Business Tip – March 2016

SponsoredbyMAPEIDo your people know the play? Practice the daily huddle to align your team

wally_adamchikBy Wally Adamchik, FireStarter Speaking and Consulting

It works for (insert your favorite quarterback here) and it can work for you, too. It is, perhaps, one of the most effective leadership and management tools at your disposal, and takes just a few minutes to execute. But it is rarely used. You should start doing it tomorrow. If you are already doing it, you should work to make it better. What is it? A daily huddle.

You need to tell your people things they need to know to do their job. They want to hear those things. Contrary to popular belief, there are employees at all levels and all ages who want to do a good job. Many of those who are disengaged feel that way because the boss is not communicating with them.

The daily huddle is a fine solution. And it can work in any industry. The concept is simple. Before the workday starts, you gather your team to deliver key information to align them for the day. Are there any special events/visitors/incentives? How about a key training or safety tip? Perhaps you will talk about production or sales targets for the day. All this information gives them direction and helps them to be more productive. You also might toss in some feedback about how things went yesterday. (While this is not a time to single out poor performers, you may highlight some wins from the day before.)

Make sure to ask for input and questions. If the huddle is a new concept for your team, people will be reluctant to share anything initially. But, over time they will see you are serious about the huddle and will work with you to make it better. I have seen, and participated in, huddles that were also a stretch-and-flex period to increase safety awareness and to warm up cool muscles before starting physical labor. It sends a strong message that the company is serious about safety when the boss joins in the huddle and the flex when he is visiting. I have also seen bosses blow off that part – and that sends a message, too! Communication is one of the keys to success in just about any endeavor. I have never conducted an employee satisfaction survey for a client in which the results indicated there was too much communication. In fact, over 85% of my surveys have indicated that communication from management is in need of drastic improvement. The huddle is a quick, easy and inexpensive way to fix a major problem.

Why it works

Let’s look at why it works. First, it is personal. No texting or email is involved. This is direct, eye-to-eye contact – still the most compelling form of communication we have. When we look someone in the eye we know we have their attention and we can see them understand our message. Also, engaging in eye contact shows people they are important, that you want to communicate with them. It conveys the message that you trust them enough to share this information with them. When you ask for their input, you are literally saying, “I want to hear what you have to say. I am interested in you and the value you contribute to our team.”

It comes down to trust and respect. And it educates and aligns people on key business issues. They feel like they are part of the team and they operate from a “we,” not a “they,” perspective. When I interview an employee and he speaks of his firm in terms of “they do… they say,” it makes me cringe. It is as if the employee does not actually consider himself part of the company, but rather some visitor who has little stake and even less affiliation or sense of camaraderie. Keeping people informed is your job. Setting direction is one of the primary roles of a leader. In the case of the huddle, the direction is short-term. We are not communicating the strategic plan of the company; we‘re merely stating the goals of the day.

What‘s the payoff? You get employees who are more motivated and educated to do the job. Does it always work? No, not every single employee may respond to the huddle – but most will. I can guarantee though that starting the day without a huddle insures a workforce that is uninformed and de-motivated. And not even the worst quarterback in the league would attempt that.

NTCA has partnered with Wally Adamchik to bring his interactive virtual training system at to NTCA members. Contact him at [email protected] to learn more about how the NTCA/FireStarterVT partnership can save you training dollars while improving your leaders at all levels.

Business Tip – February 2016


The power of a single thought


By Steve Rausch

It’s Saturday morning and I’m wondering: Can a single thought begin a snowball of momentum for yourself, your family, and co-workers? And is the timing of that thought key?

I’ll explain in a minute but first let me tell you two stories of senior marketing professionals who were given news about a recent re-organization. Neither was surprised that there was a re-org at this company, or that their role could be impacted.

The first was told her role would be eliminated. After the shock wore off, she decided to leave with the same integrity and positive outlook that she had demonstrated during her 30 years with the organization. She thanked the CMO and others who had been part of her journey. She committed to transitioning her work at the highest level of excellence and for the highest good of the company. She tucked in a trip to Hawaii for good health and continued to be available even after her official time had ended.

So what happened? She was immediately sought after to sit on boards, and when her former company threw an incredible party to celebrate her and her life-long contributions, she realized her relationships and reputation remained as stellar as when she was an employee. This was  a great asset for her next career phase, and held relief and enthusiasm for the team that stayed behind. They will not hesitate to reach out to her in the future for business opportunities because of how she exited. Her enthusiasm must have sent a tsunami of positive outlook to the team, much like a departing employee who is disgruntled sends a flood of negative outlook to those remaining.

