7 Essential Qualities of Forward-Thinking Companies

Transcript

Introduction

Okay, well, we'll go ahead and get started. Whoever comes in, we may have to stop for a moment to let them in, or someone from my office may be able to let them in. But I'd like to welcome everybody to the Lunch and Learn brought to you by The Campbell Law Group. Today we're talking about the seven essential qualities of forward-thinking companies.

In my experience in business, and of course as a corporate attorney, I have come across certain types of qualities. Companies that are built to last, that are thinking of longevity and that are nimble enough to adapt to circumstances, all seem to have similar qualities. Again, no company is perfect, and most of the time it's a learning process for most companies. But I thought I would do a session to talk about these qualities and elaborate on them.

I've also added a little bit of a twist, where we come to you from a legal point of view regarding these particular qualities and these types of companies, and how you can also apply these characteristics to the legal aspects, the legal realm that governs companies, and how they would assist them. More often than not, people do not realize that the legal aspects can get a company into trouble. A company can be doing wonderfully from a business, sales and operational point of view, and if it leaves behind the legal aspects of what goes on, unfortunately a lot of times it's going to come back and be a problem in the future, whether it's an employment issue, a contract issue with clients, or governmental agencies.

So it's equally important that you have these characteristics, and a certain type of discipline and understanding of the legal world and how it affects your company as well. One of the worst things would be, of course, that you build this wonderful company, put your blood, sweat and tears into it, and then you have a legal problem that could potentially be a death knell for the company, depending on the severity of the legal problem.

So we're going to go ahead and start off. If anyone has any questions, go ahead and type them into the chat, and we'll get to the questions in between. Or if you want to stop for a brief moment, just let me know, so that I can answer questions as we go along. And by all means, hopefully everyone is enjoying a wonderful lunch. I will not enjoy my lunch during this time; that probably would not be a pleasant sight. But please, by all means, I hope everyone is enjoying their lunch and this is a pleasant experience.

So we'll move on. What are the seven essential qualities of forward-thinking companies? Here we indicate the seven: innovative, detailed, adaptable, proactive, focused, practical slash creative, and also realistic. We're going to go through them in detail one by one and talk about them.

Basically, the mindset of forward-thinking companies: forward-thinking companies want to spur growth and longevity, not to mention they want to make money. That's pretty natural. But for a business to have the best chance of survival in such a competitive environment, it's important to possess these seven essential qualities. Forward-looking companies are usually the ones that succeed, and they're able to thrive through difficult times like the ones we are continuing to go through right now, and went through over the last year.

Innovative

So the first one we indicated was innovative. Here we have a quote from Thomas Edison. To put it simply, forward-thinking companies need to be different. As Thomas Edison once said, "There's a way to do it better. Find it." If there's a way to do it better, find it. Your product or service must be innovative in some way if you are to achieve longevity and success. What that also means is that it has to be able to survive over time, which might mean adaptability and other essential qualities that we're going to talk about shortly.

Another thing to keep in mind, which I find particularly with innovative companies and innovative thinkers, is that the wheels must always be turning. Whether it's increasing productivity, developing new technologies or products to meet market needs, or altering the way you do business or deliver your products or services, you're always thinking about the next step and how to improve a process. Those are my innovative thinkers, the innovative qualities that also lead to companies being proactive, which we will also talk about. But they are distinct. Innovative is always looking toward the future: What's coming up? What does the market want? How can I create that market difference, that market edge?

So, innovation from a legal point of view. These are some of the suggestions I would have for adopting these types of qualities through legal means or legal processes within the company. It includes removing unnecessary contractual language or shifting of risk from agreements, if it's no longer applicable or if the business model has changed. In other words, don't keep the same contractual language or the same structure and obligations between the parties, particularly if the market risk has changed, or if you've been able to mitigate a risk on your end through innovation or through changes in the products or services you offer. Sometimes the original risks you contracted for and indicated in your agreements may no longer be a concern, and that may be something you want to change. It makes your company more nimble, and potentially makes your contracts more attractive. So that's something to consider as your company goes through many changes.

