It may sound obvious but often a business will forget the fact that the only way to make money is to get customers to buy. And the best way to get customers to buy is to have am effective sales funnel.

A sales funnel is set of steps where you guide a prospect through a series of communications that results in them buying from you.

But what happens after that first sale is made? Existing customers are the people who are most likely to buy from you again.

How Does A Sales Funnel Work?

At the top of the funnel, you offer something for free in return for getting a prospect’s contact information. This could be a report, checklist, video or eBook. Then you begin marketing, following up with emails and other communications to attempt to make a sale.

Throughout your sales funnel process, you should have several offers that complement each other. For instance, before you buy a car, you take it for a free test drive. If you like the car and buy it, the salesman doesn’t just hand you the keys and then vanish. You’re offered extended auto warranties, enhancements like upholstery and wheel options.

After a couple of months the salesperson will contact you to see if you’re happy with your new car, and let you know about a discount or sale going on.In the future, you’ll be contacted with opportunities to trade in your vehicle and the sales process goes on and on.

How Many Levels In The Sales Funnel Process?

As you can see from the example above, there can be many different levels in a sales funnel. A one level funnel is where after a customer buys from you, you move onto the next prospect.

But this a critical error.

It costs 6 to 7 times more to get a new customer than keep an existing one. It makes sense to market to someone who has already purchased one of your products, rather than try to convince new people to buy your services. An existing customer already knows you and your business. If they have received excellent value from you once, they’ll be more prepared to spend money with you again, rather than somebody who has never heard of you.

There is no “ideal number” of sales funnel levels. Each business, product and service is different. Just make sure you are continuously providing your prospects and customers opportunities to improve their lives or solve their problems with future purchases from you.

Many businesses have high turnover rates due to unhappy, unsatisfied, and/or unappreciated employees. There are several ways a company can create loyalty, happiness, and more positive attitudes towards employee’s jobs. One such approach is through increased company functions and gatherings that help develop office friendships throughout the company. Also, the creation of management teams and developing a teamwork mentality will help employees gain the feeling of ownership in their company. Instead of an us versus them attitude between departments, friendships throughout the company will also help build a complete team attitude. Many prominent companies create outlets for their employees to volunteer, fundraising, and help their community. The following suggestions will also increase employee pride, happiness, and ownership of their responsibilities at work.

• Family Atmosphere – This type of environment creates a climate of fairness, equality, respect, and makes it safe to express dissent. This atmosphere is welcoming and creates a friendly environment to introduce new ideas. Employees teams may encourage a challenging but supportive environment and strengthen loyalty and teamwork throughout the organization.

• Recognition Programs – Company programs that recognize hard work, commitment, effort, and contributions breed organizational success and loyalty. The recognition program should include monthly awards and gift cards or a free lunch. Recognition from a supervisor at least two ranks above an employee makes a meaningful, engaging difference in employee morale.

• Organizational Pride and Belonging – Promote activities that development and establish pride and loyalty which is the backbone of any businesses long-term success. Employee turnover is extremely expensive and productivity and product or service development suffers. An engaged employee is a person who is enthusiastic about their work. Improving employee engagement directly impacts measurable business outcomes. Employees who are committed to success, emotionally attached, and socially involved with a company demonstrate qualities that business managers thirst to have. Engaged employees are more productive at work, take less sick days and exhibit other favorable behavior, promote the business to others and show their happiness to customers.

• Mentor Programs – Thinking long-term for future company success. A mentor is an experienced and trusted adviser that assists in developing competent employees and future leaders. Mentoring program train and encourage seasoned employees to be mentors. A mentoring program can facilitate dynamic skill growth throughout an organization. Informal learning can be as important as formal learning programs.

• Volunteering Options – Look for opportunities for your company employees to get involved in the community. Allow your employees to volunteer their time or fundraising for a good cause. It is good public relations for companies to show their communities they care about their customers. These activities will create good-will among the local community and your employees. Create a team to decide what cause your company will offer financial support for a charity or cause.

