The 58th mayor of the city of Atlanta began her public life as the commissioner of cultural affairs under then-Mayor Maynard Jackson. That was the beginning of an education process that would continue under the leadership of Andrew Young, who named Franklin chief administrative officer and city manager and made her responsible for the day-to-day operations of Atlanta, a city with a $1 billion budget and nearly 8,000 employees.
"With Andy, I would come in with a list of issues to brief him on," Franklin says. "If I could not discuss those issues in a conversational way -- if I wasn't familiar with the facts, if I wasn't familiar with the circumstances versus handing him voluminous memos - then he was never persuaded.
"He thought that I needed to know the information; that I had thought about it, not just have facts and figures at my fingertips all the time. Many people are surprised by that. We could cover 20 issues in an hour-and-a-half because we could talk about it."
It's a lesson Franklin took to heart and incorporates in her own administration.
"I engage in dialogue about public policy," she says. "I am interested in probing the issues. It has to make sense to me; the pieces have to fit together. You can't gloss over the facts and you can't gloss over the interrelationships between one issue and another. And you can't forget the history. You lead in the moment that you are leading. You're not leading in the previous moment. And you're not leading in the future.
"You lead in the historical moment. At this time, there are certain things that people are concerned about that are different than they were 10 years ago or are likely to be different 10 years from now."
Smart Business spoke with Mayor Franklin to learn how she runs the city in the present and prepares it for the future.
What was it like working in the administrations of mayors Maynard Jackson and Andrew Young?
Those were great experiences. It was like reading a leadership book every day. It gave me the opportunity that was completely focused on making Atlanta the best place that it could be. Their leadership styles are very different, so I had that opportunity, too.
They are mentors of mine; they helped me develop self-confidence, they helped me hone my skills. They ensured that I had experience in public administration. It was like a double master's degree and a Ph.D.
What did you learn from them?
The work that I did with Andy Young was basically running the day-to-day operations of the city and having a chance to interact with him on literally hundreds of different initiatives. I had the advantage of his world perspective, combined with his love of this city.
Andy encouraged me during my service to the city, in that eight-year period, to lead a balanced life, to stay connected with my family and friends and community, not to be so consumed with my work that I, myself, lose my values, lose my interests.
I understood what it was like to be a soccer mom. I understood what it was like to grapple with family problems. I understood traffic from the perspective of someone using the roadways with my children. He would encourage me to take time off, to take vacations.
The other thing was that he encouraged daydreaming and blue-skying, as he used to call it. (He was) not satisfied with people who were so mired in the details that they couldn't see the bigger picture.
Brilliant leaders like Andy and Maynard and (William B.) Hartsfield and others can project 10 and 20 years from the present on what life might be. That is the hardest thing I have to do. It's not just to project what decisions I have to make for today based on everything that you know, but how those decisions are going to play out and what opportunities or advantages the community will have or the city will have or the people will have 10 or 20 years (from now) because of a decision today.
Maynard foresaw an international city when Atlanta was not viewed as an international city. That was 30 years ago. His slogan for Atlanta 30 years ago was, 'The next great international city.' Andy foresaw how to do that. Both could see beyond the here and now and pushed themselves to do it. I push myself to do the same thing. I'm not brilliant like they are.
How did running the daily operations of the city help shape your views of business and entrepreneurship?
I viewed this city as a public enterprise, and I learned very quickly the role of the team in accomplishing your goals, whatever they are. It requires everyone at every stage of that process in order to be successful. Declaring it so from the mayor's office wasn't going to get it done.
The value of teamwork and leadership within the team and rotating roles of leadership are among the things that I learned. I also learned to appreciate the value of debate and dialogue and clear communication. The larger and more complex the organization, the clearer the communication has to be both up and down the ladder.
That communication is not just one-sided. It's not just what the mayor or the chief executive officer or the COO has to say. It is also having avenues for people at all stages, at all levels of the organization, to communicate their opinions, their advice and counsel. The person who is actually performing the function knows more about how to do it better than anyone else does.
Do you think that experience of running the city's daily operations puts you more in tune with the business community today?
It's shaped by views, but I think those principles play out in business as well. Being successful in business embraces all of the stakeholders, including employees and the people on the front line, and recognizes the people on the front line are the only ones that most people see.
I'm in tune with them because I listen to them and I value their role in making this city successful. I could have been in tune with them in 1980 and out of step with them now if I were not open to hearing their issues and seeking their advice. I learned that from Andy.
Andy believed, and to this day believes, that government has a very specific role in the delivery of municipal services and supporting business. I concur with that. The success of the city is as much dependent on the success of business as it is on any mayor.
What role should the government play in business?
There is a legislative role in terms of regulations so that there is fair competition. I think we also provide support services through zoning and the building permit process. There are certain legal requirements that are passed to cities from state or federal government.
Our role clearly is in the public infrastructure arena. The important role the city has played in the development and the expansion of the airport; the important role we play in ensuring there is clean water. Those are all services that are provided by the public sector. It is half of the puzzle.