Those of us living in Georgia just saw another example of this power when Coach Mark Richt of the University of Georgia Football team was released recently. Coach handled the transition in a positive and powerful way, praising the university, the football program, and even expressing understanding of the reasoning behind the decision yet disagreeing (obviously) with that decision. Coach Richt was picked up within a few days by another major university – University of Miami – and will, I’m certain, continue to provide young men with a positive and inspirational role model.

The second story also comes from that same corporate re-organization we discussed earlier. I had previously spoken to another marketing manager in another country of this company and he had shared his concern of the re-org. He had deep expertise in his field but he said he had trained up some of the finest professionals so if he was de-employed the business would be in excellent shape. I spoke with him six weeks later and the joy in his voice was so intense I nearly choked up. He wasn’t de-employed. He was given more responsibility and easier international travel. He said he was so happy that on Monday morning he woke up at 4 a.m. to get to the office by 5 a.m. because he was so excited to start his day! And this is a 30-year veteran with the company! No doubt, that enthusiasm was a contagious influence!

I was floored when I realized that I had uncovered what seemed to be a critical business principle – that smart people actually set up the reality of outcomes for themselves even if they don’t choose the situations in which they find themselves. And this wasn’t being a Pollyanna. I’m just an outside observer – a vendor – watching this unfold. No one was aware of or trying to impress me.

So I started to wonder, is there a critical moment in time when these people chose to be positive, optimistic and take the high road?  We all know plenty of situations, work and personal, of people who receive “negative” news and then let that news destroy their next phase in life, almost to a self-fulfilling prophecy.

I am certainly not a psychologist, but I came across a recent article that might explain the “how to” behind the positive response to build amazing life momentum. The article notes that there it is scientifically proven that the thoughts one holds in mind before going to sleep profoundly impacts one’s attitude and energy the next day. Positive, grateful thoughts prepare an individual to have a positive, energetic, day full of gratitude; worry thoughts wind up producing more worry upon awakening.

Now the people in the reorganizations mentioned above probably established their outlook early or over their entire life. But for those of us who worry or wonder whether or not to take the high road, perhaps this little exercise of controlling the single last thought before we go to sleep at night might tap us into the momentum that positive outlook brings! I certainly don’t see any downside of focusing on this and it seems to me the “upside” could be incredible. Let’s all try this starting today.

Steve Rausch has been involved in the tile and flooring business for over 30 years and is currently an industry consultant specializing in sales, marketing, and interpreting technical issues in understandable terms. You can contact Steve at [email protected] or 404-281-2218.

Business Tip – January 2016


Harpooning the whale, part I: a profit improvement report for distributors


By Dr. Albert D. Bates, Profit Planning Group

Each year, Dr. Albert D. Bates, the president of the Profit Planning Group, prepares a Profit Improvement Report for CTDA. 

What follows is part one of this report, which he has titled “Harpooning the Whale.” In this section, Bates examines the Economics of Customers. In part two, which will appear in the April TileLetter, Bates will discuss Changing the Profit Relationship. 

One of the most widely-discussed topics in distribution today is the fact that a lot of customers and a lot of items lose money for the company. That is, the cost of servicing a large component of the customer set or handling many of the items is larger than the gross margin dollars generated by those customers or items.

While the economics of the situation are fairly straightforward, the implications for action are not. One widely suggested option is to eliminate items and customers that don’t cover their costs. It is a quick and easy solution.

Another option is to work on enhancing margins or lowering costs to overcome the profit deficit. This approach is both time-consuming and difficult.

Because the observations regarding customer profitability are largely mirrored by item profitability, this report will focus exclusively on the profit realities of customers for CTDA members. The report will examine customer profitability from two perspectives:

  • The Economics of Customers – An analysis of how customers break out into widely varying profitability groupings.
  • Changing the Profit Relationship – A discussion of how profitability can be enhanced by working with customers.

The Economics of Customers

Within every line of trade in distribution, including CTDA, there are wide variations in customer purchasing patterns. Some customers buy a lot of merchandise, others buy very little. Some customers are aggressive price negotiators while others are more service oriented. Finally, some customers are the proverbial “squeaky wheel” while others are easier to work with.

These factors come together to produce widely-varying levels of profitability across the distributor’s customer set. At one extreme, customers who purchase a lot of products, are service oriented (rather than price oriented) and don’t “have issues” tend to be highly profitable for the distributor. At the other extreme, some customers who are high maintenance actually result in a loss for the distributor.