Employee engagement can be improved by aligning the goals of individual with the goals of the business. Employee motivation should be associated with traditional rewards, such as pay and compensation, but also with emotional rewards such as personal growth, working for a common cause, being part of a high-performance team, and being recognized for achievements.

Every business needs a marketing plan to be successful. An effective way to get a fast return on promotional marketing campaigns is Every Door Direct Mail, (EDDM), a U.S. postal service for local business that can benefit from targeted zip codes to every house or house and businesses right down to the individual carrier route. Compared to traditional direct mail has very low distribution costs. The cost is $0.183 for each piece. This is cost-effective marketing solution that generates fast sales to new and old customers. Another benefit to EDDM is that it is delivered the day after it arrives at the post office. Direct mail can take weeks to be delivered and you may not know when it is delivered.

There are 6 standard sizes for EDDM: 4.5 X 12, 6 X 12, 6.5 X 12 6.5 X 9, 8 X 6.5 and 8.5 X 7. All sizes cost the same to mail. In addition to cheap mailing fees, there is no need to buy expensive mailing lists and address imprinting. Just select the zip codes in your target areas right down to the individual carrier route. To make this even easier, let your printing service handle the paperwork and delivery to post offices of your choice.

With this EDDM marketing, you can mail directly to local residential customers in the address area of the card. The maximum quantity allowed in this retail program is 5,000 to 25,000 a day at any one post office. Mailers must be bundled in 50 or 100 so they can be quickly distributed to the right carrier.

Put in your target zip codes and choose using breakdowns showing residential, business, total, age 25-44, size, income and cost. This free easy-to-use demographic guide map lets you select the best neighborhoods to give you a fast return on your investment.

You can deliver to other post offices as long as you send a minimum of 5,000 to each. This is so the post offices are not overloaded with EDDM mail. Another advantage is that many printing services offer full service mailing. They do the paperwork, bundling and delivery to your post offices of your choice. Having your printing service do the mailing for you allows you to not pay sales tax as you are not taking possession of this printing.

This quick return marketing plan is best with local businesses such as take out and restaurants, realtors, dry cleaners, retail stores, auto dealerships, contractors and home services, medical professionals, health and beauty services – to name just a few business that can benefit from this promotion.

One very important tip is that this is not a one-time test to see if you can recover your cost in your first mailing. If you offer a valuable discount sale you should get your investment back in a short time. The best way to get high returns is by making your EDDM campaign a monthly mailing to keep you brand in front of people’s eyes so they remember your business.

Using this EDDM program is a great way to get a fast return on your promotional marketing campaigns. It can save you in mailing costs as well as saturate any area you want to concentrate sales. Whether you use full service EDDM printing or do it yourself, this is a successful way to target your audience without spending a lot of money.

There is real human suffering happening in our country and around the world, but we all have to step up to help because here’s the reality, we’re all in this thing called life–together. No one is better than anyone else. And, as the adage goes, “There but for the grace of God go I.”

Is it just me, or are you tired of the relentless stream of neurosis, disrespect, screaming and shouting that is dividing us on almost any and every level? If there’s an idea or statement made, there seems like there’s going to be someone out there who will take on the issue and as quickly as you can snap your fingers, there’s debate, particularly on social media. Often, these “debates” devolve into online name-calling, trolling, and utter disrespect. I have seen several conversations shut down in nonprofit and church social media groups, which is ridiculous when you think about it, because if people can’t have substantive and productive debates and discussions in these areas, where can they discuss critical social issues?

Here’s my message: We’re better than this.

I believe that nonprofit, civic and religious leaders can play a part in elevating the civil discourse.

Social networking has been great because, in practical ways, it has broken down borders. Connecting with people around the world is easy. For many organizations and groups, social media has brought down marketing and advertising costs considerably, raised awareness and leveraged resources.

But, I think that as we’ve become more “connected,” there’s incredible division. Divisiveness has got to stop.

Church, civic and nonprofit leaders can help our communities heal.

Do you remember the Golden Rule?

The Golden Rule was simple, and I think leaders should remember it each morning as they head to work and ask that their teams adhere to its tenets.

