Safety Council Recap: 5 Steps to Take After a Serious Workplace Incident

Attorney and consultant William Haak spoke to the Northeast Ohio Safety Counsel Aug. 9 concerning serious workplace incidents (and how to ensure things go right after they've gone horribly wrong). Haak, the founder of environmental, health and safety legal and consulting firm Haak Law LLC, has more than 23 years of environmental experience and 17 years of occupational safety experience.  During his presentation, he provided real world examples of workplace crises and how employers should respond to protect their people, their business, and the communities surrounding their facilities.

According to Haak, serious workplace incidents include:

  1. Injuries and fatalities;
  2. fires, explosions, and other accidents;
  3. workplace violence;
  4. spills or releases of hazardous substances;
  5. severe weather incidents; and
  6. incidents that might not seem "serious" that become serious because of social media such as Twitter, Facebook, or Instagram

The above-listed incidents could strike at any business regardless of size. Preparedness and knowing exactly what to do before a serious incident occurs is the key to success.

Haak recommends having policies and procedures in place to guide your business through what he refers to as "the Serious Incident Golden Hour"—the first 60 minutes after a serious incident occurs. In addition to protecting life (including employees, visitors, etc.), protecting your property and assets, and securing the scene along with first responders such as police and fire personnel, it is important to:

  1. Establish an incident commander and an incident command post;
  2. begin early stages of an incident investigation to determine what went wrong;
  3. preserve the scene (for investigation) and collect evidence and witness statements;
  4. make required notifications to regulatory agencies such as EPA and OSHA; and
  5. communicate any facts you know to interested stakeholders including superiors and subordinates, first responders, the community (the media), and impacted family members

All of these important steps can—and should—be practiced in routine crisis drills. Carefully crafted crisis drills can provide important insights into the strengths and weaknesses of your crisis response plans.

Finally, as an attorney, Haak advises legal counsel be involved early on for more serious incidents.  Legal counsel can assist your incident commander in many tasks including making regulatory notifications and developing talking points. An attorney with the right background and experience can also help lead your incident investigation. Most importantly, involvement of legal counsel can help establish the attorney-client privilege (which can provide you with some important protection should an incident lead to litigation).

For more information, please contact William Haak of Haak Law LLC at whh@haaklawllc.com or 216-772-3532.  You can also visit www.haaklawllc.com.

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  • Next up: Save Money on Lost Time Claims: Open Enrollment Continues Through May 28
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  • Save Money on Lost Time Claims: Open Enrollment Continues Through May 28

     

    As a Managed Care Organization (MCO), it is 1-888-OhioComp’s responsibility to ensure that injured workers receive the best treatment and return to work safely while minimizing the financial impact to you, the employer.

    There are more than 91,000 Active Lost Time claims currently managed by the 10 MCOs in Ohio. Lost Time claims are the most expensive claims and have the greatest impact on an employer’s premium.

    The Active Lost Time claims managed by 1-888-OhioComp have the:

    - Lowest Claim Costs for Lost Time claims of any MCO
    - Lowest Medical Costs for Lost Time claims of any MCO
    - Lowest Indemnity Costs for Lost Time claims of any MCO
                                                       Data Source: BWC report Sp20-004427 (12/18/20)


    Open Enrollment for workers’ compensation Managed Care Organizations (MCO) continues through May 28. COSE and Greater Cleveland Partnership (GCP) endorse and recommend 1-888-OhioComp as the preferred MCO for our members.

    During the month of May, many Third-Party Administrators (TPAs) try to confuse employers and have them sign an AC-3 and an MCO enrollment form. An AC-3 will get you a quote for TPA services and does not obligate you; a signed MCO enrollment form automatically switches you to their MCO.

    Be careful what you sign in May.

    To select 1-888-OHIOCOMP as your MCO, just click the link and fill out the form and return it to us by May 28. It couldn’t be easier! There are no costs for our services. If you have any questions or want to schedule a meeting (virtual or in-person), please call us at 1-888-644-6266. 

    Enrollment forms received after 5 p.m. on May 28 cannot be processed. Please fax the form to 216-446-6100 or email enroll@1-888-ohiocomp.com.

