Beware Diploma Mills

For my BlogTalkRadio program I am looking for Ph.D.s to interview about their research.  The idea is to inform, enlighten and educate the general public about research that is being conducted at institutes of higher learning.

Today I received a response from a woman claiming to have a Ph.D. in “Natural Health.”  Not exactly a topic that interests me but, the purpose of the program is not to interest me but rather listeners.  Health and wellness are topical subjects, and “natural” is very popular.  So I asked her to send me her research proposal and I also asked her where she received her doctorate.

She wrote me back that she did not do her own research but rather researched other people’s research.  That might actually be legitimate, but the fact that she wrote “I did not do my own research,” set off some alarms.  Regardless of how she did what she did, all colleges require students to submit research proposals explaining what they want to do, how they are going to do it, and what the expected results are.  Something did not sound right.  So I Googled her school, Clayton College of Natural Health.  Take your time, I’ll wait.

So you saw the lawsuit.  You saw that the website no longer exists, except for one allowing graduates to order transcripts and diplomas.  And you saw Wikipedia’s first paragraph, “The Clayton College of Natural Health was a non-accredited American distance-learning natural health college based in Birmingham, Alabama, offering classes on natural health. It was founded in 1980 by Lloyd Clayton, Jr. According to its website, the school at one point had more than 25,000 students and graduates. Before 1997 it was known as the American College of Holistic Nutrition  The school and some of its more notable graduates have been the subject of controversy.”

When I e-mailed her back to explain that because her degree is from a non-accredited college I felt uncomfortable having her on the program, she politely replied that she had a friend from Stanford who just got his Ph.D. and she would tell him about my program.   She did not respond to the issue of the college’s accreditation or lack thereof.

What’s sad is that she goes around the country speaking and uses the Ph.D. openly.  On her website she even mentions Clayton.  She is hiding nothing.  It’s all out in the open.  Wasn’t it Sherlock Holmes who said that the best place to hide something is out in the open?  Need to hide a book?   Stick it on a book shelf.  Her degree is out there.  I Googled her and did not find a single reference to the fact that her Ph.D. is illegitimate.   In fact, on one of her websites, she states that she has attended programs at Harvard and at the National Institutes of Health.  I know for a fact that they do not require a Ph.D. to participate in Harvard or NIH programs.  But one would think that someone would have picked up on this.

The point, my friends, is that if you attend an unaccredited college or university, you may get away with it.  But you may not.  And if you get caught, by an employer who only hired you because you qualified – in other words, you met the minimum academic requirements – when it becomes known that your degree is from an unaccredited college, you could very well be fired.

A couple of years ago I had an incident with a candidate.  He had a Bachelor’s from a State college but a second Bachelor’s from another school and ten years later got a Ph.D. from that same school.  The first thing that was strange was that he had two Bachelor’s.  It happens.  But he did not have a Master’s degree.  Again, plenty of Ph.D.s don’t have Master’s.  A friend of mine, now a professor at Yale, went to the London School of Economics.  He was accepted to their Master’s program.   After maybe a year  they told him, with British humor, that he was being kicked out of the program.  They waited long enough for his heart to stop and then told him they were putting him directly into a doctoral program.  It happens.  But I decided to check.

Google “Glendale University.”  Did you notice the link at the bottom to “Glendale University diploma mill?”  If you visited the Glendale website, it looks impressive.  They claim to be accredited by the National Distance Learning Accreditation Council.  If you visit their website, they have a long list of schools that meet their “minimum requirement and standards.”  But it does not say that those schools are actually accredited by them.  Want to know why?  Because they aren’t.  The University of Phoenix, which they list near the top of their list,  ” is accredited by the Higher Learning Commission and is a member of the North Central Association.” They are legitimate!

But look again.  Notice that some of the universities are highlighted and some are not.  Click on “Suffield University” and go to their accreditation page.  They don’t even try to hide the truth.  They make it clear that their degrees are not recognized.  Amazing, isn’t it?

Cheaters never prosper.  Don’t waste your time buying a diploma.  Do it the right way.  Just think about how embarrassed you will be if someone publicly asks you about it.  My Clayton Ph.D. claims to be a sought after speaker.  What will happen if one day someone questions her Ph.D.?  The rest of her credentials may be legitimate.  She may actually know what she’s talking about.  She may even be good at what she does.  But whose going to take the advice of someone who claims to be something she is not?  True, she claims to be a Clayton Ph.D.  But the inference is that that is a legitimate Ph.D.  And that’s where the cheating comes into play.

I do career counseling.  I have a Ph.D.  My Ph.D. is in International Relations.  It says so on my website.  When clients come to me they are coming to me for my expertise learned on the job, not in the classroom.  They know it ahead of time.  Nothing is hidden.  Why?  Because I never want anyone to questions my credentials, my ethics, or my credibility.  I’m not perfect; I make mistakes.  But I’m right about this.  If you are thinking about “cheating,” don’t do it.  Get the degree the right way.

WORD OF WARNING TO VETERANS:  If a college is going to give you credit for your military work, check them out.  My guess is that they are a diploma mill.  Don’t let them take advantage of you.

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Pharmaceutical Fornication – Part I

We’re being screwed!  It’s as simple as that.  If you did not get the chance to listen to my interview with Dr. Jeffrey Lobosky, you missed a fascinating discussion about the pharmaceutical industry.  Here are some of the highlights, or perhaps I should say, lowlights!

The $802 Million Controversy

Following World War II the pharmaceutical industry took off.  The cost of drugs began to rise, especially for seniors.  Seniors have always been a powerful lobby because seniors vote.  Congress threatened to regulate the pharmaceutical industry.  So the industry held a conference and explained, and this is true, that in the development of medications there are very few successes.  Research and development (R & D) did not guarantee the creation of new medications.  If the price of drugs was regulated, so they claimed, there would not be enough money to develop new drugs.  Everyone backed off and the matter was dropped.

Well, not everyone backed off.  The editor of the New England Journal of Medicine decided to research the claims made by the pharmaceutical industry and, specifically, the claim that it cost $802 million to develop a drug.  What she discovered was that in their calculations they neglected to deduct the cost of R & D which is tax exempt.  Moreover, their research focused on the 68 most expensive drugs that were developed in the year on which the research was based.  Additionally, the pharmaceutical industry factored in what is called the “Cost of Opportunity” which means the money that the company would have made had they invested the money in, for example, the stock market, and not used it for R & D.  (Feel free to read that sentence again.)  For her part, the good editor looked at all of the drugs produced in the same year and, deducting the cost of R &D and ignoring Cost of Opportunity, she came up with the price of $260 million for the development of a drug.  A lot of money, but far less that $802 million!

The Price of Drugs and Medicare

The grandparents are going to love this one!  The price of drugs is determined by the manufacturer, the insurance company and the pharmacy.  The more bodies the insurance company can deliver to the manufacturer, the lower the price.  Good ole’ fashioned capitalism at it’s best.  However…

The largest health insurance provider in the country is Medicare with 50 million members.  Medicare is forbidden, by law, to negotiate the price of drugs with pharmaceutical companies.  According to the Prescription Drug Act which passed during the second Bush administration, not only is it illegal for Medicare to negotiate prices, but it is also illegal to import less expensive drugs from Canada.  And it gets worse…

When the Republicans took over Congress after the debacle of the health care insurance attempt of the Clinton Administration, Representative Billy Townsend, a Democrat from Louisiana, switched to the Republican party.  When George W. Bush was elected president, he picked Townsend to shepherd the Prescription Drug Act through Congress.  Townsend worked closely with the pharmaceutical industry and, after the law passed, he resigned and became the head of the pharmaceutical industry lobby at an annual salary of $2 million.   (Don’t scream yet; I’ll tell you when I’m finished!)

When Senator Obama was running for president, he used Townsend as the example of what was wrong with the system.  When he became President Obama and wanted his own health care legislation passed, he sent for Townsend.  They came to an agreement.  The pharmaceutical company would agree to give back $80 billion over a 10 year period to Medicare and to sponsor ads supporting the president’s health care plan, and Medicare will still be forbidden to negotiate prices.  The problem is that it is estimated that if Medicare could negotiate with the pharmaceutical companies the price of medications, they would save between $70 and $100 billion annually!  (You may now scream.)

The Bayh-Dole Act

Historically, if research was conducted at a public institution using public funds, the results of that research were in the public domain.  In other words, if the research resulted in a new process or a new substance, a private manufacturer would not be able to get a patent if it were to commercially develop the substance.  In 1980 Senators Bayh and Dole sponsored legislation that enabled researchers to obtain patents on their discoveries and to license those patents to private industry.  In other words, tax payer money goes to a team of researchers at a university who develop a new drug.  They get the patent and license it to a pharmaceutical company that then manufacturers the drug at the normal high price of a medication that the company develops on its own.  So not only do tax payers pay for the research, they don’t benefit monetarily from the fruits of that research – they pay full price and the pharmaceutical company makes huge profits.

Direct-to-Consumer Advertising

Before 1997 only New Zealand allowed pharmaceutical companies to advertise.   Then the US joined them!  Between 1997 and 2006, with the birth of television, radio and print advertising of medications, the average price of a drug went from $30 to $68 and the average amount of money spent annually for medications rose from $72 billion to $300 billion.  The advertising budgets (and this would be a component in the price of a drug) rose from $780 million to $5 billion.

Academic Journals

Pharmaceutical companies have formed a relationship with medical journals.  It’s really simple:  the pharmaceutical companies pay for ads and the journals publish articles that downplay side effects or exaggerate the benefits of certain drugs.  It’s a clear conflict of interest.  Questionable science is being supported by major advertisers forcing editors to choose between staying in business or academic/scientific credibility.

Ad-Induced Diseases

Because of the ads seen by the public, mild medical complaints have become diseases.  Simple maladies are now complex conditions.  Heartburn is now acid reflux.  Instead of just taking a couple of Tums, people were prescribed Tagamet.  When Tagamet’s manufacturer lost their patent, the new drug was Prilosec.  And, of course,  each new drug is more expensive than its predecessor.  But it’s not just heartburn.  A runny nose is now allergic rhinitis requiring Claritin.

Managed Care

Physicians are now in the hands of the insurance companies.  When the new system began, if they wanted the insurance companies to send patients their way, the doctors had to agree to lower fees.  In order to make up for lost revenue, that meant they had to increase volume.  So they hired physician assistants and nurse practitioners to see patients, or they simply sent patients to the emergency room.  And when they do see a patient, and the patient asks for a drug they have seen advertised, it takes less time to simply write the prescription than to explain to the patient why the cheaper generic alternative is just as good.

Robert Torricelli

Torricelli used to be a senator from New Jersey.  (He decided not to run for reelection following a campaign finance scandal.)  In 1999 he was chair of the Senate Democratic Reelection Committee.  It was his job to raise money to get Democrats reelected (or elected) to the Senate.  The manufacturer of Claritin was going to lose its patent on the drug.  They went to the Senator, gave him a check for $50,000, and the next day he introduced legislation extending their patent.