The other half is business. I view my role as mayor as being an advocate for business, not just being supportive, but being an advocate because the majority of people who move to Atlanta and the region move here to go to school or for a job. And many of them then find themselves starting a business. We are a community of entrepreneurs.
Is there a single initiative of which you are most proud?
The initiative that I'm most proud of is not a single initiative. Balancing the city's budget in a very difficult economy -- operating the city in the black -- certainly is something I'm proud of. But the way we have gone about the initiatives is what I'm most proud of.
We build consensus. We seek expertise -- external and internal expertise. And I put a process in place for decision-making that is fact based, research based and where we can be is visionary in its goals.
What has been your biggest challenge?
Tackling the water and sewer issues, and financing $3 billion in water and sewer improvements that should have been done over the last 40 years. It's been the biggest challenge because the number is so big and the time is so short, and it's not a sexy issue.
They are absolutely important and you cannot do it without public health. You cannot do business without water -- quantity of water, quality of water accessibility of water, affordability of water. That has been the toughest issue because it hadn't been tackled comprehensively before.
The public, the business community especially, but the public understands that the city has to tackle this issue. We spent two years in public education and outreach, so people know that this is an issue that we have to tackle. They no longer glaze over when I'm talking about it.
This is not an issue that ever gets done. We're catching up on work that should have been done over several decades. We won't be finished with this issue. We have to have continual investment and reinvestment in clean water that's going to be for the foreseeable future.
What does the future hold for Atlanta?
We are developing a comprehensive economic development plan. It's the first one, we believe, that has been developed by the city, and we are engaging the private sector through a group called the Atlanta Committee for Progress, which is represented by CEO-level and executive-level leadership, as well as our economic development agency.
We are following the lead -- Boston has done similar work; Minneapolis has done similar work; Baltimore has done similar work. It is based on strengthening the growth industries in your community and then finding those opportunities for expansion of those industries. For us it would be logistics and hospitality, banking and financial services. It's also the music industry.
What legacy do you want to leave the city and business communities?
I want the city to be healthier. I want it to be safe. I want it to be economically strong and viable. And I want all people -- poor people, rich people, affluent people, business people and government to buy into a vision of a great community.
I want them to remember that my administration was honest and it was hardworking and that we do what we say we can do. In other words, we are willing to take bold steps and we are willing to do the hard work that accomplishes those. Atlanta is business-friendly. I hope that we would be viewed as business-friendly.
In my heart, I want people to know that Atlanta is the city that cares. We care about the people who live here, the people who work here, the people who invest here, and that we do something about that.
HOW TO REACH: City of Atlanta Mayors office, www.atlantaga.gov or (404) 330-6000
At a time when every other week, the reporter was writing about a company in the midst of a scandal, he asked Huling if he was crazy for making values such a focal point of his company.
"Aren't you afraid in 90 days I might be writing a story about how embarrassed you are because you went public with integrity and then it turned out you, too, were corrupt?" the reporter asked. "How do you know?"
Huling was unfazed.
"I was able to say to him, 'Let me tell you how I know. If we're not living up to that value of integrity, I have 168 auditors and 1,200 consultants who will tell us we're not living up to it,'" Huling says. "I'll know long before the newspaper does, because I give them a mechanism to do it. You can never know everything as one person, so what you must do is enjoin the people of your company in the keeping of your standards.
"I have found a way through this measurement system to share the responsibility for the upholding of our values with every single employee."
Huling's mechanism is a biannual report card in which every Matrix Consulting employee rates the company on its six values -- integrity, respect, excellence, innovation, fun and results-driven.
"We tabulate those results and give ourselves a report card," he says.
What happens next is even more important.
"We post the results in the lobby of every office where we do business," he says.
That dedication and Huling's openness resulted in the company winning the first-ever Turknett Leadership Character Award, presented by the Atlanta-based Turknett Leadership Group. The award recognizes the company that best exemplifies the standards of organizational and individual integrity, respect and responsibility.
Huling has been with Matrix since 1997, but it is his third relationship with the firm. He was twice placed by Matrix in executive positions with other companies. And during his 28 years in the IT staffing and consulting business, he has hired numerous people from Matrix.
Smart Business spoke with Huling to learn how a value system fits into business operations and why it is so important to a company's success.
B>How did this value system come to be such a huge part of Matrix's operations?
In 2001, when everything in the world was changing, we embarked on an internal initiative to solidify and identify those things that were unchangeable in our company. Everything else seemed to be almost catastrophic. So we said, 'We need bedrock to stand on while everything else is swirling around us.'
We found that part of ourselves in our shared values as a company. We did hard work in 2001 to clarify who we are and what we stand for as an organization. And remember, we did that at a time when corporate accountability has never been more in question than it was.
We published the Matrix Charter, which is today the central component of our culture. That codification of our values, that clarification of what we stand for, has literally transformed our company. We became the only company that we know of in the entire world that measures itself against its value system. We post those results in our lobby.
B>Aren't you concerned that those scores could be embarrassing?