Unfortunately, there are only a few of the highly-profitable customers and a fairly large number of the unprofitable ones. This relationship between customers and the profitability they produce for the distributor is often referred to as the “whale curve.” It is shown graphically in Exhibit 1.

Customers are ranked from most profitable to least profitable along the horizontal axis. The percent of total profit generated is presented on the vertical axis. The graph looks something like a whale, albeit a rather anemic one.

As can be seen, the most profitable customers cause total firm profit to rise quickly. Somewhere along the way the slope changes as additional customers generate profit at a lower rate. Finally, the curve starts back down as some customers cause the firm to lose money. Eventually the curve ends up at the 100% of total profit level.

BT-graphThe typical CTDA member generates $500,000 in profit. For that firm, the customers fall into four categories based upon the profit they generate for the distributor. The A customers are the most profitable and the D customers are the least profitable – the money losers.

The relationship for customers and profit tends to be a little more dramatic when put into tabular form:


The fact that the typical firm loses $225,000 on slightly more than one-third of their customers is not an inconsequential issue. Potentially, dollar profit could be increased by 45% through concerted effort.

Dr. Albert D. Bates is founder and president of Profit Planning Group. His recent book, Breaking Down the Profit Barriers in Distribution is the basis for this report. It is a book every manager and key operating employee should read. It is available in trade-paper format from Amazon and Barnes & Noble.

©2015 Profit Planning Group. CTDA has unlimited duplication rights for this manuscript. Further, members may duplicate this report for their internal use in any way desired. Duplication by any other organization in any manner is strictly prohibited.


CTDA is always looking for ways to improve the benefits of membership. CTDA offers many benefits to members including:

• Education via a variety of programs that focus on training new employees, educating customers on tile shade variation, webinars on industry issues and more.

• Connecting with the industry through annual events like Total Solutions Plus and Coverings, and networking op-portunities through CTDA committee in-volvement. 

• National exposure for products and services for distributors, manufacturers and allied members.

• Controlling costs through discounts on a wide range of services from shipping to collection services, telephone charges, auto rentals and more.

• Staying informed on association and industry news and issues through a variety of communication vehicles and social media outreach.

• Managing opportunity through “snapshots” of the association and industry gleaned through regular surveys of vital business activities. 

For more information, contact CTDA at [email protected] or by calling 630-545-9415.

Business Tip – September 2015

SponsoredbyMAPEIAGCA report: 2015 construction up in 37 states from July 2014

This month’s Business Tip checks in with the Associated General Contractors of America (AGCA) for a snapshot of what’s percolating in terms of construction activity across the country. Here’s the current report. – Lesley Goddin

Construction employment expanded in 37 states and the District of Columbia between July 2014 and July 2015, while only 28 states and D.C. added jobs between June and July, according to a recent analysis of Labor Department data by the Associated General Contractors of America (AGCA). Association officials noted that the construction industry appears caught between divergent economic trends that help employment in some areas and hurt it in others.

“Construction continues to grow overall but fewer states are participating in the expansion than was true a year ago,” said Ken Simonson, the association’s chief economist. “The uneven growth reflects the cross-cutting trends in the overall economy, as tight government budgets, plunging commodity prices and weak overseas demand lead to project cancellations in some states even while activity accelerates elsewhere.”

California added more new construction jobs (48,900 jobs, 7.3%) between July 2014 and July 2015 than any other state. Other states adding a high number of new construction jobs for the past 12 months include Florida (26,500 jobs, 6.6%), Washington (15,300 jobs, 9.6%), Texas (14,400 jobs, 2.2%) and Michigan (12,400 jobs, 8.7%). Arkansas (14.9%, 6,800 jobs) added the highest percentage of new construction jobs during the past year, followed by Idaho (13.7%, 4,900 jobs), Nevada (10.7%, 6,800 jobs), Washington and Michigan.

Thirteen states shed construction jobs during the past 12 months, up from only three with construction job decreases a year earlier. West Virginia (-16.0%, -5,400 jobs) lost the highest percentage of construction jobs. Other states that lost a high percentage of jobs for the year include Rhode Island (-7.9%, -1,300 jobs), Ohio (-7.0%, -13,800 jobs) and Mississippi (-4.3%, -2,100 jobs). The largest job losses occurred in Ohio, West Virginia, Indiana (-5,100 jobs, -4.1%) and Mississippi. Construction employment was flat in Vermont.