The Golden Rule has a religious origin. It came from the words that Jesus said in the “Sermon on the Mount.” The principles became religious teachings incorporated into the Bible.

Matthew 7:12: “So in everything, do to others what you would have them do to you, for this sums up the Law and the Prophets.”

Those words are so simple–treat others as you would like to be treated.

I think our society is in a precarious place. We are not listening to each other. We are shouting and screaming past each other. We are ignoring each other.

And, here’s the bigger thing for me–many of us are expecting attention and the world to hear us, and we are not giving others the same respect.

This has got to stop.

I think nonprofit, civic and church leaders are in a unique position. Often, because of their position in communities, they are leaders.

I wanted to explore the meaning behind the word ‘ethical’ in this day and age, and how some companies manage to slip through the net using marketing tactics.

I have recently read articles praising companies who are considered the most ethical – there is a list of these illustrious and successful business ventures of 2013, 2014 etc. – and they are set up as the benchmark for the rest of us. I opened the list in anticipation of seeing estimable companies mentioned, but was horrified to see a number of corporations on the list who are known to create products that compromise health or are involved in deforestation or child labor – to name but a few crimes against humanity.

Even if a company is taking steps to become more ethical, surely they shouldn’t be allowed on such a list until they have some substantial history in ethical practice. These questions immediately came to mind – “who on earth compiles these lists and what is their agenda?” “Are they genuinely ignorant of the practices of these companies, or is profit the only criteria?” Or even worse – “Is ethical practice now being judged by the 80/20 rule?”

So, what is considered an ethical company in this day and age?

Employment

Is it all about how a company treats their employees? If the people that work for them are treated well, getting decent salaries and benefits – does that make the company ethical?

If their employees have protective clothing while they are spraying the planet with toxic chemicals – does that make the company ethical because it is looking after its own?

If employees are given the benefit of cheap food and clothing in the form of company discounts, is the company ethical if the food is the end product of compromised ingredients and tortured animals?

If job opportunities and helping the economy is stated as being a valid reason for companies to start business ventures that poison the air we breathe, the water we drink and the food we eat, I have to ask – who benefits?

Marketing

Or maybe being seen as ethical is all about a brilliant marketing campaign. A campaign which makes the general public feel all warm and fuzzy – full of cute animals, young children or a celebrity or two – or maybe all of the above if the company has unlimited finance to throw at it. We are presented with an emotional roller coaster ride which dulls the senses and convinces people of its sincerity and authenticity, because it’s just so darn pretty!

For example, the food and drink industries are money machines that can employ the most ingenious and brilliant of marketers who are capable of blindsiding the uninformed into believing every word they say. A lot of them churn out addictive products which lack nutrition and create severe health problems through the addition of ingredients which kill brain cells, and generally attack the organs of the body. However, that seems to be acceptable because their marketing campaigns bring people together in happy food and drink related ways, and their packaging is so bright and colorful and the wording so reassuring – natural, farm fresh – got to be true, yes?

It comes to mind that some of the most successful confidence tricksters and serial killers come in a very pleasing physical package. It is because they are good looking that they are able to get close to their victims, but beautiful on the outside doesn’t necessarily mean beautiful on the inside. I think this rule applies to companies and their marketing campaigns as well.

We are surrounded by marketing images which promote ‘beauty’! These images not only corrupt and destroy people’s self-confidence, but they also set the precedence that beauty is best. Therefore, in our subconscious we link beauty to all that is good, and we dismiss all that is not beautiful, according to the current standards set by the media and marketing industry.

I lived in the Algarve, Portugal for a couple of years and while I was there I knew people who had orange trees on their land. They were the sweetest oranges I’d ever tasted in my life, yet none of those oranges would have reached supermarket shelves. The reason why is that they were all ‘ugly’ fruit – they weren’t tampered with in order to make them visually pleasing. I was told by the owner of the orange grove that the ugly fruit were the sweetest, and that is something I think is worth remembering, because it opens our minds and we won’t so easily be seduced by beauty if we know there is a viable alternative.