It's a little bit like thumb-tacking your college report card outside your dorm room door. I'll (admit) that I wouldn't have done that (in college). Imagine the gut-check you would have had if everybody who walked by was reading your report card. That's how we are.
Every client who comes through our door sees our report card -- every employee, the candidates that we're trying to find jobs for, the consultants who are on our staff, our friends, our families and reporters that come through our door. They all see our report card.
It is a way to utilize public accountability to say that this value system and culture are real. We've done that survey seven times. Every time we've had 100 percent participation. What that also tells you is that the people of Matrix care about this process.
B>So, did you make the dean's list?
We put a very high bar on ourselves. We are striving to have our score on every value be at 5.0 or above (of a maximum 6.0). All of them are above 5.0 except for one, which we are working very hard on.
We are our toughest judges, and we have a score below 5.0 on respect right now because the people of Matrix have been saying that while the market has been picking up and business is getting better, we are getting very frantic and dropping those common courtesies like being patient with each other and saying 'thank you' when we do something great. It's a level of person-to-person respect. We think we can do better.
If you interact with us, I think you'd find us to be the most respectful company you'd ever dealt with. And yet, we're very hard on ourselves. One of our goals operationally is to raise that score on the December Charter checkpoint.
B>Do you hold your clients to the same standards?
We would absolutely turn down a client who asked us in any way, form or fashion, explicitly or implicitly, to violate our value system. We've walked away from business this year where we were asked to deviate from our value system -- sometimes to our economic short-term discomfort.
We've done it, and it's not difficult to do because everything depends on that value system. Those companies that are built to last are those that have a changing strategy and an unchanging core. That's what we're trying to be.
If we allow that core to become changeable and relatively applied, we know that we've begun the downfall of our company.
B>What can other CEOs take away from your value system approach?
We're a $180 million company and we just closed a $240 million contract. How many CEOs in America can say that today? If you try to talk to them about it, what they want to know about is the execution part of it.
But what I've really learned, in a very great way, is execution alone is a very finite strategy. Getting people to do the right thing -- and do more of it -- can only take you so far. But if you approach that focused execution on the platform of a strong value system, the results you can get are truly extraordinary.
B>How has your industry changed in the past three years?
As I look at this broad landscape, I look at an industry where 20 percent of companies in it are no longer in existence. In that same time period, Matrix has remained profitable, has remained debt-free, has strengthened its culture to the extent where we are the winners of the national leadership character award, and we have launched two new lines of business, which are already in their second year of operation and are phenomenally successful. You've got to call that a pretty good period.
B>What changes have you made to the structure of the business?
We have broadened the solution that we offer to our clients. When you only do one thing, and that one thing is not in high demand, it's a difficult time.
The last three years became a catalyst for us to launch two new divisions -- a project solutions division, which does project work, and a managed service division, which is really a contingent labor management offering. Both new lines of business are having phenomenal success.
Our projects business came in at 500 percent of goal for last year. That was pretty good. And then our managed services business has closed a number of major agreements, the most recent of which was a $240 million services contract with a major financial services institution.
We are a $180 million company and we closed a $240 million services contract in a new line of business. That's a pretty good story.
B>Which division is growing fastest?
The fastest in terms of revenue dollars is probably managed services, but the fastest in terms of its overall contributions to the company's financial success is certainly the staffing part of the business, specifically the contract staffing part of the business.
Companies are hiring again, and they are hiring in larger numbers than we have seen in the last three years. But they are hiring people in the beginning on contract assignment and then later converting them to permanent positions. We're doing more permanent placement this year than we have in the last three years. That side of the business is up as well, but I think most companies are starting out by hiring people on a contract to permanent basis.
And as an old CIO, I just see that as a way of being really, really sure before you switch them over to permanent status.
B>How has technology changed your business?
It's been phenomenal. I go all the way back to punched cards and hard-wired CPUs and things like that, so I have a long history with this. The easy answer, the principal thing that has happened is that the Internet's impact on the staffing business has been dramatic and really irreversible, and it works in two dimensions.
It used to be you read the Sunday newspaper to find out what jobs were available in a city or you worked with a staffing company. Those were the only two places. Neither a staffing company nor the newspaper ever had all the jobs that were available, so there was difficulty in learning about the opportunities. Today, you can log onto the Internet and find all the jobs that are available in every company instantaneously.
What that means to the staffing company is you have to offer more to the candidate than simply knowing about the jobs. You have to know a deeper level about the company, environment and the person that they'll be working for.
And you also have to do more to prepare the candidate and help them be successful. It's forced us to raise our game beyond that major competitive advantage we had of just knowing the jobs.
HOW TO REACH: Matrix Resources Inc., (800) 627-3533 or www.matrixresources.com
- Solutions to protect against inflation, even in bond portfolios
- The use of investment vehicles other than stocks and bonds as part of any substantial portfolio
- How to bridge the difference between value investing and growth investing
- Why 40l(k) plans can benefit from having mutual funds which invest in all capitalizations and that do not readily fall into the value and growth styles
- That in selecting an investment counselor, one should emphasize proven judgment and a person who will be responsible to you.
