Why Giving Away Pays Off The Most

The bidding war that erupted among two industry titans Nov. 14, 2016 over a donated Lincoln Continental sedan finally had to wind down to a draw and a good deal.

No industry auction event had ever spawned such high stakes one-upmanship before a rapt audience. And all this over a mid-$40,000s sedan that either one could have just bought on his own, checkbook in hand.

Dawson Rutter, the CEO-owner of Commonwealth Worldwide Chauffeured Transportation in Boston, and George Jacobs, CEO-owner of Windy City Limousine & Bus in Chicago, finally settled on giving $72,000 each for the car. The vehicle donor, Ford/Lincoln Limousine & Livery Vehicles, came up with a second car so each CEO would get one. When the tab was settled, the auction beneficiary, the NLA Harold Memorial Berkman Fund, netted a record $100,000, while $44,000 funded the second vehicle.

At one point during the dinner gala bidding, held during LCT-NLA Show East in Atlantic City, N.J., the sparring CEOs threw out $2,500 raises on each other as other bidders fell by the wayside.

“Dawson says to me, ‘How far do you want to go with this?’ It was so funny,” recalled Jacobs in a recent interview. Craig Hall, the marketing manager for Ford/Lincoln, got worried about the clash. “He feared Dawson and I would come to blows. He was terrified our friendship was disintegrating but he had no idea we were having the best time. It didn’t matter who got the car and what we paid. We’re both Type As and knew we were doing something special for charity. You give to charity and have the best possible fun.”

Rutter recalled how at one industry auction about 15 years ago a bidding session for an auction item stalled at $3,400. So Jacobs waved a $100 bill to keep interest going. Once bids resumed, the auctioneer returned the $100 bill to Jacobs, who didn’t want it back and instead bid it out on behalf of the auction. Rutter bought the $100 bill for $1,000.

Intangible ROI
So how did these two chauffeured transportation leaders, who trace their industry lineage to the founding era of the mid-1980s when LCT and the NLA started, get so carefree about donating to charity? Their charitable efforts provide some guidelines for operators who seek the most joyful investments of all.

Jacobs and Rutter say their philanthropy grants a satisfaction that goes beyond any bottom line ROI. Most of their donations consist of money and chauffeured transportation.

“I didn’t have a particular motive,” Jacobs says of his years of philanthropy, “other than just a desire to give back.”

Among the many groups Jacobs has donated to over the years: Make-A-Wish Foundation Illinois/Wisconsin/Indiana, Hydrocephalus Foundation, Front Row Foundation, Harold Berkman Memorial Fund, Step Up Women’s Network, YWCA, Ronald McDonald House, Greater Chicago Food Depository, Chicago Police Department, Food Bank, Hemisphere Travel, Rush University, University of Chicago Hospitals, Loyola University, Toys For Tots, The Salvation Army, Nature Conversancy, Autobahn Society, Covenant House, Alzheimer’s Foundation, National Arbor Day, the SPCA, Animal Rescue, scholarship funds, and hometown teams Chicago Bulls, Bears, White Sox, and Cubs. In August, Jacobs will donate to Camp Kids Are Kids, a group that helps children with cancer attend summer camp free of distractions.

“It makes you feel good when you are doing something good for others,” Jacobs says. “Everything I have I got from the limousine industry. I like to give it away; sometimes it’s dollars, transportation, or advice, or sometimes it’s speaking and giving incentives to people. The letters we get from Make-A-Wish kids who draw pictures and take photos when they ride in a limo gives me joy. To them it’s everything. In some cases, it’s their final request.”

As Commonwealth grew, Rutter started compiling a list of local charity recipients, such as Massachusetts General Hospital. At first, he donated small amounts of $1,000 or less. Since 2001, Rutter has been a grand benefactor of the Boston Symphony Orchestra, donating $1.5 million in transportation. He’s also been involved with the Cystic Fibrosis Foundation, Wounded Warriors, the Berkman Fund, and the Lupus Foundation of America, to name a few.

“One thing I really felt great about is donating to cystic fibrosis for 25 years,” Rutter said. “There have been major breakthroughs and they are on the verge of curing a significant part of the fibrosis population. When you’re giving money for many years and seeing no result, and then see progress, that is very gratifying.”

Sometimes charity donations can involve showing up at activities such as golf tournaments and fishing derbies. At one event, Rutter bought a few golf balls bid up to $5,000.

Forming A Habit
Jacobs and Rutter say once a company finds a financial rhythm for donations, it should become a budget item. The amount can still vary depending on revenue and economic conditions. “When we have a soft year, I drop the amount of donated service; in a good year it goes back up,” Rutter says.