    Enrollment Form

    Claims Management

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  • Next up: SBA Loan Programs Meet More Business Needs
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  • SBA Loan Programs Meet More Business Needs

     

    The U.S. Small Business Administration (SBA) is the go-to resource for small business financing needs. Working through traditional financial institutions like banks, the SBA offers several loan programs specifically designed to meet the unique funding needs of businesses. For many of these businesses, qualifying for an SBA loan can be the difference between staying in or going out of business.

    “A banker experienced in SBA loans offers much more than loan documentation,” said Dell Duncan, First Federal Lakewood vice president of commercial lending and SBA specialist. “The best will advise borrowers, help set expectations, foresee potential pitfalls and continuously communicate to ensure the borrower is well-informed throughout the loan process.”

    Working through a financial partner to understand and apply for the most appropriate SBA loan program is the best way to ensure a timely process and increase the likelihood of approval. The commercial banker will work with the SBA directly to make the process smooth for the borrower and the lending institution. 

    The SBA’s 7(a) loan program and the 504 loan program are the SBA loans most widely sought and used by small businesses. The two programs have similar eligibility requirements, usage criteria, amortization schedules, interest rates and funding limits., but there are some unique differences.

    The 7(a) SBA Loan Program
    Offering help for small businesses, this loan program is the most common SBA loan program, and has a number of loan types. The variety of acceptable uses makes 7(a) loans attractive to many businesses seeking loan options. Loan funds can be used for any sound business purpose, including real estate purchase (land and buildings), construction, business acquisitions, working capital, refinance of existing debt, and the purchase of furniture, fixtures, and supplies. 

    7(a) loans can be up to $5 million and traditionally carry a 75% SBA guarantee. In order to provide greater funding for small businesses during the pandemic, the guarantee has been increased to 90% through the end of 2021.

    Eligibility requirements include meeting the SBA’s small business definition, operating for profit, operating a legal business purpose and operating in the United States or U.S. territories. The business owner must have some equity in the business and demonstrate a need for the funding. 

    A 7(a) loan is usually repaid in monthly installments of principal and interest. Rates can be fixed or variable. The lender establishes the interest rate based on the borrower’s payment history, collateral, credit score, and other factors. 

    A type of 7(a) loan, the Express Loan offers faster approval time, generally within 2-3 days from completed application, and can be approved for amounts up to $1 million with 75% SBA guarantee through the end of September 2021.  Small businesses like that the loan can be initially funded as a line of credit, with advances as needed, then termed out over a five to seven year period.

    “The SBA guarantee allows us to take a closer look at applications that may not qualify under stricter conventional business loan standards,” said Duncan. “It opens the door a little wider for businesses that need financial help, and would otherwise be declined.”

    504 Loan Program
    The 504 loan program continues to grow in popularity due to the low interest rate environment. These loans, up to $5 million, are funded by the bond market, backed by the SBA, and give small businesses access to more attractive fixed rate terms – 10, 20 or 25 years – and fixed rates that are often ½% less than other funding sources. The flip side is that 504 loans can only be used to fund fixed assets such as machinery and equipment; owner-occupied real estate, including new facilities or existing real estate; and commercial property improvement. Loan funds cannot be used for working capital or inventory, consolidating, speculation or investment in rental real estate. 

    Eligible 504 loan borrowers must have a tangible net worth of less than $5 million, average net income of less than $5 million after federal income taxes for two years before application, operate as a for-profit company in the United States or its possessions. In addition to SBA size guidelines, eligibility requirements include qualified management expertise, a feasible business plan, good character and the ability to repay the loan.

    Borrower Benefits
    The SBA was established to help small businesses prosper by making credit available to businesses that for various reasons would not qualify for conventional commercial loans. These can include less than perfect credit, short, or no operating histories, or those operating in certain industries that are considered riskier to traditional lenders. 

    For SBA loan borrowers, under temporary guidelines established by the recent economic stimulus package, the SBA will make the first three months of loan payments, up to a total of $9,000 per month. In addition, the SBA guarantee fee, usually about 2.3% of the loan amount and passed along to the borrower, is waived until funding runs out later this year. These temporary cost-savings are intended to help more small businesses reduce financing expenses during the impacts of COVID-19. 