The reader has also received a timely warning that the measures used to stimulate the economy posed a threat to the length of the economic upturn, and that the risk of rising interest rates had to change fixed income strategy. In this, the final article of the series, I will revisit these issues.
So how do I see the next five years?
The current economic upturn should prove more short-lived than normal. Domestic consumption will likely suffer much more in the next downturn than it did in the last recession. Lower consumer spending is both necessary and helpful.
The U.S. trade deficit now exceeds 5 percent of gross domestic product, and no country has ever reached that level without a significant adjustment taking place. If we are to avoid the financial crisis and devaluation that often results from this, our consumption must decline or the government deficit must be rapidly closed. I am confident that in the next five years, we will see a major reaction to the ever-widening trade deficit.
Turning to the investment world, I am more tentative. While the U.S. stock market will continue to be the home of many of the largest, most profitable companies in the world, its return may lag behind those of many countries when measured in U.S. dollar terms. The Japanese and British markets may rank among the best in the industrialized world.
For those managing their own portfolio, it will be important to ignore the zigs and zags of the market and remain with those companies that can maintain their profitability. For those who let others manage their money, stick with proven, dedicated investment people. The firms that cover a wide spectrum and are exclusively focused on money management will do best.
The first generation of a firm is often the best.
Test the business knowledge of the person managing your money. Stay away from those who claim they have discovered a short-cut formula. And avoid those who charge more than they are worth -- especially when considering hedge fund managers.
As I write in late August, the median return for hedge funds so far this year is about zero. Yet the hedge fund industry, now widely promoted, has seen record inflows, which have lifted its size to $870 billion. The hedge fund manager still charges a normal fee and gets expenses paid. When they do better than break even, the hedge fund manager typically gets 20 percent of the profits. No wonder the number of hedge funds is soaring. There are quite a few hedge fund managers among the lists of the very wealthy, but I know of no wealthy person who attributes his wealth to an investment in a hedge fund.
The challenge of managing funds for others is a great privilege. It requires a strong sense of responsibility and depends on your ability to learn constantly about the world. In the end, investing is a field that requires an ability to understand our environment. For that reason, it is a wonderful occupation.
Marc Heilweil (email@example.com) is president and CEO of Spectrum Advisory Services Inc. The firm manages approximately $282 million in assets, including the Marathon Value Portfolio mutual fund. Reach him at (770) 393-8725.
But where will your child live when he or she leaves the nest for college? Many campuses require students to live in university housing during their freshman year. After that, they are often on their own.
From fraternity or sorority houses to off-campus apartments or group houses, the choices are many and the costs high. But there is a solution that might be a win-win for both your student and your investment portfolio -- purchase a condo or home in your child's college town.
With interest rates still at historic lows, favorable tax laws and the notion that housing is one of the best investments you can make, this option is looking better and better for some parents. You may be able to lower the cost of housing for your child, help them get off to a good start in terms of building a credit history, give them a sense of responsibility and give you peace of mind that your child is in a safe living environment.
Here are a few questions to consider before making a college-area home purchase for your child.
- Is the area around the college growing? Research the city or town where the school is located to see if it has suitable housing at a reasonable price. Check out prices to see if they are appreciating. Find out whether there is economic growth and other industry in the area. A local real estate professional can give you a clearer understanding of the housing picture.
- Will other family members or friends be attending the same college over the years? While college selection is unpredictable, you can sometimes gauge whether the college is popular with your child's peers or siblings. Buying a home for your child now may become a long-term investment (and savings) if you have other children who may attend the same school. If you choose wisely, you may be able to rent the home after your own children have graduated.
- Can owning a home or condo help with tuition fees? Some out-of-state students can establish residence if their parents purchase a home for them in the college town. This may enable students to pay in-state tuition rather than the more costly out-of-state tuition.
- What about the size of the home or condo? It does matter. You may be inclined to buy a one-bedroom residence because the purchase price is lower. But look at the possibility of a home with several bedrooms and baths. If your child has roommates who pay rent, you may be able to generate income above the mortgage payments, giving you a nice return on the investment now. Additionally, multiple bedroom properties may have a higher resale value, making your investment that much more lucrative.
- How can this affect my child's credit history? Consider including your child's name on the contract and loan. This can have several positive outcomes. For one, there are many first-time homebuyer assistance programs that make it easier for students to qualify for a loan. This will help your child establish a credit record, and it may enable you to get a lower loan rate than you may have had on a comparable investment loan. By putting your child's name on the loan, you are also giving him or her a feeling of pride of ownership.
Everyone's situation is different, and professional advice is required. Be sure to consult with your tax or financial planner before you move forward. College is a place for your children to learn new things and prepare for the future. Buying a home in their college town may be a way for you to do the same.
