Thursday, November 15, 2018

YWCA Leader Luncheon Honors Kaplan Institute Exec Director Howard Tullman with Ally Award


I want to thank Kristi for her very clever video and I want to congratulate all the other honorees and leaders. And I especially want to thank my good friends at the YWCA for this honor although I’m not sure that I’ve really done anything special to deserve it. Dorri said that I’m only the 3rd man honored with this award in its lengthy history. I guess if you hang around long enough almost anything can happen. Hopefully we’re all here today to help make some critical changes happen that are long overdue.

My interest in supporting, mentoring and advancing women in several dozen businesses over the last 50 years (take that Michelle!) has always been totally selfish. Apart from the fact that I have 2 terrific daughters and 4 amazing granddaughters who I want to have the very brightest futures and the broadest set of life choices and opportunities possible (they’ve already got great genes and terrific talents) - the fact is that, in every company I’ve ever built (or been a big part of), strong, skilled and passionate women have always played major leadership roles and made important contributions to the design, development and success of those businesses.

This didn’t happen because it was in fashion or the right thing to do or even a special thing to do; it happened because it was the smart thing to do and that’s why I say it was selfish. It was the best thing I could do for my business at the time and it’s been a part of my program ever since. I don’t think anyone does anything important all by themselves these days and I don’t think you can build any business that’s ready for the challenges of tomorrow which isn’t aggressively inclusive and diverse.

Nothing this important happens by itself. And no one who has the opportunity to help make changes like this does it without sacrifices of their own. Time, energy, sleep – these are all at a premium today and I can tell you that I wouldn’t have been able to pull off even a fraction of my “accomplishments” without the support, love and exceptional patience of my family and especially of my wife Judy. She really loves our dogs the most, but I’m pretty sure that I’m a strong third or fourth. 

And, I’ve also been privileged to be a part of and work with several organizations (including 1871 and the YWCA) which have helped to set great examples for today and for the generations to come. I’ve worked closely with Dorri for many years. I want to end by taking a moment to recognize and thank her for the amazing transformation of the Y which she is leading. I’m always proud to call her my friend. Thank you all again. 

Kaplan Institute Exec Director Howard Tullman Presents the A.B. Dick Lecture at Lake Forest Academy

Chicago Tribune Op Ed by Kaplan Institute Exec Director Howard Tullman

Amazon sweepstakes? Move on, Chicago!

Amazon isn't bringing a second headquarters to Chicago, but Howard Tullman writes that he sees "powerful evidence that Chicago’s momentum is unabated." (Terrence Antonio James / Chicago Tribune)

Howard Tullman
There hasn’t been a lot of hand-wringing or despair since Amazon CEO Jeff Bezos announced the winner of his yearlong quest for a second headquarters and jobs bonanza.
You know why? Because there’s been tremendous leadership and collaboration working in the trenches the past decade to put Chicago on the global tech map — led by 1871’s multiyear status as the No. 1 university-affiliated tech incubator worldwide.
So, was it really a loss not landing the thousand-pound gorilla, where it could potentially inflict damage by crushing competition, close down a few more retailers and strangle a bunch of our fledgling startups?
And that’s if you even believed the HQ2 story, which is now more of an HQ3.5 story (with Virginia, Long Island City, and Nashville, Tenn., all in the mix). I never did.
As I’ve long observed, the only real existential risk facing Amazon is something regulatory or legislative, and those fateful decisions will be made in Washington, D.C., where Bezos already owns the franchise daily newspaper. The Big Apple play was largely driven by media and market concerns. Frankly, the Nashville logistics hub is the only part of this story that was a real opportunity for us, and it’s the thing that Chicago deserved to win on merit from day one.
But the great thing about our city is its rock-solid resilience and commitment to perpetual progress and ongoing improvement. So, the Amazon passion play was merely a hiccup or pothole in the road on a long journey forward. The resurgence of the city’s South Side with a developing new tech district, anchored by the $40 million Kaplan Family Institute at Illinois Institute of Technology; the visionary Discovery Partners Institute, a purpose-driven, collaborative research institute located in Chicago that is focused on creating solutions to grand challenges; new facilities being planned at the University of Illinois at Chicago; the redevelopment of the Michael Reese property — the list goes on. These are powerful evidence that Chicago’s momentum is unabated, and our growth will continue.
Chicago has always been about building a stronger, brighter future. We continue to be a hub of game-changing leaders, abundant resources, first-class universities and innovative vision — like the P33 program, a “Burnham plan for Chicago’s tech future,” which is a remarkable road map to an even brighter tomorrow.
You’re never really out of the game unless you wallow in regret more than dream big. Chicago’s dreams are alive and well, and since Amazon was wishful thinking from the outset to most of us in the tech world, it’s more like a bullet we dodged than something to regret. It’s time to move on and move forward, with optimism and a strong, savvy game plan. Now, that’s Chicago.
Howard Tullman is a professor and executive director of the Kaplan Institute at Illinois Institute of Technology, and the former CEO of 1871.