During the last recession, Jacobs had to cut salaries at his company 10% and reduce charitable donations, but the company never laid anyone off and kept giving as it could. “You try to plan ahead and make it part of your expenses,” Jacobs says. “You do the most you can do; sometimes you don’t have the best year ever. You always let them know you’re there and you always do something.”

Finding The Right Causes
Like any business line item, organized donations require review and evaluation. Donors often learn by doing. To select charities, Jacobs and Rutter follow two approaches:

1. Check out recommendations from clients and employees. “I like to get input from other people and see the best use of funds to do the most good and cover the greatest number of people,” Jacobs says.

2. Rutter suggests using charity scorecard websites online that can tell you if a charity misuses funds or doesn’t run efficiently. “Some of them donate very little to the actual cause and most of the money is eaten up by administration and to support salaries,” he says.

While both companies give generously, they do not designate a position to handle donations. Rutter makes all decisions on charity. Jacobs and senior managers choose where to disburse funds. Jacobs advises not to allow sales staff to determine giveaways because “they think they can sell more if they give more.”

Personal Connections
Some causes are obvious good fits for the limousine industry, such as the NLA’s Harold Berkman Memorial Fund that sends money to a group of charities, and the Make-A-Wish Foundation that uses free limousine rides for children. Otherwise, operators should choose donors based on success and a high pass-through of funds to recipients, Rutter says.

Worthy causes also can reflect the interests and motives of the owner. “A lot of charities suit my own wishes and desires,” Rutter says. “With the Lupus foundation, it almost all goes to the patients. I donate to Alzheimer’s because by the time I get older, I’d like to see less risk for getting the condition. I’ve had animals my whole life, so I donate to the Massachusetts Society for the Prevention of Cruelty to Animals. I had a heart issue, heart arrhythmia, so I put in $50,000 for a heart charity. I’m with a group of men a friend put together and we all pledged $50,000 each to Brigham and Women’s Hospital’s cardiac center and cardiologist research.”

“The Berkman Fund has no fees or salaries and makes perfect sense because it’s a good central location,” adds Jacobs, who helped start the fund named after the late founder and owner of Los Angeles-based Music Express, Harold Berkman.

Qualifiers
As with any business-related venture, not all charitable efforts necessarily work for the best. “We do not donate to auctions anymore,” Rutter says. “The reason is when people buy [your service] at an auction, they think they own the car. It’s based on availability, but we had so many problems with people arguing and complaining to us about the free service. No more. People abused us on one-off donations. Now we’ll donate $200 instead of a car.”

For the same reason, Commonwealth does not offer rides for weddings or proms. “Too many complaining brides and we don’t have limos anymore,” Rutter says. “We don’t do proms or retail work, so we don’t get people throwing up in the back of limos. No more brides complaining dirt got on their dress from my car.”

Let Publicity Find You
While media exposure on charitable activities can yield new clients and positive word-of-mouth, the CEOs eschew those motives. “You don’t do it with that mind, but it’s a nice thing when that happens and it comes back to you,” Jacobs says.

“I don’t look for publicity,” Rutter says. “I used to go to charity golf events and donate items back to be auctioned off. It’s a lot of fun just giving away money to the right people.”

Inspiring Employees
Another benefit for a business with a charity program is it sets an example for employees. At Commonwealth, employees participate in a YMCA Christmas gift giveaway for children in underprivileged neighborhoods. “They are happy to be part of what we’re doing as a company,” Rutter says. Adds Jacobs: “What our company does is if a chauffeur or employee falls on hard times, has a death in the family, or a setback, employees raise funds. I match the employees by a set amount and it creates great camaraderie.

Tax Write Offs?
Rutter advises keeping accurate records for tax returns. The mention of taxes spurs a pet peeve for Jacobs: “Everything you do in business — payroll, rent, gas, etc. is an expense. It’s income minus expenses. Charitable expenses are no different. You give because you want to give, not because it’s a tax deduction. Every expense is a tax deduction in a way.”

What’s Next?
After the blowout auction in Atlantic City, Jacobs and Rutter plan to ratchet up their efforts.

“We have all this year to figure out how to top ourselves,” Rutter said. “We’re starting to have a germ of an idea: Team Dawson and Team George. Maybe we raise $10,000 from each of 10 people. . .” he says, thinking out loud.

Such an idea could yield another high-stakes stalemate.

But then, who cares if Rutter or Jacobs gives more? The benefits always ensure the most winners.

Keywords

charity   Commonwealth Worldwide Chauffeured Transportation   Craig Hall   Dawson Rutter   Ford   George Jacobs   industry charity   LCT-NLA Show East   Lincoln Limousine & Livery Vehicles   Lincoln-Continental   National Limousine Association   vehicle auctions   Windy City Limousine   

 

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Attendees Apply Winning Concepts To Their Companies (Pt. 2)

MIAMI BEACH, Fla. — If you want to know how operators successfully run their companies, you’ll find a showcase of best practices among Summit attendees. This year, LCT editors took some time out from the three-day event agenda to talk with operators one-on-one about how they manage staff and lead in an era of tech disruption.