Florida (4,800 jobs, 1.1%) added the most construction jobs between June and July. Other states adding a high number of construction jobs include Oklahoma (3,000 jobs, 3.9%), California (3,000 jobs, 0.4%) and Arizona (2,400 jobs, 1.9%). New Mexico (4.9%, 2,000 jobs) added the highest percentage of construction jobs during the past month, followed by Oklahoma, Arkansas (3.6%, 1,800 jobs) and Oregon (2.9%, 2,300 jobs).

Twenty-one states lost construction jobs during the past month while construction employment was unchanged in Virginia. New York (-4,500 jobs, -1.3%) shed more construction jobs than any other state, followed by Indiana (-4,400 jobs, -3.6%), Ohio (-2,300 jobs, -1.2%) and Connecticut (-2,200 jobs, -3.6%). Indiana and Connecticut lost the highest percentage of construction jobs between June and July, followed by West Virginia (-2.4%, -700 jobs) and Minnesota (-1.8%, -2,000 jobs).

Association officials said that contractors in parts of the country where construction demand is growing report worsening shortages of qualified workers to fill available positions. They said that as demand for construction continues to grow, those shortages will only get more severe.  That is why they urged federal, state and local officials to act on the measures outlined in the association’s Workforce Development Plan.

“Education officials need to include high-paying jobs in construction among the career choices they encourage and help prepare students to pursue,” said Stephen E. Sandherr, the association’s chief executive officer.



Business Tip – August 2015 “Green Issue”


Creating a sustainable culture for your business


By Wally Adamchik, president FireStarter Speaking and Consulting



A few years ago I was working with a large client to help plan their annual meeting. There would be over 1,000 attendees with mostly internal speakers who had worked to create the content.

One of the groups was assigned the topic of sustainability. After several months of planning and development, the steering committee met for a dry run. We were all caught off guard when the sustainability group presented sustainability in the context of people. They argued that if the company didn’t work hard to create a great culture that attracted and retained the best people it would not endure. It was hard to disagree. And here we are looking at sustainability in this issue so let’s take a closer look at sustainability from a people perspective.

In construction, sustainability starts with design. That’s no different with the people side of your business. Your firm has a distinct culture. Does that culture stem from a dedicated and deliberate effort or is it the result of inattention and lack of effort? Either option is a choice. Best-in-class firms make the choice to invest in their culture and make it a place people want to work.

With culture established, we now look to people. To create a sustainable culture where people stay for the long term you must be very intentional and disciplined in selection. The U.S. Marines are known for creating Marines from civilians. The better-kept secret is their ability in the selection process – during recruiting – to select people who actually want to be Marines. It is far easier to make a Marine from someone who wants to be a Marine than from someone who doesn’t want to be one.

We know construction is not a glamour industry, but that doesn’t mean we have to hire anyone who can fog a mirror. It’s not easy to find top-tier people, but it’s worth the effort. Maybe you find people in the second tier and work to make them top tier. Do you know the characteristics of the people who succeed in your company? Identify those traits and then find candidates who have them. What about referrals? Internal referrals from current employees are the best way to find qualified employees. Do you have a real, robust, and not cheap referral program?

Creating top-tier talent requires training and leadership. You cannot expect people to perform if they have not been trained correctly. In fact, inadequate training contributes to high turnover as people leave because they don’t feel like they can do the job correctly. All the training in the world though will not create great employees. It is a foundation to build on, but leadership is required to give people a reason to lean in and engage with their heart, as well as with their hands.

Another facet of sustainability is disposal. I hate to say it but sometimes we do need to get people off our team. Do you do this with dignity and respect or with an email on Friday afternoon? I know what you think you do but we have all gotten this wrong at least once in our life. The important part here is not that a former employee feels treated fairly and respectfully after being dismissed. The important part is that current employees see how you treat people and will not have the “they are going to wrong me like that someday too” feeling. There are many examples of firms that have downsized and morale increased because of the process they used and the way they involved people along the way. What is your process for insuring people walk out the door with their dignity?

In ecology, sustainability is about how biological systems remain healthy and productive. Achieving sustainability will enable the Earth to continue supporting human life. In business, a bigger view of sustainability, beyond products and processes, is to include people who will enable your firm to continue supporting profitable operations.


NTCA has partnered with Wally Adamchik to bring his interactive virtual training system at to NTCA members. Contact him at [email protected] to learn more about how the NTCA/FireStarterVT partnership can save you training dollars while improving your leaders at all levels.


