By: Debbie Barnett, Founder & President, Barnett Design, Inc.
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Let’s face it—prices are skyrocketing all around, with food prices hitting especially hard. Something’s gotta give. Do we really care what’s printed on the outside of that box of pasta, or what the label on that can of corn looks like? Or are we simply going to look at pricing and purchase the cheapest product in the category?

The straight up answer is yes and no, and no and yes. Good design matters as much as it ever did, as long as we understand what good design really means. Communicating the essence of a brand and standing out in an authentically unique and appropriate way is only part of what good design is all about. At least as important — especially in a market such as our current one — is clearly representing the value of what is inside that box, can, bottle or pouch. It’s an opportunity to show the consumer the “why”. Why YOUR product. From the obvious statements of benefit to the more subtle nuances of good design, consumers want to feel good about their purchasing decisions. Consumers want value and reassurance. And the satisfaction of a purchasing decision should continue when the consumer gets your product home and uses it. Good, ethical design truthfully represents the product. After all, our goal is repeat customers. The quality of your package design can affect consumer confidence about the quality of the product inside that package. 

Another critical element of good design is properly meeting mandatory requirements. Clear, legal display of mandatory information, such as nutrition facts, net weight, bar code, and distribution clause, serves two purposes: First, consumers can easily and clearly find the information they need to help make informed purchasing decisions, and, perhaps more importantly, setting up this information properly helps protect your company from being hit with costly violation fees and having your product pulled from distribution. 

So it’s really about value. And that includes the value of your design team. Make sure you’re working with someone who is a true professional, who understands the purpose and intricacies of good design—and is someone who truly cares about the value of your spend.

#choosingvalue #ideasthatwork #gooddesign #barnettdesigninc #consumerinsights #consumerpackagedgoods

Debbie Barnett is the founder and President of Ramsey, NJ based Barnett Design, Inc.—an award-winning, refreshing, boutique studio that specializes in customized branding, design, and communications for a wide variety of clients in the consumer products, healthcare, non-profit, and professional services sectors. For more insights or a complimentary 30-minute consultation, reach out at barnettdesign.com.

By: State of New Jersey

With the summer construction season beginning, the Murphy Administration is reminding local governments and school boards of their obligations under the New Jersey Prevailing Wage Act. 

The New Jersey Department of Labor and Workforce Development (NJDOL) and its partners at the New Jersey Department of Community Affairs’ Division of Local Government Services (DLGS), and the New Jersey Department of Education (DOE), recently sent a letter reminding local governments and boards of education of their responsibilities under the New Jersey Prevailing Wage Act.    

The New Jersey Prevailing Wage Act (N.J.S.A. 34:11-56.25 et seq.) establishes a prevailing wage for workers engaged in public work. The act requires the payment of minimum rates of pay to laborers, craftsmen, and apprentices employed on public works projects. Covered workers must receive the appropriate craft prevailing wage rate as determined by the Commissioner of Labor and Workforce Development.

The state wants to make sure public bodies are aware of their responsibilities when working with contractors or subcontractors including:  

Ensuring that the appropriate prevailing wage determination(s) are contained within the contract between the public body and the general contractor.  

Ensuring that certified payrolls are submitted weekly for all work performed subject to the NJPWA.  

Checking the NJDOL website prior to awarding a contract to confirm the contractor and any named subcontractors are registered with the NJDOL as public works contractors under the NJPWCRA and do not appear on the list of ineligible bidders by virtue of debarment or outstanding judgments.  

Establishing and maintaining a process for collecting certified payroll records and making them accessible to the public and NJDOL for review.  

When the lowest bid for a contract for public work is at least 10 percent lower than the next lowest bid, ensuring that, prior to awarding the contract, the lowest bidder submits a written certification stating that the contractor will pay all workers the prevailing wage rate.  

Additionally, Governor Murphy signed A-3666 in 2019 which mandated that construction contractors performing public work participate in a USDOL Registered Apprenticeship program. The apprenticeship model reinforces positivity in the work environment by enabling participants to earn wages for skills learned.

For more information on New Jersey’s wage and hour laws, visit myworkrights.nj.gov.

