Born: 1952, Cologne, Germany
Education: Universities of Bonn and Paris, with degrees in theology, French literature, culture and history; did a correspondence course in economics (similar to an MBA) and participated in a trainee course
First job: High school teacher in Cologne
Career moves: Executive vice president, Forbo International SA, a manufacturing firm specializing in flooring materials headquartered in Switzerland; before that, served as group president, CLAAS KgaA mbH, a global manufacturer of agricultural equipment headquartered in Germany. Prior to 1995, senior executive vice president of field operations, Schindler Aufzugefabrik GmbH, Germany
Boards: I gave up all the board seats I had in Europe in order to focus on the business here.
What is the greatest business lesson you've learned?
The most important one is it's much better to talk with people about their problems than with other people about the people (with the problems) -- communication is very important -- straightforward communication and proper feedback.
What is the greatest business challenge you've faced, and how did you overcome it?
The biggest challenge I had was when I worked in the elevator industry in Berlin, and I had to close a factory with a couple of hundred people, knowing they wouldn't get a job -- just sending them into unemployment.
Whom do you admire most in business and why?
That's a tough question. I don't want to mention a name because I think most of the people I know ... you hear about people and then you meet them and you are a little disappointed.
I'm always impressed by pragmatic people who walk the talk. And what I don't like are those who write books or make speeches, and when you talk with people who worked for them, you find out the reality is totally different. Of course, I admire very much the founder of Agco, Bob Ratliff. That's the reason I'm here.
Church's Chicken named Farnaz Wallace chief marketing officer. With 18 years of experience in QSR marketing and advertising, including the past 11 years with Church's, Wallace is responsible for developing brand strategies to drive sales and profits, and deliver on both short- and long-term initiatives.
In addition to leading all corporate marketing and national advertising agency initiatives, Wallace oversees all R&D, QA and field marketing initiatives, which includes two regional advertising agencies. This is the first time in years that all marketing functions are fully integrated, reporting to Wallace.
"Farnaz's extensive QSR knowledge and experience in field marketing and advertising agencies affords her a valuable macro view of the industry that encompasses various marketing aspects from brand positioning and strategic planning to market research, menu creation, promotion analysis and media management," says Church's president and CEO Harsha V. Agadi. "We are excited about the addition of Farnaz to our executive team and believe that her extensive marketing experience and trusting, long-lasting relationships with the franchise community will contribute greatly to the success of the brand."
Wallace began her career at Church's Chicken in field marketing. As vice president of field marketing, she pioneered many multicultural branding initiatives, including cluster marketing, which propelled the brand in maximizing transactions and check average among demographically diverse trade areas. Prior to joining Church's, Wallace spent five years on the advertising agency side of the business in media planning and placement and two years with KFC.
Arcapita Inc. hired Charles "Chuck" L. Griffith as executive director. In this position, Griffith oversees Arcapita's 15 portfolio companies, including TLC Healthcare Services and Loehmann's.
Previously, Griffith was an executive vice president at Texas-based computer firm Electronic Data Systems Inc. He also was president and CEO of Ingersoll-Dresser Co., a global producer of pumps, motors and industrial equipment. Before that, he was president of Allied Signal's FRAM/Autolite automotive business and president of Allied's Carbon Materials' business unit. Griffith earned his bachelor's degree from the University of Colorado-Boulder and his master's degree from Stanford University's Graduate School of Business.
NATIONAL DISTRIBUTING CO.
Atlanta-based National Distributing Co. promoted Peter Madden to senior vice president/corporate wine director, and named Ken Rosenberg vice president/assistant corporate wine director.
Madden's primary responsibility is to support all NDC houses with wine initiatives that ensure coordinated direction and success. Madden also works closely with NDC's suppliers, helping them by maintaining NDC focus on their goals for cases sold, proper distribution levels and brand standards.
Rosenberg reports to Madden and assists all NDC markets with their wine initiatives.
Rosenberg has more than 10 years of experience with NDC. Most recently, he was the off-premise sales manager, wine -- Richmond, for the NDC-Virginia location. He has also worked for NDC's Colorado and South Carolina houses.
SCHWEITZER-MAUDUIT INTERNATIONAL INC.
Schweitzer-Mauduit International Inc. elected Manuel J. Iraola to its board of directors. Iraola serves as an unclassified director until he stands for election by stockholders at the annual meeting of stockholders in April 2006.
Iraola is president and CEO of Homekeys, a developer, integrator and provider of innovative Web-based information tools and services for the real estate industry. Prior to launching Homekeys, Iraola served on the board of Phelps Dodge Corp. as president of Phelps Dodge Industries. During his 16-year tenure at Phelps Dodge, Iraola held several senior executive positions and was on the boards of several Phelps Dodge Corp. ventures and related companies. Iraola also held positions with ITT Corp., KPMG Consulting and Andersen Consulting during his career.
MAIN STREET BANKS INC.
David W. Brooks II joined Main Street Banks as executive vice president and chief financial officer. Brook is an 18-year veteran of Wachovia Corp., where he most recently served as senior vice president and group executive. His career with Wachovia Corp. also included responsibilities for treasury, funds transfer pricing, interest rate risk management, earnings forecasting, capital planning and balance sheet structure.