Business Tip – July 2015


Benefits of international trade in the tile industry

CTDA members take a trade mission to Turkey
Contributed by CTDA staff

Thirty-four CTDA members recently traveled to Istanbul, Turkey, for an amazing experience they will never forget. The CTDA Trade Mission to Turkey gave members an opportunity to meet with Turkish manufacturers face to face, explore new trends in Turkish tile, visit showrooms, and network with each other. As the United States’ economy recovers and business in the tile industry picks up, distributors are looking abroad for the next great opportunity in tile. International business across all sectors has grown tremendously with advances in technology and a willingness to create a strong global economy.

Dr. Robert Mousettis, professor of International Business & Strategy, and coordinator of the Masters of International Business Program at North Central College in Naperville, Ill., explains that global markets are one of the most attractive reasons to conduct business with a world-wide view in mind.

BT-ctda-0715“In general, the international markets provide an opportunity to venture into untapped markets with enormous potential,” Dr. Mousettis said. “However, it is not easy; if it was, everyone would do it. It requires companies to be comfortable with complexity and ambiguity. It requires companies to have individuals who have exceptional intercultural skills, natural curiosity, flexibility, adaptability, and superb leadership skills.”

With major manufacturers all over the globe, distributors realize the importance of broadening their horizons to buy and sell products abroad. International business does not come without challenges. Dr. Mousettis cites differences in culture and politics as major obstacles to conducting business abroad. As CTDA members learned during the trade mission, understanding more about different suppliers by experiencing their culture first hand is one way to alleviate concerns and become culturally sensitive. Politics and legal differences can arise while doing business internationally so it is important to have a strong understanding and clear communication with business partners.

Imports increase Americans’ purchasing power and give them access to products that may not be available in the United States. The tile industry is full of opportunity for collaboration between countries that excel in creating quality materials demanded by educated consumers. International trade in the industry can also broaden distributor and retailer horizons on how to display, use and promote tile in local markets.

To learn more about the CTDA Trade Mission to Turkey, please visit the CTDA blog (

Business Tip – June 2015


NTCA makes apprenticeship and career development a top priority with web-based Learning Management System

By Dan Welch, Welch Tile & Marble, NTCA Apprenticeship Committee chairperson (Ed. note: This article is a follow-up to the story about the expansion of NTCA educational efforts with CEFGA and MiCareer Quest as reported in May TileLetter’s Benefits Box section. That May story introduced the idea of a Career Development Matrix, which is explained in greater detail here.) The daunting task of updating the existing NTCA apprenticeship manuals and transferring the information to a web-based Learning Management System (LMS) is under way. This Apprenticeship Committee began in San Antonio, Texas, at Total Solutions Plus where I again opened my mouth during a Training and Education Committee meeting and found out that this thought was a common concern and needed a chairperson. As the newly-appointed chairperson I set out to find an easy way to transfer information from the elder employees to the new millennials. BT_matrix_0615A Career Development Matrix idea was spawned during a post company-meeting event. The basic idea was to build a path easily understandable to the young men and women in our trade, linking the job title to the job duty and connecting it to a value or wage increases. The matrix is categorized by Orientation, Task, Skill, Knowledge, and Management. It can be used for personal career growth by an individual, or for a company to use to develop its people and personnel. A matrix shown to me on a YouTube video that night (Crazy/Hot Matrix) fit what I was thinking and the rest is history. Currently it’s in draft stage and is being honed and perfected.

Why an LMS? Apprenticeship development within a working company is tough to implement, and there are several obstacles to overcome if you plan to execute this within your organization. Welch Tile & Marble started a Department of Labor-approved program in 2005 with the help of DMI from Birmingham, Ala., and updated the program in 2008. The first class to go through the program was eager to learn and to improve their earning potential, but the energy it took to set up a class at night and come up with the lessons and hands-on training was exhausting. These are some obstacles to a traditional apprenticeship program:

  • Time out of busy schedule
  • Canceled class time
  • Lesson-plan development
  • Employee engagement
  • Absent employees
  • Out-of-town workers
  • Make-up class
  • Outdated materials
  • Multiple classes needed Apprentice 1, 1a, 2, 2a, 3, 3a training at the same time
  • Cost
  • Employee financial reward upon completion
  • Economy

The LMS is a must-have for two reasons. First, Welch Tile & Marble has 10 years of experience proving that implementing an apprenticeship program isn’t easy. Secondly, the new generation uses the internet for everything and grew up with instant information access. The vision and mission of the Tile Contractors Apprenticeship and Career Development Program is as follows:

  • Vision: A dedicated investment in developing tomorrow’s leaders .
  • Mission: Communicate, educate, evaluate, compensate, and cultivate the future generations of tile professionals through safety, productivity, passion and critical thinking.

