding for executives.

Scott Harper: Thanks for listening to Growth Igniters Radio with Pam Harper and Scott Harper. To check out additional resources related to today’s conversation, join our community and subscribe on iTunes or Stitcher. Go to www.growthignitersradio.com and select episode 5.

Pam Harper: Until next time. This is Pam Harper …

Scott Harper: … and Scott Harper…

Pam Harper: … wishing you continued success, and leaving you with this question to share with your communities on Twitter, LinkedIn, Facebook, and anywhere else.

Scott Harper: … Now that you’re