Also consider the use of technology: DocuSign and other similar programs to facilitate and automate the execution of documents and record keeping. Your clients, for the most part, would also appreciate being able to find things simply, either on a user-friendly client platform, which is one of the other suggestions, or just in general, being able to store their information without creating more paperwork and more need for clerks to process documents. You're just making it easier and putting things at their fingertips. So if you ever have to talk about what's going on, or an invoice, or what's included in the obligations or warranties, it's easy to grab and to find.

Detailed

The second essential quality is detailed. Forward thinkers do not simply wait for success to come to them. Forward thinkers plan and prepare for success down to the smallest detail. When I was preparing this presentation and looking for some quotes, I came across one from Gianni Versace. He said, to create an extraordinary product, you have to take care down to every essential detail. When you're creating an actual product or service, I do believe that's probably a very good thing to follow.

But in business, you can't necessarily give importance to every single detail. Otherwise, you can get bogged down in the minutiae, and that's usually not very healthy for companies. When I say minutiae, I mean things like the wastepaper baskets, or something that's just not essential. Although I do have to agree with Versace that to create something extraordinary you have to have that love for it, that attention to detail. There's no question about that in creating a product or service.

But it's important that companies plan ahead and think about their immediate future, along with their near future and long-term future, in a detailed manner, so that they avoid the minutiae taking over, or being bogged down in minutiae when it's not productive. If you remain detail-oriented, this most likely will not be an issue, because you'll be able to dismiss the things that don't need that level of attention.

From a legal point of view, detailed means not leaving important decisions to chance. Don't stop looking at your employee processes, your manufacturing line, your contracts, your agreements with your vendors. Do not just leave that by the wayside and say, "Well, I have something in place, we'll just leave it alone," and ignore it. You always need to pay attention to the evolution and changing nature of the business, which also affects those processes, production lines, client communication, strategic partnerships, the agreements that hold all of these relationships together, and the individual processes that go into creating these procedures. Do not ignore that.

A lot of times, detail and innovation come from making things better, improving them, and that only comes with detailed analysis of those processes. I don't think this is something that has to be done every day or every week or every month, but you certainly want to consider these things at least every six months to a year. If no change is needed, no harm done. You'll move on to the next one, and you'll stay focused on paying attention to that in addition to the other things going on with your business. It becomes part of your core structure, part of the process that makes you successful.

Adaptable

Number three is adaptability. This is very, very important, and we all know it's more important than ever given this pandemic and the unprecedented economic and political upheaval we've seen in the last year in domestic and global markets and countries, and of course the pandemic, which has undoubtedly affected everybody. Forward-thinking companies always try to read and understand the direction in which the winds, or the market, are blowing, and they adjust to them effectively and efficiently.

I'm going to give you a couple of examples of companies that literally shifted and adapted within months and became leaders and drivers in the 2020 pandemic. You can take from their examples to understand what this means, and the importance of being able to read the market, read the direction the wind is blowing and adapt. Important in this is also making sure your company remains nimble enough to adapt, which goes back to being detailed and innovative. If you're keeping all of these other essential qualities in mind, it makes it easier for your company to adapt.

Another thing: companies should not fear change. You should embrace change, because change is most certainly one of the constants in this world, along with death and taxes, as they like to say. Be willing to pivot. Do not hesitate to pivot if you need to. If not, you may find yourself unable to adapt and being left behind in the market little by little: losing market share or losing attention or focus because of your inability to adapt, while you give other competitors a chance to come in and take over your spot in the market.

Businesses that thrived in 2020

Here are 20 of the most successful types of businesses in 2020. Most of these probably will not surprise you, given how the pandemic has changed us and our behaviors, from consumers to businesses to everything. I think the one surprise here was used car sellers. I had to look further into this. This was from an article from the U.S. Chamber of Commerce, where I got this information. What they explained is that used car sales rose because a lot of people did not want to take public transportation anymore, and there apparently was a lack of inventory of new cars as well. Along with the low interest rates, that made used cars more attractive to these commuters. They didn't want to ride the subways or use public transportation anymore, and used cars were cheap enough. It was the right fit. New cars were low in inventory and more expensive. So the low interest rates and the shift in consumer behavior, thinking of safety and distancing themselves, added up.