As chief financial officer, Brooks is directly responsible for all of the company's financial operations, including accounting, treasury and finance. As part of the company's senior management team, he also provides direction to and influence over strategic direction and tactical implementation of all of the company's operations. Brooks also has responsibility for Main Street's investor relations function.
Southern Co. named Kim Greene assistant treasurer. Greene assumes this responsibility in addition to responsibilities as vice president of finance for Southern Co. Services. Greene's new role is among several responsibilities that were held by Tommy Chisholm, secretary and assistant treasurer, who retired.
Greene joined Southern Co. in 1991 as a mechanical engineer and progressed through various areas of responsibility in engineering, strategic planning and finance. Greene earned a bachelor's degree in engineering science and mechanics from the University of Tennessee, a master's degree in biomedical engineering from the University of Alabama at Birmingham and an MBA from Samford University.
Previously, Sears had been executive vice president at Coldwell Banker Residential Brokerage since 2002, when Northside Realty was acquired by NRT and became a part of its Coldwell Banker Residential Brokerage/Atlanta operations.
"Charlotte's 27 years of experience in real estate, from sales associate to managing broker to EVP, make her the perfect candidate for the job," said Schmidt. "She will lead the company to new levels of success."
Sears started her real estate career at Doris Hebert Realtors in Metairie, La., as sales associate and marketing director. When Gertrude Gardner Realtors acquired that company, she moved from being a top sales associate to branch manager of two offices, both ranking the highest in sales volume in the company under her leadership. She came to Atlanta in 1999 to become general sales manager at Northside Realty and became EVP during the acquisition.
"I am very excited about the opportunity to lead Coldwell Banker Residential Brokerage and to build on the many traditions that have shaped it," said Sears. "The management team here is second to none, and I know we will continue to lead the way in the industry."
GE COMMERCIAL FINANCE BUSINESS CREDIT
GE Commercial Finance Business Credit named Stephen R. Philpott senior vice president of origination. Philpott assumes responsibility for originating transactions of up to $30 million throughout Alabama, Kentucky, Mississippi, Tennessee, West Virginia and parts of Georgia.
He worked as director, leveraged capital division, for Wachovia Bank. Prior to joining Wachovia, he spent 15 years with First Union, where he originated asset-based and leveraged cash flow transactions for middle-market manufacturing, distribution and service companies across the Southeast.
He holds a bachelor of business administration degree from the University of North Carolina at Charlotte.
TAUBER & BALSER PC
Robert N. Greenberger, CPA, a tax principal of Tauber & Balser PC, earned the Accredited Estate Planner (AEP) designation from the National Association of Estate Planners & Councils.
The AEP designation is a graduate-level specialization in estate planning. It is awarded to recognize estate planning professionals who meet stringent requirements of experience, knowledge, education and professional reputation and character. An AEP must embrace the team concept of estate planning and adhere to a professional code of ethics.
Greenberger has more than 20 years of experience, with a concentration in taxation, estate planning and closely held businesses. He has earned the Personal Financial Specialist designation from the American Institute of Certified Public Accountants and is a board member of the Atlanta Estate Planning Council.
Lisa Morse joined Church's Chicken as general counsel and chief compliance officer.
Previously, Morse spent more than four years as vice president, legal and chief compliance officer at AFC Enterprises, where she developed and implemented the first formal compliance program. She was also an integral member of the Church's transition team during the divestiture to Arcapita.
In addition to her legal and compliance responsibilities, Morse is responsible for all supplier relationships at Church's Chicken.
Church's Chicken also hired James Parrish as chief operations officer and executive vice president. Parrish has 28 years of operations experience with Pizza Hut Inc., where he began his career as a restaurant manager in 1976.
Parrish spent the last five years as vice president of field operations. He is responsible for providing overall leadership for all U.S. company operations, including restaurant support services and global training.
PERIMETER COMMUNITY IMPROVEMENT DISTRICTS
The Perimeter Community Improvement Districts (PCID) hired Tony Peters as program director. Peters oversees PCID's $500 million portfolio of transportation improvement projects.
"We are fortunate to have found a person like Tony to oversee our transportation improvement program," says Yvonne Williams, president of the PCID. "His enthusiasm and breadth of knowledge will help us successfully transform our $500 million in grant funding into transportation improvement projects that will improve accessibility and mobility, benefiting everyone in the region."
NEWELL RUBBERMAID INC.
Newell Rubbermaid Inc. hired Shaun Holliday as president, new business and innovation, reporting to CEO Joe Galli. In this newly created position, Holliday focuses on global business development, including market and channel expansion, new ventures and global licensing.
Holliday joins Newell Rubbermaid from The Pepsi Bottling Group, where he first served as president, international, and most recently as president, business operations, responsible for global supply chain operations as well as human resources, communications and information technology functions. He has also held executive positions with eMac Digital LLC, Diageo/Guinness PLC and Frito Lay Inc.
Holliday holds an MBA from J.L. Kellogg Graduate School of Management, Northwestern University, and a bachelor of commerce degree from University of the Witwatersrand, Johannesburg, South Africa.
According to mergerstat.com, there were 10,296 domestic mergers and acquisition in 2004, representing in excess of $820 billion in value. Academic studies predict an M&A failure rate of approximately 75 percent, which suggests that more than $600 billion invested will result in a significant loss.
