2012 777   The Seven Blind Spots in Business and How to Prevent Them
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2012 777 The Seven Blind Spots in Business and How to Prevent Them

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Recent news of financial misappropriation by employees, brand hijacking and even natural disasters have left many businesses in the lurch and even closed many. As a business owner or leader, time and ...

Recent news of financial misappropriation by employees, brand hijacking and even natural disasters have left many businesses in the lurch and even closed many. As a business owner or leader, time and knowledge is critical. The pace of each day leaves little time for knowing every facet of your business. As budgets tighten, you are pressed to do more with less. It is not uncommon to have a myriad of things fall through the cracks - blind spots! This year's 7-7-7 panel will explore the many blind spots that exist and offer some simple and practical tips for identifying and preventing them from doing further damage.

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  • Do you know who this man is?
  • How about now? He’s flanked by LeonardoDiCaprio and Steven Speilberg. His Name is Frank Abagnale. You may recall that Leonardo chronicled his life between the ages of 16 and 21 in the film “Catch Me if you Can.” In this film, Frank
  • We love checks
  • In 2009 wrote nearly 25 billion checks. While this number is declining, there’s still plenty of reasons why we don’t anticipate they will be going away soon…….
  • So with all these checks in the banking system, folks like Frank Abagnale have figured out how to fradulently produce or alter them for profit. The 2012 AFP survey revealed that 85% of businesses experienced attempted or actual check fraud in 2011. That is nearly every single one….if you haven’t experienced fraud, the statistics indacted that you will.
  • Even scarier, of those business that experienced actual fraud, the average loss was over $19,000. Let’s just stop for a minute and think aobut what that would mean to your business. This is a real loss, after all the dust has settled. So, the fraud amount may have been more and this was the “residual” loss after the bank helped you untangle the web which could have taken years and potential litagation.
  • So, who is committing check fraud? 85% of business report that is committed by someone outside the organization by stealing checks and creating bogus ones, or by altering the payee or amount. What is important also about this slide is that what you don’t have to be afraid of….look at account takeover or compromised iphone. Very small percentage.
  • Checks are going thru the sorters so fast...the banks have figured out what the combustion speed to catch a check on fire then processes them just a bit slower.Check 21 brought us the ability to pass checks as images or convert to electronic transactions like when you go Walmart or Costco.Accelerated availability – very competitive, everybody wants immediate use of their money once depositedGood quality printers, scanners, photo shop and available check stock at staples. Old days had to use chemicals, isotone, brake fluides, etc. to wash the check. Now just scan off the MICR line with the routing & transit number and account number, buy some stock at Staples and start creating checks. Or better yet, order some checks on-line by providing that information.
  • Who is the boogey man? We worry about lots of very complex stuff, like hackers and spyware, trojan horses and brower-in-the middle. We are worried about on-line banking and mobile apps. The data is overwhelming that we can control our likelihood of fraud by taking a few simple precautions….
  • Who is the boogey man? We worry about lots of stuff…but let’s keep it simple.

2012 777   The Seven Blind Spots in Business and How to Prevent Them 2012 777 The Seven Blind Spots in Business and How to Prevent Them Presentation Transcript