Jim Schmidt is president of Coldwell Banker Residential Brokerage, the No. 1 residential real estate firm in metro Atlanta. The company includes 27 real estate branches plus specialty divisions - The Condo Store, Builder Developer Services, Commercial and Corporate Relocation. Affiliated companies offer mortgage, title and closing services. Coldwell Banker Residential Brokerage is a member of the NRT family of companies. NRT Inc., the nation's leading residential real estate brokerage company, is a subsidiary of Cendant Corp. For more information, call (404) 705-1500 or visit www.ColdwellBankerAtlanta.com.
Most, if not all, of the concerns of naysayers are valid. But despite these concerns, HSA plans are going to take over as the core medical benefit within the next five years. Trends in health care costs have slowed but are still multiples of general inflation. Economists are still predicting high inflation on health care costs through the rest of the decade.
Employees won't like HSA plans because they are simply a shift in expense to the employee or patient. HSA medical plans require the first $1,000 of expenses to be paid by the member. The HSA account provides wonderful tax advantages, but a tax advantage doesn't make it free.
Employees will feel the financial burden the first time they seek medical attention. Instead of a co-pay, they could be faced with hundreds of dollars of expenses. The effect on the employee will be multifaceted. They will only seek medical attention when they feel it justifies the substantial expense. They may also drop coverage when they look back on the year and see that for their contribution, they didn't get a return from their investment.
If a person has one office visit and pays a co-pay, with the balance paid by the plan, the employee feels a return. It may not be a good return, but is one nonetheless. However, when the employee has the HSA $1,000 deductible, no co-pay plan, he or she could pay $999 out-of-pocket and get zero return. Employees will question why they have coverage at all.
Health care providers are not going to like HSA plans, either, because of the lower utilization and higher bad debt exposure. When HMOs and managed care plans first came on the scene, one of the lures to join as a provider was reduced bad debt. An employee can afford a co-pay, and the balance was coming from a more reliable source. Now providers are going to see more bounced checks and uncollected fees.
Once again, providers will be caught in the middle, trying to keep their fees down while expenses continue to mount. Doctors are going to eventually require payment before services are performed versus after.
Insurance carriers are not too anxious, either. Because all carriers can and will provide similar plans, there will not be any real marketing advantages to offering an HSA plan. Carriers make margins off of premiums. HSA plans with high deductibles and no co-pays are priced lower than current common plans. Unless margins are increased with the HSA plans, the end results will be lower profits for the carriers.
Employers will also taste the bitter aspects of HSA plans. Employee complaints will increase, with the employer as the sounding board. The HSA may not lower the employer's expense but it may maintain it.
If everyone is against HSAs, why are they being introduced and why are they inevitable? The reality is, affordability is the No. 1 priority. Employers and employees cannot afford to stay with current plans. Premiums are just too expensive.
Every generation is famous for something that their grandchildren will be fascinated with. Our generation will be the 20- to 30-year period out of the entire history of health insurance in which the consumer was removed from the process.
Would that be the golden era? Maybe not. With the greatest health care system in the world, more Americans are morbidly overweight and unhealthy.
HSAs are most definitely coming, and hopefully with them, a return to healthier and happier Americans. 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.
"Esvel was the first company I founded," Eswaran says. "It got sold to Computer Associates and also to Hewlett Packard in 1989. I worked for Computer Associates as executive vice president for 18 months. Then I formed Kaps. Kaps did an automatic translation of AS/400 applications to UNIX, from a proprietary platform to a nonproprietary platform. The technology was bought by a wing of British Petroleum in 1992."
But that was all before a friendly tennis match put Eswaran back in the game.
"After I sold Kaps, I kind of retired," Eswaran says. "My wife's physician was my neighbor, and we were playing tennis one day. He kept calling the hospital to get a patient's results. He told me, 'I'm able to call my bank and get my bank balance instantaneously. Here, I have to keep calling and get put on hold and put on hold because I want to discharge this patient and I want to look at his sodium level.'"
Eswaran decided to take up the challenge.
"I told him, 'I'm not doing anything; let me build you a system,'" Eswaran says. "And I literally built it in the basement -- an IVR system, interactive voice response system -- that would recognize the doctor's patient. And if the doctor says, 'I want the results of a lab from a particular test,' it will play it back."
The appreciative doctor introduced Eswaran to the folks at Northside Hospital.
"We wound up that we could not take our product and interface it with their lab information system," Eswaran says. "It was a database issue -- an old database called MUMPS. So I had to build an interface, which I did, and they bought the product. They like it. They're still using it. That's how we got started.
"If they had not bought it, I would still be on the beach. And then I said to myself, 'Now I've got to make something out of this.'"
That "something" became Integrated Informatics, Eswaran's current venture. The company provides hospitals with database systems to organize operations and workflow.
Smart Business spoke with Eswaran about the industry and his plans to revamp the way hospitals utilize their database systems.
What was it like to be part of the team that created IBM's DB/2?
That was one of the most rewarding and exciting experiences. Like any other company, IBM had a very large investment in a legacy database system called IMS, a huge investment. And we, in research, introduced this new concept called relational database, so IBM has got to balance both the ideas -- coming up with a new product or creating research.