Tuesday, November 13, 2018

New INC Magazine Blog Post by Kaplan Institute Exec Director Howard Tullman

Five Rules for Getting the Year-End Bonus Right
A bonus isn't a gift and you aren't Santa Claus. You need to reward performance, not make the whiners happy.

Executive director, Ed Kaplan Family Institute for Innovation and Tech Entrepreneurship, Illinois Institute of Technology

Now's the time for you to start figuring out year-end bonuses. As much as you'd like to, you can't really put it off any longer being that December is right around the corner. Honestly, the whole deal would be so much easier and less stressful if we distributed bonuses in July instead of in the midst of the holidays. If you're a typical entrepreneur, though, your people are paid twice a month, which means that you've got to distribute their bonuses with their first check in December, so they have a little time to spend it on holiday presents.

I was going to say, "time to decide what to do with it," but these days the idea of "saving" some of that extra cash doesn't even enter into the discussion. These bonus payments are often pre-spent, which just makes the pressure greater on you to get the amounts right. This is no easy task in the age of over sharing, profound entitlement, exaggerated expectations, and dysfunctional transparency. As hard as you try and as diligent as you can be, a bunch of your people are still going to be unhappy.  Get used to it.

If you're a startup CEO who's even a little bit conscientious, and most of us are, you'll spend way more hours than you'd imagine stewing over these decisions, slicing up the fixed and often shrinking pie in a million different ways, and trying to do right by everyone.  Which, of course, is unrealistic and impossibly subjective as well. You'll work really hard to try to do the best job you possibly can.

You can collect input and suggestions from your board, your accountants and other team members (who, as a rule, are always willing to spend more money than the company can afford to take care of their own folks) and you can look at "industry" guidelines, which are usually just as useless. Because, especially at this time of the year, every business sits on its own bottom; has its own Rashomon history of the past year; and a big bunch of explanations, rationalizations, and "woulda, coulda, shoulda" excuses.

 So, there are no pat patterns, flawless formulae, or even good guidelines to really help you make these personal and highly emotional decisions. And, as you're sitting and sweating these decisions out on the Sunday after Thanksgiving, you'll quickly realize that this is another one of those "buck stops here" situations. If your business has had a lousy year, I guess it's a little easier to be more modest in payouts, but -- nine times out of ten -- those overall results weren't the fault or the responsibility of most of your hardworking employees. So, don't bother whining too much to them about the bottom line. That explanation might work better on the managers who truly understand the math -- but don't count of any of them stepping up to take a bullet for the team, either.  It's fair to say that baseball is still the only place in the real world where a sacrifice is actually appreciated.

Even if every case is ultimately a little different, there are a few things to keep in mind, and to learn from those who've suffered through the painful process over and over again.