Used cars actually became a market that thrived during the pandemic, which to me was a very big surprise. It just goes to show you how different factors, environments and elements can come together and create unexpected results.

Also, the mindset of forward-thinking companies: for better or for worse, 2020 has been an unprecedented year. However, if you look at the companies that have not only survived but thrived in one of the worst economic and political times in modern history, you will see that these companies possess the essential qualities we're talking about today. So here are a couple of examples of 2020 thrivers. This is only a couple of them, but they succeeded for various reasons, or exhibited one or more of the essential qualities in their transition.

Zoom. We've all come to know Zoom. We're on Zoom right now. A year ago, Zoom was barely in my vocabulary, so it goes to show how they've been able to adapt. Of course, they had a platform that was apt for this type of situation and pandemic, but other providers, like Microsoft, Cisco and Google, also had platforms that could have lent themselves to courts holding virtual hearings, and to meetings and everything else going on. Zoom was able to become a force to be reckoned with in 2020 because they were able to quickly scale and adapt to the circumstances. They went from 10 million users in December 2019 to 300 million users in April 2020. That is a significant difference. They had the ability to open new data centers and sign new partnerships with strategic partners. That nimbleness and adjustment by management and the company itself, adapting internally, operationally and sales-wise, is what led them to such a market share, particularly in light of all the major competitors that were in the field at the time.

Salesforce, too. You would think, okay, Salesforce: normally retail sales, assistance for area managers, sales managers and so forth, typically connecting outside sales, but still associated with more brick-and-mortar types of companies. They were actually able to adjust and create new, innovative software solutions that met new consumer demands within months of the pandemic starting. So they're one of our thrivers of 2020.

Airbnb. You would think they would most certainly be a company teetering on the edge of bankruptcy. Not the case. They were able to read the tea leaves a little bit better, and able to adapt, innovate and adjust their focus when they realized that people were more willing to rent an Airbnb that was close to their home. So they shifted their focus and their investment dollars into that area, and pulled investment, strategic thinking and marketing away from promoting the areas they knew people were not going to be traveling to at this time, when we were all still hunkered down. They realized the consumer was willing to go close by to take a staycation, but wasn't willing to travel across the country in the same manner as before.

Amazon. We would assume, of course, that they did very well. But I think we forget they were actually going through a lot of safety and employment issues at the beginning of the pandemic, because the policies they had in place at the time were not conducive to the amount of volume going through the company. There were employment and safety issues and concerns from employees being voiced all over the news. They were able to deal with those issues by increasing pay, giving hazard pay as well, and putting numerous safety provisions into place that made employees more comfortable. That resolved a lot of the issues that were bottlenecking the company's whole potential at the time. And of course they doubled profits. But if they had lacked that ability or foresight to take care of those issues, or had taken too long to do so, they may not have been one of our thrivers in 2020, although they would seem like an obvious choice.

So internal things, things that aren't typically related just to sales or your product, can negatively impact the success of your company. Forward-thinking companies look at all of these aspects, every procedure, every aspect of the company, to make sure they're applying the essential qualities to all of it.

Nestlé. We all know it's a food company, a very broad conglomerate with a lot of different product lines. The way they chose to innovate was by taking new products into consideration given changing consumer habits. They also invested in their health science business, realizing that consumers, while at home, have been focusing more on taking care of their health and exercising. They also tried to develop additional products for people who suffer from allergies, particularly food for allergy sufferers, which has actually become a rather large market as well. They've been able to do so rather quickly and nimbly, and they've been proactive in that respect.

Ericsson. It's sort of weird; you wouldn't think it would be on this list. It's a telephone company, for the most part a technology company, mostly a telephone maker. But they were actually able to capitalize on the trade wars between the U.S. and China, because they were not necessarily in the trade wars. And with the use and innovation of 5G technology, they were able to grow in a diminishing market, in these difficult times, when other companies were being affected by the China trade war.