You have my permission to scream again!  And you are invited to listen to my next program on the pharmaceutical industry, on Monday, June 27 at 2:00 PM.  My guest will be Tom Loker, author of The History and Evolution of Health Care in America: The Untold Backstory of Where We’ve Been, Where We Are, and Why Health Care Needs More Reform.

What “Non-Profit” Means

This post originally appeared in 2006 on my blog, Non-Profit Concerns.

Back in 1991, Governor Richard Lamm of Colorado told his state’s Association of Nonprofit Organizations Ethics Conference, “there are a large number of use nationwide who are looking at the reasons why we give tax-exempt status to organizations.  America is filled with nonprofit hospitals that give practically no charity.  Certainly they give far less charity than their tax exemption is worth to them.”

That’s the concern. Here’s the history:

One of the things of which we as Americans can be most proud is our tradition of creating non-profit organizations to help the less fortunate. Alexis de Tocqueville wrote with admiration about the “associations” that our forefathers formed. As eloquently stated by Larry Kennedy in Quality Management in the Nonprofit World, “An organization that attains tax-exempt status is the beneficiary of a profound opportunity to apply entrepreneurship, compassion, and practicality in fulfilling social motivations while remaining exempt from any responsibility to underwrite the nation’s infrastructure through taxes. We are exempt from these burdens because we operate under the public perception that what we do is important to society and that we are managing a business that provides services for reasons other than personal financial gain.”

In 1939 the House Ways and Means Committee noted, “The exemption from taxation of money or property devoted to charitable and other purposes is based upon the theory that the government is compensated for the loss of revenue by its relief from financial burden which would otherwise have to be met by appropriations from public funds, and by the benefits resulting from the promotion of the general welfare.” As stated by the US district court in Washington, DC in the 1972 case of McGlotten v. Connally, by granting tax-exempt status “the Government relieves itself of the burden of meeting public needs which in the absence of charitable activity would fall on the shoulders of the Government.”

Tax exempt status, therefore, is granted to enable a spirit of entrepreneurship to blossom in areas serving the public good, by saving the government the burden of funding programming that charities are able to provide for the benefit of society, and not for the benefit of any one individual. (Not to confuse the issue, there are tax exempt organizations that are not 501(c)(3)s. For present purposes I am only discussing tax exempt non-profits recognized by the IRS as 501(c)(3)s.)

Today, in fact, there are two type of non-profits. The first are the classic non-profits. For example, any disease related organization that provides advocacy and education, and conducts research to rid humanity of the evil of Alzheimer’s, autism, cancer, Parkinson’s or any other true scourge on humanity. Relying on some government funding and charitable donations they offer free services to the community.

Then there are those of a different type, as mentioned by Governor Lamm. Today the government in many cases provides both tax-exempt status and 100% funding for these very organizations. That gives these non-profits an unfair advantage over for-profit competitors which could eventually lead to for-profits lobbying to have their non-profit competitors non-profit status revoked. In fact, these organizations would be better described as government subcontractors.

Far from unique, there is the example of a New York nursing home that received $32,702 in private contributions and $46,866,827 from the government according to its most recently available 990. Their CEO’s compensation totaled $578,524 or 1.2% of the total. All nursing home residents must either have government or private insurance, or be private payers. No services are provided gratis.

This charity provides important services. It pays no taxes. Should it? Its for-profit competitors do. They offer the same services. Why the difference? Does the fact that one employee receives over 1% of all government and charitable revenue bring into question the issue of “personal financial gain?” (To keep things in perspective, taxpayers pay $20,000 less to the above mentioned CEO then they pay the president and vice president of these United States, combined!)

Of equal importance is the prohibition on partisanship. Because non-profits are to serve society as a whole, they cannot support one political movement at the expense of another. That’s why during an election year non-profits refrain from honoring politicians or inviting them to events, as all candidates would have to be invited. Take the infamous case of the former Bronx-based Gloria Wise Boys and Girls Club. While there are usually three sides to every story, it appears that the Club, either with the knowledge or apathy of its Board, transferred some $875,000 to the anti-Bush liberal Air America radio station. Forgetting about everything else – including the improper use of municipal funds – that alone should be enough to have its 501(c)(3) status reviewed and possibly revoked.

Non-profits are tax exempt because it is recognized that there is a tradeoff between the non-profit’s work and the need to support society through the paying of taxes. In exchange for its providing services for the betterment of the community which, in its absence, the government would have to offer, non-profits do not have to pay taxes in support of local, state and national services. It is thus a win-win for everyone but only if all non-profits remember that they are to serve the public by saving the public an expense. If there is no tradeoff, if the non-profits receive government support (tax dollars), pay no taxes, and provide no charitable services, does not society lose? Is not the purpose of the law establishing non-profits defeated? And does this not endanger the status of all non-profits if for-profit competitors protest?

“Non-profit” does not mean not making a profit. By all means, make one. But that profit must be used for charitable purposes. It certainly cannot go to the aggrandizement of an individual, which may be the case when exorbitant salaries are paid. As Governor Lamm warned, it needs to go, at least at a minimum, to offsetting the nonprofits savings by being exempt from taxation. That’s what “nonprofit” really means.

Quality Assurance and Customer Retention

This post originally appeared in 2006 on my blog, Non-Profit Concerns.

Former GE CEO Jack Welch made many things famous, not least of which is the quality assurance program knows as Six Sigma. As explained by Martin Kihn in the September 2005 issue of Fast Company, “Sigma is the Greek symbol used to denote deviations from the mean. And so Six Sigma is essentially a set of procedures and tools designed to measure and analyze ‘defects’ in a process and help determine what’s causing them. The goal – the ‘six sigma’ part – is 3.4 defects per million, or 99.997% perfection.”

Ever wonder how the Japanese took over TV, stereo, electronics and automobile production from us? In the US manufacturers were willing to accept 5% rejects per million. In other words, for every 1 million anything that was Made in America, 50,000 would be no good. The Japanese lowered that number to 200 and gained industrial leadership. As Jay Levinson notes in Guerilla Marketing, “Every error that could possibly be construed as a mistake was noticed by people actually hired by industry to count mistakes. In the category of mistakes included shoddy workmanship, tardiness, breaks that lasted too long, minor flaws in detail work, low morale, and anything at all that impeded production.”

So how many errors does your organization make? How can you implement a Six Sigma program at your agency?

How often do you send out a mailer that is improperly folded? How many of your employees arrive at work late (begin the day eating breakfast) and leave as the clock strikes five? How often do staff go out shopping on their lunch hour and return, purchases and food in hand, and then take an additional 20 minutes to actually eat lunch? How many typos are there on your publications? How proud are your staff of where they work? How much bureaucracy do you have which stifles creativity?

J. Edgar Hoover had a rule that phones had to be answered by the third ring. If I call your offices, how long is it going to take for the phone to be answered – dare I dream? – by a real person?

How long does it take for a receipt to be sent to a donor? How long does it take for a stock letter to arrive?

Here’s one: How much failure do you encourage? Do you let your staff try new things? Do you celebrate the attempt, regardless of the results? Do you see failure as a learning experience? At IBM a manager was given $10 million to start a new program. After a year the attempt was a total failure. He went to his boss and offered his resignation. His boss refused to accept it on the grounds that they had just spent $10 million educating him!

Of course it does not need to cost anything, let alone millions, to get it right. It is all a matter of recognizing for whom you really work.

When working at a nursing home, a colleague and I made a presentation at the Greater New York Hospital Association. In passing she mentioned something about working closely with hospital discharge planners and I said something about having stories about the home appear regularly in the local newspapers. They were just passing remarks of seemingly no great importance.

After the formal presentation was over, she was asked how long it took her to respond to a request from a discharge planner. She said about 10 minutes. I was asked how often stories about the home appeared in the newspapers. On average it was 15 times a month.

Our colleagues were shocked. And so were we. One hospital discharge planner said that he was happy if he got a response for a request for a bed in two days. One community relations director said that her boss was thrilled if she got them into the paper once a month. They wanted to know the secret:

There is a saying in the Talmud, Know before whom you stand. In other words, know who your clients are.

The nursing home where we worked was a good nursing home. It had been before the new admissions director arrived, and was after she arrived. But her predecessor could only keep the occupancy rate a few points above 90%. The new director had us at 99%. Same nurses, same certified nurse assistants, same doctors, same therapists, same housekeepers, same maintenance staff, same food, same everything. What was the difference? Her predecessor felt that her clients were the potential residents and family members. The new director saw the discharge planners as are her clients. Instead of going to the hospitals to interview patients, family members, doctors and nurses, she stayed at her desk to answer the phone when the discharge planners called.

As for press coverage, colleagues at other facilities told me that their bosses had them sending out long press releases going into great detail about this that or the other thing that was happening at their facilities. For them, their bosses were their clients. Not for me. I explained to the boss that we had little control over what actually happens to our press releases. The longer they are, the more editing will be needed and the more mistakes will be made. So all I would do is send out a 3 to 4 paragraph press release with a photo. Basically, they were fillers – photos with long captions. That is what my clients, the newspaper editors, wanted. And what my boss really wanted was to see the home being recognized in the press.

Remember, your clients are not your bosses and board members. They are only the ones who hire and fire you! Your real clients are the persons who allow you to succeed at your work. They may be donors. They may be hospital discharge planners. They may be newspaper editors. They may be politicians. They may be organization members. They are the ones who utilize your services and the ones whose cooperation you need. Whoever they are, if you keep your clients happy, your bosses will also be happy. And the secret to doing that is quality assurance. There are literally thousands of other nonprofits to where they can turn. Don’t encourage them by being sloppy.

Board Member Responsibilities

This post was originally written on January 26, 2006 for  my previous blog, Non-Profit Conerns.

Writing in 1995, Peter Drucker, the dean of leadership studies in America, wrote in part, “Many people do not realize it, but the largest number of leadership jobs in the United States is in the nonprofit, social sector. Nearly one million nonprofit organizations are active in this country today, and they provide excellent opportunities for leadership. The nonprofit sector is and has been the true growth sector in America’s society and economy. It will become increasingly important during the coming years as more and more of the tasks that government was expected to do during the last thirty or forty years will have to be taken over by community organizations, that is, by nonprofit organizations.”

Fast forward a decade and we read a quote from Harvard Business School Professor James Austin in the September 2004 issue of Fast Company, “The growth rate of new nonprofits now exceeds that of private business formation and government expansion. Entrepreneurs go where the action is.” And the action is in creating 501(c)(3)s!

The problem is that a great many civic/community minded individuals believe that all they have to do is get a few friends together, send in the forms, become a non-profit, and sit back while foundations and philanthropists provide them with funds for their pet projects. Not so. Forming a non-profit means one thing and one thing only: responsibility.