Why does this happen? While mergers and acquisitions that proceed to close look good on paper, it appears that business purchasers often focus too narrowly on financial analysis to the exclusion of rigorous due diligence concerning cultural fit and human resource issues.
However, these issues are highly predictive of whether a transaction will succeed or fail.
When evaluating a target, the following cultural factors should be considered.
* Organizational philosophies. Determine whether similar business environments exist at both the buyer and the target. Are there similar decision-making processes, reporting structures, management responsibilities and autonomy levels, as well as similar employee incentive structure, motivation and drive?
* Strength of management team. Is the management team committed to the merger or acquisition? Without a true commitment or confidence in the transaction, it is likely that management will fail in navigating new territory and meeting new challenges.
* Location. Is the target located near an existing buyer location? Remote locations often present serious management obstacles.
* Employee morale. In a general sense, employees should be positive and inspired. Have the employees previously been through a merger or acquisition and been successfully assimilated?
Human resources issues
If the cultural fit of buyer and target appears to be good, a buyer needs to engage in a thorough HR analysis that consists of reviewing not only existing employee litigation and claims but also the target company's employment practices and policies, with particular focus on equal employment opportunity, wage/hour, workers compensation and benefit issues.
Although actual charges of wrongdoing may not exist at the time of a transaction, a buyer that uncovers questionable employment practices is better able to assess future problems and more effectively evaluate the acquisition price of the target.
* Equal employment opportunity issues. Review the target's affirmative action plans, audits, results, conciliation agreements, charges and proceedings. Insufficient or nonexistent documentation policies should raise a red flag.
* Wage/hour issues. Investigate compensation practices, a hot target for plaintiff class action lawyers. Improper classification of employees as "exempt" can cost millions of dollars depending on the pervasiveness and duration of the misclassification.
* Health and safety issues. What is the target's record regarding accidents? Review OSHA claims and investigations and workers' compensation history carefully. If the company is poor in this area, the potential exists for significant damage awards.
* Cost of existing benefits. Be certain to assess what it will cost to maintain the current work force.
In reviewing executive compensation packages, beware of golden parachute provisions, as well as options and extensions. Assess restrictive covenants to uncover costs that could be associated with competitive threats.
A focus on these types of people issues by a business buyer go a long way in uncovering potential problems in any acquisition. In the classic Stanley Kubrick cold war comedy, "Dr. Strangelove," the president of the United States is unable to understand how a mentally unstable Air Force general could launch a nuclear attack on the Soviet Union despite the numerous technological and other safeguards that had been put in place to prevent such an attack.
By way of explanation, his military adviser, Gen. Buck Turgidson (played by George C. Scott), ultimately is forced to admit to the president that, "It appears the human element has failed us here."
When conducting due diligence, business buyers would do well to remember Gen. Turgidson's words and do all they can to assure that the human element will not fail them in an acquisition.
Robert E. Dewitt is a partner at Gambrell & Stolz LLP. His areas of practice are business, health care, mergers and acquisitions, and joint ventures/strategic alliances. Reach him at (404) 577-6000 or firstname.lastname@example.org.
"Our opportunity in this market is large enough to provide meaningful, incremental growth over the next several years, and I look to Kevin to help lead the way by generating new business and developing other service lines within the financial administration services sector," says Tom Crawford, president and CEO of Crawford & Co. "Kevin's experience, demonstrated leadership ability and vision are great assets to the company."
Frawley arrives from Prudential Financial Inc., where he held the titles of chief compliance officer, United States Insurance Division; chief administration officer, Retail Division, United States Insurance Division; chief compliance officer in Individual Financial Services; and senior vice president and senior counsel for Prudential Securities.
Prior to Prudential, Frawley worked for the Office of the Mayor in New York City as commissioner of the Department of Investigations. As a mayoral appointee, he supervised a staff of more than 700 attorneys, accountants, police detectives and investigators responsible for pursuing fraud, corruption and conflicts of interest, in collaboration with state and federal prosecutors and law enforcement agencies. He began his career in the Office of the Mayor as a criminal justice coordinator.
Frawley earned a bachelor of arts degree from the College of the Holy Cross in Worcester, Mass., and a juris doctorate from Fordham University School of Law in New York City.
William Nahill joined Georgia-Pacific Corp. as chief procurement officer. He reports to Steven J. Klinger, executive vice president - packaging.
In this new position, Nahill oversees strategic sourcing across Georgia-Pacific's businesses and staff functions. He leverages supplier relationships on behalf of the company, institutes metrics to track the impact of sourcing and works closely with business unit and functional leaders to streamline purchasing processes. Additionally, Nahill partners with Jean-Luc Zauner, chief procurement officer - international to develop consistent sourcing policies, procedures and processes for the company.
Prior to joining Georgia-Pacific, Nahill held various leadership positions at ConocoPhillips for more than 20 years, including chief procurement officer and general manager. Nahill earned a bachelor's degree in biology from Trinity College in Hartford, Conn., and graduated from Cornell University's Executive Development program.
ALIMERA SCIENCES INC.
Alimera Sciences Inc., an ophthalmic pharmaceutical company, named Phil Tracy, J.D., chairman of its board of directors.