Proactive

The fourth essential quality is proactive. Do not simply handle issues as they arise. Take steps to minimize your risk of having to deal with the issues in the first place. This may take some foresight. But if you're on top of the company with detailed attention, you have the room to adapt to different changes, and you have the ability to be innovative when necessary to resolve a problem, you will most likely be able to foresee potential issues coming down the road. And if you're not able to, you have the ability to adjust quicker to deal with the issue. Being proactive is a very important element to add to your business, to try to foresee things ahead of time.

In a legal sense, this means using strong and effective contracts, analyzing your company's potential liability points, and proactively addressing and anticipating the risk. It's the same thing as in the practical business world, where you want to anticipate issues coming up, whether they're employment, consumer, or changes in overall rules, governmental rules that might have an effect on your business. On the legal side, you need to do something similar as well. Once again, you do not want to be blindsided by legal problems. They can be a large liability to manage, and one you cannot control. If it goes to court, or you have other issues going on, it can basically hijack a good part of the company's resources and attention, and leave it without direction, not knowing where to go until the litigation is done. So you do want to be proactive, and you want to be focused on the litigation front and on mitigating risks as well.

Focused

Focused. As previously mentioned, forward-thinking companies need to be willing to adapt. But at the same time, forward-thinking companies must remain focused and driven toward their goals. Now, this doesn't mean your goals have to remain steadfast, stuck in quicksand at all times, and never change. You still must consider being proactive, being innovative, and being adaptable depending on the circumstances. So you have your goals, and your goals can change, but not every action you take serves the process of achieving those goals, whatever they may be at that time. That doesn't mean you can't do things; it means doing the things that keep you focused on the business and your particular goals at that time. That's something that should be part of the culture and environment of every company. And if the goals change, you take that same discipline and focus and adapt to the new goals.

This also means cutting out anything that's unnecessary or excess, and being willing to say no to bad ideas, or to the idea of leaving everything the same. So you want to be careful not to engage in frivolity: "Oh, there's an idea, let me try that." You do want to have some discernment, some thought process about whether it's a good or bad idea. What does it mean to chase that idea or that potential goal, or to shift the company's resources or strategic thought process? You also want to be careful not to remain the same, to remain static. That does not work for a lot of businesses. Maybe not today, but down the road, it could be a potential death knell, becoming inconsequential. So you want to be very careful with that.

From a legal point of view, you must remain focused and disciplined in the way you do business, and in how the changes you make to the business or your model can have an impact on the legal aspects of your business. If you change your goals or your processes, part of the focus from the legal point of view is making sure you know how those changes affect what you have in place, whether it's contracts, governmental permissions, or compliance with certain regulatory issues from federal, local or city governments. Does it interfere with an existing contract? Is there a restrictive covenant that says we cannot do it? You need to remain focused on that legal aspect of what's already in place, so that you don't create a problem on the legal side, depending on the direction your company takes and the goals it attempts to achieve.

I'm sorry, I also covered this in the previous slide: your focus also has to include understanding how your business changes affect anything you have in place from a legal point of view.

Practical and creative

Number six, practical and creative. To be a forward-thinking company, you must be practical and creative in the business methods you create and in their execution. The same old method today may not be the best method for tomorrow. As cliché as it sounds, you must be willing to think outside the box to discover the most practical solutions and methods for reaching your goals.

So you might be creative: "Okay, how can we resolve these problems? How can we find solutions to these problems, and potentially to future problems?" The way you dealt with them in the past may not be the best way to deal with them now. You have to be willing to think outside the box about how to resolve the problem. Maybe the old solution does work, but you have to be willing to consider that it's not the solution anymore, or not the solution to a new problem that may have arisen.

You also need to consider the execution. You can come up with a new idea for how to resolve issues, but if it's not practical, not easily implemented or executed, it's not going to serve its purpose. You might be defeating the point of the potential solution you found. So keep that in mind: it also has to be practical.

Some examples of things you might do in problem solving: rather than focusing on traditional employees, maybe you consider hiring independent contractors or freelancers to do certain aspects of the labor, if that works better or provides additional flexibility. Once again, it also has to be practical. Can you incorporate independent contractors and freelancers into your process and into how you do business? It may not be so easily done if they're remote and the work requires a little more attention from the person day to day at the business site. So when you're trying to find solutions, you want to be creative, but you also need to be practical. Whatever you come up with has to actually work for the company.