The primary responsibility of a board member is his (or her) fiduciary responsibility. All non-profits must have financial oversight committees. The most scandalous nonprofit failures have been because of financial irregularities which resulted from board members not asking questions or from accounting firms not doing their job. Board members can be held liable for the actions of a nonprofit if they do not exercise due diligence. So ASK QUESTIONS!

Choosing the organization’s chief executive officer is the most public decision a board member can make – along with the CEO’s removal. Of course, hiring the CEO is not the be all and end all of human resources. The important thing, when hiring the CEO and all other staff is, as the saying goes, “hire talent, not skills.” If you hire skills, you will get someone who can do the job. If you hire talent, you will get someone who will grow and take your organization along with her (or him). One of the most ridiculous exercises I was ever involved with was my annual employee review. My boss took a copy of my job description and by each item marked a 1, 2 or 3. Since it was against the rules to give all of one number, in addition to the 3s I also got a couple of 3 pluses. Nonsense!

If over the past year an employee has not been doing her job then her boss should have known it and dealt with whatever the problems were. Grading someone on job description is grading the supervisor not the supervisee. (In fact, it’s the supervisor grading himself!) More importantly, it is a formula for stagnation. The proper performance review is to look at what the employee has done above and beyond the job description. That is the only way an organization will grow, and that has to be the goal of all board members, the growth of their nonprofits.

Board members need to bring with them to the board table their professional skills (knowledge and expertise) and contacts. If their expertise is, for example, in marketing, they should assist in that capacity. They should never be compensated. If they “volunteer” their company’s facilities, for example, in providing printing services, it should be clearly documented that they are not profiting in the least from the relationship. While it would probably be lawful for them to make a reasonable profit, it would not look good. Looks are impressions and impressions are reality. It is never worth it.

Many board members cannot “write the check,” but they have to be willing to open the doors to those who can, or who know someone who can. Board members are a crucial source for networking. If they are uncomfortable in this capacity, they should not be on the board.

Boards, working with the CEO, must establish the organization’s agenda, priorities and expectations, in other words, policy development. All of this is necessary within the context of formulating the organization’s mission and seeing to it that the organization, top down, acts in accordance with societal morals and values.
Finally, Board members need to be aware of the organization’s structure. Who is responsible for what? What is happening on a daily basis? This is not micromanaging, but macromanaging. Make certain that the organization is receiving proper legal and financial counsel. Make certain there is a conflict of interest policy in case any board member is directly benefiting from the work of the organization.

Sadly, a good case study is that of the Gloria Wise Boys and Girls Club. The Bronx-based Club, which has subsequently lost its affiliation with the Boys and Girls Clubs of America, apparently (remember, there are always three sides to every story – if you’re lucky!) gave a loan of $875,000 in municipal funding to liberal talk radio station Air America. The transfer was allegedly made by the executive director, without the knowledge of the Board, but with the use of a signature stamp of one of the Board members. So what did they do wrong?

First, if improper use of municipal funds (or any other type of restricted support) is not a felony, it should be. Second, non-profits are supposed to be non-partisan. Giving a loan to a political radio station is a partisan act. Third, an executive director must report to his board about all financial transactions. Fourth, board members cannot have stamps of their signatures made as that, by definition, violates their fiduciary responsibility. Fifth, board members must ask finance related questions. Sixth, the bank should never have permitted a check to go through with a stamped signature. And seventh, where were the Club’s accountants?

As noted by John Hawks in For A Good Cause? How Charitable Institutions Become Powerful Economic Bullies, “As long as an officer or director exercises ordinary diligence and care, no personal liability will arise, even when actions or decisions made in poor judgment cause injury or damage.” What it all comes down to is this: Use common sense, be aware of what is happening, ask questions, demand reports and accountability, and you won’t have to worry about being embarrassed when you see the morning newspaper.

Conducting an Effective Job Search

The following is the text of my June 14 broadcast on Bruce Hurwitz Presents.

Welcome to Bruce Hurwitz Presents, I’m your host, Bruce Hurwitz, president and CEO of Hurwitz Strategic Staffing.

Today’s broadcast is the second in our Oral Essay Forum and I’ll be discussing how to conduct an effective job search.  If you have any questions feel free to call in.  The number is 323-792-2978.

For those of you living in metro-New York, or who may be visiting on August 10, I’ll be giving a talk at The New York Public Library’s Science, Business and Industry Library at 6:30 PM on today’s topic – but in more detail.  Visit my website, www.hsstaffing.com, and click on the link on the home page to get the details.

The most effective way to find a job is through networking.  “Networking” means establishing relationships.  It does not mean exchanging business cards.  The goal of networking is to get someone to endorse or recommend you.

Let’s take a simple scenario.  You attend a professional networking event.  You chat with someone and exchange business cards.  She likes you, or rather doesn’t dislike you, but it is doubtful she would let you use her name when contacting an employer who is looking to hire.  And she knows of one.  Or she might know of one in the future.

So how do you turn a business card exchange into a networking situation?  By asking her, the woman with whom you want to network, what you can do for her.  Networking is all about giving, not getting.  Once you give, you’ll start to get.

A more modern way to network is over the Internet.  The best networking website is LinkedIn.  It is a professional networking website.  Everyone with whom you are in contact should, ideally, be in your LinkedIn network plus everyone who is willing to join your network.  For example, right now I am just shy of 20,000 first degree contacts in my LinkedIn network.  That means there are potentially 20,000 individuals whom I can contact to tell about positions I am looking to fill.  That also means there are 20,000 individuals who can contact me directly, through LinkedIn, to tell me that they are looking for work.

There are job boards on LinkedIn.  Now is not the time to go into detail but I invite you to watch my podcast for The Learning Annex on June 22^nd at 3:00 pm.  The link is not yet active but you will be able to find it at www.ustream.tv/learningannex and click on Business & Careers.

In addition to networking, of course there are traditional ads.  They work.  The proof is that employers advertise job openings.  If ads didn’t work, they would not spend the money.

Of course, when networking and ads fail, or when an employer simply does not have the time, they may use a recruiter as should you.  Find recruiters who service your industry or profession and send them your resume.  Most recruiters do not advertise.  Advertising is counterproductive.  Let’s just say I have a search, I place an ad and I find the right candidate.  Well, that candidate may very well inform the client that I found her through an ad.  The client will then say to himself, “If Bruce found Cathy through an ad, why would I hire him in the future to conduct another search?  I’ll just place an ad myself!”  So by connecting with recruiters you can learn about non-advertised positions.

Regardless of how you discover the availability of a job, the following rules apply:

First, you need a good cover letter.  “Good” means short, sweet and to the point.  The recipient of the cover letter will take 10 to 20 seconds to read it.  A two-page treatise on your phenomenal career will wind up in the trash can.  You have to be focused.  The purpose of the cover letter is not to get you a job, it’s to get the recipient to look at your resume.  So get to the point.

In the first paragraph you announce that you want to apply “in confidence” for whatever the position is.  The reason for the “in confidence” is to protect you if you are presently employed.  While no employer should ever contact a candidate’s present employer, or anyone else for that matter, without the candidate’s permission, it could happen.  If it does, the “in confidence” line will make it easier for you to sue the employer if that employer contacts your boss and you get fired.

Continuing the first paragraph, state where you heard about the opening.  That’s important because it shows the employer that you understand how the game is played.  You recognize that the employer wants to know what he is doing that is effective.  So by telling him, for example, the name of the newspaper where you saw the ad, he knows where to advertise in the future.

Of course, if you are not responding to an ad, but are writing at the suggestion of someone in your professional network, here’s the place to mention their name.

Now you may be responding neither to an ad nor to a suggestion by a friend.  You may just want to work for the company.  In this case you should explain the reason.  Write something like, “I read in The Post that you are about to launch a new initiative that seems to be identical to one for which I was responsible when I was with….  I would like to offer my services in making this initiative a reality.”

The second paragraph is your elevator pitch.  It’s that one sentence that is going to want to make the recipient of the letter look at your resume.  The best example I have was a candidate of mine for a vice president of Human Resources position at a nursing home.  Nursing homes care about two things: the care and dignity of their residents, and keeping the union out.  Keeping the union out would have been the vice president of Human Resources’ primary responsibility.

My candidate wrote that he had successfully fought 12 union elections, meaning that the unions lost each time and the homes where he was working were not unionized, and that he lowered average annual employee grievances from 50 to zero.  When my client read that, she stopped reading, called me, and we set up an appointment.  Find the one thing that will impress more than anything else and put it in the cover letter.

The third paragraph answers any questions the employer may have asked in an ad – assuming you are responding to one.  For example, if a writing sample was requested, and they asked about salary, here’s the place to refer to both.  Mention that the writing sample is enclosed and tell them what you are earning.  You are not conducting salary negotiations.  In the end you will get what you negotiate.  All you are doing is answering their question.  If you don’t answer it, they probably won’t consider you.

In the final paragraph reference the enclosed resume.   Next, thank them for their consideration and state that you look forward to hearing from them.  And on that note, make certain that your contact information appears on the top of the letter.

Some people do not like to provide an address.  You should, but don’t have to.  But you should at least include your city and state of residence.  The area code of your phone number means nothing since the number most people use today is their cell phone number which they can keep for life.  The area code may be in Texas, while the person may live in Maine.  Make certain that your e-mail address is not cute, and that your voice mail message is not silly.

For sake of argument you have written an excellent letter and the recipient now wants to look at your resume.  That being the case, the letter was a success.

How long will the person, on average, spend on your resume?  About 10 seconds, if you are lucky!  So you once again have to grab the recipient right away, just like you did with the cover letter.

Begin with your contact information.  If they can’t find you, they won’t call or e-mail you.  And, yes, I have received two or three resumes that had no contact information on them, just the word “Confidential.”  They certainly were that…

The important thing is to start the resume with a section called “Selected Accomplishments.”  This section will contain about five bullet points of successes that differentiate you from your competition.  The first bullet point will be the example of your career success that you used in the cover letter.  Then give a few more.

Remember one thing: Don’t lie on your resume!  If you lie on the resume you can be fired, for cause, at any time.  A colleague of mine once placed an internal auditor at a non-profit.  The auditor did not have to be a CPA.  Her candidate wrote on his resume that he was a CPA.  He was working there a week or so, doing a fine job, but for whatever reason his boss decided to check.  It turned out he had not taken the exams but only the courses.  He was fired on the spot.  Don’t lie on your resume!

If you are just starting your career, after “Selected Accomplishments” should come “Education.”  Include the college you attended, the degree awarded, the year it was awarded, your major and your GPA.  After your first “real job,” your education is no longer that important.  It might qualify you for a job, but it won’t get you one.  A Harvard MBA, fresh out of school, should not have too much trouble finding work.  After all, she’s  a Harvard MBA.  But after that first job, she has to rely on her work record.  So if she’s a lazy and unproductive Harvard MBA, and her competition is a hardworking innovative community college MBA, guess who’s getting the job?