  • 7 Experts – 7 Tips – 7 MinutesThe Seven Blind Spots of BusinessMay 23, 2012 1
  • Ground Rules1. Each EXPERT will have SEVEN MINUTES to share theirTIP.2. A one-minute warning will sound.3. Once the signal sounds, no more TIPS!4. Please hold all questions until the end.5. There will be approximately 30 minutes for questionsand answers after all have shared.6. Questions should be directed to the moderator.7. Please keep track of TIPS on the back of your info sheet. 2
  • Today’s moderator Veronica Williams President 3
  • Jill MuhrDirector of Operations 4
  • Hiring is a Big Deal• Lots of: time, money, effort• Turnover costs:• Minimum wage employee 1/3 to ½ salary ($5,600-$8,500)• $50,000 employee 1 – 2X salary 5
  • After All this Effort:• Sink or swim philosophy• We don’t have time to coddle employees.• No one gave me extra help when I was new.• We don’t have a training budget; they’ll just figure it out. 6
  • Some Employee Statistics• According to research by the Aberdeen Group, 86% of new hires make their decision to leave or stay within the first 6 months; and• 89% of new hires say they do not have the optimum level of knowledge and tools necessary to do their job.• According to research conducted by Society for Human Resources Management, 79% of those who quit their jobs cite lack of appreciation as the main reason. 7
  • Onboarding: deliberate, focused effortsover the first 6 months to a year to helpnew employees acclimate. • Feel comfortable sooner • Feel competent and become more productive • Become an engaged team member • Happier customers • Reduced turnover 8
  • First Impressions Count • Send a new employee packet before the start date; practical information: dress code, parking, lunch protocol, job description, sense of the culture, etc.) • Clean work space • Make sure supervisor is in first day • Message: “We’re so glad you’re here!” • Tour, introductions, lunch • Spend time with top executive • Add to all communication lists • Be creative! (freebies, note from top executive) 9
  • Tools of the Trade • Assign a mentor or buddy • Provide all the materials and equipment needed • Provide information or where to find it • Provide role modeling • Check in periodically to see how they’re doing; what else they need-- weekly, monthly 10
  • C-o-n-n-e-c-t-o-t-h-e-o-d-o-t-s • What is this job and its purpose? • What does excellence look like? • How does this position contribute to the well-being of our customers? • Set up informational meetings with managers in other departments • Communicate goals, mission and core values 11
  • Employee Recognition and Motivation • Recognize early and often! • Give honest feedback and coaching • Determine first year milestones • Recognize and celebrate accomplishments • Get to know the whole person • Learn what’s important to this employee 12
  • What’s good for new staff is good for all • Don’t have dumb policies • Nip bad behavior in the bud • Encourage and value employee ideas. Listen! • Engender trust: keep your word, communicate often (even to say “I don’t know yet,”) never publicly criticize, be consistent in actions, values, practices. • Accentuate the positive! 13
  • Jon Jamieson President 14
  • Risk Management• Once risks have been identified and assessed, all techniques to manage the risk fall into one or more of these four major categories: • Avoidance: eliminate- withdraw from • Reduction: optimize – mitigate-disperse and redundancy • Sharing : transfer risk – outsource or insure • Retention: accept and budget 15
  • Break it down to the most obviousthreats to your operation:• Employees not able to come to work and the fall out of whatever has happened to them.• Power/communication interruptions.• What will produce these outcomes?:• Fire.• Flood.• Blizzard/Ice storm.• Theft, vandalism, PHISH reunion. 16
  • Amy Mailloux, CTP Vice PresidentSenior Cash Management Advisor 27
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  • Agenda•Scope of check fraud?•Mitigate the risk? 30
  • Nearly 60% of allbusiness transactionsare made by check! 31
  • Industry Statistics 2006 2009 CAGR* Total (billions) 95.2 108.9 4.60% Checks 30.5 24.4 -7.2% Debit Card 25.0 37.9 14.8% Credit Card 21.7 21.6 -.052% ACH 14.6 19.1 9.3%2010 Federal Reserve Payments Study 32
  • Why checks?•Float•Fraud Prevention Services•Reconcilement•Remittance 33
  • Prevalence of Fraud by Payment MethodType of payment % of organizations subject to attempted or actual fraud in 2011Checks 85%ACH Debits 23%Purchasing Cards 20%ACH Credits 5%Wire Transfer 5%Payroll & Benefit cards 5%Source: 2012 AFP Fraud and Control Survey 34
  • 2012 AFP Fraud and ControlSurvey shows that….. Average Fraud is loss up 25% $19,200 35