By: Frank Banda, CPA, CFE, CGMA, PMP, Managing Partner – Government and Public Sector Advisory, CohnReznick

CohnReznick’s Government team talks about potential changes to the FEMA Public Assistance Program and how these changes might positively or negatively affect recipients and subrecipients.

Congress recently passed H.R. 5641 – Small Project Efficient and Effective Disaster Recovery Act, or the SPEED Recovery Act which, if approved by the Senate, would have lasting impacts to FEMA’s Public Assistance (PA) Program. FEMA’s PA Program provides supplemental grants to governments, as well as some non-profit organizations, so that they can quickly respond to and recover from major disasters or emergencies.

In October of 2021, Representative Sam Graves (R-MO) introduced legislation to increase the threshold for what is considered a “Small Project” to $1 million under the Stafford Act. This is intended to streamline the recovery process for jurisdictions by reducing administrative burdens during the obligation and closeout process.

When presenting the bill, Representative Graves stated that historically, Small Projects account for about 95% of recovery projects in a disaster. However, due to the threshold not being adjusted for inflation and rising repair costs, only 75% of projects are Small Projects. He also said, “this will allow communities to have more control over their disaster recovery efforts and allow FEMA to focus their time and resources on larger and more complex projects.”

Q&A with Charles Smith, Manager, and Logan Hurley, Manager, of CohnReznick’s Government and Public Sector practice 

Q. Before we discuss how the SPEED Recovery Act might affect Public Assistance programming, will you please clarify the difference between a Large Project and Small Project as defined by FEMA?

Charles: The difference between Small Projects and Large Projects is centered in how the funding is administered by FEMA. While Small and Large Projects are both often initially obligated via a cost estimate, Large Project funding is adjusted to the actual cost to complete the eligible scope of work. Alternatively, Small Project worksheets are not adjusted to the subrecipient’s actual incurred amount. FEMA determines whether a project is Small or Large based on the final project amount, including any applicable reductions such as insurance. FEMA establishes a threshold each fiscal year for implementation of Simplified Procedures which serves as the threshold for Small and Large projects. Any projects that have costs equal to or above that threshold are classified as Large Projects, and those that have costs below the threshold are Small Projects. Additionally, a minimum project threshold is established and any projects that have costs under that threshold will not be processed by FEMA. For 2022 the minimum project threshold is $3,500 and the Small Project maximum threshold is $139,800.

Q. The bill’s author says that the smaller jurisdictions don’t have enough resources to “deal with the bureaucracy at FEMA.” How might the SPEED Recovery Act help lessen the administrative burden on small communities that are participating in the FEMA Public Assistance program? 

Logan: Small Projects typically do not require as much supporting documentation in order to be obligated, reimbursed, and closed out. Often, we see that smaller jurisdictions have limited staff, and those staff have to wear multiple hats and serve in many roles.  

So, while a large city may have dedicated finance staff for each of their departments that have all received training on how to code their disaster expenses, smaller jurisdictions may be relying on a single staff person to make sure all expenses are being captured appropriately. Keeping track of costs and supporting documentation across several projects can quickly become an overwhelming task. By requiring less documentation to get a project obligated and reimbursed, these jurisdictions with limited resources will benefit from a lessened burden on the front end. Essentially, subrecipients will have more time to compile Small Project costs as they are required to by regulation. 

Charles: Also, raising the Small Project threshold to $1 million may result in FEMA shifting more of its staff resources towards focusing on developing the more complex, Large Projects. This might result in more support from FEMA with regards to developing Large Projects.

That said, increasing the Small Project threshold to $1 million will likely result in less Large Projects and, thus, subrecipients will have to spend more time developing their Small Projects. FEMA has been gradually pushing subrecipients to take ownership of their own project development for years and we expect this to be the next step in that direction. 

Q. Congressman Sam Graves alludes to the headaches that applicants deal with as it relates to getting “the help they need to recovery and rebuild.” But he doesn’t mention the administrative burden after funds are received. Let’s say this bill passes and becomes law. What types of administrative requirements do applicants still have to abide by?

Logan: Regardless of a projects size, administrative requirements still need to be adhered to. Records retention requirements require that documentation be kept for three years after the closeout of an applicant’s last project for that disaster.

