Approaching the Summit

SIMON
SIMON SCHOOL OF BUSINESS/UNIVERSITY OF ROCHESTER
Fall 2013
BUSINESS
Approaching
the Summit
How Doug Petno used
what he learned at Simon
to scale the heights of Wall Street
SIMON
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Brand Integrity Founder and
CEO Gregg Lederman ’99S
(MBA) (center) is flanked by the
company’s President and fellow
Simon alum Bryan Bond ’96S
(MBA) (left) and Partner, Senior
Vice President Technology Doug
Bennett ’06S (MBA) (right).
12 Fall 2013 ◾ Simon Business JOHN SMILLIE
QUANTIFYING
CULTURE
Through their innovative software program
and cross-functional approach to measuring
employee engagement, Brand Integrity is
bringing change to the modern workplace.
By Sally Parker
Once upon a time in the story of American business, the human resources department was the warm and fuzzy part of a company—necessary for marshaling and rallying the troops, but not always essential to
the bottom line.
These days, HR is shedding its humble image and stepping to the forefront in a new breed of business. It’s one player in a fresh push to harness the power
of all of a company’s functions—from HR to marketing—with a single system that not
only boosts the bottom line, but also enriches the lives of its workers.
Three Simon School alumni are leading this movement. Their Rochester-based
company, Brand Integrity, was one of the first to help companies align objectives with
employee satisfaction.
“Every day I come to work I know that, with our software, we have the ability to
dramatically improve people’s lives—and make companies more profitable,” says
Founder and CEO Gregg Lederman ’99S (MBA).
Using Potential Point 5.0, Brand Integrity’s cloud-based software, a company lays
out its brand (mission, objectives, reason for being), aligns and engages employees
(so they can “live the brand,” Lederman says), and creates greater accountability and
recognition that in the end improves customer service. Companies license the patentpending product for an annual license fee.
Simon Business ◾ Fall 2013 13
Potential Point focuses on three areas: With simple, clickable
online questionnaires, it measures the motivation and commitment of staff; offers customers a chance to weigh in on their
interactions with the firm; and provides social media tools that
managers and employees can use to recognize and share one another’s efforts toward achieving company objectives.
The software streamlines employee recognition, making it not
only easier to provide but more visible and meaningful as well. It
creates conversations between employees and managers, among
employees themselves, and between employees and customers.
Potential Point is the first software on the market to help firms
quantify their culture.
“Most people recognize the importance of culture, but it’s
always been this amorphous thing nobody can measure,” says
Bryan Bond ’96S (MBA), who joined Brand Integrity as President
earlier this year. “When you generate metrics that quantify culture . . . you really have a powerful tool to improve the business
in a variety of ways.”
T
he importance of employee engagement cannot be
overstated, Lederman says. Polls by Gallup and many
others agree: Roughly 70 percent of American workers are not engaged in their jobs. Lederman likens the
statistics to a 10-person crew in a boat race: three crew
members are working as hard as they can, four are distracted or
just relaxing, and three are actively working to sink the boat.
“It’s unacceptable that two thirds of employees aren’t engaged,” Lederman says. “There’s a crisis that’s been going on for
years. It got really bad during the Great Recession.
“That’s the reality of engagement. When your employees are
engaged, they speak positively of the company and they’ll stay
and be productive,” he says.
Lederman, who grew up in Rochester, founded Brand Integrity in 2002. After studying business at Ithaca College, he
worked in Texas and California before returning to buy Buckmans Dairy in Greece. He and partner Tim Vottis pared down
the product offerings, boosted employee morale, and improved
customer service before selling the company.
Lederman then used his share of the proceeds to study at
Simon. Fascinated with marketing and company branding, he
went to work for an advertising agency after he graduated, and
quickly learned a lesson: It wasn’t enough for a firm to say it
could deliver on promises; change had to happen within first.
He wanted to start a business that would help other companies
walk the walk and talk the talk behind their brand and launched
Brand Integrity in April 2002.
One of his first clients was Wegmans Food Markets, consistently a top performer on national Best Places to Work lists.
“People at Wegmans know the answer or they know how to
14 Fall 2013 ◾ Simon Business get you the answer. And if you need to know where a product is,
often they walk you right to it,” Lederman says.
Brand Integrity was mainly a consulting company for the
first few years. Then, in early 2006, Lederman and Fred Beer ’95
started planning a software product to help companies track employee engagement. They needed someone to build a financial
model for the software business. At that time, Doug Bennett ’06S
(MBA) was studying at Simon and had success building financial models for several startup businesses on the side. Eager to
grow something from the ground up, he called Lederman, who
is a Lecturer in Marketing at Simon. The phone call to introduce
himself turned into a 7:00 a.m. office meeting and then an opportunity. The model he built showed that a software business—
which later folded into Brand Integrity—would be a smart move,
and Bennett joined the staff and invested in the business. (Beer
has moved on to other things, but remains active on the Brand
Integrity board.)
Those were heady, creative days, Bennett recalls. Only a few
people worked in the firm’s converted Victorian on Park Avenue, and Lederman traveled a lot to consulting engagements.
At first, Bennett was alone most of the time, managing the first
few software clients and serving as liaison between the client and
developer. He had done similar work as a business analyst in a
suburban Philadelphia trading office.
“At the end of the day it really was about making the world a
better place. It was great to feel like every hour, every minute I
put into this business we get payback. It was such a cool feeling
coming out of school applying finance and operations—and marketing,” he says.