    Other criteria appeal to SBA borrowers. Industry eligibility for SBA loans is broader than traditional banks provide. SBA loans generally require a lower equity infusion from the borrower. The SBA may require owner equity as low as 10% instead of a bank’s 20-25% equity requirement.  The SBA will not decline a loan due to lack of collateral.  Inconsistent debt service capacity is acceptable if there is a valid reason (like the COVID pandemic).  The SBA has a little more flexibility in weighting a borrower’s credit score. A longer repayment period, resulting in lower monthly payments, also make SBA Loans attractive to businesses that need to conserve cash.  

    Getting Started
    The SBA doesn’t expect small business owners to decipher hundreds of pages of programs, guidelines and regulations to apply for its loan programs. Instead, business owners work with a local banker who will take time to understand the business and the financing request and work with the borrower and the SBA throughout the entire process to generate the most useful financing arrangement in the most efficient manner.

    Not all banks and commercial bankers are active or dedicated to the SBA programs, so business owners may need to talk with more than one institution until they are comfortable with the banker’s SBA knowledge and ability to recommend and facilitate the right SBA financing option for the business’s best interest. 

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  • Next up: Selection Process for Hiring Star Employees
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  • Selection Process for Hiring Star Employees

    It is not new news to hear how difficult it is to attract, retain and develop talent. It seems nearly everyone agrees one of the most challenging responsibilities is to hire and onboard employees.

    It is not new news to hear how difficult it is to attract, retain and develop talent. It seems nearly everyone agrees one of the most challenging responsibilities is to hire and onboard employees.

    In fact, few dispute the pitfalls commonplace to staffing. Living with a bad hire is one of the biggest mistakes we can make. The U.S. Department of Labor estimates the average cost of a bad hiring decision can equal 30% of the individual’s first year potential earnings.

    If that’s true, then why is it that hiring practices for many organizations have changed so little during the past 50 years? Why are organizations not making better use of affordable, time-sensitive, activities that can drastically improve a company’s batting average when it comes to selecting and retaining talent? Why are companies not investing in ways to review hiring data that can predict the next star employees?

    These activities seem critical given the aging workforce and the need for organizations to improve their succession planning processes. “Companies need formal succession plans to be competitive in 2015,” says Josh Bersin, principal and founder of Bersin by Deloitte. In a 2015 HR Magazine article, Bersin wrote many organizations struggle to facilitate internal talent mobility. Fewer than one-third have formal succession plans for all but the very top levels, according to research conducted by Bersin by Deloitte and published in November 2014.

    While it can be easy to see the typical pitfalls when we step back, it is much harder to catch ourselves from making missteps when we are in the middle of filling a critical role. For example, hiring managers often admit the pressures they are under to hire, often sacrificing diligence and patience when it is needed most. Others readily point to a time when they experienced groupthink and didn’t question a peer or boss when making a poor decision after a final interview.

    Others say they overlooked, and/or justified their decisions in the face of contrary objective personality or ability data, after living with a bad hire.

    In other words, people are so busy with the day-to-day, they often do not invest the time to proactively work on their organization’s hiring process. In fact, it seems that many organizations engage the hiring process as a reflexive, knee-jerk activity in response to an opening or vacancy. All that said, many organizations have a way to go when it comes to tightening up their hiring processes. So, how do you avoid making a bad hire? Here are my five suggestions:

    1. Stop making the common errors we make under pressure to hire. For instance, mistakes such as falling for candidates who remind us of ourselves, or not having a structured interview format so that we can compare apples to apples.

    •    RELATED: Learn how adding diversity to your workforce can help your business grow.

    2. Start treating the entire hiring process as a way to collect data and then incorporate ways to review the information in a consistent manner. Many organizations do not have a common way to synthesize all of the information collected throughout the hiring process, such as interview notes, personality data, resumes, etc. In the end, many feel that there is so much data to comb through that it can be overwhelming.