The next section, or the one before “Education,” is “Work Experience.”  List jobs going back 20 years.  Give your title, the name of the employer, the dates or years of employment, and a short blurb about the employer so that the recipient of the resume will know what type of business it was.  Then use bullet points to list your main responsibilities and accomplishments.  Do not repeat what you wrote under “Selected Accomplishments.”

Now comes the fun part.  Everything up until now is pretty much what everyone else will do.  So now you really have to set yourself apart from the crowd.

List any media citations you have.  Not many people have them.  Sign up at www.helpareporter.com and become a source for reporters.  Then you can say that you are “a recognized authority in your field.”  I’m a source and in the past 13 months I have been cited in over 165 articles in print and on the web.

Next list any publications that you have.  After that comes “Awards.”  This is a way for you to show that other people think you are great, not just you and your mother.

Have a section entitled “Languages and Special Skills,” if you have any.  Foreign languages are a great asset to any candidacy, so list them all.

And finally, “Volunteerism” or “Community Service.”  This can be problematic.  You want to show that you are involved with your community and like to help people in need, but too much of a good thing can be bad.  Don’t overdo it.

So let’s summarize:  You found out about a job, sent a cover letter that resulted in the recipient reading your resume.  And it’s a good resume.  So she wants to invite you in for an interview.  That’s the point of the resume, to get the interview.  Does she pick up the phone?  Nope!  She Googles you.

Everyone potentially has two Internet presences.  The first is the one you create for yourself.  It’s your LinkedIn profile, comments you’ve place on other people’s blogs, maybe things you have written on your own blog, or possibly your own website.  All of these need to be professional.  What else needs to be professional are your FaceBook and Twitter accounts.  Persons have lost interviews and job offers because of the foolishness that they have posted, especially photos, on FaceBook and the nonsense that they have tweeted about.  Clean up your FaceBook and Twitter accounts.  Make everything private and, if you can’t, take down whatever makes you look foolish.

The second Internet presence is what other people have placed on the Internet about you.  Be aware of it, but don’t worry about it.  There’s nothing you can do about it.  Complain, and the person just might make matters worse for you.  Most employers will ask for an explanation, or simply laugh it off.  I know of no one who has lost a job offer because someone on the Internet said something bad about them.  It’s not worth losing sleep over.

For sake of argument, you passed the Internet test.  Your phone rings and you are invited for an interview.

The preliminary interview will be the initial phone call.  All the person will want to do is to set up a time for a real phone interview – although they might invite you in for a face-to-face meeting.  But let’s say they want a phone interview.

There are a few rules.  First, get dressed.  You have to feel professional to act professionally.  Second, don’t be too relaxed.  Sit in a comfortable chair but not one that rocks or spins.  You want to literally force yourself to sit up straight.  Third, if you have one, have a mirror next to the phone.  Look at yourself and make certain your are smiling.  It’s true that people can really hear a smile in your voice.  Since you will not be able to benefit from body language, you have to come across as positive.  Smiling should do it.

This will not be a long and complicated interview.  All you need in front of you is your resume.  You are being interviewed about you.  You should know the facts, but it is human nature to forget something – especially dates of employment. You don’t want to make any mistakes.

Let’s say you do a good job and are invited in for an interview.  Here are the rules to follow:

First, arrive early.  There is no excuse for being late for an interview.  If you are late, you will not get the job.

Second, dress conservatively.  And don’t wear any cologne or perfume.  Women should not wear too much makeup or too much jewelry.

Third, when you arrive you will be greeted by the receptionist.  She will be asked for her opinion of you and it will count.  Make certain you treat her with respect and professionally.  Shake hands with her.  Surprisingly, very few people do.

Fourth, when the person with whom you are meeting comes to get you, stand up, smile, look her straight in the eye, give a firm handshake and thank her for inviting you for the interview.

Fifth, follow her lead.  If she likes small talk, chat.  If not, get down to business.  And remember, body language is important.  Don’t fidget.  Be a bit animated.  Move your hands.  Smile.  Make eye contact.  Don’t look down or up when you are thinking about an answer.  Always look straight ahead.

Sixth, an interview is no time to be modest.  This is what I call “’I’ vs ‘We’.”  You want to come across as a team player, but the company that is interviewing you is not looking to hire your team; they are looking to hire you.  So I always say the following, “I worked with good people.  We were a good team.  But I’m going to focus with my answers on what I personally did.”

Seventh, open ended questions are a way for the interviewer to ask you illegal questions.  She may want to know if you have any children and will therefore need time off from work without warning.   So she might ask, Tell me your negatives.  Or, she might ask, Tell me your positives.  These are opportunities to talk about your values, morals and ethics.  For example, in the case of negatives you can say, “There was time when… but I learned my lesson and now you get to benefit from the mistakes I made with my previous employers.  The most important thing I learned was not to repeat the same mistakes!”  And in the case of positives, which could also be negatives, “I pride myself on the fact that I have never lost a day’s work because of personal matters.  I keep my personal and professional lives separate – although I do take work home with me when necessary.”

Eighth, in general, when asked any question, but especially difficult ones, tell the truth, don’t talk too much, and don’t think you have to confess your sins.  What you are concerned about may be of no interest to the interviewer.

Ninth, you have to have questions to ask.  The questions should show that you have done your homework and researched the employer.  And, if possible, research the interviewer as well.  In any case, here are some powerful questions to ask:

• What is the company’s turnover rate?
• What is the average tenure of an employee?
• Do you promote from within?
• Why do you like to work here?

The first two questions tell you if it’s a good place to work.  The third question let’s you know if you will have a future with the company.  And the last question makes the conversation personal and shows that you are interested in the person with whom you are speaking.

At the end of the interview, smile, look the interviewer in the eyes, give a firm handshake and thank her for the opportunity to be considered for the position.  It’s perfectly acceptable to ask about the next stage and when you can expect to hear from them.

If they say to call them in two weeks, call them in two weeks.  If they don’t take your call, or if they don’t return your call, you didn’t get the job.  If they say they will be in touch with you and you don’t hear from them, you didn’t get the job.  And if you don’t get the job, send a thank you letter.  No one else will.  They’ll remember it and may contact you in the future.

In any case, after the interview send an e-mail thanking the interviewer or interviewers for meeting with you.  Include any requested information.  Then, mail a hand written thank you note to the persons with whom you met.  Unlike the e-mail, the note is unexpected and will remind them about you.

Just as you did with your Internet presence, make certain that you are prepared for a background check.  If you have a criminal record, tell them about it.  If your credit is bad, tell them before they find out.  Have an explanation, explain what happened, what you learned from the experience and why it makes you a better employee, and in the case of the credit report, what you are doing about it.  The important thing is not to try and hide anything and not to surprise the prospective employer.   Employers do not like surprises when hiring candidates.

Best case scenario, you get a job offer. Now the negotiations begin.  They will ask you what you are looking for in a salary.  The answer is critical.

If you say, “What are you offering?” then they know you are not a serious professional.  If the salary range was not in the job description, then you should have some idea of what the market is demanding.  After all, it’s your profession.  It also sounds like you are playing games.  Employers don’t like employees who play games.

This is the answer.  “I am presently earning X.  To make a move I will need at least an increase of Y%, depending on benefits.”  Now the ball is in the employer’s court.  Some benefits are worth more than salary so listen to what the employer has to say.  You don’t have to give an answer on the spot.  Promise to get back to them the next morning.  If it’s a good offer, accept it.  If you want the job but need something more, explain why.  You can make one, and only one, counter offer.  For example, I had one candidate who told my client, after consulting with me, that while a $10,000 increase was totally acceptable, his new commute would cost him $5,000 a year in gas and tolls.  A $5,000 net increase was not worth the move.  They gave him the extra $5,000.

Finally, only resign once you have a written offer in-hand.  As a general rule, you should give your present boss notice equal to your vacation time.

CEO Compensation: A Bronx Tale

Please note that this posting was originally written on October 17, 2006 for my previous blog, Non-Profit Concerns.

The Bronx, New York is a great borough. In a relatively small geographic area you can find the wealthy and the poor. If I remember correctly, there are more institutes of higher learning in the Bronx than any other similar sized region of the country. And, according to Guidestar, there are 928 non-profits. That is a testament to the caring and compassion of Bronxites. It also makes the Bronx a good “laboratory” for looking at non-profits which all share the same geographic area and, for the most part, the same client base.

CEO compensation, by which I mean the total pay packages of the top executives of non-profits, is a continuing bone of contention. Is anyone worth a $2 million salary? Should half million dollar salaries be paid by non-profit tax-exempt organizations, like nursing homes, that receive almost all of their funding from the government? Can anyone find fault with organizations that pays their top salaried employee less than 1% of their gross receipts?

There are 93 non-profits, out of the 928, who have 990s on Guidestar that show that they have a minimum of $1 million in revenue, and at least one paid employee. As someone who worked in the Bronx for 5 years, I know that the list is incomplete. For some reason my former employer, Morningside House Nursing Home, did not appear on the Guidestar generated list. I added it. There are others missing as well. While incomplete, it is an interesting academic exercise if nothing else. Look at the salaries and look at the percentage of the total gross receipts that they represent. Draw your own conclusions.

The salaries listed are of the highest paid employees. That may be a president, a CEO, CFO, executive director, director, principal, doctor, nurse, coordinator, or administrator, just to name the most common.

Again, draw your own conclusions… (and apologies for the lack of columns… E-mail me if you would like the Excel spreadsheet and I will be happy to send it to you.)