  • Who is committing the crime?Kind of party % of Organizations subject to attempted or actual fraud in 2011Outside individual (ie. checks forged, stolen) 85%Organized crime (ei. City specific crime spree) 16%Internal party 11%Third party or outsourcer (ie. Vendor, professional 7%services provider)Account takeover (ie. Hacked system, malicious 7%code – spyware, malware, man in the middle)Lost, stolen or compromised laptop or mobile *devise Source: 2012 AFP Fraud and Control Survey 36
  • But why?•Can’t look at every check•Check Conversion (check 21)•Accelerated availability•Low cost, high quality equipment 37
  • Regulations are changing…Isn’t the bank responsible when there is checkfraud?Changes to Uniform Commercial Code (UCC) • Significant rewrite of articles 3 and 4•Introduced “negligence” and “ordinary care” • potentially shifting responsibility for fraud•“Ordinary care” requires companies to follow “resonableCommercial standard” 38
  • What am I worrying about?Usually the WRONG things……. Who is the boogey man? 39
  • What should I be worrying about?•Keep checks & endorsement stamps in a locked location•DO NOT take photocopy of checks that come into youroffice•Banks will never send you an e-mail asking you forinformation 40
  • #1 Way to Prevent Check FraudCheck your accounton-line EVERY day. 41
  • Other Ways to Protect YourBusiness•Segregation of duties•Timely reconciliation of accounts•Insist on vacation time off•Protect check stock and endorsement stamps•Positive Pay•ACH Debit Blocks•Create separate accounts for tax payments, payroll, etc. 42
  • David RosePresident and Founder 43
  • On Sept 17th, 2011 Floyd Mayweathersucker-punched Victor Ortiz in Saturdaynights welter-weight title fight in Las Vegas. 44
  • Protect Yourself at all times! IT Basic & Pitfalls 45
  • Security:• Use and Manage a quality Firewall Appliance• Don’t assume that no one wants to access your data• Don’t store confidential data unless required. • Credit Card data • Social Security # • Birth Date• Use strong passwords – 8 case sensitive, alphanumeric• Change Passwords periodically. 90 days.• Case Study. 46
  • According to the US Archives and RecordsAdministration, 93% of the companies that losttheir entire data for 10 days or more filed forbankruptcy within one year of the disaster and50% of businesses that found themselveswithout data management for this same periodof time filed for bankruptcy immediately. 47
  • Business Continuity:• If your server was stolen today could you be operational tomorrow?• What would happen to your business?• What is your Business Continuity Strategy?• Do you test your backup on a regular basis? How do you know you can restore data?• Business Continuity is not the same as backup.• If you delegate this function, test it quarterly. 48
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  • With today’s technology and pricing, theonly reason to lose data or havesignificant downtime is poor decisions.Never Click Here!One Tip: Protect Yourself at all times! 51
  • Nicole Junas Ravlin Co-founder 52
  • https://www.facebook.com/policies/
  • Facebook cover images on brand pages are for visually branding your page –think striking image – NOT advertising
  • You must administer ALL contestson Facebook via a third-party app ON the Facebook platform.
  • Insights = Measurement Photo provided by facebook
  • Issa Sawabini Partner 61
  • Awareness vs Engagement
  • Control
  • You Are Losing Control Consumers Are Defining Brands
  • Shifting Mindset
  • Progression Awareness / Adoption / Loyalist / Advocate
  • New Marketing Philosophy
  • Shouting Isn’t Enough Consumer Engagement
  • Consumer Engagement Think Beyond Advertising Build A Relationship Creating Experiences Multiple Touchpoints
  • New Marketing Philosophy 7 minutes vs. 420 seconds
  • Two Way Dialog Engaging Sharing Asking Answering Empowering Reacting Rewarding
  • New Marketing Philosophy Chief Engagement Officer vs. CMO
  • 360 Integrated Approach Experiential Digital Social Advertising PR Retail Trade
  • Why Care? Recall Preference Purchase Intent Lifetime Value
  • Why Care? It’s What The Consumer Expects
  • Keys To Success 1// Evolve Your Internal Marketing Culture 2// Create Experiences 3// Consistent Personality 4// Listen & React 5// Empower
  • Stop Shouting & Start Engaging
  • Porter Knight Author 78
  • “I can do it [all] myself.” SHRED the illusion  Sleep  Hobbies  Relationships  Exercise  Diet 79
  • “I can do it [all] myself.” 80
  • Process DocumentationSpell it out, step-by-step 81
  • “I’m not going to do it [all] myself.”Benefits  Workforce flexibility = Better results > Efficiency 82
  • Success is measured by results, not “busy-ness.” 83
  • Questions?Please direct either towards a specificpanelist or in general for any to answer 84
  • THANK YOU FOR ATTENDING TODAYCopies of today’s presentation are availablefor sharing or download at:  www.twitter.com/FamBizSuccess  www.facebook.com/vermontfamilybusiness  www.slideshare.com/dvdv 85