FEMA implemented the Validate As You Go program, or more commonly referred to as VAYGo, after the historic 2017 hurricane season. This was required by provisions of the Appropriations Act, as well as guidance from OMB that agencies should implement additional measures to identify and address improper disaster recovery payments. During this process, FEMA samples project documentation and conducts testing to verify that the costs were properly expended by the subrecipient or applicant.

This process is currently on hold as administration evaluates how to make it most efficient, but before that pause it had been expanded to other disasters and we foresee VAYGo to return and continue to expand. If the SPEED Recovery Act passes the Senate, I think there’s possibility it starts to incorporate the review of Small Projects.

While subrecipients and recipients will benefit if less supporting documentation is required up-front to drive project obligations, project awards, and disbursements after a disaster event, subrecipients and recipients will still be required to track expenses that are directly attributable to their federal grants and adhere to all documentation retention policies regardless of project size. Failing to keep complete records to support your Small Project can result in project closeout delays and even de-obligation of funding. 

Removing “red tape” from the grant life cycle in the pre-obligation and payment phase may give applicants a false impression that they do not need to track and support Small Project costs. That’s not the case. Applicants will need to compile this information before closeout in the event of a future audit. In conclusion, the SPEED Act will very likely expedite the recovery process as it occurs right after an event but it does not remove recipients and subrecipient responsibilities to track and support costs as required by federal regulation.

Q. Can you think of any new risks recipients or subrecipients need to consider if the Small Project threshold increases to $1 million?

Logan: As touched on previously, there’s almost certainly going to be a need to increase monitoring of Small Projects. Whether that means the recipient has to be the one who implements those increased monitoring efforts, or it comes through the federal side via a VAYGo-like audit, recipients and subrecipients should be prepared to provide all cost documentation for those Small Projects, or risk losing otherwise eligible funding.
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Charles: Subrecipients who have not done a great job of tracking and supporting Small Projects costs in past disasters stand to lose more funding if the Small Project threshold increases to $1 million. Recipients need to know which subrecipients need additional training on the front-end, as well as increased monitoring, to avoid questioned costs and de-obligations.

By: NPZ Law Group
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The State Department has waived the need for interviews (in certain cases) for visa applicants to the United States. The considerable backlog of applications since the COVID-19 pandemic made this step necessary to speed up the process of evaluating nonimmigrant visa applications. Here’s what you should know about this change by the NPZ Law Group.

Waivers for Applicants of Employer-Petition-Based Visas and Their Spouses and Dependents

The employment-based visa includes the following:

• H-1B
• H-3
• H-4
• L
• O
• P
• Q

Therefore, the aforementioned visa applicants, the H categories’ dependents, and H-4 spouses must meet the following conditions to have their interviews waived for the visa application process.

• Must have had any type of visa issued previously
• They will need to submit their visa application in the country where they reside or have nationality of.
• The applicants should not appear to be potentially ineligible or ineligible for the visa they are applying for.
• The applicants should never have had a visa refused unless the refusal was waived or overcome.

Those applying for the aforementioned visa applications for the first time can also have their interviews waived if they are nationals or citizens of a country that is included in the Visa Waiver Program. However, they will need to meet the following conditions:

The applicants should not appear to be potentially ineligible or ineligible for the visa they are applying for.

The applicants must have traveled to the US previously with authorization obtained through the Electronic System for Travel Authorization (ESTA).

Waivers for Applicants of Academic-Based Visas

The academic-based visa includes those for professors, students, short-term scholars, research scholars, and specialists. These visas are categorized as the following:

• F
• M
• J

Therefore, the aforementioned visa applicants must meet the following conditions to have their interviews waived for the visa application process.

• Must have had any type of visa issued previously
• They will need to submit their visa application in the country where they reside or have nationality of.
• The applicants should not appear to be potentially ineligible or ineligible for the visa they are applying for.
• The applicants should never have had a visa refused unless the refusal was waived or overcome.
• Those applicants from a country in the Visa Waiver Program must have traveled to the US previously with authorization obtained through ESTA.

The Conditions for Applicants Who Are Renewing Expired Visas
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Applicants who were renewing expired nonimmigrant visas could have their interviews waived if the visa was valid or expired within a time period of 12 months. The expiration time has changed from 12 months to 48 months now. It seems that this new rule is applicable to all nonimmigrant visa categories.