From a legal point of view, regardless of the methods you choose, forward-thinking companies need to make sure that what they do, and how they do it, remains practical and easy to implement, like we were just discussing, whether you're creating new processes or developing new ideas. That's just something to keep in mind.

Realistic

Okay, so the seventh essential quality... oops, I went too fast... is realistic. At the end of the day, as much as we like to be lofty and have these wonderful business ideas, like going to Mars (although that might have been lofty 20 years ago, apparently it's not so lofty anymore), we do want to be realistic about the goals we set and the ideas we have. Forward-thinking companies need to dream big, but they must also remain grounded and realistic. You can't get caught up chasing a pipe dream. This requires a great deal of objectivity when you're considering a dream or an idea, and you need to consider what your definition of impossible is, because what's impossible to one person may not be impossible to another, or vice versa.

So you have to be very clear and have your feet on the ground to distinguish what is actually attainable by your company. That way you can determine what resources to give to that goal. It might be something that's more R&D, where you understand the likelihood of it succeeding may not be great, and then you adjust your budgets and your personnel and everything accordingly, depending on the circumstances. Or you decide not to do it, if it's not realistic given what's going on.

From a legal point of view, although it's also not recommended from a business point of view: don't promise something you cannot deliver. And take corrective action when something you promised cannot be delivered. I think it's so important, from a business reputation point of view and of course from a legal point of view, especially depending on what is in writing, not to overpromise to a client. It almost never ends well. You've set the bar really high, and if you're unable to accomplish it, no matter what happens, even if it's unintentional, the client is going to be let down and feel as if you have not met expectations. They also may have relied on it. They may have relied on your word that you were going to be able to do this for a difficult or impossible task, and that could potentially create legal liability, as far as reliance by a third party.

Questions and answers

So we're at the point now where we have questions and answers. I don't know if anyone has any questions. Okay, Ricardo's bringing in questions. Thank you, Ricardo. Okay, so this person said, "First of all, thank you for the information. I would recommend that you get the word out about the webinar earlier." Okay, I'll take that advice. Thank you very much.

This person is asking, "What is the single most important advice you would give to a new partnership?" Well, actually, the single most important advice I would give is not even necessarily related to business. My recommendation would be to make sure you have a strong partnership agreement, whether that's a shareholder agreement or an operating agreement. Of course, the business aspect of everything is important: investments, who's going to do what, who has what smarts, who has what experience. That's all part of the secret recipe. But it's going to be a house of cards if you don't have a clear partnership agreement and something happens.

A partnership is much like a marriage. Depending on the different styles of people, one person can be more frugal, and one can be more of a spender and risk taker. Partners can get into trouble in these types of circumstances, and then the business will not run well because there's no clear direction as to who wins, so to speak, or whose ideas go first. It's not necessarily about winning, but about whose ideas can be implemented or not. For instance, if you're in a 50-50 partnership and your partner says, "I want to buy this," and you say, "No, I absolutely don't want to buy this," you're at a standstill, what we call a deadlock.

So partnership agreements, operating agreements and shareholder agreements help. It's not pretty; it's almost like a prenuptial agreement. But it helps define what each party's rights and obligations are and what to do in the event of a difficulty, whether it's a buy-sell provision or how to break a deadlock. That type of agreement, particularly those provisions, helps ensure the continuity of the business. Unfortunately, sometimes one partner will have to leave and the business will continue, but at least you ensure the business is not destroyed by this business divorce, if you will.

Okay, also: "What might employers and companies do once COVID fades, with remote work, and how do you successfully manage the employee workforce?" This is actually a question I get often from my existing clients. I think we have definitely experienced a seismic change, so to speak, in the world, and the workforce is no different. So do I think a lot of people are going to come back to work? At first blush, everyone thought real estate, real property, was going to go by the wayside, and everyone was going to start working from home. But I also think people realized that is not a complete solution, although it might offer more flexibility to particular employees: less driving, potentially more productivity, and the ability to attract more talented employees with that flexibility. I do think in-person employment, so to speak, is not going away. I think it's going to come back, no question. There may still be some divergence, where we have a little more flexibility for remote workers.