Organization Gross Receipts Salary Percentage
1215 Seneca Ave. Houses $2,106,513 $70,000 3.32%
Abraham House $2,167,695 $80,500 3.71%
Aging in America Community Services $3,959,650 $86,169 2.18%
Aguila, Inc. $4,871,147 $65,000 1.33%
Argus Community, Inc. $8,362,503 $156,848 1.88%
Belmont Community Day Care Center $4,886,449 $175,185 3.59%
Bronx Aids Services $6,611,505 $122,111 1.85%
Bronx Arts Ensemble $1,009,349 $55,753 5.52%
Bronx Charter School for Better Learning $1,135,518 $96,703 8.52%
Bronx Charter School for Children $1,628,159 $102,818 6.31%
Bronx Charter School for Excellence $2,028,828 $100,000 4.93%
Bronx Charter School for the Arts $2,685,487 $94,500 3.52%
Bronx Council on the Arts $1,462,867 $98,085 6.70%
Bronx Defenders $5,318,231 $148,534 2.79%
Bronx House, Inc. $3,766,020 $134,988 3.58%
Bronx Jewish Community Council $1,990,187 $88,760 4.46%
Bronx JCC – Home Attendant Services $17,702,429 $62,150 0.35%
Bronx Museum of the Arts $2,462,020 $65,768 2.67%
Bronx Overall Economic Development Corp. $3,666,734 $126,104 3.44%
Bronx Preparatory Charter School $4,753,853 $108,191 2.28%
Bronx Lebanon Hospital New Directions Fund $1,078,654 $32,176 2.98%
Calvary Hospital $78,910,500 $458,336 0.58%
Cancer Service Network $3,080,573 $142,228 4.62%
Casita Maria, Inc. $1,929,677 $162,522 8.42%
Christian Community in Action $25,559,793 $66,118 0.26%
Citiwide Harm Reduction Program $2,997,359 $63,558 2.12%
Citizens Advice Bureau $21,910,573 $166,632 0.76%
Claremont Neighborhood Centers $1,823,849 $94,821 5.20%
Comm. Resource Center Develop. Disabled $10,763,204 $154,636 1.44%
Com. Care Man. Diagnostic & Treat. Cntr. $6,150,887 $228,445 3.71%
Concourse House Housing Development Fund $2,605,453 $57,982 2.23%
Creative Lifestyles $5,364,153 $168,169 3.14%
Diego Beekman Mutual Housing Association $13,192,715 $81,544 0.62%
Downtown Bronx Medical Associates $65,249,865 $412,408 0.63%
Dreamyard Drama Project $2,248,431 $53,334 2.37%
East Bronx NAACP Day Care Center, Inc. $3,757,638 $62,800 1.67%
East harlem Council for Community Development $6,681,837 $150,000 2.24%
East Tremont Alumni Day Care Center $3,959,099 $78,593 1.99%
Families Reaching in Ever New Directions $2,639,035 $61,010 2.31%
Family Care Services $21,426,143 $84,080 0.39%
Family Life Academy Charter School $2,476,685 $96,397 3.89%
Family Support Systems Unlimited $14,761,303 $122,872 0.83%
Fordham Bedford Housing Corporation $4,456,798 $151,238 3.39%
Fordham University $526,706,428 $316,244 0.06%
Friends of Bronx Preparatory Charter School $4,017,568 $46,745 1.16%
Geel Community Services $4,709,690 $118,899 2.52%
Health People Inc. $2,981,536 $90,106 3.02%
Highbridge Advisory Council Family Services $15,889,748 $124,136 0.78%
Highbridge Community Life Center $4,371,561 $65,543 1.50%
Horace Mann School $68,030,265 $385,988 0.57%
Hunt’s Point Mult-Service Center $23,420,220 $182,145 0.78%
Institutes of Applied Human Dynamics $33,285,736 $231,683 0.70%
Kinneret Day School $1,782,646 $76,500 4.29%
Kipp Academy Charter School $4,409,458 $115,945 2.63%
Kips Bay Boys’ and Girls’ Club, Inc. $13,967,572 $331,815 2.38%
The Learning Tree $1,093,111 $12,310 1.13%
Life Adjustments Center $5,322,711 $235,251 4.42%
Marc After-School Program $1,114,212 $87,765 7.88%
Morris Heights Health Center $29,340,109 $374,824 1.28%
Mid-Bronx Senior Citizens Council $5,394,667 $130,702 2.42%
Montefiore Medical Center $1,502,034,230 $1,979,453 0.13%
Morningside House Nursing Home Company $49,149,935 $497,845 1.01%
New Era Veterans $1,411,210 $103,714 7.35%
New York Botanical Garden $86,333,767 $382,336 0.44%
New York Harm Reduction Education $2,713,593 $96,740 3.57%
New York Institute for Special Education $68,848,475 $377,478 0.55%
New York Medical Alliance, UFPC $102,766,373 $612,448 0.60%
New York Westchester Square Medical Center $69,742,164 $477,987 0.69%
North East Bronx Day Care Center $5,412,024 $175,000 3.23%
OP & CMIA Local 530 – Welfare Fund $9,879,985 $180,333 1.83%
Paraprofessional Healthcare Institute $7,506,990 $125,929 1.68%
Pibly Residential Programs $7,786,799 $119,422 1.53%
Puerto Rican Home Attendant Services $11,968,687 $60,796 0.51%
Readnet Bronx Charter School $1,164,372 $93,022 7.99%
Riverdale Country School $58,416,025 $374,289 0.64%
Riverdale Neighborhood House, Inc. $1,802,183 $111,647 6.20%
Sammon Build Center Housing Development Fund $1,269,317 $66,444 5.23%
SEBNC Quality Vending Services $15,085,383 $53,939 0.36%
Seventh Avenue Center for Family Services $1,637,120 $81,261 4.96%
South Bronx Housekeeper Vendor Program $4,517,181 $57,920 1.28%
South Bronx Overall Economic Devel. Corp. $9,475,809 $116,586 1.23%
St. Ann’s Corner of Harm Reduction, Inc. $1,240,233 $87,234 7.03%
St. Peter’s Children’s Network $3,574,152 $54,627 1.53%
These Our Treasures $3,246,390 $135,650 4.18%
Tolentine Zeiser Community Life Center, Inc. $5,281,764 $85,133 1.61%
Tremont Crotina Day Care Center $4,655,869 $90,782 1.95%
Tremont Monterey Day Care Center $3,370,326 $65,120 1.93%
Union Community Health Center $16,257,607 $89,070 0.55%
United Bronx Parents $10,111,701 $150,040 1.48%
University Consultation & Treatment Center $4,652,848 $74,246 1.60%
VIP Community Services $16,114,551 $235,000 1.46%
Wave Hill Incorporated $7,579,059 $104,400 1.38%
YM-YWHA of the Bronx $4,907,517 $183,210 3.73%
TOTAL $3,231,350,245 $15,613,768
AVERAGE $34,745,702 $167,890 2.64%

Hiring Professional Fundraisers

 Please note that this posting was originally written on August 6, 2006 for my previous blog, Non-Profit Concerns.

General rule of thumb number 2: You never want Mike Wallace to show up at your door with a camera crew. Yes, I know he’s retired but just because someone is changing – or hoping to change – his employment status does not change the rule. Which leads me to general rule of thumb number 1: You never want to receive a letter, call or visit from Eliot Spitzer that indicates that there may be a problem with your policies and procedures. One of the Attorney General’s pet peeves is non-profits that don’t have ethical standards when it comes to their fundraising.

Just look at his website – http://www.oag.ny.us – and click on “Charities” under “Ensuring the Integrity of Public Institutions.” It’s first on the list. And the list is not in alphabetical order. “Charities” comes before “Broker-Dealers, Advisers, Investors and Securities,” “Franchise and Business Opportunities,” “Lawyer’s Page,” “Opinions of the Attorney General,” “Real Estate,” and “Telecommunications & Energy.” The man takes charities seriously. And you should take him seriously as well.

If you have not reviewed the website, review it! Scroll down and before you spend money on fundraisers, spend time reading the reports under “Pennies for Charities.” Here’s how it works:

You are a charity. You have thousands of donors. For sake of argument, 5% have not made a donation this year. The campaign is coming to an end. You do not want to lose them so you hire a fundraising telemarketing firm to solicit them. They have 500 donors to contact. They do an excellent job and reach 400, obtaining contributions from 350. Well done. Congratulations! Problem is that you are paying them either a flat fee per call, or a flat fee per donation received, or a flat fee per hour and mathematically that means that since these are probably relatively small gifts, the telemarketer keeps the lion’s share. Here’s what the AG reported in 2005:

“A total of $170.6 million was raised on behalf of 440 charities in 2004 by the 555 telemarketing campaigns covered in this report. The $170.6 million includes funds raised in New York and other states during telemarketing campaigns on behalf of charitable organizations registered to solicit contributions in New York. Charities retained $63.5 million, or 37.24 percent, of the funds raised by telemarketers registered to solicit contributions in New York in 2004. While some charities received more, many received less that 37.24 percent, and some received nothing at all. The remainder – $107.1 million – was paid to fundraisers for fees and/or used to cover the costs of conducting the campaigns.”

From the perspective of the charity the situation is like this. We raise millions. The telemarketing campaign is only a small percentage of funds received. We don’t want to lose these donors. So while we may actually only be bringing in a few pennies on the dollar, as part of the overall campaign, this is insignificant. Our overall fundraising costs are still well below the 35% that the Better Business Bureau says is the maximum that a charity should spend on its fundraising efforts. In fact, this is not really fundraising; it’s more like PR.

As far as it goes, the charity is correct. So how do you make certain there is no issue with the AG. Have the telemarketer say the following: Good evening Mrs. Smith. I’m calling on behalf of the XYZ Fund. We want to thank you for your past support. Last year you were kind enough to donate $15.00. Can we put you down for an $18.00 donation this year, with $15.00 going to pay my expenses as a telemarketer and $3.00 going to the Fund?

Full disclosure is what is required. Read the report. The African Wildlife Foundation received –40.20% of the money it raised from one of its campaigns. (In other words, it cost them $1.40 to raise $1.00!) On the other hand, the Association of Graduates of the US Military Academy received 93.70% of their telemarketing efforts. (They paid six cents for every dollar raised!) If your campaign is closer to Africa than West Point, don’t do it. After all, is it really worth it if donors find out what you actually did with their money?

This does not mean that you should not engage professional fundraising services if you cannot afford to have your own development office, or if you need to supplement their activities. Just make certain that whomever you hire is properly registered with the Charities Bureau of the Attorney General’s office. There are four types of professional fundraisers:

A “Professional Fund Raiser” (PFR) is someone who is contracted to plan or run a fundraising campaign, solicit potential donors, or advertise goods or services for the benefit of a charity. A “Professional Solicitor” (PS) is employed by a PFR to solicit donations. A “Fund Raising Counsel” (FRC) is contracted to plan or run a fundraising campaign but does not solicit funds and does not have any access to funds received. Finally, there is the “Commercial Co-Venturer” (CCV) which is defined as, “Any person who for profit is regularly and primarily engaged in trade or commerce other than in connection with the raising of funds or any other thing of value for a charitable organization and who advertises that the purchase or use of goods, services, entertainment, or any other thing of value will benefit a charitable organization.” While a PS, FRC and CCV must be registered with the Charities Bureau, a PFR must also be bonded. It is the responsibility of the charity to make certain that any professional fundraiser hired is registered, and the responsibility of the professional fundraiser to file copies of any contracts/reports with the Bureau.

The exact requirements can be found in form CHAR009 (www.oag.state.ny.us/charities/ forms/char009.pdf). Simply stated, a charity that requires someone to advise them on its fundraising activities, write grants, plan special events, etc., only requires a Fund Raising Counsel. If, however, the charity needs someone to actually ask for donations, collect monies and issue receipts, it would then have to hire a Professional Fund Raiser.

Paid staff, volunteers and board members are not required to be registered or bonded if involved with fundraising activities. The best telemarketers are in fact those same volunteers and board members because they are motivated by passion, while some telemarketers are apparently only motivated by profit.