Tracy served from 1989 to 1995 as president and CEO of Burroughs Wellcome Co., a pharmaceutical company with $1.2 billion in sales and 5,000 employees, until its 1995 merger with Glaxo Inc. He began a venture partner firm with Intersouth Partners in 1997 and has worked with dozens of life sciences companies in their growth and development. Tracy joined the Alimera Sciences board of directors in July 2004 and serves on the board of the Burroughs Wellcome Fund and the Peace College board of trustees.
JAMESON INNS INC.
D. Anthony Maness was named vice president of hotel operations at Jameson Inns Inc., a leading hotel company and owner/operator of Jameson Inn and Signature Inn hotels. Maness replaces Gregory Winey, who left the company.
Maness joined Jameson in 1998 as a regional manager. He has held various other senior management capacities at the company, including IT director, director of training and chief information officer. Previously, he spent six years with Holiday Inn Worldwide, nine years with McNeill Hospitality and Equity Inns Inc., and five years as the founder and CEO of Winfield Hospitality.
Rayovac Corp. appointed Robert L. "Bob" Caulk, president and chief executive officer - North America. Caulk is responsible for all Rayovac businesses within the region. He is also a member of the company's executive committee, providing leadership in the development and execution of Rayovac's strategic growth plans.
Caulk, most recently CEO and president of United Industries, joined Rayovac concurrent with the company's recent acquisition of United. His career includes stints with S.C. Johnson, Johnson Worldwide Associates and Clopay Building Products Inc. He has a bachelor of arts degree from the University of Delaware and an MBA from the Harvard Graduate School of Business Administration.
Rayovac also promoted Kenneth V. Biller to president - global operations. He also continues as a member of the executive committee.
Biller has been with Rayovac for more than 30 years, most recently serving as executive vice president - global operations. He holds a bachelor of science degree in chemical engineering and a master's degree in business administration, both from the University of Wisconsin-Madison.
Benjamin H. Griswold IV, former senior chairman of Deutsche Bank Securities, was elected to Flower Foods' board of directors.
Griswold began his career as a security analyst for Alex. Brown & Sons, where he became a general partner. Following the merger of Alex. Brown and Bankers Trust New York, he became senior chairman of BT Alex. Brown. Griswold was senior chairman of Deutsche Bank Securities following Deutsche Bank's acquisition of BT Alex. Brown in 1999. He retired from that position in February.
Griswold was director of the New York Stock Exchange for six years, completing his term in 1999. He is on the board of directors of The Black & Decker Corp. and the Baltimore Life Insurance Co. He also serves on the advisory board of Princeton University's Bendheim Center for Finance and as a trustee of Johns Hopkins University. He is a graduate of Princeton University and holds an MBA from Harvard Business School.
As health care costs continue to climb at double-digit rates, employers are looking at the only thing left with teeth. Deductibles are increasing and, in some cases, being added even to HMOs. Although not new to the market, more and more employers are pulling the trigger on deductible changes.
Although deductible plans still have co-pays, the sting of these plans is starting to be felt by employees. The deductible comes into play primarily outside of the office visit or prescription drug purchase. Lab work or X-rays that are provided or billed outside of doctor visits are typically employees' first exposure. With the most common deductible of $500, the employee usually pays the entire cost the first time these services are rendered.
The concern with HSA plans has been that employees will not seek recommended services due to an inability to pay. It is important to remember this when questioning your employees' ability to pay more.
But although health care costs are at record highs, several independent sources show that employees still put more disposable income toward entertainment than toward health care, something to consider when looking at how much your employees can tolerate in health care expenses.
This trend toward deductible plans is simply a return to what Americans had prior to 1970. Until the introduction of co-pays by PPOs in the late '70s, everyone had a major medical plan, insurance for a major medical problem.
In the 1970s, the most common deductible was $200. To put that into perspective, the average cost of a new automobile was $2,700. With the average cost of automobiles today around $30,000, that could justify a deductible of $2,222 for a plan with no co-pays.
The next step will be the elimination of co-pays for office visits. Then, and only then, will prescription plans fall to the power of the deductible.
Economists predict that trends for increases in the cost of medical premiums will continue to be in the low double digits for the rest of the decade. With the diminishing return of deductible changes, co-pays will be the next logical choice in offsetting increases.
Whenever that inevitable time comes, HSA plans will be the most common financial tool to prepare employees. The power of the HSA plan is not the high deductible; it is the tax advantage of saving for the day employees have to pay their high deductible.
HSA plans will need to be presented to employees like 401(k) plans are today -- get in while you're young, because someday you will need it. And it can be hard to convince employees to save for retirement when it seems so far away, even to a 30-year old.
With great tax advantages and a target of $5,000 in savings, it will not take a lifetime to save for completely funding the deductible. Once the deductible is funded, employees will have 100 percent coverage with no concern for withholding recommended services.
Both political parties secretly admit the prospect of additional government solutions is dead. Americans have made it clear that they want no interference in their access to health care, be it by the government or managed care companies.
Some day, our kids will be sitting around the fireplace telling their grandchildren about how their parents paid just $10 for a knee replacement, and those kids will look at him in wonderment.
Bruce Bishop (email@example.com) is director of marketing and managing partner of KYBA Benefits. KYBA Benefits provides consulting and administrative services to more than 400 corporate accounts, ranging in size from 20 employees to more than 7,000. Reach Bishop at (770) 425-6700 or (800) 874-2244, ext. 205.