How did you finally convince IBM the new solution was the wave of the future?
We were trying to wear multiple hats -- trying to find a sponsor in the IBM customer base that would help us by trying the product out. We went through some large academic institutions that are always open for some new ideas. We also found a small investment bank that was interested in it.
We did a prototype, and we got accepted. Then IBM decided to bring it as the mainstream DB/2 product. It took five years to convince IBM that it was the way right to go.
Are you proud that you were part of such a successful product?
It is scientifically a great achievement transferring science into technology into a commercial product. It took more time and more energy. Currently, IBM is making around $2.5 billion per year out of DB/2 and connected products.
Oracle adopted the technology based on our scientific publications. Oracle really became pretty big, not as big as it is now, but it became a $500 million company. Then IBM said, 'Well, it looks like the competition is going to take over this database market. Let us also get into it,' and they started swimming.
Why did you leave IBM?
I wanted to build technology that would be based on an open system. IBM was very reluctant at that time to accept anything other than proprietary systems -- we were all pushing UNIX. IBM would not give me the resources.
I decided, let me go, and I'll find a way to build a database that is portable. It gave me a lot of freedom to do what I wanted to do and to make a sizeable amount of money. That is kind of rare that you do what you want to do and make money, too.
How important to business today are the database products you helped create?
To give you a comparison -- Windows and Apple made a big change in the use of computers by nontechies -- it's the same way SQL and DB/2 changed (businesses). To use the old legacy databases, you had to be a computer programmer. SQL actually was invented and tested by nonprogrammers.
The word was UFI -- user-friendly interface. We wanted to structure it so nontechnical people could use it, to bring databases to the masses. Before that, it was kind of a mystery.
What were the challenges?
The biggest challenge was how do you make it useful, and, at the same time, provide performance. One of the bugaboos, by the traditional people, was if you make it useful and user-friendly, you have to sacrifice performance. You cannot achieve both.
In research, we were challenged. We were given a bunch of canned transactions from the financial side, from the manufacturing side, the distribution side -- they have a bucket of transactions. Then you run it against IMS and SQL, our own database, and then prove we are within 10 to 15 percent of the response time from a performance point of view. That's what made it possible to commercialize the idea.
How important are databases to the health care market?
It's very important, especially nowadays with HIPAA (Health Insurance Portability and Accountability Act of 1996). Because databases come, inherently, with security -- only the proper person can access the data and they also log who accesses what data. Still, there is a problem in the health care industry because the database is fragmented.
There is no integrated database inside a hospital. That is one of the regrets I still have, even though I have been here 10 years. I'm not able to change the health care information industry dramatically because they are very slow in accepting an integrated database concept.
What's the problem?
A laboratory will have its own database system. The radiology department will have its own. Finance, patient care -- they're all islands of databases. They build bridges (between the systems). But what they don't think about is, why can't I have a unified system so I can avoid building bridges? They always collapse -- the bridges -- because they don't anticipate the need.
That's what slows it down -- the growth of information systems in hospitals. In a physician's office, they have a different system; it's hard to communicate between the hospital's system and the physician's system. There are not many database standards there.
How do you get the word out about your offerings?
All of our selling so far has been reference selling. That's all we do. This is very important in health care because they are dealing with patients. Health care is different from everything else because the salespeople for a hospital are actually physicians.
If they don't admit patients, hospitals cannot exist. But the physicians are not employees of the hospital. They can't induce them, because that is against the law, so they have to somehow manage and buy the physicians' loyalty.
Because physicians are the people who admit the patients, they have a lot of influence on what a hospital does. So they also have an influence on information systems -- but it's indirect, and we can't approach them because they are not employees of the hospital.
That's one of the reasons it takes a longer time to get accepted any new ideas inside a hospital, because there are patients, there is the administration of a hospital and there are physicians. They want to make sure the physicians are going to accept the process or the idea or the technology, and the physicians are always busy.
Trying to coordinate all of them takes a long, long time.
How do you stay on the cutting edge technologically?
Constant training, conferences, we always bring in new people. If you don't have people in your organization below (the age of) 30, the organization is doomed.
Because in two or three years, they are going to be the people really running not only in R&D, but in marketing and sales. That's my philosophy.
How do you keep employees in the fold?
Motivation is different for different people. For technology people, their main motivation is, are they working on leading-edge tools. Second is salary, and third is benefits.
One of the things we also do well, we take the same developers and expose them to our customers as part of the install (process), so they get to know the customers. They can really see their product, their code and their implementation is getting used by end-users. That is very satisfying for them.
What metrics other than sales volume do you use to measure your business?
How long they remain as a customer. The average length of our customer is eight years. Do they give you repeat business?
The way we sell our product, even today, is reference selling. Can I use them as a reference? We are very proud to say almost all our customers are referenceable. I don't think any other companies can say that.
Where is the growth in the marketplace?