Recruiting and Retaining Top Professionals: The Art of Differentiation

Please note that this posting was originally written on December 25, 2006 for my previous blog Non-Profit Concerns.

(The following was prepared for presentation at the 2006 Solomon Schechter Day School Association Biennial Conference, December 11, 2006, Boca Raton, Florida.)

Good afternoon.

This afternoon we are going to answer two interconnected questions: First, why should you hire a specific candidate for any position at your school? And, second, why should a candidate want to work for you?

The way we answer those questions will lead you to a way to differentiate yourself from the competition. And just to make it clear, the nice people sitting around you, your colleagues from other schools, they’re you’re competition! Throughout my presentation I will be suggesting a reading list. One book that you should read – although the title says it all – is Jack Trout’s Differentiate or Die: Survival in Our Era of Killer Competition.

I’ll just quote two sentences from the jacket cover. “For marketers, differentiating products today is more challenging than at any time in history – yet it remains at the heart of successful marketing. More importantly, it remains the key to a company’s survival.” Make no doubt about it; your schools are companies. And remember, your students’ first example of how a company/organization runs, is your school!

For sake of argument, we’ll be talking about hiring a new principal. But everything that I will say during our time together is equally applicable to anyone else from the custodian all the way down to the head of school, principal or executive director.

Before we begin I just want to remind you of one thing that you all know. An interview is a two-way street. The crucial component from the perspective of the candidate is the way you conduct the interview, which includes how that candidate is received and treated. The way you reach your decision about hiring her, will tell her how she will be expected to make decisions at your school.

Do you procrastinate? Do you keep her informed as the process proceeds? Do you need an excessive number of people to interview her? Everything you do begs the question, Is this how all decisions are made? That can be a positive or a negative question. If it’s negative, you won’t get a star to work for you.

Additionally, before you even begin the hiring process, ask yourself this question: Why are you hiring anyone for the position? Are you trying to fill a chair? Are you looking for someone who will continue where her predecessor left off? Or are you going to use the opportunity to hire someone who has no loyalty to your history and will move you to a new level without carrying the burden of your past?

In his book Only the Paranoid Survive. Andrew Grove, chairman of the Board of Intel, identifies this as “a key point.” He writes, “The replacement of corporate heads is far more motivated by the need to bring in someone who is not invested in the past than to get somebody who is a better manager or a better leader in other ways.” Take his advice. He knows of what he speaks. Don’t just look for a new model of what you had. View all hirings as opportunities for fundamental change. That does not mean that the past was bad. All it means is that the future will require something different. Just as the technology you use must be constantly updated, so too must your management philosophy and approach.

Let’s get started.

First question: Why should you hire a specific candidate to be principal of your school?

You tell me. What are you looking for? What are the top two or three concerns about which you ask a perspective candidate?

· Advanced academic/administrative credentials
· Experience administering educational institution
· Familiarity with level of instruction and current trends in education
· Staff development
· Curriculum development
· Human Resources
· Teaching experience
· Administrative experience
· Statistics: size of school, teacher/student ratio, graduation rate, percentage of students going on to ivy league colleges
· Fundraising experience
· Budget control/cost cutting
· Expected/desired compensation package

If those are your key concerns around your questioning, then you have a guaranteed formula for mediocrity. All of those issues are secondary. What I am now going to present are the main issues that you must address if you want to differentiate yourself from the crowd. And remember, your questions are half of what will differentiate you; the other half are your answers to the candidates questions.

Without exception, every successful company owes its success to the fact that it holds all of its employees accountable. GE is a success because GE’s executives are accountable for their decisions. Enron was a failure – to put it mildly – because its executives were accountable to no one.

All employees need three things to be successful – responsibilities, authority to carry out those responsibilities, and most importantly, accountability, to their supervisors, to their peers, to themselves and to their stakeholders.

If you have not done so yet, read Gary Neilson and Bruce Pasternack’s book, Results: Keep What’s Good, Fix What’s Wrong and Unlock Great Performance. While they mainly use examples from the corporate world, one of their case studies is of the Special Olympics, which, they emphasize, is an excellent organization that just needed some improvements.

What was improvement number one? What they refer to as “decision rights,” meaning who has the responsibility and authority for what decisions, were, and I quote, “Unclear, both in terms of accountability and process. People did not understand what they were accountable for and how they were being measured.”

Following their reorganization, Special Olympics instituted, and again I quote, “a rigorous performance measurement system that reinforces accountability and control at all levels.”

The same, of course, is true in the corporate world when reorganizations are called for. Caterpillar had the second highest shareholder return among companies on the Dow Jones Industrial Index in 2003. The Financial Times named it the 27th most respected company in the world. And in 2005, Forbes magazine listed it as the best-managed industrial corporation in America. So what did Caterpillar do after it survived losing a billion dollars in the first half of the 1980s and once again became profitable? It reorganized. And what was the first step in that reorganization? To quote from Neilson and Pasternack, “It moved accountability dramatically downward in their organization by reorganizing Caterpillar into ‘accountable’ business units that would have P&L statements and be judged on divisional profitability.” The results? From a $2.4 billion loss in 1992, to $2 billion in profits in 2004. From $10.2 billion in revenues in 1992, to $30.3 billion in 2004.

Of course, that’s on the company-wide level. What about the individual toward the bottom of the organizational chart? Jim Despain headed Caterpillar’s manufacturing operations in East Peoria. He recalled the following incident after the reorganization:

“When people feel accountable, they do wonderful things, if they really are accountable. I’ll never forget, it was down in the fabrication buildings where all the really tough guys hang out, the welders.

“One of the more cooperative people down there was given some responsibility to look at saving money in the weld-repair area. We had this little red lens that you put on the eye of the welding robot so the robot can follow the weld route. And we burned those up pretty quickly, because the fire was hitting them with pellets all the time. These lenses were costing us sixty-two dollars apiece, and he found a way to make them in our own tool room here for six cents. Sixty-two dollars to six cents. And there were many other things the same way.”

The bottom line for Despain’s division was that it became profitable in 1995, for the first time since 1990, when the reorganization went into effect. The number of employees dropped from 4,500 to 2,000. As he remembered, “We never invested a dime in more technology, never did any outsourcing. We just changed the way people worked together. They were putting their own creativity into the opportunities they were provided. They forgot about themselves and started looking at the bigger picture.”

Accountability works!

So the first question for your candidate is, How do you hold staff accountable? What do you do when an employee refuses to be held accountable? How do you reward accountability? How do you hold yourself accountable? To whom do you feel you are accountable?

Accountability is first. Mission is second.

Read Jim Collins’s books, Built to Last: Successful Habits of Visionary Companies and Good to Great: Why Some Companies Make the Leap…And Others Don’t. Also read Bill George’s autobiography (he’s the former chairman and CEO of Medtronic), Authentic Leadership: Rediscovering The Secrets to Creating Lasting Value.

I’m going to spoil the ending for you. The key is that all decisions are based on the companies’ mission statements. If a company lives by its mission statement it can make the tough decisions, survive, and grow to greatness.

Remember in 1982 when you couldn’t buy Tylenol? Johnson & Johnson’s mission is to place the priority of the health of its customers above all else. So what to do when containers of Tylenol are poisoned in Chicago and the next day your stock price plunges 20% and you lose $2 billion in company value? Launch a nation-wide advertising campaign pointing out that the cyanide did not come from your plants, that it was an isolated incident of an individual madman, and that the product is safe. Of course that is not what mission-driven Johnson & Johnson did. They pulled Tylenol from the shelves and took a $240 million hit! As their credo states, “We believe our first responsibility is to the doctors, nurses and patients, to mothers and fathers and all others who use our products and services.” That’s why their CEO was praised, not condemned, for the decision.

Ever hear of river blindness? Scientists at Merck found the cure for the disease that was decimating the lives of Africans. On average it costs $200 million and takes 12 years to develop a drug. In this case just to market Mectizan, as the cure was named, was expected to cost $2 million in its first year for distribution alone. It was estimated that the annual bill for producing and distributing the drug would be $20 million. The $3 price tag per pill was too high for anyone with the disease to pay. No government or international organization was willing to pick up the tab. What to do? Quote: “The mission of Merck & Co., Inc., is to provide society with superior products and services.” Merck gives the drug away for free. Every year it takes a multi-million dollar hit so that thousands of Africans can see. Again, the decision was praised by shareholders.

Of course cynics will say that Johnson & Johnson had no choice but to pull Tylenol from the shelves because no one would buy the product. And Merck may be losing millions on Mectizan but it gains untold millions from good press and good will. But having a moral foundation to one’s decisions is good business.

To quote Bill George, the purpose of his book is “to show all leaders… that there is a better way to lead than we have seen in the past decade – by pursuing your mission, living by your values, and getting superior results for all stakeholders.”

George describes Medtronic as “a mission-driven company.” The mission statement that the company’s founder, Earl Bakken, wrote was “to restore people to fuller lives.” The full mission statement is literally plastered throughout the company, and a regular topic of discussion among employees.

Bakken wrote the mission statement in 1962. Five years earlier the company had created the first pacemaker. On the verge of bankruptcy the company’s board of directors urged Bakken to write the company’s mission statement. “It gave the company a clear purpose and focus. Within three months the company turned profitable and has been so ever since.”

According to George, “the best-kept secret in business is that mission-driven companies create far more shareholder value than do financially driven firms.” (During his tenure at Medtronic, George “created $60 billion in shareholder value!”)

So what is the second question you ask your candidate? How does the mission statement of your present employer impact your decision making? Ask what the mission statement is. If she doesn’t know it, don’t hire her! Is this someone who just talks the talk or does she also walk the talk?

So we have accountability and we have adherence to a mission statement.

Here’s another book for you to read. In Search of Excellence: Lessons from America’s Best Run Companies, by Thomas Peters.

And I’ll spoil the ending for you again:

“The excellent companies seem to have developed cultures that have incorporated the values and practices of the great leaders and thus those shared values can be seen to survive for decades after the passing of the original guru. … it appears that the real role of the chief executive is to manage the values of the organization.”

Values-centric decision making is the only effective type of decision making. Case in point, the Four Seasons. Neilson and Pasternack quote the chain’s Regional Vice President, Stan Bromley, as follows:

“We advise all staff to make sure that every decision they make squares with our goals, beliefs and values … and they honor that obligation, because they feel they are respected. If we were seen as only caring about profits and prestige, rather than our customers and employees, they would not believe in our values, and we would be communications across a trust gap.”

And for the record, he was not talking just about managers. He was talking about housekeepers, bus boys, and bell hops as much as anyone else. And that’s why the Four Seasons is the Four Seasons and not Motel 6 (which, I hasten to add, I have frequented far more often than a Four Seasons!).

If you have a position that needs to be filled and you are looking for someone to fill that position, make certain that you have clear guidelines for what to do in case your school goes out of business, because it will. Never hire for today. Always hire for the future. That means the individual must leave a legacy. To do so she must be respected. To be respected she must have values.