Course Description

The Tile Contractors Apprenticeship and Career Development Program is an organized process designed to:

  • Communicate position descriptions, requirements, duties and responsibilities, measures of performance, and expectations.
  • Establish wage and benefit expectations nationwide.
  • Define career paths for all areas of the tile trade.
  • Develop tasks, skills, knowledge, and management modules to install tile successfully.
  • Provide educational tools, limit risk, and maximize productivity through technology and a positive environment.
  • Evaluate using training modules and certifications.
  • Cultivate passion and culture.

Pay for performance

Pay for performance has always been our belief: provide a good day’s work for a good day’s pay. So how do we provide this pay and who is going to identify what is good? Each market segment, region, work category, and job classification offers a different set of guidelines for what the market will bear and what each company’s core project business operations can offer. This draft is just that, a draft of what an average could be with a market that is diversified. For a company offering a service that is considered a commodity, the cost of doing business is very slim. The workforce is well trained to provide a limited skill with very little flexibility in what they can make available to the end user outside of the core competency. The result is lower pay. For a company offering a service that is considered a specialty, the cost of doing business is larger. The workforce is well trained in multiple areas and has the ability to do projects that are challenging and outside of the norm. The result is higher pay. I hope you are as excited as I am with the Tile Contractors Apprenticeship and Career Development Program and our industry’s attempt to attract new talent, build on their strengths, and move this industry forward. Stay tuned for periodic updates on the progress of the web-based Learning Management System, The Tile Contractors Apprenticeship and Career Development Program, and the refinement of the accompanying Career Development Matrix.

Business Tip – May 2015


The Affordable Care Act at the five-year mark

By Patrick C. O’Connor, Kent & O’Connor, Washington, DC

The Affordable Care Act (ACA, or Obamacare, as it is referred to by both friend and foe alike) just celebrated its fifth anniversary. It survived an embattled beginning, an embarrassingly inept launch and so many House votes to repeal that we have lost count. Still, it survives. Nearly 10 million people have signed up for insurance on a state or federal exchange. And some analysts even say the ACA has created the possibility of real competition in the individual insurance market for the first time.

Yet, while Obamacare seems to have found its footing, the health law remains in peril. The latest threat is a second Supreme Court decision – with the ruling due in June. King v. Burwell presents a deceptively simple case of statutory construction, centering on language in the ACA that allows subsidies for those enrolled in an exchange established by the State. Challengers say that, under the clear words of the statute, the subsidies only apply in states that have established their own exchange. Therefore, the plaintiffs contend, the law does not authorize subsidies for individuals who live in states that did not set up an exchange (and who, as a result, participate in a federally facilitated exchange). Since there are 36 states without their own exchange, the outcome of this case has potentially huge consequences.

A ruling against the government would not repeal Obamacare, but the law would quickly unravel. The ACA has sometimes been compared to a three-legged stool:

1) Individual mandates/penalties to encourage broad participation, particularly among younger, healthier people, in the marketplace;

2) Subsidies on a sliding scale for low- and lower-middle income individuals who purchase policies on the exchange so health insurance is affordable, with penalties on companies who don’t offer affordable coverage and who have one or more employees receiving a subsidy;

3) Insurance companies must provide health coverage to everyone, regardless of pre-existing conditions or poor health, and cannot charge higher premiums based on health status.

All three legs are necessary or the stool begins to tip over. If the government loses in King v. Burwell, one leg of the Obamacare stool is removed and the others are weakened.

Be careful what you wish for

Many employers in the 36 states without an exchange are rooting for the challengers. Who could blame them? It is, after all, the subsidies that trigger employer penalties – if no employee can receive a subsidy in the 36 states, there can be no penalty on the employer for not providing coverage.

Beyond this clear advantage, however, there are other consequences to consider:

The insurance markets in those 36 states will be in turmoil. The health insurance companies will still be required to offer coverage to everyone, no matter the state of their health, and will continue to be limited in how much more they can charge an unhealthy person. Yet, with the healthiest participants likely to drop their coverage when it is unaffordable (absent the subsidy), a classic “death spiral” is likely to occur: with the deteriorating health status of their customer base, premiums increase across the board, more healthy people leave, premiums increase and so on until the market is unsustainable.