N2, which recently merged with United Kingdom-based TANDBERG Television in a $118 million deal, is a provider of scalable, open-platform solutions for on-demand entertainment.
"One of the reasons we've been very successful is that we've had a product that helps the cable operators reduce churn" -- the cable industry term for people moving from cable to satellite or other platforms, says Reggie Bradford, former president and CEO of N2 and now president of TANDBERG Television Americas.
"That's really what's going on in cable," he says. "The total (number of) cable subscribers is flat, but there is a big growth in digital. People are migrating away from analog boxes to digital. Video-on-demand in '04 hit about 24 million households -- using or have access to it. That's expected to grow substantially in the next couple years with more content coming in."
That made N2 a very attractive company, one ripe for acquisition.
"We had several suitors that wanted to acquire N2," Bradford says. "The reason that Tandberg was most attractive to me personally and looking out for all of our shareholders is that there is really no overlap in the business."
N2's focus is entirely in the United States, while Tandberg's operations are largely in Europe and Asia. There is no overlap in product offerings, either.
Smart Business spoke with Bradford to learn how the company he once owned fits into the bigger picture and how he intends to manage the TANDBERG Americas operation moving forward.
What was the impetus behind selling the company to TANDBERG Television?
Their impetus and ours was fairly consistent, and that was that we saw an opportunity that we could accelerate both companies' business models by putting the companies together. We saw that N2, as a stand-alone entity, could continue to grow in the foreseeable future. But at some point, we were going to hit a wall.
As we continue to grow the business model, we start competing with much larger companies and selling into huge customers, and they're increasingly concerned to make sure that smaller companies that they do business with have strong balance sheets and plenty of cash flow and ability to invest in R&D. And while we've done a good job as a $20 million company, it gets harder to go to $50 million or $100 million.
We saw an opportunity -- we could combine with TANDBERG, have a company with over $200 million in revenues, $100 million in cash, very profitable, and maintain our ability to grow the business inside of that.
How will this change your approach in the marketplace?
For (the former) N2, it will give us the capability to sell our products into additional market segments -- the broadcast market and the telecommunications market in addition to cable. And within North American cable, it will dramatically increase TANDBERG Television's presence, awareness and, hopefully, revenues.
They basically haven't been able to crack that market, and it's a tough market. We have real solid relationships with the Top 10 cable operators and even a lot of the small to mid-sized ones. I think we'll be able to positively affect their business right out of the chute.
Does it take a special mindset to handle that technology environment?
In any industry, any job, there are a number of consistencies -- leadership, having a sense of urgency, having a nose for the football. Those capabilities are important to anything you do in life. Those are all transferable.
On the emerging side, you've got to have a much more heightened sense of urgency. You just can't sit around on your heels and wait for things to happen.
No. 2, you (must) be substantially more precise in your decision-making because mistakes are much more costly in an emerging business than they would be in a traditional (business). In a mature type of company, you can make a lot of mistakes and still have a nice market share. In this one, you make a mistake, you're dead.
What were the challenges to making sure the merger was successful?
No. 1 is to make sure the employees understand what their position is, what their value is, what their role is and what their accountability is. The second area to make sure it's successful -- maybe it's 1A, really -- is the customers and making sure that the customers No. 1, have buy-in to the plan. No. 2 is to agree with and see the value that the two companies can bring together better than we could have individually.
We've worked very hard in the last few weeks to get in front of our customers, laying out the vision and getting their input and buy-in as opposed to just telling them, 'This is happening this way.'
Where there concerns about the merger?
I don't think there was any concern about control. The only concern was, could we continue to grow our value by staying the course as an independent company -- in terms of valuation, shareholder value -- things like that. Our board unanimously decided this was the best course of action because there is consolidation happening in the market. Our customers are consolidating, our vendors are consolidating, and I think this is a great outcome for our shareholders.
Everybody is very pleased with this decision. We've certainly thought through the other options -- keeping the company independent, perhaps taking the company public, and ultimately decided this is a much better outcome for us.
How difficult was it to arrange the deal?
We met about a year ago, the CEO of Tandberg and myself. Basically, we put together a distribution agreement that got announced last spring, whereby TANDBERG would distribute N2's products into Europe and, to a lesser degree, Asia. In the late summer, early fall, the CEO of TANDBERG came to me and said, 'We're interested in pursuing a tighter relationship. In fact, the integration is going so smoothly and the opportunities are so enormous that we'd be better off putting the companies together. Is that something you'd consider?'
I said, 'Absolutely. Let me go talk to the board.' It was probably, from when we first started talking to the time the deal got announced, maybe two or three months. There were other people pursuing the company aggressively. It probably took a little more time than normal because we had to consider all the options.
How will your role as president of TANDBERG Television Americas differ from your previous role?
The role is enhanced somewhat in that Tandberg has an Americas existing business. Last year, they sold around $50 million of U.S.-based revenues to the broadcast industry. My role will now be to take over the management of that business, plus the N2 business.
How do you deal with the rapid pace of change in the cable market?
There is huge transformation in cable right now and in the content industry, and we're one of the big catalysts of that. One of the things that I always preach to our people is, never rest on your laurels. Always maintain an aggressive vision and be on the balls of your feet, is what I tell people.