Charitable Donations

If a cosmetics company donates money to eradicate skin cancer they have to be ethical, right? People will think that they are wonderful and more readily buy their products. However, what if that same company includes ingredients in its products which can cause cancer – aren’t they just creating a market for themselves? It bears thinking about!

If a food or drink company gives donations to schools in the form of IT or sports equipment etc., is it really an altruistic act? They often get returns in the form of advertising on the premises and massive hikes in sales as the word spreads about their good deeds. Not forgetting that they are creating a new generation of people who will be addicted to their products.

Charitable donations also need to be a win/win situation. The people needing help are no lesser beings than the people giving it, just because they don’t have financial wealth. They shouldn’t be exploited in the name of profit.

I think we need to remember that the companies that give lots of money to charity are usually companies that can easily afford it. It doesn’t hurt them at all, in fact it often benefits them – they don’t feel the pinch. There are many companies that give money open-heartedly and genuinely help everyone they touch, and there are those that give money in order to gain goodwill and a rise in sales. It is our job to find out which is which.

So what percentage between donations and damage constitutes ethical by today’s standards? Is it 25%/75% or does it need to be 50%/50%? Who makes these decisions and what is their agenda? It doesn’t seem to be the health and well being of the planet, that’s for sure.

Conclusion

I suggest that before we decide that a company is ethical we look deeply into the face of that company, look into its eyes and see its soul. Remember that a beautiful face is no indicator of a beautiful soul – the eyes are the windows of the soul and by looking deeply into them you will be able to discern whether it’s transparent or deceptive.

My father was a magician, a member of the Inner Magic Circle, and when I was growing up I used to watch him practice. He told me to always watch the hand that seemed to be doing nothing – and that has taught me a valuable life lesson. So when a company or institution of any sort puts forth a spectacular display which draws my attention, I drag my eyes away from where the lights are shining and look into the shadows to see what they are hiding, what is it they don’t want me to see? If after careful scrutiny and research I find there is nothing being hidden, then I deem that company ethical and sit back and enjoy the show!

I am not for one minute telling anyone what to think, or what to do. What I humbly suggest is that everyone looks carefully at the decisions they make, and the companies they support by either using their services or buying their products. Then each of us will know that we aren’t being led by the nose into compromising our own set of values and what we personally believe in.

The bottom line is that if people, animals and the planet are being negatively impacted by a company’s products or services, that company is not ethical – no matter how much they give to charity, or how many heart-warming marketing campaigns they launch. They are shirking their responsibility towards all living things in the name of profit. That is the truth!

I would love to hear your comments and what the word ‘ethical’ means to you personally.

Sue is the Founder of Soulfully Connecting. The idea behind Soulfully Connecting is to demonstrate that there are other ways of living which can heal the earth, the animal kingdom and ourselves. She is passionate about people having freedom of choice, which is only possible when they know about all the options.

Events are synonymous with real-world marketing for businesses across industry verticals. They are being leveraged by brands small and big alike to reach out to customers and convey their messages. A growing number of firms trust events to build their base, expand their horizon and tap into the potential in the market. Quite clearly, a lot is at stake when a business decides to host an event and penetrate the market deep. Right from launching a new product or service to enhancing the goodwill of the existing resources, businesses know where to turn to in the need of hours.

With so much benefit to take, it’s natural to expect your event to be successful so that all goals are realized with ease. For that, an expert agency will be needed familiar with every aspect of event, including from planning to strategics to hosting to customer servicing. The job at hand is not that easy for the agency as well as it has to take care of a lot of aspects to ensure success for the planned event. Among other things, it has to make sure that the brand messages are conveyed in the way they should be.

Further, a good event is one that seamlessly merges the concepts of aesthetics and functionality in true sense. And this is where furniture do have a role to play as they often add a great deal of value to any occasion. Their market is stuffed with inventive, high quality event furniture which can really make a big impression on your product launch party or customer get-together occasion. Right from chairs, sofa seating, stools, benches, poseur tables, dining tables, bars and plinths, your event can benefit from a wide range of furniture and surely stand out from the crowd.