If you have any questions about how these laws in the United States may impact you or your family, or want to access additional information about United States or Canadian immigration and nationality laws, please feel free to get in touch with the immigration and nationality lawyers at NPZ Law Group. You can send us an email at [email protected], or you can call us at 201-670-0006 extension 104. In addition, we invite you to find more information on our website at www.visaserve.com

By: Cynthia Romano, Global Director, Performance Improvement and Restructuring & Molly Jobe, Director, Restructuring and Dispute Resolution Practice, CohnReznick

In 2021, many companies and funds were flush with cash and looking for opportunities to spend their cash productively; Some invested in improving performance, others invested in mergers and acquisitions (M&A). As a result, 2021 was a banner year for performance improvement advisory (top line growth, cost optimization, leadership effectiveness, digital, and extracting value from M&A) which took advantage of a record-breaking year in M&A activity. According to Refinitiv, there was over $5.9 trillion in deals transacted globally including $2.6 trillion of U.S deals making up approximately 63,000 in transactions.  While transaction flow may be slowing slightly as we come to the end of the first quarter, Morgan Stanley anticipates that 2022 will continue to provide a strong environment for M&A activity due to robust economic factors and significant dry powder to be used.  

Even with interest rate hikes, inflation, supply chain issues, a war in Europe, energy uncertainty, additional COVID-19 challenges, and other economic issues existing or looming, Citizens Bank found that 58% of survey responders from U.S. middle market companies still believe their companies will improve in 2022 with 62% predicting that M&A will be the “primary growth driver”.  And as transactions continue to close, the performance improvement initiatives necessary to derive planned value from existing and newly acquired businesses will continue to be critically important for the reasons outlined below.

Why 90% of transactions fail

For many businesses, mergers and acquisitions are a key tool to accelerate revenue growth through quick expansion into new markets and products as well as accelerated production and service capabilities. However, with a record-breaking year last year, and similar activity expected for 2022, how many of these transactions are truly successful and create value for shareholders? Studies have shown that between 70% and 90% of transactions are not successful i.e. they don’t live up to their investment thesis.  

A recent Harvard Business Review study reported that more than 60% of transactions actually destroy, rather than create, shareholder value and up to 90% fail to achieve their investment thesis. The reasons for failure are few in number but common in occurrence including:

1. Hubris and bias
2. Inadequate diligence and planning
3. Lack of integration strategy and priorities
4. Leadership and resource challenges
5. Poor communication
6. No end-state clarity
7. Slow or weak implementation

Countless articles have been written and are available to help the uninitiated navigate better than their predecessors. Capable and experienced guidance is available through partnership with various advisors and yet, over and over, the cycle of optimism, failure to plan, poor execution, and lost value repeats; never more-so than in a year of record transactions. Why does this happen repeatedly? Why hasn’t the problem been solved? Some of the answers below have been studied and proven with hard data. Some of the commentary, though, is the result of years of personal experience with, and observation of, transactions of all sizes and stripes with numerous clients and their advisors on both the buy and sell side. Sometimes, you don’t need a research study to draw a solid conclusion.

One reason this phenomenon repeats over and over again is, like the cause of many business missteps and failures, hubris. As expressed so eloquently by James Hollis, author of What Matters Most, “hubris, or the fantasy that we know enough to know enough, seduces us toward choices that lead to unintended consequences.”  Many corporate executives and fund managers, particularly those who have been successful, are under the mistaken impression that they are too smart to fail, that they are more insightful than what the team, data, and advisors are telling them; that because they feel it, it must be so. As a result, the overconfidence in themselves and their optimism around the investment thesis biases the diligence (or causes flags to be ignored) ignores the need for (and often the pleas for) early integration planning and resourcing, leaves key team members out in the cold (which leads to poor morale, lack of support for the transaction, and unwanted departures), and brings everyone, unprepared, to a Day 1 post-close without the necessary foundation for integration and success. We all, at times, suffer from hubris. And, sometimes brazenly marching forward pays off. As Julius Caesar said, “It is only hubris if I fail.” But, more often than not, hubris is just hubris, not concealed genius. As Roger Lowenstein, author of “When Genius Failed” wrote, “Finance is often poetically just; it punishes the reckless with special furvor.”  The same can be said of M&A and the data is there to prove it.