There's a lot of truth to Andy Grove's, "Only the paranoid survive." I think that is how you continue to innovate and take advantage of change. We've had to reinvent ourselves several times. This merger is a case of N2 reinventing itself yet again. That's what companies have to do to be able to survive in this market -- really in any market -- but this one is particularly disruptive.
Is it enough to react or must you anticipate changes?
Absolutely, you've got to anticipate. If you don't, someone else will, whether it's two kids in a garage trying to mow you down or Microsoft.
What did you learn from your experiences as chief marketing officer at WebMD Corp.?
WebMD was a company that achieved tremendous success in a very short period of time in a very different market than the one we have today. Obviously, the go-go '90s were driven by a huge stock market run-up and lots of access to capital.
What I learned was there's a huge component of building a business called creating momentum in the marketplace for the customers, the employees the investors and driving that through. That translates to any market.
I also learned that, while growing a company through acquisition is important, it's equally or probably more important to make sure you've thoughtfully considered the implications on integration and those types of activities.
How about your work experience with Miller and Philip Morris?
Whenever I talk to young people, I strongly recommend for people to go to work for a company like Miller when they get out of college because it teaches you tremendous fundamentals of business and tremendous discipline. I wouldn't trade those eight years for any experience in the world.
It gave me a great base from which to determine my strengths and opportunities and help condition myself for the market and be able to grow from that. It was a great experience. But at some point you have to decide, what do you want to be when you grow up, and I ultimately decided I was an entrepreneur at heart and that I was much better suited to growing a business at a fast pace, disruptive, always-changing environment than I was in a staid, mature environment.
What is the biggest business challenge you face?
I would say, and this is consistent with why we think this merger makes the most sense for us, the biggest challenge for us is, we're in a highly concentrated market with a few very large customers that control a lot of spending in the industry, so the customers have a lot of leverage over their vendors. And they are very demanding in terms of the products and services.
And we've got to be able to have seamless execution and be competitive in the market with pricing and services. That's always a challenge. This merger gives us an opportunity to sell across more channels.
HOW TO REACH: TANDBERG Television, +44 (0) 23 8048 4000 www.tandbergtv.com
If a buy-sell agreement has not been drawn, you may not have planned sufficiently for the future. The agreement decrees how a business, or a share of a business, will be transferred upon death, disability or retirement.
It can be between partners, a business entity and its stockholders, or an owner and a key employee, and it determines who will receive a business or its share and how the sale or transfer will be funded, and provides a means for paying personal estate taxes after the transfer.
There are three types of buy-sell agreements -- a stock redemption plan, which is an agreement between a corporation and its shareholders; a cross-purchase plan, which is an agreement usually among shareholders or partners; and a wait-and-see buy-sell plan, which offers flexibility and tax and economic advantages that take the best from the first two options. In the third scenario, a corporation can exercise its buy option or waive its right, thus triggering the cross-purchase option.
Regardless of which buy-sell plan you choose, consult with a professional to help avoid tricky tax and procedural pitfalls. Equally important, a financial professional can present appropriate funding options.
Nearly 25 percent of all business successions don't go as planned because of a lack of adequate funding to carry out the plan. The number is even higher among family businesses because, while many family business owners spell out transfer arrangements, they don't plan how to fund the transfer.
When a business owner is disabled or opts out of the business for other reasons, other owners get first crack at that share of the business. Of course, they need the money to acquire those shares. When a business or its shares becomes available because of the death of an owner or shareholder, surviving owners again get the first option to buy, even though the business interest is usually willed to a family estate.
Most buy-sell plans include the stipulation that surviving family members, if not previously involved in the day-to-day business operations, sell their interest to surviving owners. Cash received for this interest helps meet family estate tax obligations. It also ensures the business is in the hands of the people best qualified to run it.
Self-funding, borrowing and insuring a buyout are the three basic ways most plans are funded.
With self-funding, surviving owners or shareholders can pay for the business interest outright or through an installment plan. Buyout funds can also be accumulated through the establishment of a sinking fund, a savings plan in which business owners put aside money on a regular basis for the sole purpose of buying shares when they become available.
This funding arrangement helps money accumulate for the future, while at the same time earning interest. Borrowing provides the money up front, with interest payments figured into future payments.
But what if death or disability happens before enough funds have accumulated to meet the buying price? Or what if borrowing becomes tight because the departure has an adverse affect on business? And, can a deceased owner's estate afford to wait for an installment plan?
That's where insurance comes in.
Bought by either the company or by partners on each other's lives, insurance is the surest method of providing cash when it's needed. Through a variety of insurance programs such as split-dollar, in which an insured owner and other partners split the cost, tax-advantaged savings can be accomplished now while future payout is guaranteed.
Whole life insurance, which builds cash value, can also provide funds when events other than death trigger a buyout clause. Many companies sell disability insurance to specifically meet buy-sell needs.
The existence of a buy-sell plan ensures the orderly transition of a business. A proper funding vehicle ensures the money will be there when the time comes.
Plan for the future now. Your business depends on it.