    3. Pay attention to what the research tells us. For instance, new insights from Glassdoor data suggests that globally, the time required for hiring processes has grown dramatically in recent years. Based on a sample of 344,250 interview reviews spanning six countries, key findings from their survey indicate that, “Hiring policies of employers can have a large effect on the length of the interview process. Choosing to require group panel interviews, candidate presentations, background checks, skills tests and more each have a positive and statistically significant effect on hiring times.”

    •    RELATED: Check out the BizConCLE workshop: “How to Get the Right People on the Bus and the Wrong People Off.”

    4. Copy from those companies that know how to hire effectively.  Leading companies have incorporated the latest advancements in personality assessments, combining them with world-class hiring practices, to drastically improve their selection success. Instead of getting mired in too much data, top organizations have systems to assist hiring managers with making sense of the data, thereby allowing them to achieve quick consensus.

    5. Learn from mistakes.  When mistakes happen—as they occasionally do when it comes to predicting talent—the best organizations look at any missteps made along the way. And the learning is perhaps the most crucial when it comes to the outliers—those who are performing well outside of expectations. With data and systems in place, the best companies can quickly pull together data to hypothesize why and how some people are drastically outperforming their peers.

    Looking into the future, it is safe to say that attracting and keeping talent will continue to be a challenge. Paying attention to what you’re doing, as well as what others are doing (like making use of a personality assessment combined with HR best practices) is a wise way to maintain a distinct advantage relative to the competition.

    Mark Kogelnik is part of the leadership team at Watterson & Associates, Inc., in Chagrin Falls.

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  • Next up: Small Company Growth…You Don’t Know What You Don’t Know
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  • Small Company Growth…You Don’t Know What You Don’t Know

     

    Small Company Growth…You Don’t Know What You Don’t Know when it comes to knowing what human resources changes and requirements are needed as your company size changes due to growth.  In some HR instances, size does matter.

    Why does size matter?

    As company size changes due to growth, there are areas that may be affected that concern your employees and human resources and many times You Don’t Know What You Don’t Know when it comes to the following areas:

    Compliance and reporting
    Talent acquisition
    Education, training, and development
    Employee relations and performance management
    Labor relations
    Compensation, benefits, and total rewards
    Diversity and EEO
    Safety and environment
    Security

    Human Resources is accountable for obtaining and maintaining qualified employees. As your Company changes and grows, the employee and governmental requirements change and become outdated.   

    The decision to create a human resources department may depend on the number and type of workers you employ (union/non-union) and where you operate the business. However, federal (and state) laws shape your HR functions and determine the level of expertise you need for carrying out HR strategy and activities.

    In many cases, whether an employer is required to comply is based on meeting a threshold number of employees. The following are some examples of when size matters:

      Employers with at least 15 workers must adhere to Title VII of the Civil Rights Act of 1964, the and the Americans with Disabilities Act of 1990 Title VII and ADA

    FMLA applies to employers with at least 50 workers (within a 75-mile radius)

    For OSHA, employers are required to report workplace injuries for all businesses with more than 10 employees unless they are in one of the partially exempted industries

    In Ohio, if you have one (1) employee, you must carry workers’ comp coverage through Ohio Bureau of Workers’ Compensation.  

    The EEOC collects workforce data from employers with more than 100 employees (though lower thresholds apply to federal contractors)

    The Age Discrimination in Employment Act of 1967 applies if you employ at least 20 workers

    The Equal Pay Act of 1963 pay rules apply to all employers, regardless of employee count

    The Immigration Reform and Control Act of 1986 requires that all U.S. employers hire only employees legally authorized to work in the United States

    Even if your employee count is below the threshold, your HR functions should include developing an equal employment policy. It's an effective way of demonstrating sound business principles and attracting qualified applicants.

    Based on the record-keeping and administrative requirements for many of the federal (and state) laws, your organization should have HR functional support even if you don't have a dedicated HR department.  Size does matter and you don’t want to be caught in the You Don’t Know What You Don’t Know situation.  

    To avoid these situations, StaffHR’s Fractional HR services can start with a comprehensive review of your HR practices to better understand your legal compliance and alignment with HR best practices. The result of the review will provide a roadmap which prioritizes the action items we will address in conjunction with your team.  