It is estimated that 8 million people will lose health insurance because they can no longer afford the policy without a subsidy. Others are likely to see steep increases in the cost of their health insurance as the pool of exchange participants in these 36 states shrinks, when the healthiest drop their coverage.

The health insurance systems in these states – the hospitals and doctors – will experience similar disruptions as the number of insured patients abruptly declines.

Politically, even Republicans in Congress who detest the law may be chagrined at the prospect of an estimated 8 million people becoming uninsured virtually overnight (in mostly Red states) while chaos roils the health insurance and provider markets – not the kind of headlines you want in an election year.

(Editor note: It’s also been widely reported that Health and Human Services Secretary Sylvia Burwell announced that in 2014 hospitals saved $7.4 billion in uncompensated care costs due to patient enrollment through ACA health insurance exchanges and Medicaid. In 2013, before ACA, hospitals provided more than $50 billion in uncompensated care.)

Of course, Congress could always take action to fix the problem or devise an alternative approach – but either would involve some degree of bipartisan cooperation and compromise, both of which are in short supply on Capitol Hill these days.

And so, we watch and wait for the Supreme Court to rule.

What’s next for employers?

Even if the Supreme Court sides with the challengers in King v. Burwell, important new reporting requirements will soon apply to all employers (with 50 or more employees), whether or not the company is located in one of the 36 states impacted by the court decision.

The reporting is meant to provide the IRS with information on who is providing coverage, what kind, to whom and at what cost. Fines and penalties apply for non-reporting. The reports must be filed whether or not the company offers health insurance coverage.

The statement of coverage for 2015 must be provided to each employee by January 31, 2016 on a Form 1095-C and sent to the IRS by February 28, 2016. The information includes:

Certification as to whether the company offered full-time employees (and dependents) the opportunity to enroll in Minimum Essential Coverage by calendar month;

The months during which coverage was available;

Each employee’s share of the lowest cost monthly premium for an individual policy (regardless of whether the employee opted for a higher cost plan or declined coverage), by calendar month;

Number of full-time employees for each month during the calendar year;

Name, address, SSN of each full-time employee during the calendar year and the months, if any, during which the employee was covered.

The take-away for employers: even if the Supreme strikes a blow to the health law in June, that’s not the end of Obamacare.

States without a state-based Health Exchange:

Pat O’Connor is a principal in Kent & O’Connor, Incorporated, a Washington, D.C.-based government affairs firm. A veteran of Capitol Hill with particular expertise in health, transportation and the environment, O’Connor works with trade associations and companies to find workable solutions to the most pressing regulatory and legislative issues. For more information, visit or call 202-223-6222.



Business Tip – April 2015

mapei_sponsorWho would think that snails, insect pests, weeds and seeds would threaten the ceramic tile business? But they do! Unwanted passengers in the form of bugs or agricultural pests – such as seeds and weeds – often hitch a ride amongst large quantities of ceramic tile and quarry products exported to the United States from Mediterranean countries – particularly Italy and Spain, as well as from China.

GPP_0415How does that happen? Before shipment to the U.S., tiles are boxed and then stacked onto pallets where they are held for shipment. Often those pallets of tile and stone are stored outside uncovered. Sometimes pallets are stored in areas where vegetation becomes overgrown. Snails and insect pests may be attracted to the warmth and moisture in pallets. These pests, among other import issues, often cost distributors large sums of money and time during the import process.

To assist its members in overcoming these challenges, CTDA has been working with U.S. Customs and USDA for several years. Last year, CTDA and Confindustria Ceramica (The Italian tile manufacturers association) announced the creation of The Good Phytosanitary Practices certification program for tile manufacturers and shippers. The program is quite extensive and prescribes the processes manufacturers and shippers must implement in order to significantly reduce or eliminate pest issues in their shipments. To date, 93 manufacturers have achieved the certification. A list of all certified manufacturers is available at this link:

CTDA has also created an Import Form Submission System that helps track and manage issues with customs when importing ceramic tile from around the world. CTDA members can log into the system through the members-only section of CTDA’s website (or by placing an icon for the system on their desktop) and report problems using a drop down menu format. Members can enter the factory name, port of entry, receiving terminal, freight forwarder company, shipping line and other pertinent information. Members can also upload pictures of the problems found with the shipment. The information is then available to CTDA staff in a database. Accessing this data and sharing it with U.S. Customs will help CTDA demonstrate to U.S. Customs that it is no longer necessary to check EVERY tile shipment from Italy.