Further, event planners know how to place furniture at right places and positions to have maximum impact out of them. They add a creative approach to occasion and make guests and potential customers impressed in true sense. It’s also a cost-effective approach to not buy all of those furniture and rather hire them and add great value to the whole affair. Whether classic touch or contemporary styles, you can select what suits your interests and events the best and win maximum attention out there. After all, the purpose is to create a vibrant atmosphere and let the brand benefit in more ways than one.

In overall, furniture hire is a very helpful and innovative concept to benefit from as make the event a big success. It has the potential to enrich your business even without asking for resources to be put at used. So, your business can benefit from furniture by adding value to the event for brand building efforts. For that, you have to find a right agency with years of experience in the domain and you will also need a company that rents out furniture. This is how your event can become as successful and impact as you’d expect it to be in a real sense.

Business Intelligence

Read the following points below:

1. Companies are aggressively moving to computerized support of their organizations. Can you list at least 2 of the factors driving this move?

• Speed and efficiency.
• Legibility and accuracy.
• Self-sufficiency.
• Cheaper research and development.

2. The definition of Business Intelligence (BI) is:

BI is an umbrella term that combines architecture, tools, databases, analytical tools, applications and methodologies.

What does “umbrella” term mean?

The definition of Business Intelligence (BI) encompasses various software applications used to analyze an organization’s raw data. The discipline entails many related activities, including data mining, online analytical processing, querying and reporting

3. Sometime we say that the term Business Intelligence (BI) is “context free”. What does this mean?

The term business intelligence is “context free” in the sense that the expression means different things to different people. For this reason, we have seen researchers advancing different definitions for business intelligence.

4. Describe what a data warehouse is and how it might differ from a traditional database used for transaction processing.

A data warehouse is a central repository for corporate data and information that an organization derives transaction data, operational systems and external data sources. Although these two may look like they are similar, they exhibit several differences with regard to usage pattern, architecture as well as technology. A traditional database is based on operational processing while a data warehouse is based on informational processing.

A data warehouse focuses on storage, filtering, retrieval and analysis of voluminous information.

A traditional database is used for day to day operations while a data warehouse is used for long-term informational requirements.

5. What is the difference between a data warehouse and a data mart?

A data mart is a subset of a data warehouse that relates to specific business line. Data marts are managed by a specific department within an organization. On the other hand, a data warehouse involves multiple subject areas and assembles detailed information from multiple source systems.

6. What is meant by “Big Data”?

Big data refers to a huge volume of structured, semi-structured and unstructured data from which viable information can be extracted. This kind of data is so voluminous that it cannot be processed using outmoded database and software techniques. Big data helps organizations to improve their operations and be in a position to make quick and smart decisions.

7. Data mining methods are divided into supervised and unsupervised methods. What are these and how are they different?

Supervised data mining method has to do with the presentation of fully labeled data to a machine learning algorithm. On the other hand, unsupervised data mining methods conduct clustering. Data instances are divided into a number of groups.

Unsupervised data mining methods do not put emphasis on predetermined attributes. Moreover, it does not predict a target value. Instead, unsupervised data mining finds hidden structure and relation among data.

Supervised data mining methods are appropriate when there is a specific target value that I to be used to predict about data. The targets can have two or more possible outcomes, or even be a continuous numeric value.

Supervised data mining methods the classes are known in advance while in the other the groups or classes are not known in advance. In supervised data mining methods, data is assigned to be known before computation but in unsupervised learning Datasets are assigned to segments, without the clusters being known.

8. When we consider KPI’s (key performance indicators) we distinguish between driver KPI’s and outcome KPI’s. What is the difference between the two (give a couple of examples of each)

Key performance indicators provide a framework on which organizations can value their progress. Outcome KPIs which are also referred to as lagging indicators measure the output of previous activities. On the other hand, driver KPIs/leading indicators measure the activities that have a significant on outcome KPIs. Driver KPIs have a significant effect on outcome KPIs, but the reverse is not necessarily true.