We have been concentrating right now on the U.S., but now, what is happening there is a trend. European Union countries, especially Germany and England, are beginning to model their computer systems like the U.S. Even though their health care industry is national, from a clinical point of view, they are trying to model it after the U.S., even though their financial systems are very different. So we are also looking a little bit overseas for growth.
Do you plan to sell Integrated Informatics like you did your other two companies?
No. We are actually looking for some acquisitions. What we are looking for is a company that will complement our product and that's got a customer base. Health care, several sales are through reference sales, so having a customer base always helps. That is what we are looking for right now.
HOW TO REACH: Integrated Informatics, (678) 323-1093 or www.ii-i.com
If you are an IT manager, you're probably thinking of the capital that's been invested in the hardware and software your company needs to get things done. That's a good guess, but it's not the answer. I'm thinking about human capital, defined as the value good people bring to good companies.
Your most valuable IT asset is your IT staff. Your company may have spent millions on hardware and software, but it takes the IT staff to implement it, maintain it, update it and navigate through never-ending changes in technology. Your IT staff is your most valuable IT asset, and they should be treated as such.
The benefit you benefit from
Each year, ComputerWorld magazine produces a list of the 100 best places for IT professionals to work. This year's list is out, and it includes benefits and working conditions cited by IT professionals as essential for companies wanting to attract and hold the best IT talent.
Taken by nearly 17,000 IT employees working at the 100 best companies, the survey put health insurance and vacation at the top of the list, followed by investment in technology, flexible schedules and training.
The results show that employees value training almost as highly as hard benefits such as vacation time and health insurance. The best of these best companies have taken these results to heart -- 49 percent plan to increase their training budgets next year.
Even in the best economic times, IT budgets are stretched thin. Training is sacrificed, which is a shame because companies that don't invest in training end up with employees who lack the skills they need to move the company forward. A recent report in a British professional journal reported that London businesses are failing to provide vital training and development.
Of the 130,000 employers in London, less than half have training plans in place and even less have a training budget.
Making the most of it
When your IT budget does provide funds for training, several things can be done to maximize your return on investment. Start by making sure your employees go to training with the highest expectation for success. Request a syllabus so you know what topics will be covered, then make sure your employees have the skills they need to succeed in the classroom.
After employees return from training, guard against "training atrophy." This happens when employees are sent for training, then never get to utilize the knowledge once they return to the workplace. Usually it happens because training is scheduled too far in advance of the projected need.
When there is a large gap between the training and the actual project, schedule practice time weekly or daily so the skills learned can be practiced or reviewed. Because heavy demands are often placed on IT employees to meet deadlines and satisfy impatient end-users, this takes a strong-willed IT manager to implement.
Another way to prevent training atrophy is to plan not only for training but also for timely software upgrades so that training and software upgrades coincide. Ensure that the versions of hardware and software your employees have used during training are the same ones they will use when they return to work. Far too many students have told me that they won't have access to the version of software that we have just spent a week training them to use.
Treat employees' time away as if they were unreachable. Don't bother them with work responsibilities when they are trying to soak up valuable knowledge for your company's benefit. Instruct employees to remember that they are on a mission for your company. They should be prepared to train each day, and get the rest they need to be attentive during the sessions.
IT employees want to provide value to their company, but they also want to feel valued. Investing in the training they need is the best vote of confidence you can give them.
It has immediate benefits for your employees and for your company as you both move forward with an ability to understand, implement and profit from new technologies. Bruce Thompson is manager of education services for BravePoint, a supplier of e-business and enterprise IT solutions to mid-market companies. Reach him at (770) 449-9696, ext. 3034.
Education: Bachelor of science degree in business management, George Mason University (Virginia)
First job: Behind the counter at McDonald's -- "I lasted one month. It was the hardest job I've ever had."
Boards: Treasurer of Online Publishers Association; Interactive Advertising Bureau (focuses on online advertising and maximizing success); Atlanta Chamber of Commerce; and Cool Savings, an Internet-based direct marketing company
What is the greatest business lesson you have learned? It's all about how you treat and motivate people in your organization. If you have a strong, engaged and aligned team, miraculous things happen. (If you don't) everything is harder.
What is the greatest business challenge you've faced, and how did you overcome it? Managing through the Internet bubble. It seemingly changed all the rules in business. Everything was turned upside down -- deficit spending was king, profits were out of style, people with no experience running successful and sustainable businesses were put on a pedestal as prophets of truth and wisdom, programmers just out of school were making more money than business owners who had built their companies from the ground up.
It was an incredible time to be in business; it taught me so many things, but it was, at the same time, a huge challenge.
Whom do you most admire in business and why? I struggle so much with giving you any one answer. I could come up with a whole bunch of people and tell you why I think that they're awesome business leaders, and I've got a list, but I think about it a little differently. I would say, as a group, I really admire small business owners. These are the people that put it on the line 24/7. The skills, the dedication, the smarts, the personal finances, the sweat equity that these people have to have to be successful, it's not really well-understood or communicated because the headlines focus on the big corporate CEOs.
As a group, I always have a deep amount of respect for someone that becomes a success by starting their own small business.