Jeff Wright, owner, Pinnacle Car Services, Rogers, Ark.

Wright has 81 employees, including about 50 chauffeurs. He’s had to evolve staff from a small operation to one that does $4 million per year in revenue.

Empowering managers: “If it’s day one and you’re wearing every hat in the company, there isn’t anyone to empower, and there’s more micromanagement. Then you start hiring a few associates. The first person I think you want to get on board and empower to do things is either a bookkeeper or somebody who has the potential to be a CFO. It’s easy for an operator to manage everything else, but you need somebody else managing payroll and making sure all the car payments and finances are done correctly — payments being made on time, cash flow being correct. As you get up to $350,000, $400,000, $500,000 in sales revenue, you must have that bookkeeper/CFO in place.

The second position you can empower would be someone in operations who can take some of the items off your plate. It should be someone you can train, trust, and then ultimately empower to run all of operations. And then additional people from a support standpoint such as a human resources director who can handle everything from hiring to unemployment claims to training. Anything that falls under HR you should empower someone else to do for you full-time.”

Cory Zucker, EVP sales/marketing, VR Worldwide, E. Elmhurst, N.Y.

Growing responsibility: Cory Zucker describes his personal leadership style as stern but fair. “I try to look at the other person’s thought process and what they did that I don’t agree with. If there’s some merit to I say, ‘Okay, I see why you did it that way, but this is the way to do it.’” He then explains why in detail, so the person fully understands.

“If you just tell them they did it wrong, they shut off. You want people to be receptive. I feel explaining it in fine detail helps. If you’re going to do something, do it right. Don’t try to patch it temporarily like a Band-Aid…fix it so it stays that way long-term.”

Empowering his employees boils down to giving them as much responsibility as possible and not limiting their abilities. He wants them to feel they have a role in helping build the company and are not just another cog in the wheel. “The simplest thing you can do that many overlook is just acknowledging them and telling them they did a great job. Thank them for the extra effort they make to help you out.”

Nick Lopez, VP of operations, and Todd Roberts, president, JACO Limousine & Transportation, Louisville, Ky., Cincinnati, Ohio, and Knoxville, Tenn.

Communication commandos: Nick Lopez and Todd Roberts are rarely seen apart, and while their leadership styles may differ, their belief in the power of teamwork doesn’t. Lopez believes leadership is based on training and helping people understand what’s expected of them.

“Every day I work to hold people more accountable as they become more aware of the context of what we do. You can never be upset at somebody if they don’t know what to do, but when they’re trained and they know, they’re expected to do things a certain way,” he says.

A difficult obstacle the two have faced in business is running the company in three different markets, but they’ve been able to do it by being experts in communicating. “We’re so heavily involved, and since we’re always together, we’re able to meet demand and expectations because our line of communication is so good; we’re always able to get a hold of each other and solve things pretty quickly,” Lopez says.

The basics of what operators do is turn employees loose in $100,000 plus vehicles and leave important people in their care. Therefore, your staff is always empowered. It’s up to operators to put competent people in place and provide them with the proper training.

“We let them know they’re in charge of their trips so they have an owner’s mentality in everything they do. You have to instill that belief and thought process in them, which interests a lot of people when they are being hired because they’ve not had that kind of ability before,” Lopez says.

Nadeem Ajaib and Rabia Patel, Icona Global, London, U.K.

High-end humility: Serving the ultra-high-net-worth global VIPs, they must take more of an “OCD” approach to business: Check and recheck all details and anticipate all client needs.

Nadeem: “When you deal at the highest end, royalty and A-list celebrity status, you can have as many layers of trained managers as you like, but often they want to reach out to the owners and operations director at any time of the day or night. Sometimes it has a lot to do with security as well because often we’re not disclosing the names of the clients even to our chauffeurs and staff. We’re using pseudonyms at times because we can’t afford to leak out details of specific itineraries, as they’re often mobbed by paparazzi, so it’s very intense for ourselves.”

Rabia: “I find very wealthy clients will want personal attention. So even if they’re happy with a comped ride, they’ll want you to go a little bit extra and make sure the owner of the company calls them back so they feel valued. Any time of day or night, I will do that. . . I don’t mind humbling myself, going down on one knee to any client. At the end of the day, they’re paying for a service and I’ll do whatever it takes.”

Ajaib and Patel admire Richard Branson, the worldwide famous founder and CEO of the Virgin brand. They cite a story of Branson getting down on one knee to ask a former client to return to Virgin Airways.