1      There's no silver bullet and this never gets easier. On bonus day, you're gonna be sitting opposite a bunch of people -- one at a time -- who think that you have measured their value and worth as human beings, not just as employees, and converted that opinion into dollars and cents. A lot of heat and emotion is bundled into that bonus amount and you can count on some sparks flying during those conversations.
2      Percentages are a really poor proxy. Comp committee members and other experts are notorious for telling you (with little or no basis in fact or even experience) that bonuses in "a new business like yours" should be around X% of most employees' salaries. In my experience, this advice always results in dollar amounts that you'd be afraid to give your doorman or letter carrier. My advice is to build your bonus structure from the bottom up. Start with a dollar amount that you won't be embarrassed to present to your youngest and newest employees and go from there.
3      Making mediocre people happy is a good way to lose your best performers.  Trying to buy peace so you won't get a bunch of dirty looks and evil eyes at the office party is a bad bet for the business overall. Some people are alive only because it's against the law to kill them and some people deserve exactly what they've earned -- or not earned. And they shouldn't get one dollar more. Overpaying for peace sends the worst possible message to everyone and really discourages the people who are hitting it out of the park. Get in the habit of sacrificing the few, if necessary, to save the many. Always be raising the average.
4      Don't make promises you can't or won't be able to keep. It's easy, in your haste to get out of the room and end the conversation, to fall into the "there's always next year" trap. Please don't. First, because it doesn't really help the situation -- no one wants to be happy tomorrow. And second, because if you really think things are unlikely to improve, you're just delaying a more difficult and more critical decision. And, by the way, when you say to yourself that you don't know about a person, the truth is that you do. Try to always be able to say that your average employees now work somewhere else.
5      Buckets are much better than brackets or bands.  Using systems of brackets or bands for comp or bonus determinations are okay, but they often miss a very central consideration, which is that some of the most impactful and important people in your business could have relatively low salaries.  So, the pure math can be misleading, but in your heart and your head you know who these people are. And that's why I like the "buckets" approach. Start the whole process with 3 big buckets. Bucket 1 is for the best people in the business-- wherever they are and whatever they may be earning. These folks need to be rewarded. Bucket 2 holds the vast majority of your employees and hopefully they're doing more than their fair share and contributing. These people need to be recognized. Bucket 3 is for the people who are just doing their jobs and not much more. Frankly, if they aren't getting better, they better be gone. These people need to be reminded. Use bonuses to send the appropriate messages to each group.
And one last reminder. Don't take it personally if employees aren't grateful or thank you. That's just another part of the job.

Saturday, November 10, 2018

8uilt by Barcode

It’s 90 degrees on a late June day as Edward L. “Ed” Kaplan (ME ’65) bounds into IIT Tower dressed in navy walking shorts, a navy plaid polo shirt, and fluorescent yellow athletic shoes. While his chronological age may be 75, his spirit and enthusiasm appear to be no less diminished than when he was a 26-year-old entrepreneur who, along with the late Gerhard “Gary” Cless, began to fabricate the machines and processes that would eventually form Zebra Technologies Corporation, a pioneering asset-identification company that earned $3.72 billion in revenue during fiscal year 2017.

Ed and Carol Kaplan

Too hyped up to even take a seat inside the cool conference room where we meet, Kaplan stands and provides a quick object lesson on a 500-milliliter plastic bottle of purified drinking water. He turns the bottle on its side and points to the black-and-white strip of lines and numbers—the barcode—that, in a sense, comprises the cornerstone of the Ed Kaplan Family Institute for Innovation and Tech Entrepreneurship.
“We had an entry product that was better, in some ways, than other printers that were in the marketplace,” recalls Kaplan about the duo’s first barcode printer, the MODUPRINT. “But we didn’t stop there. We went into what was called thermal transfer and a revolutionary printing technology that moved Zebra Technologies into the industry leader position. The MODUPRINT could print this,” Kaplan says, gesturing to the bottle’s barcode. “But it couldn’t print it as well or as fast or for the same price as the Z-130,” he adds, acknowledging the thermal transfer device that moved the company into the top tier.
Kaplan’s gaze shifts out the window 17 floors up and over an unobstructed view of Mies Campus to the north.
“I’m just a lucky guy who made some money, and that money is now invested in that white building and in the people who are going to be in that white building,” he says, nodding his head in the direction of the ethylene tetrafluoroethylene-paneled Kaplan Institute. “Universities could be about a lot of different things, but to me, the reason we’re building that institute is because we want to teach students to—by themselves or in collaboration with others—build a business, learning what it takes to go down that road.”
A few years before he retired in 2007 from the company that he co-founded, Kaplan prepared a thick binder’s worth of presentations that he wrote—what he calls “Zebra’s vision and guiding principles”—for management and other interested groups. Equal parts historical overview and business wisdom, the binder emphasizes the importance of all of the people involved in the evolution of building a successful company—from the staff and the suppliers to the customers. With his attention now focused on Illinois Tech’s students, Kaplan shares 10 pivotal moments—both high and low—in the history of Zebra Technologies that may serve them as guideposts of innovation and tech entrepreneurship.