    To learn more about Fractional Support go to www.staffhr.com or call 216-472-1465, email greatjobs@staffhr.com

    Natalie Harding, SPHR-SCP 15+ years’ human resources experience within manufacturing (union/non-union), service, and consulting industries. Pat Tokarcik, SPHR-SCP, has 30+ years’ experience also within manufacturing (union/non-union), service, and retail/wholesale industries.  Both are HR consultants currently available for projects through Minutemen StaffHR.

     
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  • Next up: So Why Is It So Hard To Get the Right People On Your Bus? Part Three: Hiring, With Particular Emphasis on Interviewing
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  • So Why Is It So Hard To Get the Right People On Your Bus? Part Three: Hiring, With Particular Emphasis on Interviewing

    If you have been reading this series of blogs, you already know the previous two blogs were concerned with hiring for some specific positions.  This blog extends that more generically, but with much the same set of rules.

    If you have been reading this series of blogs, you already know the previous two blogs were concerned with hiring for some specific positions.  This blog extends that more generically, but with much the same set of rules.

    A Story

    I had a long term consulting assignment with a manufacturing firm in the Southeastern United States a few years ago.  The company had been around for almost 40 years, employed about 200 people.  The company culture was very conservative.  Located in a small town, the firm even had its own company chaplain!. The COO knew the names and key metrics of every one in the plant, including birthdays and anniversaries.  The COO of the company wanted to put the firm on a faster growth trajectory.  Sales at the start of the assignment were around $12 million. 

    On my first trip to the plant, I met the senior management for the first time.  Since the major goal was faster growth, I paid particular attention to the Sales Manager.  He had just come off the road working with the sales force.  I asked him what the customers were saying and how he saw the potential for more sales from his sales team.  Rather than answer those questions, he evaded them, telling one semi-objectionable joke after another.  After a group lunch at a local diner, the CEO and the COO and I rode back together.  The COO asked me what I thought of Jerry.  I told him Jerry might be his Sales Manager, but he would not be mine.  That confirmed what they both thought even though I had no previous discussion with them.  Two weeks later, Jerry was gone.  Not surprising to me, he had been promoted to Sales Manager a couple of years prior because he was one of the most productive salespeople in the company! 

    Over the next several trips, the Controller, the head of IT, the HR manager, Customer Service manager  and a couple others were all replaced.  The major problem with each of these people wasn't their willingness to do their jobs, but it was their capacity to grow. The company started  working with an executive search firm which had a solid reputation for screening potential candidates and administering various tests for fit.  The two companies were pretty much locked at the hip.  The search Firm took the time to get to know the client company's culture and the need for fit long before Gino Wickman wrote his Traction book emphasizing "Wants It, Gets It, has the Capacity to Do It". Over a period of about three years, I was known as the 'bad guy' because people had figured out that shortly after many of my visits, one or more heads were going to roll. 

    While the COO and the search firm were joined at the hip, the CEO wasn't always on board with prospective hires.  Since this was a family business and the CEO was the majority shareholder, he held the power to override decisions and made it (albeit infrequently) a habit of hiring relatives whose major strength was having the right last name.  Every time the CEO overrode the search firm's recommendations, we had to repeat the hiring process.

    The firm grew organically to about $20 million over a five year period.  That was not the accelerated growth desired, and the blame was mainly due to a very comfortable sales force that was well compensated but had little desire or aptitude to prospect for new customers.  The incentives were there, but the wrong kind of sales person (a maintainer) was the norm.  New blood who had to develop their own territories started a sales improvement process. 

    Back to the Basics

    Let's briefly review the basics that are prelude to actual hiring.  First, establish what your firm's core values are.  Without that you will have no standard metrics to help you determine the fit with your culture of a given candidate.  Next, prepare a detailed job or position description that outlines the expectations  you have for the person to occupy that position. 

    Now you can begin your search.  Assuming you have identified some candidates and have reviewed their resumes, you can then vet the candidate's history, check his/her references, and do at least some background checking.   If all goes well, you are then in a position to establish whether or not the candidate(s) might fit your needs. 

    The Interview

    There are well-defined steps to conducting good interviews. 

    l. Do your homework.  If you are doing the interviewing, you should have a thorough knowledge of what the candidate has done and his/her background.  You cannot get that done in 10 minutes before the interview. 