“I think what motivates me the most is building something—
working on a project and seeing it used and enjoyed by employees. I think that’s what all entrepreneurs want: seeing all of your
hard work come to life,” says Bennett, a Senior Vice President
who now leads Brand Integrity’s technology side.
Lederman says Bennett is “the big, big reason why our technology is as great as it is.”
W
hen Bennett joined the firm in 2006, consulting was the biggest piece of the pie. That began to
change in 2010—a year Lederman recalls with a
wince. By the fall, the recession was eating into the
consulting market; Lederman says it was a wakeup
time during which staff “kept plowing through.”
Consulting represented 75 percent of the business at the
time; software was bringing in 25 percent. The firm made a
decisive and pivotal switch, pouring more resources into Potential Point and focusing less on consulting. Today the software
makes up 80 percent of the company and consulting represents
20 percent.
Roughly half of Lederman’s time is now spent on the speaking
circuit. He has 50 to 85 engagements a year, and this year he is
promoting his new book, Engaged! Outbehave Your Competition
to Create Customers for Life. The book details the 22 behaviors
Lederman considers essential to living the brand.
Much of the company’s success will hinge on telling the story
of America’s crisis of disengagement. Besides promoting the
book and Potential Point through social media, Brand Integrity is giving away access to a portion of the software, called the
Engaged Index, to build a database of proof consisting of four
simple questions. An employee can go to the website, answer the
questions, and click on his or her employer in a dropdown menu.
Once coworkers also respond to the questionnaire, a picture will
start to emerge—one that shows how engaged the employees of
that company really are. Brand Integrity can use the data to show
regional and national trends—and build its own database of prospects in the process.
“The intent there is to raise awareness of the employee engagement crisis,” Bond says. “It will be a stand-alone, and we’re
hoping it will go viral.”
A
s the first-ever employee recognition system to quantify engagement, Potential Point has to educate possible clients first. Lederman ranks it among the firm’s
biggest challenges. The software’s cross-functional
nature also makes it harder to sell. The notion of living
the brand is “owned by no one but managed by everyone,” Bond
says. Hence, there are various buyers within a company—including marketing, which represents the brand externally, and HR,
which is typically responsible for internal employee engagement—that have to agree on a purchase.
Those who sign on are enthusiastic. Since the software was
launched in 2006, not one of the more than 100 for-profit employers who use the software has voluntarily shut it off, Lederman says. Among clients are the University of Rochester Medical
Center, AAA of Western & Central New York, Chobani Inc.,
Constellation Brands, the Bonadio Group, Excellus BlueCross
BlueShield, Five Star Bank, and Wegmans.
At Five Star, the software helped managers assess their
branches. They discovered that offices with the highest loan production figures also had the highest levels of employee engagement, Bond says.
Genesee Regional Bank credited the Brand Integrity software
for helping it place seventh in the small/medium employers
category in this year’s Best Companies to Work for in New York
competition.
Another client, SavOn LLC in Oneida, thanked Brand Integrity when it won the 2013 American Society for Training and
Development CNY Best Award for For-Profit Organizations. The
award recognizes a firm that has linked employee learning to the
business’s strategic growth or success.
Competing products focus on selling rewards; Potential Point
focuses on recognition and appreciation and garners 80 to 95
percent employee participation—10 to 20 times the participation
rate of other models, Lederman says.
“You don’t need rewards. Just create a social environment
that fuels the recognition people crave,” he says. “You create this
environment of constant sharing of best practices. It sustains the
environment in which people can become more motivated.”
In its own office, Brand Integrity is purposeful and busy—but
easygoing, almost laid back. Bennett, Lederman, and Bond hint
that the sportscoats they are wearing are not everyday attire.
They ping each other with good-natured teasing and sing each
other’s praises.
Interns beg to come back, Bennett says.
“The culture here is something really special. We have a group
of A players who really want to see the company succeed—but
it’s a fun group of people, too,” he says. “It’s not just the owners
living in Lala Land. I truly believe our employees love working
here as well.”
Bond joined the company last year after a conversation with
Patrick Ahern, Brand Integrity’s Senior Vice President for Business Development. Bond helps with strategy, direction, and
managing the day to day, Lederman says.
“I just met Bryan last fall. There are some people you meet
and you just know,” he says. “I didn’t know he was a Simon alum.
Patrick met him at a Forty Under 40 cocktail reception. Within
90 days he had accepted an offer.”
Bond, who had just sold his share in Bond Financial Network
to his brother, had other offers on the table at the time.
“This one really struck me because I am very passionate about the
impact of culture on an organization and truly believe it is a differentiator. It’s fun. It’s a puzzle I enjoy playing with,” he says. “I wanted
entrepreneurial skin in the game, but with enough of an established
base and a strong leadership team that I could help scale it.”
Lederman, Bennett, and Bond are all active Simon alumni.
Bennett and Bond are members of the George Eastman Circle
and Simon Alumni Council. Lederman continues to lecture at
the Simon School, while Bennett meets with marketing students
and does alumni interviewing. Bennett says Simon’s small size
allowed for more interaction with professors; he also appreciated the School’s zealous grounding in economics. As for Bond,
he says James Brickley’s class on organizational development,
one of his favorites, foreshadowed his current work.
“I really think this idea of managing human capital is a critical
topic for the next decade,” Bond says. “Those who can figure out
how to engage employees—manage their experience and the experience they in turn deliver to the customer—will win.” s
Simon Business ◾ Fall 2013 15