But not every executive or fund manager lacks humility or the willingness to listen or listens with a biased perspective. In fact, many do not. Yet a majority misstep and fail when pursuing a transaction. Why else, then, might smart people repeat the same destructive pattern over and over? 

One core reason for this repeating debacle is the insatiable drive for growth and the fact that capital needs to be deployed to create a return. The old adage, “Money just sitting is being lost” drives a lot of bad behavior by smart people. This is true of lenders who are under pressure to lend, often doing bad deals rather than no deals.  It’s also true of companies and funds under pressure to grow, often causing shrinkage rather than growth. If the goal is growth or the objective is putting capital to work, the outcome will likely miss because the starting point is wrong. The starting point for a good transaction needs to be that (a) there is an objective reason for the businesses to come together, (b) there are compelling synergies that can be achieved, (c) there is a workable cultural fit and, (d) the companies (or at least one of them) is healthy and has a solid foundation (too many buyers and sellers try to bolt crap onto crap to create gold and it never works). If any one of these reasons are missing, the transaction will be destined to fail no matter how great the opportunity seemed on paper. Desire is not a strategy. A good narrative doesn’t cause 1+1=3. The impression of growth is not growth. Real growth takes an open mind, hard work, planning, and outstanding execution whether done organically or via acquisition. A purchase is not the easy path, at least not in the long term.  

Which brings us to the last reason successful executives continue doing bad deals despite all the lessons in plain sight to learn from (think Payless Shoes, Deadspin, Shopko, and RadioShack for private equity examples and AOL/Time Warner, eBay/Skype, Google/Motorola for corporate examples). It is difficult to grow a business organically and it is getting more difficult as time goes on. Price arbitrage and leverage have gotten harder to achieve in such a competitive market. Margins and efficiency have also gotten harder to realize with globalization and commoditization. Let’s face it, it is hard work to dream up new products and gain market acceptance. It is challenging to squeeze every last penny of efficiency out of a decent, but not great, organization.  

As Jim Collins, author of Good to Great said so profoundly: “Good is the enemy of great.”   So few achieve great because it is easier to settle for good. When the ease of settling for good crashes headlong into the pressure to grow, transactions get done as a way to grow that lack the requirements for success: a reason, synergies, cultural fit, a solid platform. In short, transactions appear to be an easier way to grow but, time and again, the destruction of shareholder value in a majority of transactions prove that appearances are deceiving.  

Don't be one of the 90%

Let’s say you have your eye on an acquisition, you’ve checked yourself for hubris and desperation under pressure, and you believe the requirements for success are there. Since everyone starts out thinking they will succeed, how do you not become one of the 60-90% who, nonetheless, fail?  

1. Fight against bias. We look at a deal. We like it. We have dreams of its success. We see our names in headlines. And, with that, have created a mental investment, a bias, that precludes us from seeing clearly. “We are all biased. Our brains were designed to be. We categorize information to store it, which means we have to make judgments. Those judgments rely on our past experiences, which, in turn shape our perspectives. They help us figure out what is safe (generally, what is known) versus where to be cautious (generally, what is unknown). So, bias always plays a role in decisions.”  But, science has shown that our brains don’t work well when conditions for bias exist. Nowhere is the condition for bias stronger than in risk-reward situations under stress. To fight against bias, be curious, be willing to re-evaluate as new data comes in; listen, listen, listen. Do not be so invested that you aren’t willing to pull the plug.  

2. Broaden diligence and plan early. Our best advice, though not to be self-serving: hire good advisors so that the people evaluating the deal aren’t you, don’t report to you, and don’t have a stake in the outcome. Don’t be pennywise and pound-foolish.  Go broad when considering how to unearth issues and achieve success. Focus on not just the financials but the market, the customers, the products/services, the systems, the foundation of the entities, and, most of all, the people.  If any of the information coming back about the combination, at any time, smells funny or feels off, do not ignore that feeling. And, if the diligence appears positive, begin planning immediately. To begin with, it will always take longer than expected. But, as importantly, the process of pre-planning is a form of diligence in and of itself. It is one thing to say, “Put these two things together.” It is another thing entirely to plan out the how of putting them together. In that process, it will either start to appear workable or it will start to feel like squeezing a square peg into a round hole. Synergies aren’t created without an early plan, a talented integration team, clear priorities and communication, and outstanding project management.