Nadeem: “One thing about Richard Branson is he started his business with a phone call in a pub, one of those old red telephone boxes in London. He never had a telephone in his house, so he went to a public telephone box and set up a meeting with somebody he called. He dialed that number and the person answered. So he’s gone from very humble beginnings and a fairly impoverished background to being at where he is.”

Rabia: “I think he’s a brilliant person. He really looks after his employees, he spends a lot of time with them, gets to know them, and they will always stay with him.”

Michael Brinks, owner, American Luxury Limousines, New Orleans, La.

Cooperative competition: In a town known for conventions and group outings, Brinks sees competitors as an asset to leading in a market.

“When I look at the market, I’ve always been able to appreciate competition and see value in working with your competitors. If everybody works together and ends up getting better…then that leads to the success of everything. If you assume you have a pie of 100%, and if a given company has 20% of that pie, in order to increase to 22%, you have the choice of taking from someone else or working together to increase the pie. Because if the pie goes up to 110%, 20% of the market is like 22%. The bigger the market gets, the better it is for every company.”

John Paraoan, assistant VP/brand manager, West Suburban Limousine, Winfield, Ill.

Can-do attitudes: Paraoan uses the acronym TRIP to describe the foundations of his leadership style: Teamwork, Responsibility, Integrity, and Professionalism. “None of us can do it all by ourselves, so my leadership style is to be approachable to our team as well as our customers. There’s no question or issue too big or small they can’t come to us with.”

His company has implemented a feature called “Rate My Ride.” This enables customers to provide feedback at the end of a trip. “Our goal is to, within 24 hours or less, immediately respond in a professional manner. If they touch base with us, whether it’s through Yelp, Facebook, email, or even a phone call, we want to be there for them; I don’t think TNCs take their customers as seriously as we do.”

Paraoan wants his company to foster a “never say no” attitude among employees. “You want them to think in terms of ‘let’s find out how we can do it. Maybe it’s a no now, but it might be yes in the future.’ That starts with hiring the right people.”

To find the right person, you have to hire slow and fire fast. “Recognize the positive and/or negative influences in who you are looking to hire. You may have to go through a coaching and probationary period, but you need to make a decision quick before that type of negativity or inactivity creates the wrong type of atmosphere.”

The biggest obstacle Paraoan has seen is changing the company culture to handle today’s sales pressure. There wasn’t as much competition in the past, so employees didn’t have to work as hard. To prevent a laissez-faire attitude toward business, he ensures staff feels comfortable discussing issues with one another and acting as a team to maintain prestige. They must realize everyone is working toward one goal: Creating a successful company.

Michael Fogarty, CEO, Tristar Worldwide Chauffeur Services/Americas, Boston

Info-driven delegating: As an executive at one of the world’s largest ground transportation companies and former president of the Taxi Limousine & Paratransit Association, Fogarty maintains consistent quality through a detailed reporting system that allows him to delegate and focus on priorities.

 “I’m a metrics driven leader. Fortunately, I have a really strong team of tenured managers, many of whom have worked for me for more than 10 years. This management structure enables me to focus my time and business development in any problem areas that arise. We have a tremendous reporting system that enables our team to keep an eye on the health of the business, quickly diagnose business issues, and work collaboratively to resolve them. These metrics also demonstrate successful sales and marketing efforts, so we can quickly double down on what’s working. I love frontline employees who step up and resolve customer issues on the first call. We will always stand behind this person’s efforts to satisfy our customers. I also mentioned we are a metrics driven organization. I tend to leave my team alone to do their jobs. We all understand what the key metrics we need to achieve are, and we share these with all involved to deliver on these goals. If we need to support any area of the business, I work with my managers to assure the resources are deployed.”

Jeff and Laura Canady, co-owners of CLT Express Livery and S.C. Express Chauffeured Transportation, Charlotte, N.C., and Aiken, S.C.

Hands on & hands off: The Canadys practice a leadership balanced by knowing when to pay close attention and stay on top of matters and when to empower employees to solve problems.

Jeff: “I am always hands on. I follow up all emails and with dispatchers, communicate with our mechanics every morning, our South Carolina office, and out motorcoach office. We educate and re-educate staff. I’m there and they can always get in touch with me when they have to.”

The co-owners make sure clients or prospective ones are only asked questions once, and not subjected to a phone tree or multiple transfers requiring them to re-explain the reasons they called.

Laura: You want to have that personal touch…We empower all our team to make decisions on reservations. We give the staff the tools needed to handle conflicts and resolve them. They can do a 10% discount if they are negotiating rates. It gives them ownership and they know they are part of the business.”

Related: Attendees Apply Winning Concepts To Their Companies (Pt. 1)

Keywords

business management   Cory Zucker   employee management   Jeff Canady   Laura Canady   LCT Events   LCT Leadership Summit   Michael Fogarty   Nick Lopez   staff management   Todd Roberts   

 

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