Never forget, in every candidate you are looking to hire, you are looking for a leader. There is only one definition of a leader; all others are just a description of the attributes of leadership. I think I am quoting Peter Drucker, “A leader is someone with followers.” And not followers by coercion; but followers by conviction. And the only way someone earns followers, is by displaying admirable personal qualities. In other words, he has to have values.

So the third question for the candidate is, What are your values? How do they impact your decision making? Give us an example of a decision that you made which was not necessarily in your self-interest but was in the best interest of your school.
Accountability. Mission Statement. Values.

Hand-in-had with values goes ethics. And this leads to the issue of transparency. Accordingly, this is the one place in the interview where you have to volunteer sensitive information. And, when it comes time for the candidate to ask questions, you have to be forthcoming. (And, not to get ahead of myself, a key to your decision about whether or not to hire someone should be based in part on the questions that the candidate asks!)

Who are your stakeholders? How do you share information with them? Are staff, students, parents and donors invited to board meetings? If so, why? If not, why not? Do you issue an annual report? Do you invite dialogue with your stakeholders? How transparent are you?

Now it’s the candidate’s turn. Question number 4: How transparent is your decision making? Do you share the rationale behind your decisions with stakeholders? Which decisions? Which stakeholders? Why or why not? Do you invite dialogue throughout the decision making process? Or do you guide the so-called decision makers to the decision that you wanted all along? How do you implement decisions? What level of credibility do you have when you make a decision? And if this sounds like accountability, it is!

And thus from accountability, to mission statement, to values and ethics we arrive at transparency and return back to our start, accountability.

But let’s stay with transparency for a little while longer.

When someone has a success it is critical that it be shared with others. It’s called “best practices.” It’s important to explore with a candidate how she relates to best practices.

The other side of the best practices coin is failure. We all do it! Bill Cahill, the head of human resources at FedEx goes so far as to say that “success is when you learn from your failures.”

How much failure do you encourage? Do you let your staff try new things? Do you celebrate the attempt, regardless of the results? Do you see failure as a learning experience? At IBM a manager was given $10 million to start a new program. After a year the attempt was a total failure. He went to his boss and offered his resignation. His boss refused to accept it on the grounds that they had just spent $10 million educating him!

So our fifth question is, What is your experience with best practices and failures? Does one department share amongst itself? Does it share with some other departments? Does it share with the entire staff? And does the school share with other schools? When it comes to failures, how do you encourage risk taking? When do you pull the plug on a failed project?

Accountability. Mission Statement. Values. Ethics. Transparency. Best Practices.

Of course, the most important best practice is the one concerned with the industry of which we are all apart: customer service. If you don’t treat your customers well, you will be out of business.

Former GE CEO Jack Welch made many things famous, not least of which is the quality assurance program knows as Six Sigma. In the September 2005 issue of Fast Company, Martin Kihn explained it in the following terms:

“Sigma is the Greek symbol used to denote deviations from the mean. And so Six Sigma is essentially a set of procedures and tools designed to measure and analyze ‘defects’ in a process and help determine what’s causing them. The goal – the ‘six sigma’ part – is 3.4 defects per million, or 99.997% perfection.” (Don’t ask me to explain the math!)

Ever wonder how the Japanese took over TV, stereo, electronics and automobile production from us? In the US manufacturers were willing to accept 5% rejects per million. In other words, for every 1 million anything that was “Made in America,” 50,000 would be no good. The Japanese lowered that number to 200 and gained industrial leadership. As Jay Levinson notes in Guerilla Marketing, “Every error that could possibly be construed as a mistake was noticed by people actually hired by industry to count mistakes. In the category of mistakes included shoddy workmanship, tardiness, breaks that lasted too long, minor flaws in detail work, low morale, and anything at all that impeded production.”

Yes, this is relevant to you. You also produce a product: students. Your students are your widgets. So how many errors does your organization make? How can you implement a Six Sigma program at your agency?

How often do you send out a mailer that is improperly folded? How many of your employees arrive at work late (begin the day eating breakfast) and leave as the clock strikes five? How often do staff go out shopping on their lunch hour and return, purchases and food in hand, and then take an additional 20 minutes to actually eat lunch? How many typos are there in your publications? How proud are your staff of where they work? How much bureaucracy do you have which stifles creativity?

J. Edgar Hoover had a rule that phones had to be answered by the third ring. If I call your offices, how long is it going to take for the phone to be answered – dare I dream? – by a real person?

How long does it take for a receipt to be sent to a donor? How long does it take for a stock donation letter to arrive?

The key to customer service is recognizing who your clients are. And in a way, the key is not forgetting that your clients are really your bosses.

When working at a nursing home, a colleague and I (she was the admissions director and I was the director of development), made a presentation at the Greater New York Hospital Association. In passing she mentioned something about working closely with hospital discharge planners and I said something about having stories about the home appear regularly in the local newspapers. They were just passing remarks of seemingly no great importance.

After the formal presentation was over, she was asked how long it took her to respond to a request from a hospital discharge planner for a bed. She said about 10 minutes. I was asked how often stories about the home appeared in the newspapers. On average it was 15 times a month.

Our colleagues were shocked. And so were we because we did not think these were special results. One discharge planner said that he was happy if he got a response for a request for a bed at a nursing home within two days. One community relations director said that her boss was thrilled if she got them into the paper once a month. They wanted to know the secret:

There is a saying in the Talmud, “Know before whom you stand.” In other words, know who your clients are.

The nursing home where we worked was a good nursing home. It had been before the new admissions director arrived, and was after she arrived. But her predecessor could only keep the occupancy rate a few points above 90%. The new director had us at 99%. Same nurses, same certified nurse assistants, same doctors, same therapists, same housekeepers, same maintenance staff, same food, same everything. What was the difference? Her predecessor felt that her clients were the potential residents and family members. The new director saw the discharge planners as her clients. Instead of going to the hospitals to interview patients, family members, doctors and nurses, she stayed at her desk to answer the phone when the discharge planners called.

As for press coverage, colleagues at other facilities told me that their bosses had them sending out long press releases going into great detail about this, that, or the other thing that was happening at their facilities. For them, their bosses were their clients. Not for me. I explained to the boss that we had little control over what actually happens to our press releases. The longer they were, the more editing would be needed and the more mistakes would be made at the newspaper. So all I would do is send out a 3 to 4 paragraph press release with a photo. Basically, they were fillers – photos with long captions. That is what my clients, the newspaper editors, wanted. And what my boss really wanted was to see the home recognized in the press.

Remember, if you are an employee, your clients are not necessarily your supervisors and board members. They are only the ones who hire and fire you! Your real clients are the persons who allow you to succeed at your work. They may be donors. They may be hospital discharge planners. They may be newspaper editors. They may be politicians. They may be organization members. They may be vendors. And, of course, they most definitely are your parents and students. A client is anyone who utilizes your services and they are the ones whose cooperation you need. Whoever they are, if you keep your clients happy, your bosses will also be happy. And the secret to doing that is quality assurance.

So the next question for your by now exhausted candidate is, What do you do to assure the quality of your services? How do you minimize errors? How do you deal with a disgruntled stakeholder?

Accountability. Mission Statement. Values. Ethics. Transparency. Best Practices. Quality Assurance.

Finally, it is a fact, not a truism, that the most important resource of any organization is its human resources, its staff. The candidate should be a personal example of professional development. So here the final question is easy:

What is the difference between your job description today and when you first got the position? If it has not changed, don’t hire him! And, What do you do to assure the professional development of staff? This does not just mean traditional staff development: holding seminars and the like. And this is something that schools are uniquely qualified to exploit: mentoring.

When was the last time you assigned a student to mentor a teacher or administrator at your school? Companies do it all the time. Junior staffers mentor senior staffers. If memory serves, Jack Welch had an intern teach him how to use the Internet. He learnt about the Web and, while talking with her, about her perspectives of GE. She received an education that money truly could not buy: seeing the view (literally, but more importantly, figuratively) from the head office.

The two most important jobs of a CEO are succession and hiring the right people. As Jim Collins puts it, if you don’t have the right people on the bus, you will not get where you’re going. And if, as CEO you do not identify and train – and see to it that everyone else does as well – your successor, then what is going to happen when you leave? Will the place fall apart? It happens everyday.

So a final, final question for your now comatose candidate is, How do you go about hiring the best people and keeping them? Do you interview, or at least meet, all candidates for all positions? If not, which ones don’t you? Are there any new hires that you do not interview? When you leave your job is there anyone who can take over? Did you train her? If there is no one, why not?

Now we come to our second issue. Why should the candidate want to work for you?
What’s your sales pitch?

Why should anyone want to work for you?

1. Your Board is committed to the future of the school and the success of all hires, first and foremost the principal.
2. Admissions are rising steadily over the past decade and are projected to continue.
3. You have a state-of-the-art facility.
4. Your teachers come from the finest institutions.
5. You have the largest library for a private school in the county.
6. Your students have the highest average GPA of any other school in the state.
7. Your students win numerous awards in local, regional, state and national competitions.
8. More of your students are accepted to ivy league universities than any other private school in the state.
9. Your teachers are paid a highly competitive salary and have a benefits package second to none, including paid sabbatical leave.

If you want the best you have to appeal to them on a different level. The following four-part justification for why anyone should want to work for you will differentiate you from your competition:

First, what is your employee turnover rate? If it’s low, that means you have good professional and lay leadership. Your best ambassadors are your staff. If they stay that tells the prospective employee everything he needs to know.

Second, show that you have the right people in the right jobs. Granted, this is a logical extension from the previous point. However, emphasize it. Show how all departments work as teams. Give concrete examples of professional growth. Mention promotions and expanded job descriptions.

Third, revisit the issue of values. As we have seen, the greatest companies are those that place values above all else. The most successful companies are those that have a track record of values-based decision making. They live their mission statements. Give examples of why that is true for you.

Fourth, risk taking. Celebrate mistakes and failures. The FAA rewards pilots who immediately inform on themselves when they make an error. Pilots actually carry the “self-reporting” form in their flight kits. There are 3,000 such reports filed every month, and 150,000 subscribers to NASA’s monthly newsletter, Callback, read about the most important ones. Residents at the Mayo Clinic publish on an internal blog their errors. The US Department of Energy has a “lessons learned” database for contractors. And, of course, the Marine Corp has a culture of celebrating honesty in admitting mistakes.

So what mistakes and failures can you celebrate with a prospective employee? Just imagine the individual’s shock of hearing about the chances that you allow your staff to take, fail at, and then move on having learned and benefited from the experience. That’s differentiation!

Thank you for attending, for your participation, and for your attention.

Internships

The following is the text of my June 6th broadcast on Bruce Hurwitz Presents.