  • 1969
    AN IDEA SPARKS: A 26-year-old Ed Kaplan [left, in photo below], along with Teletype Corporation colleague (the late) Gerhard “Gary” Cless, form a part-time business—Data Specialties (DSI)—to design electromechanical equipment and “have some fun,” says Kaplan.

  • 1969-1970
    UPS—AND WAY DOWNS: A client places an order for 500 data recorders. (A cash register sent transactions to the recorder, which encoded the data in the form of punched holes in a one-inch-wide paper tape.) Kaplan and Cless secure a one-time $10,000 bank loan and then return to the bank to plead for a second $10,000 loan to complete the job. After the duo purchases 200 sets of custom parts and delivers 25 data recorders, the client cancels the remaining job. “We were left with 175 sets of unique parts—nobody else could really use them,” says Kaplan. “This was a big problem for two young kids. What do we do with the parts and what do we do when we can’t pay our bills?” Their problems only increase. The duo places ads in trade publications to drum up business and receives an order from Florida for 1,000 teller terminal printers. After DSI delivers two prototypes, that client serves the company with a bogus lawsuit claiming that it showed drawings and prototypes to a competitor.
  • 1971
    SCRAPPY SMARTS: Kaplan and Cless, who left their full-time jobs in 1970, borrow money from family and friends to launch a full-throttle sales campaign. They create the PMR-820 paper- tape perforator from the scrapped parts, and this decision enables their first real success.
    “I started to drive across the country (sleeping in my car at night) and demonstrated the PMR-820 to anyone who would let me in the door. A few months later, I received a call from one of the companies I visited asking if I could take an order for 100 units and ship 10 in a week. I just about fainted!” recalls Kaplan, with a laugh. “It was our first order for the PMR-820. I didn’t have to buy very much inventory because I had all of the old custom parts. How did we survive and ultimately prosper? This was when many of our values and principles started to emerge— commitment, focus, innovation, quality, and reliability.”
  • 1973

    BIG IDEA: The duo designs and constructs the MODUPERF modular paper-tape punch, an industry first. The device is billed as “The Ultimate in Design Simplicity.”

  • 1982
    REALLY BIG IDEA: DSI introduces a product new to the barcode world with the MODUPRINT, a matrix label printer that features eight different barcode symbologies in 37 sizes.

  • 1985-86
    KA-CHING!: Kaplan and Cless earn their stripes and change the name of their company to Zebra Technologies Corporation. They enter the upper echelons of the barcode industry with their introduction of the Z-130, a thermal transfer printer for on-demand barcode labeling.
    “Our thermal transfer printing of barcodes was a technological breakthrough at 200 dpi. We went from being a product to a labeling solution,” Kaplan explains. This thermal transfer technology no longer depends upon the use of temperature-sensitive paper for recording the impact dots that comprise the barcode lines and numbers. Now, barcodes can be printed on almost any surface, from foil to wax paper to plastic bottles.
  • 1991
    BET THE RANCH: The privately held Zebra Technologies makes an initial public offering in 1991 and raises $40 million.
    “The $40 million was used to fund new product development and expand distribution channels, both domestic and international,” Kaplan explains.
  • 1998
    KNOW YOUR GAME: Zebra Technologies merges with Eltron International, a provider of desktop and photo ID card printers for items such as driver’s licenses and access cards. Two years later, Comtec Information Systems, a leading provider of wireless mobile printers, joins Zebra.
    “Learn to stay close to your customer, anticipating their changing needs,” says Kaplan.
    The acquisitions enable Zebra Technologies to extend the barcode printer range and also add desktop printer competencies and products.
  • 2007
    LEAVING A LEGACY: Kaplan retires after 37 years as Zebra’s chairman and chief executive officer to head Nalpak, Inc., a private investment firm.

  • 2014
    GLOBAL LEADERS: Zebra Technologies acquires Motorola Solutions–Enterprise Business.
    “Zebra took a giant step,” says Kaplan. “The acquired company was more than twice Zebra’s size. Zebra is a company that has been extremely successful for perhaps all of its existence. It’s quite amazing.”


Kaplan Exec Director Howard Tullman Speaks on Tech Trends to Navistar Dealer Convention

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