3. Formalize the integration strategy and priorities. Over the course of the merger or acquisition process, good company leadership focuses on managing a meticulous due diligence process, risk assessment review, marketing testing, and capital raises to achieve a successful closing. But the integration strategy and work needed to ensure the transaction is value-add in the long-term must be initiated in tandem with the due diligence process and implemented immediately upon closing. To extract value from any transaction, it is critical that (a) an integration team be appointed, (b) a comprehensive integration map and checklist be developed and planned for during the deal process, and (c) once the transaction closes, outstanding project management to integrate the newly married entities. Often times, we see leadership teams do all the right things up to prioritizing the long list of tasks required to be thought through and implemented. Drinking from a firehose is rarely a successful strategy for hydrating and, in the case of a transaction, the integration team needs vision, leadership, and a clear hierarchy of what is most important.

4. Clarify leadership and resources. Of the many transactions we’ve seen come off the rails, the most frequent roadblock involves people. From which company? From which departments? Who stays? Who goes? The two sets of leaders have to decide early on who is going to be part of the integration team, who will lead what (remember, there are two sets of leaders at the start who both have a vested interest in the outcome), who will stay and who will go (if there is to be consolidation), who will be privy to the planning (are you in the club and motivated or out of the club and demoralized), and who will make the tough calls when they arise. This is particularly challenging since (a) most people are conflict averse and (b) early in the process no one wants to give anything away lest it doesn’t work out. Yet, the paradox is this: If control is not taken and ceded, if trust is not created and relied on, the transaction that everyone wants to work stands a far greater likelihood of failing.  

5. Communicate, communicate, communicate. Right behind leadership snafus in terms of why transactions fail comes communication lapses. Key people internally need to be in the loop. Full stop.  See #4 regarding selecting key people. But, once the hard work of selection is done, no secrets. That team of key leaders can then work out a communication strategy for the market, for customers, for vendors, for employees. The human brain abhors a vacuum. Absent information, people make things up to fill the vacuum and it is almost worse than the worst of the truth. A lot of our clients fight us on this with fear that communication will make it impossible to retain customers, staff, etc. In fact, the reverse is true. Of course, there is a time and place for all communication. But, it is almost always earlier than your instincts advise you.

6. Begin at the end and be ready to go. In the same way that a transaction needs a reason to be, a clear path from here to there needs a “there” in clear sight. To borrow wisdom from Stephen Covey: “To begin with the end in mind means to start with a clear understanding of your destination. It means to know where you’re going so that you better understand where you are now and so that the steps you take are always in the right direction.”  In any implementation, success depends on good people, correct and prioritized tasks, and speed. Implementing immediately post-close to prevent or solve for any integration plan gaps as quickly as possible. The leadership team and integration team must be prepared to act quickly, pivot as needed which may include making difficult decisions regarding people and systems. 

7. Finish strong. All the planning in the world accomplishes nothing if it doesn’t translate into strong integration and performance improvement implementation with an open mind, a solid plan, achievable priorities, the right leaders, transparent and inclusive communication, and strong project management.  The performance improvement measures that are almost always baked into an investment thesis – grow the topline, optimize costs, create an effective workforce, and integrate and upgrade systems – must take place quickly and efficiently while also engaging the combined workforce for the benefit of the transaction to be realized. It is a daunting task, but it is doable. As numerous famous and wise individuals have said, in one way or another: “Good judgement is the result of experience and experience the result of bad judgement.” If experience has taught us anything it is this: learn from, and rely heavily on, those who have been through it before and succeeded. 

While there is no guarantee that any transaction will ultimately be a successful value-add transaction, incorporating the recommendations above can help organizations develop a strong plan and foundation for integration and, if implemented properly, can provide a stronger likelihood of success limiting the possibility of becoming one of the large majority of M&A deals that aren’t successful.