Today’s program is the first in a restructured show.  In order to expand listenership and to offer opportunities to individuals starting their careers, I’ve reformulated the program’s structure and divided it into four different forums.

The Ph.D. Forum will introduce listeners to doctoral and post-doctoral students, giving them an opportunity to discuss what, by definition, is cutting-edge research, be it in the arts, sciences or humanities.  Starting off the Ph.D. Forum will be Jason Sole, from Capella University, who is an expert on gangs.  He’ll be appearing at 11 AM on June 21.  On June 23 at 5 PM I’ll be joined by Neal Ramer from Ryokan College.  We’ll be discussing coping with depression – something of which the long-time unemployed know only too well.  And the next day, June 24, at 10:30 AM I’ll be interviewing Christopher Morrissey from the University of Notre Dame on the influence of religion on war and peace.

The second Forum, Business Forum, will feature guests from the for-profit and non-profit sectors talking about their careers and professions.  Two guests who I have yet to schedule but who I am confident will be on, will both be discussing various aspects of career growth.  One, a Ph.D. himself, will be speaking about changing careers.  Check out my website homepage, http://www.hsstaffing.com, for updates.

The third Forum, Social Forum, will deal with current events.  The lead-off show will be June 16 at 11:30 AM.  Its focus is on health care and specifically insurance companies and the pharmaceutical industry.  The impetus for the program was an incident with my health insurance provider, EmblemHealth, and their on-line pharmacy, Medco.  Suffice it to say that I have invited numerous members of Congress, as well as a representative of the New Jersey Attorney General’s Office to participate, along with representatives from EmblemHealth and Medco.  The title of the show, “Are EmblemHealth and Medco Fixing Prices and Violating the Law?” pretty much says it all.  I hope you’ll be able to join us for what I am certain will be an energized show.

In fact, it will not only be energized, it will be the first in a series of programs dedicated to the pharmaceutical industry.  Again, check out my website for updates.

Finally, the fourth Forum, Oral Essays, features talks by me on various topics.  Today’s broadcast is obviously the first and I’ll be discussing Internships.  On June 14 at 11 AM I’ll be speaking on conducting a successful job search, and on June 30 at 10 AM on obtaining and profiting from free PR in business and employment.  I hope you’ll be able to join me and, as always, questions from callers will be welcome.

Which brings me today’s program on Internships.  If you have any questions feel free to call in.  The number is 323-792-2978.  I’ll also be glancing at the chat room.  If you have any questions, you can post them there.   I’ll take questions at the end of the presentation which will last just under 15 minutes.

With the onset of summer and vacation season it seems timely to discuss internships.  Of course, students should have arranged their internships long ago.  However, there is much for both students and employers to keep in mind.

First, for employers, do they have to pay interns?  And second, for interns, why are internships important and how can they assure a successful experience?

So the first question is, Do interns have to be paid?  And I begin with the standard disclaimer:  I am not an attorney and employers should discuss this with their attorney or financial advisor.

But it’s a simple question.  Do employers have to pay interns?  After all, they are affectionately referred to as “slave labor.”  Since this deals with Federal government regulations the answer is simple, Yes and no.

I am basing my answer on Fact Sheet #71, titled “Internship Programs Under The Fair Labor Standards Act,” put out by the U.S. Department of Labor’s Wage and Hour Division.  And I must add, employers need to check on the regulations of their individual states as well.  But I’m going to focus here on the Feds.

First, the regulations deal with, and I quote, “Internships in the ‘for-profit’ private sector.”  That’s important because an intern at a non-profit will no doubt be classified as a volunteer.  Volunteers, by definition, do not have to be paid.  Before becoming an executive recruiter and career counselor I had worked at non-profits in the US for well-over a decade.  We had volunteers doing real work.  There were security guards at a nursing home.  There were seniors helping with mailings.  And there were board and committee members offering substantive advice which, under different circumstances, would have constituted consulting services.  None was paid.  None had to be.

So were are speaking about for-profits.  According to the Supreme Court, if the work being done only serves the interest of the person doing the work, then that person is not an employee.  For example, if the individual wants to learn IT administration and an IT company grants them an internship, if the owner of the company, or one of his or her employees, takes the intern along with him and shows her, the intern, what the work is like and actually permits her to do some work, under his supervision, the employer is not benefitting.  In fact, the employer is losing.  Why?  Because he would get the job done a lot faster if he did not have to explain everything to the intern.

Another example might be at an accounting firm where the intern is being trained in what she has studied in school.  Let’s keep it simple and say she learned QuickBooks.  At the accounting firm the owner is allowing her to enter data using QuickBooks.  After she’s finished, someone has to double check what she did, a step that would not be necessary had an employee actually done the work.  So, again, the employer is losing.

There are, in fact, six criteria which must apply if the employer is to be free from paying the intern:

First, even if real work is being done, the internship is similar to school training.  Thus, my example of data entry.

Second, the internship is for the benefit of the intern.  The owner of the IT company didn’t need to train an IT intern.

Third, the intern did not replace any employee but worked closely under the supervision of an employee.

Fourth, the employer gets no advantage from the internship (good PR and a good feeling aside) and may actually have his operations impaired because of the internship, for example, when explaining or checking up on the intern’s work slows a job down.

Fifth, the intern is not guaranteed a job at the conclusion of the internship.

And sixth, in the beginning of the relationship, both the intern and the employer understand – and it should be in writing – that the intern will not be paid for her work.

If all six criteria exist, there is no employment and therefore no right of payment.

Basically, if the internship is educational there is no need to pay. However, and here is where things get complicated, if the employer is actually benefiting because the intern is engaged in actual operations – even if it’s just filing or other clerical work or assisting customers – the employer may have to pay minimum wages because he is benefiting from the intern’s work.

Another way to look at it, and to become even more confused, is by focusing on the issue of supervision.  If the intern is replacing an employee, the intern is entitled to minimum wage.  Same is true if the employer would have hired someone to do the work had he not been able to find the intern.   However, if all the intern is doing is shadowing an employee and doing at the most minimal work, then it will probably be considered educational and the employer will owe nothing.  But, if the intern is supervised to the same extent as an employee, the employer may have to pay minimum wage.

Lastly, time can be a factor in determining if the intern needs to be paid.  Internships should be for a fixed period determined at the start of the internship.   The internship should not be considered a trial period leading to employment.  If the intern expects to be hired after the internship, the employer will have to pay minimum wage.  That is why, as previously noted, I highly recommend written agreements with all interns so as to clearly state expectations.

So much for employers.  What about the interns?  How can an intern assure a successful internship?

First, interns should understand why their internship is important.  What do they need at the end of the day?  They need real work experience and, most importantly, a good recommendation.  They also need to show future prospective employers that they are serious about their careers.  Having internships on a resume, as opposed to just having a good time during the summer, can differentiate graduates from their peers.  Employers take internships seriously.  They do not take college students who fool around during the summer seriously!  You need that letter of recommendation.  Or, ultimately, you need the owner of the company where you did your internship to remember you and, maybe, when you have graduated, offer you a job.  A good recommendation or a job offer are the outcomes that make an internship a positive experience.

I recommend reading a recent article by Matt Brownell from Main Street.

Surprisingly, and encouragingly, Matt quotes a survey by the National Association of Colleges and Employers that found that 58% of interns were hired as full-time employees.  I think that pretty much ends any discussion about whether or not internships should be taken seriously.

Here are some rules to follow that should help assure a successful internship:

1. Act professionally – meaning dress the part, don’t talk on your cell phone, don’t be listening to your iPod or MP3 player.  Concentrate on your work.  Yes, I know that you are used to studying while listening to music.  But that’s not what the employer sees.  The employer sees someone who is listening to music and therefore not concentrating on her work.  And he also sees someone who is not going to be able to hear if a colleague calls her.  Impression is reality.  If the impression is that you are goofing off, you are goofing off!
2. When you have nothing to do, ask people what you can do to help them.  In other words, show that you are not lazy and that you are a team player.
3. Ask questions.  As Samantha Zupan of GlassDoor.com says, “You have to be insatiable and have to have curiosity about what you’re up to.”  However, don’t be rude.  Pick the proper time and place.  You want to be seen as someone who wants to learn, not someone who is a pest.
4. If you have a problem, don’t be confrontational.  Raise issues in the form of questions.  But don’t ask stupid questions.  “Why was I sent to get lunch?” is a stupid question.  The answer is, “You’re the intern and we have work to do!”  You should know that.
5. You will make a mistake.  You may even make a number of mistakes.  It’s called being human and being inexperienced.  And it’s expected.  Don’t cover it up.  When you do something wrong, own up to it.  Tell your supervisor about it.  Better he should hear it from you than from someone else.  If possible, have a proposal to fix the mistake.  Taking ownership of one’s mistakes shows maturity.  And it is a good life lesson.  The fact of the matter is, it’s rarely the crime that get’s you, it’s the cover-up.  It’s generally accepted that President Nixon would never have had to resign and President Clinton would never have been impeached had they just told the truth.  That brings up another life lesson: It’s better to learn from other people’s mistakes than to have to learn from your own!
6. Follow the advice of Robin Richards of Internships.com and, when given a task ask about benchmarks.  Say something like, “I want to know that I’m doing a good job and contributing.  What’s the goal I should shoot for?”  And if during the work you have questions, ask them.  It’s better to ask than to make assumptions that will lead to mistakes.  Supervisors sometimes forget that what is obvious to them may not be so obvious to an intern – or anyone else for that matter who is doing the work for the first time.
7. Attitude is everything.  You are not going to be judged solely on outcomes.  If Jane does the job better than Joe, but Jane is difficult to work with and Joe is a pleasure, as long as Joe has potential and is worth the investment, Joe will get the job.  It’s a lot easier to train someone nice to do a job better than to try and change a person’s character flaws.  And –
8. Don’t try to ingratiate yourself to the big boss.  “Sucking up,” so to speak, is always transparent.  Moreover, if you are seen by your supervisor to be speaking with her boss, she’ll think you are going behind her back.  Be pleasant.  Be a team play.  Go to lunch with the gang.  But impress your supervisor with the quality of your work and the depth of your character and she’ll start talking about you to her bosses.  As I told Matt, “Once your supervisors start speaking well of you, they’re going to talk about you to the big boss.  You go over to the president and start schmoozing, that’s not going to get you anywhere.”

Finally, have fun.  An internship should be enjoyable.  You may very well be making contacts that will serve you throughout your career.  It’s the start of building a professional network.  Networking is the best way to find work.  And the more people who can say, “I knew her when…,” the better.  So enjoy and keep in touch with your new colleagues.

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Be sure to join me for our next broadcast on June 14, at 11 AM, when I’ll be discussing how to conduct a successful job search.

And remember, the mission of my company is to promote the hiring of veterans.  The most tangible way to acknowledge the sacrifice of a veteran is through employment.  So please, hire a veteran.

Thank you for listening and enjoy the remainder of your day.