9. A BSC (balanced scorecard) approach for BPM (business process management) is well-know and widely-used. Describe the strengths of a BSC approach.

BPM entails activities

BPM involves activities like automation, remodeling, monitoring, and analyzing and improving business processes.

Cost efficiency

This is one of the most palpable benefits of BPM approach. It cuts down on costs and increases revenue. BPM adds crucial value in the long run by allowing businesses to compete globally. BPM technology equips a business to switch gears and respond to changing business environment appropriately.

Agility

Change is inevitable in business and a business must be ready to undergo sudden changes at any time. BPM accords a business the flexibility of making changes at minimal costs.

Improved productivity

BPM automates several elements within regular workflows. Process improvements such as eliminations of drawbacks, elimination of redundant steps, and introduction of parallel processing are achieved through BPM. These process improvements allow employees to focus on other important activities of their business since the core support functions would have been handled.

Better visibility

Basically, BPM uses advanced software programs to facilitate the automation process. These programs enable process owners to keep abreast of their performance. Apart from guaranteeing transparency, BPM keep track of how processes work without the need of monitoring techniques and extensive labor.

10. A closed-loop process is often used to optimize business performance. Briefly describe what a closed-loop process means.

A closed-loop process, also referred to as feedback control system is a management system that promotes a well-organized base of preferred outcomes and system feedback. This process is designed to achieve and maintain the desired output in comparison with the actual condition.

It’s not unusual to find a company that has hired a coach to take its employees to a seminar, conference or simple social event but who have subsequently been disappointed with the results.

Here we’ll examine some of the common causes and their solutions.

Poor turnout / response to invitation

This is a commonly expressed frustration in many organizing departments.

Ignoring mechanical causes (such as poor communication of the “we weren’t told” variety or insufficient notice) this is often attributable to:

low morale in the company;
a lack of interest in the event concerned;
conflicting priorities (your event has been scheduled at a time which clashes with other things).

There is no easy answer to this and simply making attendance mandatory isn’t likely to be the answer. You may need to analyse the causes in more detail.

Dissatisfaction with the quality of transport

In the 21st century, professional people expect corporate transport to be modern and comfortable.

If an “old banger” of a coach arrives at the outset, then already your session is in trouble due to creating the wrong impression.

Be prepared to spend a little money here to get a comfortable limo bus.

Impacting personal lives

Today, most people expect and demand a professional / personal life balance.

So, anticipate dissatisfaction and disgruntled attendees if they’ve had to get up at 4am to make your planned departure time and/or they won’t be getting back home until the early hours of the morning.

A luxury coach might help alleviate some of this through comfort during the journey but it won’t, in itself, be the solution.

Impacting professional lives

On a similar theme to the above, asking people to get back very late to their homes, while expecting them to be back in the office at 8am and firing on all cylinders, is likely to be a recipe for ill-feeling.

Provide or arrange for refreshments

If people have been asked to get up unusually early and been on a coach for some time, then it’s really good psychology to provide (or stop for) some refreshments.

A little caffeine and a calories boost can ensure people arrive at the destination eager to get started rather than tired, jaded and looking for reasons to complain.

Railroading

Ideally, your corporate event should be so desirable by its very nature that your colleagues should be fighting for the chance to participate.

Only use “attendance is mandatory” approaches as an absolute last resort, as touched on earlier.

If you see a lack of interest and voluntary participation, something is wrong and a re-think is required. People typically don’t respond well to being forced to attend company events.

Relate to the wider world

Remember that a corporate event will be seen by many against a much broader backdrop of the wider business world you share with your colleagues.

So, expect a very negative reception for (e.g.) a company team-building exercise held at an expensive external venue, if just a few days before the company has announced major ancillary benefits cuts for employees due to the prevailing economic circumstances.

70% of all change initiatives fail.

That’s a pretty startling statistic. Especially when you consider how important change is. I mean, we all acknowledge this, right? There aren’t many organizations out there saying, “You know what we need to do? We need to maintain the status quo, and we need to do it now!”