This state-of-the-art program is only available to CTDA members. To learn more about the benefits of membership, please contact CTDA at [email protected]

The Ceramic Tile Distributors Association (CTDA) is a nearly 40-year-old trade association representing distributors as well as manufacturers in the ceramic tile, stone and related products industry. CTDA’s mission is to connect, educate and strengthen tile and stone distributors. CTDA’s members receive tangible value from participation in CTDA through educational events such as webinars and online training programs, valuable business tools such as benchmarking reports, certification of ceramic tile salespeople, planning of Total Solutions Plus, the annual conference for the industry, and industry issues coordination such as the Good Phytosanitary Practices program. For more information about CTDA or to become a member, visit the website at or call 1-630-545-9415.

Business Tip – March 2015


Obstacles to doing more business

Often salespeople are their own worst enemies

steve_rauschBy Steve Rausch

There is an old adage that says: “When I ask you what time it is, please don’t tell me how to build a clock.”

Many of us in this industry find ourselves “constructing clocks” frequently instead of listening completely to the question the customer is asking (don’t assume you know), and then answering that question, and that question only. It’s wise to ask the customer another question if you want to go further in your information-gathering process.

Listen, and keep it simple

It’s perfectly understandable how we grow into making these mistakes: we’ve spent years learning and perfecting our skills in the ceramic tile and flooring industry, and we are delighted to share that knowledge whenever we can. Unfortunately, we tend to forget to LISTEN to the question completely. Instead, we listen until we hear something we want to hear, and then like a buzz saw we take off “helping” that person by sharing all of our technical knowledge about the subject. The problem is the customer didn’t want to know all of that, or why/how it works, etc. He or she just wanted that one question answered.

Please try to remember this: “IF I want more information, I will ASK for it.” An example of this would be: “I was only asking about the color or grout because I want to coordinate with the new furniture I am planning to buy for that room when the work is completed. I really don’t care about all the technical characteristics of the product.“

Buzz-word fail

The same holds true for industry buzz words that you know and use, but are confusing for the customer because they don’t know, use, or even care to learn them. That’s YOUR job, not theirs.

Think of it this way: if you are standing in a courtroom explaining your side of the case to a judge, who knows nothing about your industry, telling that judge that ANSI, ASTM, TCAA, TCNA, or NTCA is the authority on this situation will not endear you to that judge. However, if the judge asks you WHY you did your work the way you did it, then you have permission to explain, in plain language, that your company does all work to ceramic tile industry standards as published by the Tile Council of North America and the National Tile Contractors Association. You can further explain that those two organizations publish technical manuals for material and installation procedures that your company follows. Now you are showing your true technical expertise without scaring or offending anyone.

Gently lead, don’t steamroll

Another obstacle to doing more business is giving your customer the impression (true or not) that you know everything about everything and whatever it is they want doesn’t matter. An example of this would be saying or thinking: “This product will be right for you and the other one you picked just isn’t going to work.” You may in fact know that, but you must gently lead the customer to come to that conclusion on their own. I one time had a salesman who really did know better than I did what I should have been looking at and purchasing; however, my resentment toward him for the way he expressed himself blocked me from purchasing from him. I went to a competitor, was properly treated and educated, and ended up purchasing that exact product. The first salesperson lost the sale with his inappropriate expression of his vast product knowledge. The second salesperson may have had exactly the same knowledge, but in addition, he had people skills enough to “read” the situation and educate me to find the proper conclusion with his expert guidance.

Stop talking!

The final point in our discussion of obstacles is too much talking after the sale is made. In the classic TV series Columbo, starring Peter Falk, in almost every episode the prime suspect blabbers on, answers unasked questions and provides more details about the crime. Almost without fail, that unrequested information was what allowed Columbo to put them in jail.

The same is true with many salespeople. The customer has made the decision, yet the salesperson just keeps on chattering and unwittingly raising new issues the customer hasn’t thought about or considered. Sometimes that slows down or completely eliminates the sale.

An easy example of this would be a seemingly innocent statement like: “Oh yes, this product you are buying – and this exact color – is and has been our single most popular product. Everyone is buying this.”

“Oh,” replies the customer, “Cancel my order. I wanted something unique and different than anyone else I know.”

If you are trying to generate revenue for your company, please consider these points and consider attending training in a sales and/or business development program to learn the most efficient way to increase your business without being tripped up by the many obstacles that are present every day.

Steve Rausch has been involved in the tile and flooring business for over 30 years and is currently an industry consultant specializing in sales, marketing, and interpreting technical issues in understandable terms. You can contact Steve at [email protected] or 404-281-2218.

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