The Management-Investor Catch 22: McGrath
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Published in U.S. 1 Newspaper on July 12, 2000. All rights reserved.
Building Customer Loyalty: Angela Deitch
Maybe you don’t have a “customer relations”
department or your sales department is too short-staffed to coddle
clients.
Tough. Only companies that nurture their customers — and this
goes well-beyond just offering a product, by the way — prevail
in this competitive market, says Angela Deitch, a management
training consultant who specializes in customer relations, communication
skills, and sexual harassment policies (609-883-6327). “In the
past the companies that provided products and services drove the economy,”
she says. “Today customers are driving the economy. The more enlightened
companies get really top-notch people in their customer service departments.”
Deitch speaks on the process of managing customer relationships at
the Institute of Management Consultants meeting on Monday, July 17,
at 6 p.m. at the Doral Forrestal. Cost: $60. Call 609-520-1188.
Also on the program is Hugh J. Devine, of Hugh J. Devine & Associates
(609-799-8170). Devine was president of Total Research from 1993 to
1996 and he will cover the strategy of customer relations, such as
how to increase profits by concentrating on high-value customers that
fit your brand position and that you enjoy working with.
Deitch, based in West Trenton, has worked with such clients as Wyeth
Ayerst, American Cyanamid, Johnson & Johnson, and Merck, covering
training issues, avoiding harassment, problem-solving, decision-making
and project management. Prior to starting her own firm, she received
a masters’ in education from Rutgers and worked several years on a
program for the prevention of sexual harassment for New Jersey’s 70,000
employees.
Companies have to make a decision that they are going to be customer-
focused, says Deitch. “Someone in top management has to have a
vision and the will to see to it that the entire company is focused
on the needs of the customers, not just what you’re going to provide,”
she says. Companies must know what the customers want, when they need
it, and how to provide it to them.
Interpersonal contact, says Deitch, is key. “The process is not
just high-tech, it’s also high-touch,” she says. Large companies
can use software programs such as FirstWave (www.firstwave.net) with
onscreen scripts for capturing customer data. Another firm (www.answers.com)
allows customers to type a question and receive a quick, relevant
response. A third program (www.eloyaltyco.com) helps identify what
is unique about the customer, sets up rules for the company to act
by, and reports on how effective it is. Still another program available
at www.terradata.com deals in financial services and has active data
warehouses.
Small companies won’t be using — and don’t need to use — these
high tech call centers with fancy software. For instance, says Deitch,
take her own company. “I don’t have a lot of technology and applications
that larger organizations might have. When I talk to somebody I try
to get that person to understand that I care about them personally
and let them know that I care about achieving their goals. I educate
them, because sometimes when they ask for something they don’t know
that other options exist. I share information with them and I honor
commitments.”
Constantly stay in touch with your clients and get feedback from them
whenever possible, says Deitch. “It takes a long time for a company
or culture to get on board,” Deitch says, “and realize we’re
going to do this for our customers because — if we don’t —
the competition will.”
Top Of PageThe Management-Investor Catch 22: McGrath
You have heard the paradox — a start-up wants investment
capital but needs a hot chief technologist or CEO to get it, but in
order to attract the best talent, they need money in the bank.
There are ways around this problem, says Stephen McGrath of
McGrath & Associates, an executive search firm at 993 Lenox Drive.
“Suggest that in order to accept those terms they have to pay
a premium, a high salary, or a bigger equity stake,” says McGrath.
“It’s all about the total package.”
McGrath speaks on Tuesday, July 18, at noon at the Venture Association
of New Jersey’s meeting on “Strategic Human Resources for the
Fast Growing Company.” Diana Krajewski of Technoforce
LLC (a technical search firm) will moderate the panel, which also
includes her cohort at Technoforce, Robin Berg Tabakin. Ron
Hahn of Early Stage Enterprises, and Marc Gross and Rachel
Coe of Greenbaum Rowe Smith Ravin Davis & Himmel will also add
their expertise. The event is at the Westin in Morristown. Cost: $45.
Call 973-631-5680.
Preceding the luncheon meeting, entrepreneurs can attend a workshop,
“Business by the Numbers: Validating the Business Model,”
with Ron Hahn, Alan Wink, director of management group, Amper
Politziner & Mattia, and Randy Harmon, director of technology
commercialization for Rutgers Small Business Development. Cost: $40.
Call 973-631-5680.
A VANJ sponsor and member, McGrath spent 20 years with PA Consulting
Group in England prior to starting his company in 1995. He has a BS
in chemical engineering from Wooster Polytechnic Institute, Class
of 1974, and an MBA from Wharton. “I almost went for a PhD program
in engineering and then later somebody asked me if I’d considered
business school,” he says. “The decision was made pretty quickly
once I knew what business school would do.”
McGrath, whose company has filled chief positions for several Internet
start-ups and new media companies, claims to be busier this year than
last, and doesn’t see any end to the talent shortage. Fortunately,
his firm has a database of people with the right credentials: someone
with 7 to 10 very focused years of experience in their field, and
a high tolerance to risk. “They’re maybe in the mid-point of career,
have some entrepreneurial orientation, a desire to hit the big time,
and a willingness to take risk,” he says.
Some current vacancies: McGrath has been hired to find a chief
sales officer for a local web design company, a business development
officer for a company in New York that specializes in delivering items
to homes, and a chief marketing and financial officer for a company
that does job placements over the Internet. McGrath is also short
on help as well; the firm is seeking two research associates who can
help track down candidates.
Since many of today’s start-ups are still waiting for funding to come
through, McGrath has redesigned pricing schemes to accommodate the
fast-growing company. “Particularly in start-up firms, they’re
not in a position to pay,” he says. “Clients have asked us
to build a management team and defer their compensation until the
funding comes through. In return for doing that we’ll ask for a premium,
maybe twice the normal fee.”
Like many of today’s executives, McGrath is also learning that a little
equity can be better than cash up front. “It helps the client
company from a cashflow standpoint, and it means that we have some
skin in the game, too,” he says. “Then it’s in our best interest
to find the best candidates because we’re part owners of the company.”
There’s an element of risk to these creative pricing schemes, however,
and as McGrath admits, funding only comes through 75 percent of the
time, and “it always takes longer than anyone expects. I do think
we’re going to see some repercussions of the Internet boom,” he
says. “We read a lot of business plans and it’s clear to us that
there’s only a 10 percent probability of success. There’s going to
be a lot of casualties.”
The availability of talent is perhaps one of the major reasons, he
says. “They’re all looking for the same people: chief technology,
chief financial officer, chief executive,” he says. “You have
to hire quickly, because they’re talking to 10 other firms.”
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