    2. Decide ahead of the interview the questions to ask that are appropriate to the position. 

    3. Consider having two (or more) interviewers in the room so that four or more ears hear what is said.

    4. Schedule the interview in an uninterruptable space and time.  There should be no outside distractions if at all possible. 

    5. For important positions, set aside at least 45 - 60 minutes for the interview.  Data show that the longer the interview, the more accurate the quality of the interview.  Behavior can be 'faked' in a15 minute interview, but rarely in a 60 minute interview. Sidebar: If you determine in the first few minutes that the candidate simply doesn't fit your criteria, but you advertised the interview to be 45 - 60 minutes, what should you do?  The best advice I have on this subject - and it comes up a lot - is to simply terminate the interview.

    6. Listen a lot.  Your job is not to sell the candidate on coming to work for you, no matter how much you would like to do it.  If anything, a discussion at the end of the initial interview about the company benefits, advancement opportunities, etc. is a post script to that interview, but only if the interview went well.  Selling the candidate on the company is a logical step after you have decided you have a match. 

    Special Problem: Resume Truth

    Data shows that about 80% of all resumes contain one or more significant omissions, outright lies, or embellishments.  Case in point: One firm was hiring a key engineering manager.  Late in the hiring process, the top candidate was discovered to have embellished his academic accomplishments.  His resume stated that he had graduated from a top engineering school when in fact he had only attended that institution for one year.  Knowing that, what do you do?  If one of your core values is "high integrity", you go to another candidate.  If he hid something or embellished that, what other issues are going to emerge?  In this case, the company decided that while his track record was solid, they felt they could not trust him.

    Some Conclusions

    Hiring takes time and money.  Using an outside firm that can bring qualified potential candidates to you is worthwhile IF you (and they) take the time to understand what you are looking for and the core values you espouse.  That investment in a professional search firm to help screen out unlikely candidates and vet more likely candidates can be valuable.  They do this all the time; you usually do it only in trying to fill an immediate need.  Getting the expectations clarified and articulated up front makes the process better and more productive.  Remember the experience of the Southeastern US company above.

    Most small businesses I have worked with don't have a good handle on the hiring process, and they waste a lot of time and money on hiring ill-fitting or poorly fitted people for positions.  It is more usual to begin searches when crises arise - the resignation of an incumbent or the 'final straw' act of the incumbent that results in searching.

    Over the years I have frequently recommended to my consulting clients that they should always be gathering leads on prospective potential hires.  Naturally, given all of the other duties of the CEO's job, that advice usually gets ignored, to the detriment of the progress of the firm, its performance, and the amount of Maalox the CEO imbibes due to his/her dissatisfaction with incumbent performance.

    Sidebar: I am a strong proponent of hiring people who have already demonstrated their capabilities in larger firms because smaller enterprises rarely provide the training and guidance that gets them to the next level of growth with inexperienced people.  That creates consternation for people who make the "Gets It, Wants It"  but lack the experience (think recent college graduates without a lot of experience).  Here's the good news/bad news on that.  The people who don't have the experience can overcome the deficit over time.  They most likely will not have sufficient guidance/training to gain sufficient capacity to take a high growth firm to the next level.  However, those people, as they grow because of their desire and commitment to you can usually be very effective middle and senior managers in companies that expect more normal (definition: sales growth in the range of 5% to 15% annually) growth and are critical cogs in the company wheel.  High growth/scaled companies trying to grow from (pick a number - $20 million to $50 million over a rapid time frame) cannot usually achieve that growth with people who haven't already worked in a larger, high growth environment.  If you are trying to scale your company, your HR requirements are simply different.  If that is what you are trying to do, I highly recommend that you read Doug Tatum's book, No Man's Land.          

    Some Takeaways

    l. Follow the process - see above.

    2. Don't settle for OK.  Go for potential and very good to great.

    3. Look for people who, even if they don't have all the experience you would like, but have the potential, with help, to grow into the position or even the next position above the present one.

    4. Hire people who "Can Do, Will Do, and have Capacity.”  Anything less represents less than optimal company performance.

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