Jan Bell is the owner of Bell & Associates Planning in Atlanta, an affiliate of National Financial Services Group (www.nationalfinancialservicesgroup.com). Her planning strategies focus on the conservation of assets for present and future generations through business and estate planning. Reach her at (770) 399-0417 or Bell_Jan@nlvmail.com. Securities and Investment advisory services are offered solely by Equity Service, Inc., a Registered Broker/Dealer and Investment Adviser, 1050 Crown Pointe Parkway, Suite 1000, Atlanta GA 30338. National Financial Services Group is independent of Equity Services Inc.
Now that the one-year anniversary is here for all employers with less than $5 million in health care expenses, you should remember what it takes to continue to be in compliance. If you are your company's privacy officer, this responsibility sits squarely on your shoulders.
For those ostriches with your heads in the sand, let me remind you that the penalties are stiff -- including jail time -- for individuals who intentionally violate HIPAA. Getting into HIPAA compliance is not hard, but it does require properly executed documents and procedures. Maintaining compliance is even easier.
* Retrain your entire HIPAA work force annually.
Every year, you must retrain your HIPAA work force. This can be accomplished in about an hour if your training materials are complete. Many times, employers are more puzzled with who is considered a member of the work force than in the training that must occur.
Your HIPAA work force generally includes several departments. Human resources is the primary group and includes anyone who touches an enrollment form or is the primary source for employees to seek assistance with benefit problems.. Certain members of the finance department can be included because finance handles payroll, and payroll deductions are related to plan selection.
The last department that most people forget is members of the IT group. When HR or finance needs assistance with their systems, IT members have access to that information.
* Train your new members of your HIPAA work force within 30 days.
Thirty days is not much time to get a new employee trained on HIPAA, let alone all the other aspects of a new job, but it must be done. Training a new employee doesn't have to be any more time-consuming than retraining.
* Maintain your training log.
HIPAA states that the employer must maintain a log. This log should include:
* The name of the employee and his or her department
* Date the member was initially notified that he or she was a member of the HIPAA work force
* Date the member was initially trained (required within 30 days of notification date)
* Date member was retrained (at least once a year)
* Date member was terminated as a member of HIPAA work force
Your log must be stored for six years, along with all of your other HIPAA-required documents.
* Audit your business associates for HIPAA compliance.
Most employers believe that having a business associate agreement with your agent or vendors provides protection from liability. The law is very clear that the employer should audit its business associates for compliance. Although the audit does not eliminate liability, it does comply with the requirements, which may result in penalties being less severe.
Many times, your benefits agent is your primary business associate. How do you audit your agent? The recommended format is to pay a visit to its office and review each HIPAA process to see if it is in compliance. Use your business associate agreement as your roadmap to your audit. A properly written agreement will list all those processes.
Most canned agreements include a right to correct. Employers who find a violation may be bound to allow 30 days to 90 days for the associate to correct the violation.
Violations on behalf of your agent may be your greatest exposure. As the privacy officer, your selection of your benefits agent goes beyond getting quotes from the same old carriers and HMOs. Your agent should be an extension of your HR department and, in turn, should be managed as a member of your team.
Bruce Bishop (firstname.lastname@example.org) is director of marketing and managing partner of KYBA Benefits. KYBA Benefits provides consulting and administrative services to more than 400 corporate accounts, ranging in size from 20 employees to more than 7,000. Reach Bishop at (770) 425-6700 or (800) 874-2244, ext. 205.
For more than 90 years, the American Cancer Society has worked to find a cure. And, since 1913, ACS has sought the best way to mix its local and national resources to create a very local, community-level organization to serve patients, their families and others concerned about the issue.
As CEO of ACS' South Atlantic division, Jack Shipkoski does his best to mix the agency's regional and national resources to serve the public. Shipkoski's division, ACS' largest, was created in 2003 with the merger of the Southeast and Mid-Atlantic divisions. It was an arduous process that required both the assistance and they buy-in of many people.
"When you look at for-profit mergers, probably half of them don't work," says Shipkoski, who spearheaded the initiative. "A lot of it is cultural. That's why involvement is so important (instead of) just (directive) from the top down. You're getting people from all parts of the organization involved, and it's an understanding. It gets back to 'How are we communicating?'"
At one time, there were 58 divisions of ACS -- the national office, one in each state and several in large metropolitan areas. About seven years ago, a merger shrunk that number to 17.
That merger, says Shipkoski, was a learning experience.
"It gave us an opportunity to make sure we didn't make some of the same mistakes again," Shipkoski says. "By merging, you are more effective; you're able to put resources where they're needed."
Shipkoski previously served as head of the Georgia and Southeast divisions. His new entity covers seven states -- including Georgia -- and Washington D.C. One of the most important messages he had to communicate before, during and after the merger was that, despite the concentration of power, there would be no loss of control for the 500 communities that make up the new, larger division.
'The bigger you get, the further away you are from your constituents," he says. "We said we want to get closer to our constituents, closer to our donors. We did that by concentrating on community."
The newly formed South Atlantic division has four strategic points -- state-of-the-art in-mission delivery, concentration on volunteerism and community, renewed commitment to income development and getting connected.
"I've been able to drive that with our board members and with our staff," says Shipkoski. "And if you ask any staff member the four key strategic points in your division, I think they'd be able to tell you what they are."
But none of it would have been possible if Shipkoski had been unable to bring together the divisions and overcome the naysayers. Smart Business spoke with him about what it took to consummate the merger and how he overcame the cultural and structural issues that led to the largest merger in ACS history.