Every breakthrough involves change. Every innovation involves change. Every new product, policy, or service that moves you ahead of the competition involves change.

So change is vitally important-and yet 70% of change initiatives fail.

Why is that?

It’s because the people leading change don’t play the long game.

To put it another way, they declare victory too soon. Here’s why.

Change is difficult. There’s no getting around that. Change can be messy and uncertain-especially when you’re right in the middle of it. As Harvard professor and author of The Change Masters Rosabeth Moss Kanter puts it, “Everything can look like a failure in the middle.”

In fact, the middle part of change-the messy, uncertain part-can be so painful that we declare victory the instant we’re through it. It’s as if, as soon as we start to see light at the end of the tunnel, we wipe our brow, give each other a high five, and say, “Whew! That’s done!”

But it’s not done. Yes, you’ve made it through the messy part, but you haven’t anchored the change. It’s not yet a part of the culture. It hasn’t “stuck.”

You played the short game.

The truth is, change is a long game. The average successful corporate change initiative is a seven-year process-of which years three, four, and five are the messy part. But notice that there are still two years of anchoring left before the change sticks, before it becomes part of the culture.

It’s the part after the messy part that determines whether or not your change initiative will last.

So what, as a leader, do you do during this part?

You reinforce the change.

You actively look for any and every positive outcome that is a result of the change, and you become relentless about communicating these outcomes to the team. You have to be the one connecting the dots of success back to the change because, left to their own, your team members will not make the connection.

Only by reinforcing the change can you anchor the change, and only by anchoring the change can you make the change truly stick.

And once you do this, you’ll be in that exclusive club of leaders whose change initiatives succeed.

While cyber security is an important issue for boards, it has not always been top of mind. Because a major corporation like Equifax had a breach in its IT system, many companies are rethinking how to secure cyber security.

Boards around the world are examining the Equifax case to determine how to best secure their organizations valuable information stored in their IT systems. So who is responsible? Since the CEO has stepped down, it is apparent he was being held accountable. However, where was the board of directors?

In today’s world of cyberspace, corporate boards have to think about more than governance, CEO compensation and strategy.

As it stands, it is in the board’s best interest to ensure the company is not exposed to debilitating risks. Companies have workplace safety standards and sexual harassment policies to mitigate lawsuits. They even have disaster recovery plans in the event of natural disasters or occurrences like the World Trade Center plane crash. These plans and policies are in place to keep business running smoothly and perpetually. It protects customers and employees.

However, with sophisticated computer hackers around the world, it is no news that computer systems and valuable information can be breached and stolen. There are hackers who breach computer systems as a business. They ask for ransom in the amount of tens of millions of dollars. If it is not paid, they threaten to release the companies secure information, which sometimes could contain private email communication from top executives.

While many enterprises as large as Equifax may have disaster recovery plans for their physical operation, they may not have the same plan for cyber breach. The disaster recovery policies would include immediate action steps based on size of the breach, who made the breach, what information was taken, were company smart phones breached, what to communicate to employees, the public and shareholders as well as other important factors.

In some cases, it may make sense to inform the FBI. In other cases, it may be better to pay the ransom. The challenge with calling the FBI is that the hackers could be in countries like Russia. In Russia, the FBI may not pursue them. Why? Because the Russian government is always looking for good hackers. If the FBI exposes the hackers in Russia, the government may hire them, which can present long-term problems for the US. When it comes to paying ransom, it’s tricky. If you pay, they may hack you again as though you are an ATM machine. If you don’t pay, they may expose confidential information. These are also the kinds of challenges that directly involve the board.

What’s most important is that the board is talking about cyber security before there is a problem. There should be constant audits of the cyber security system to mitigate any risks. In addition, as a board, they should hold the CEO accountable for that security. Furthermore, there should be clear policies to guide the board and the executive team on how to handle the various moving parts in a delicate situation. Boards with disaster recovery plans and high accountability with the CEO are more likely to be forward thinking about cyber vulnerabilities and proactive about updating the security system.