But how do you successfully manage your remote workforce? This is a complicated issue, and it also touches on employment law, because employment law specifically requires the employer to keep time records of when the employee is working and not working. How do you manage that when the employee could be taking a break every 15 minutes that you're not aware of, or potentially not taking a break and saying they're working 10 hours straight?

One of the ways to navigate that is clear-cut policies: "If you are not working for 10 minutes or more, you must clock out. You must take a break." And if it's still wishy-washy, and the employee is like, "Well, today I did and today I didn't, and then I ran an errand for you, and in between I did an errand for myself, but I got the work done," you probably want to clarify those lines a little more. You want to say, "Listen, there has to be a little bit more of a regimen. Your lunch is at this time, errands are done at this time. If you have to do personal errands, please do them at a different time." That gets a little tricky. But the problem is that the employers are the ones with the liability if they can't prove what the employees actually worked.

So if an employee says, "I worked 10 hours," and the employer says, "I don't even think they worked five. The amount of work they got done is very little," it's hard for employers to gauge whether that's due to an unproductive environment, where it's difficult to work remotely, or whether the employee is abusing it, potentially trying to get paid for additional hours they're not working and taking advantage of the fact that the employer cannot verify what they're doing. That's when you have to have consistent policies, and make sure managers are following up with employees and staying on top of tasks and processes.

And I would also be careful about punishing an employee if they did have to stop. We know some of these employees are working with children at home. We know they still have to do virtual learning and school with the kids, and we've accepted that as employers by giving them the flexibility to do so. But you need to have defined policies, defined processes and time frames in which to complete work, to keep a better eye on it. At least that way you can say you have those in place, and you require active and affirmative obligations from the employee to do time entries: "When you step out for 10 minutes, if you're running an errand or helping your daughter or son with school, you need to clock out." We need a little better schedule, so it's not a runaway train.

I think remote working can be a very good tool to some extent, although I do see it being phased out with some businesses. And I still think in person is a very important part of collaboration, creating an environment and creating teamwork. So I do see some of that coming back, but it's hard to navigate. It also depends on the particular company. I may have special instructions for you depending on whether it's a restaurant or a dry cleaning company. I can give you different ideas depending on how your specific company works.

Okay, and then the last question: "What types of forward-thinking businesses do you see coming to you for legal help?" The types of forward-thinking businesses I see coming to me for help can be in any industry. It's not a particular one. It's not the software industry, it's not restaurants; it's every single industry. The distinction I see with these companies is, again, that forward-thinking mindset, and most of the time the owners possess those characteristics. They're proactive, they're adaptable, they're innovative, they're detailed, and they're practical at the same time. They want to know how to implement things, but they're creative. Their mind is always working: "Regina, I have this idea, and I have that idea," and we'll walk through these things. "Regina, listen, I want to change the workforce to do this, and I want them to drive from location to location." And they know to come talk to me: "Does this change anything? Do I have to pay them for the travel? Do I have to have separate insurance for them?"

So their wheels are always turning. It's not a particular type of company; it's basically the owners themselves, who think in a certain way that breeds longevity and growth and makes money, and they're proud of every moment of this business. They're taking care of all the elements. They're trying to delegate where they can, but ultimately they are entrepreneurs. They're just forward-thinking, always thinking about the next step and about growth. So any company that has these qualities or these concerns, I would say, is right for me to help, or for them to seek legal help.

I think that's all the questions we have. I don't know if there's something else someone may want to talk about, or any of the business examples we discussed. I do want to take the time to tell you about our next webinar. This is actually going to be a webinar, not a Lunch and Learn, and it's going to be on important financial documents in family law cases. Although the topics we're going to discuss in the next webinar also relate to regular litigation, they're particularly important in family law cases. We recommend that everyone register for the webinar. If you're unable to see it, we always post the webinar later on, so you can always watch the video and see the PowerPoints at another time.

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