What prompted this latest merger?
It's basically efficiencies. How can we save money on a lot of these support items, and can we have a better product as we move forward?
Our key officers and key staff got together, and the major reason for merging was we can do a better job and be more efficient in mission delivery and cancer control. When I say cancer control and mission delivery, I'm talking about prevention, detection, quality of life for cancer patients. That was our major objective: Can we be better than we are today in mission delivery?
What was the problem?
We had ownership and cultural situations where the state was the corporation and everything revolved around the state. We found we couldn't do anything around (state) borders because we were running into somebody else's territory.
We didn't work together that well. You'd think we would; we're the same organization. But everyone had staff working for a different corporation.
When we merged [the first time] we formed regions put together by media markets and we also overlapped state lines. We did that on purpose in order to bring the divisions together and so we wouldn't have those border issues. That served well for seven or eight years.
With this new merger, what we found out is that there are a lot of issues that are state-based -- health departments, advocacy with governments -- so we put together this new organization based upon states .
Why did you insist on following business principles in the merger?
I also belong to a group called TEC -- The Executive Committee. It's 16 CEOs here in Atlanta. We get together on a monthly basis.
Fourteen of them are for-profit companies and two of them are not-for-profit. We talk business and we talk business principles. Moving ahead in a business manner when you talk about planning and organizing, teams, leadership and all those principles are the same whether you're not-for-profit or for profit. It was a major help to me putting together the merger because the one thing I knew I had to do right from the beginning was put together a leadership board.
My next challenge was I had to put together my executive team. We wanted to keep thing simple, mainly because people would ask me, 'Jack, how are you going to do this? It's so big. How are you going to make this happen?'
I try to keep it simple with these four key points, which I think most people know by now and can recite. The other thing was, let's put together the teams that are going to make this happen -- the volunteer team and the staff team.
The first thing we did was put that together and get buy-in from them as to the direction we were moving in. I believe we did that very successfully. We have a great executive team.
What benefits has the merger had?
I have a phrase, 'Start less and finish more.' Really, it's another name for focus. We have all these programs going on. Some divisions are doing the same and some are doing (things) differently.
We wanted to start less and finish more and focus and say, these are the programs and the fund-raising programs and the other programs that we're going to do, and just focus in on those so that we can be successful in it.
The other thing we wanted to do is increase our income and control expenses. We did that the first year. We had a $10 million increase in income and we decreased our expenses by $4 million. That gave us a differential of $14 million that we could use in the fight against cancer as we started out this fiscal year. So we're in pretty good shape, in fact, very good shape from a stewardship perspective and from a business perspective moving forward.
How challenging was it to meld the cultures of the two divisions?
Culture is an issue. For example, if Mid-Atlantic were to merge with Ohio, I think it would be a lot more difficult. It's a lot more difficult going north than it would be going south because there are a lot of differences.
One issue we have is tobacco. We have a lot of tobacco-growing states in the same culture. We have a lot of the Appalachia-type issues in the same culture.
There are (other) differences -- state-to-state you have differences. Advocacy, from the perspective of a state being more engaged in anti-cancer, anti-tobacco situations. For example, Delaware is a lot more prominent than some of the other states in making some things happen as far as dedicated insurance for health care reasons.
There are a lot of differences state-to-state, which is why we organized on a state basis for a lot of these advocacy reasons. We have people that work within the state (borders) vs. working across the division lines.
What was the reaction of your many volunteers?
From their perspective, there was some anxiety. The anxiety was you're going to forget about us down here in Macon, Ga. When Georgia was its own division, Macon was a big player. Now, all of a sudden, Macon is part of seven states, so you're going to forget about us.
The answer is no. In fact, we're going to put more emphasis on Macon so that we don't forget about you, so that we do involve you. We're going to communicate with you; we're going to have you involved.
We put together a great communications department. It's in the objectives of our key executive team and staff members that we go in that direction. It's in their performance reviews. If you measure it, you're going to receive action from it. We've been saying that to everybody. We want to walk the talk.
How did the merger affect the ACS's Relay for Life program?
Our bread and butter for fund-raising is Relay for Life. It's our 24-hour event. We're in the 20th anniversary of Relay for Life. If Relay for Life were a not-for-profit organization, it would be in the top five of all not-for-profits. That's how large it is.
This year, we'll raise about $300 million in Relay, and the South Atlantic division -- we're the No. 1 division. We'll raise $60 million in Relay for Life. This year, we'll have 600 events with the goal of $65 million. It's more than an event. Really, its mantra is about a community taking up the fight.
You have individuals coming together, an average of 4,000 to 5,000 people that come together at an event, and we have 600 of those within our division.
Here in Gwinnett County, it's the largest Relay in the country. In the 24-hour event, they raise about $2 million, and they'll have about 15,000 or 16,000 people there -- 20 percent of those are cancer survivors. We're bringing together cancer survivors.
It's really a community event. We bring together youth. In Gwinnett County, every school district is involved. You bring together adults and they pitch their tents and they have contests -- who has the most innovative tent, the best-looking tent and all that, but it's really about people coming together in the fight against cancer at the community level.
HOW TO REACH: American Cancer Society (404) 315-1123 or www.cancer.org