Each holiday season, we select what we consider to be the year’s most influential business book to share with our clients and partners. This year, we chose Free – The Future of a Radical Price by Chris Anderson as our firm’s 2009 Book of The Year.
 
We have simple criteria when picking our book of the year: 1) it must be published in the given calendar year, and 2) it needs to be both meaningful and enjoyable to read. While the selection formula is straight forward, the process of selecting our book is never easy. There are always varied opinions and good options from which to choose. We have chosen Free because the main idea of the book resonated with our firm’s culture and philosophy. It is the intriguing idea that you can make more money by giving services and products away for free.
 
As a professional service provider, we constantly give away our intellectual property for free. Gone are the days when you can simply say you’re an expert and expect to receive someone’s business. You must now fully demonstrate your value proposition and do it in a way that is both meaningful and economically neutral. The fascinating paradox explored in this book is that the more you give away, the more you receive in return. And the game-changing part of this “free,” is that it is not a twentieth-century marketing gimmick with strings attached. Twenty-first-century “free” really is free.
 
It’s a time-honored holiday tradition that giving is more important than receiving. Can this same principle of giving things away be applied to the business world? Can an economic model that is built around the concept of “free” be sustainable, not to mention a way to build even greater profits for your business? The reason this book struck such a chord with us is that we see this principle proven all the time in our business dealings. Serving others and giving value away does increase returns and there is a multiplier effect.
 
If you get a chance, we’d appreciate your comments on the titles we’ve selected as our books of the year.

2005 The World Is Flat
2006 Small Giants – Companies That Choose to Be Great Instead of Big
2007 Wikinomics – How Mass Collaboration Changes Everything
2008 Outliers – The Story of Success
2009 Free – The Future of A Radical Price

Happy Holidays and Best Wishes in the New Year!
 
Diversified Insurance Group

I help organize the Summit Director and Officer Training Conference that is held every year in Deer Vally, Utah. While doing a bit of research on topics for this year’s conference I found a well-written paper by Steve Wagner and Maureen Errity on the Risk Intelligent Board: Viewing the World through Risk-Colored Glasses. It’s a topic of keen relevance in today’s business world.

Analyze the demographics of most corporate boards and you’ll find a heterogeneous collection of exceptional talent. The skills members bring to the table reflect a wealth of experience, knowledge and wisdom. Yet despite this extraordinary diversity of viewpoints, it is important that every member of the board don a pair of risk-colored glasses.

These days, you can’t even sit on a public company board without giving at least cursory attention to risk. The New York Stock Exchange requires the audit committee of all listed companies to annually discuss the company’s financial risk exposures and understand how management addresses such risks. Several shareholder ratings services and institutional investors now include risk management in their corporate evaluations. And, of course, the potential for out-of-pocket settlements paid by board members or costly shareholder suits against the company have driven home the point in boardrooms across the land — risk has become personal.

To meet their fiduciary responsibilities, directors must share a common vision of risk and adopt a framework to support their risk oversight activities.

Boards are generally not negligent when it comes to risk. Quite the contrary; most board members make careful deliberations and bring to bear their best judgment. They summon the chief risk, strategy and audit executives, along with the external auditor and others who manage exposures to risk and related policies, to appear before the board. They listen to presentations, ask tough questions, and review reports.

Boards are under pressure — regulatory, legal, fiduciary, stakeholder — to oversee the risk management activities of the company. But many board members are unsure how to approach their risk-related responsibilities. They are uncertain about roles and delineation of responsibility. They wonder where to start and how to bring all the disparate pieces together.

Merely putting risk on the agenda for discussion starts a process that will spur creative thinking and generate illuminating discourse. Whether the initial conversation takes place at a committee level, at the full board level, or both is not as important as getting the discussion started. The topic of risk should be placed on the full board meeting agenda on a regular basis, perhaps several times per year.

By broaching the risk discussion at the board level, one pervasive problem is immediately confronted — the tendency for risk management activities to take place in “silos.” Most companies spread risk management across the organization. Treasury manages credit risk; IT oversees technology and information risk; facilities handles real property risk. This level of specialization is essential to effective risk management. But problems can arise if these risk specialists remain in isolation, never venturing from their bunkers. Among the potential concerns: the “big picture” remains out of focus; disparities arise in the terminology used to talk about risk and the metrics used to measure it; and risks in combination and cascading risk scenarios don’t enter into the discussion.

To combat these problems, the board can act as a catalyst to bridge the silos. By bringing various risk managers into the same room to present their perspectives and strategies on risk, the board is creating an environment that will jump-start a collaborative and synchronized approach to risk management.

On Friday night, the wait was over for the finalists of the 2009 Ernst & Young Entrepreneur of the Year contest for Utah and southern Idaho. Awards were given in a total of eight categories. Over 1,200 people attended the black-tie event at the Salt Palace Convention Center.

Utah Lt. Gov. Gary Herbert, the keynote speaker, noted that small businesses fuel the state’s economy, with about 57,000 “small employers” representing 97 percent of the state’s employers.

Utah’s economy favors free markets, which is why a handful of national business publications have rated Utah’s economy as No. 1.

“I fear, at least in some ways, (the importance of free markets is) being forgotten in Washington, just a little bit,” Herbert said as the audience applauded in agreement. “Capitalism is becoming a dirty word. I’m here to tell you that’s not going to happen in Utah.”

New this year in the awards competition was a social-entrepreneur category, described as being for well-managed organizations that solve problems in the community with strong leadership. Matt Minkevitch of The Road Home received the award.

Minkevitch said The Road Home’s clientele are people who live in the margins and have one setback that ruins them financially. They end up homeless.

“One of the significant transitions that has taken place over the last eight years is we’ve focused on the other end of homelessness,” he said, “to help people move into housing.”

The Utah award recipients will next compete against other companies for national awards. Diversified Insruance Group was one of the sponsors of the awards.

Award recipients in the Utah competition were:

Technology: Matthew Heaton — BlueHost

Retail and Consumer Products: Jonathan Freedman, William Freedman and Charles Freedman ?— DownEast Outfitters

Emerging: David Flynn and Rick White — Fusion-io

Contract services: Douglas Sayer — Premier Technology Inc.

E-Commerce: Ryan DeLuca — Bodybuilding.com LLC

Social Entrepreneur: Matt Minkevitch — The Road Home

Services: Andrea Anaya — Career Step

Distribution and Manufacturing: Dallin Larsen — MonaVie

Diversified extends congratulations to all of the finalists and award recipients.

Each year the Benefits Group at Diversified puts on a seminar for our clients. They always try to select a topic and speaker that brings useful and pertinent information for Human Resource professionals and other company leaders. This year the topic is “Demonstrating Principal Centered Leadership in Troubled Times” and will be presented by R. Craig Pace. The seminar will be held on May 26th at St. Mark’s Hospital. Not only do we have an excellent speaker scheduled but the seminar has been approved for 2.5 hours of PHR/SPHR/GPHR credit.

Please RSVP by email to soliver@diversifiedinsurance.com as soon as possible. We look forward to seeing you on May 26th.

To view the pdf with additional details, please click here.