There are also great people. Most of these people you'll understand and have heard about. I really admire Sam Walton for teaching us that you can take a mundane and centuries-old business concept and make it the most important business in the world, or Lou Gerzner for having the smarts to take a venerable but declining business (IBM) that was, frankly, in a lot of trouble, and turning it into something more powerful and valuable than it ever was.
Jack Welch -- all the good and bad that has been said. This is the guy that taught corporate America that developing talent can be a competitive advantage. That's a book in and of itself.
CIOs looking at developing new applications are faced with the daunting challenge of meeting ever-changing business demands within a shrinking budget. The normal course of action is to either develop an application from scratch with the help of an outside contractor or purchase an out-of-the-box solution.
Working with an outside contractor has obvious benefits. Without adding headcount, you can assemble a team with the skills you need to meet your demand. You can also create a dream application to capture or process information specific to your industry.
No out-of-the-box solution is going to give you that functionality, no matter how good it is. But no out-of-the-box solution will cost you as much as it will to hire a contract team of programmers, either.
Out-of-the-box software can offer a short-term solution if you don't have a big development budget. Most will handle your basic needs. Some providers can provide further customization on a contract basis to help meet specific business objectives. Of course, if you can find an out-of-the-box solution specifically designed for your industry, it will make customization that much easier.
Partnering -- a new option
An emerging trend is for companies to form a partnership with the companies developing their applications. This usually entails an agreement that, for a reduced rate, the contractor will develop an application and retain rights to the source code.
The contractor is then free to develop and market the application as an out-of-the-box solution for other clients.
This arrangement probably wouldn't work for companies that hope to gain a proprietary advantage from the software they are developing, but for most others, it's an ideal arrangement. After all, once an application is developed, most companies have little or no use for source code rights.
Case study -- LAMPS
My company, BravePoint, has been a pioneer in this approach. Recently, we were contacted by the Georgia Association of REALTORS to develop an application capable of keeping track of membership and other data for all of the real estate agents in Georgia.
There were already several packages on the market specifically designed for this task, but the Georgia Association felt they were too expensive, too cumbersome or not customized enough to do what it needed them to do.
BravePoint looked at existing applications to see what has worked and what hasn't. We were able to take advantage of technology that wasn't available when many of the competing applications were first written. The result was LAMPS -- BravePoint's Lightweight Association Management Processing System.
Since we retained the rights to the application, we were able to offer it as a custom solution to the Georgia Association at a dramatically reduced price. We knew we would be selling the product in this market, so we became experts in its technology and its business, as well as its specific needs.
The Georgia Association was left with a custom solution, as an out-of-the-box package called LAMPS -- a software product with all the maintenance and support that go along with it. Also, any future upgrades are easy to accomplish because of our partnership
Partnering for a win-win
Costs for producing major IT initiatives haven't gone up, but budgets have gone down. If you are about to start a major IT initiative, consider forming a partnership with your provider.
Relinquishing ownership rights of the source code for a new application can help you do a major installation at a tremendous discount. The result is cheaper, better and more versatile software for everyone. John Harlow is president of BravePoint, a supplier of e-business and enterprise IT solutions to mid-market companies. Reach him at (770) 449-9696, ext. 3012.
The board of directors of OuterBounds Technologies Inc. appointed Frederic J. "Fritz" Hibbler CEO. Hibbler joined OuterBounds Technologies in March 2003 as chief technology officer and executive vice president.
He has experience in wireless mobile voice/data, billing systems, enterprise resource packages, software development, systems operations and information technology organization. During his 22-year career, he has held several executive positions: vice president and CIO for Rural Cellular Corp., VP of operations for Global Mobility Systems, CTO for SportsFunds.com and CIO for the University of Wyoming.
Stiefel Laboratories appointed William D. Humphries to the newly created position of senior vice president, commercial operations.
Humphries brings 16 years of domestic and international experience in sales and marketing, management, training, operations and business development in the pharmaceutical industry. He spent 14 years in several positions with Allergan Pharmaceuticals, departing as vice president of sales and marketing with hands-on involvement in strategy, execution and business development for the company's dermatology product line. Previously, he was on the management team at Dermik Laboratories, with division responsibilities in sales operations and product management.
He will be responsible for strategy, business development, sales and marketing for all Stiefel products.
THE TECHNOLOGY ASSOCIATION OF GEORGIA
The Technology Association of Georgia's Steve Jeffery will step down as president to assume his new role as CEO of an Atlanta-based technology company.
Jeffery joined TAG as president in April 2003, with a planned tenure through the end of 2004. The executive committee has initiated an active search for a new executive director. In the interim, TAG operations and staff will be overseen by the executive committee.
COLONIAL TAX COMPLIANCE CO.
Colonial Tax Compliance Co. named David Fromal executive vice president of marketing and sales. Fromal will spearhead the company's growth initiatives across all of its markets and verticals. He will also assume responsibility for all marketing, branding and positioning initiatives. He brings to Colonial Tax more than 20 years of sales and marketing experience.
Prior to his role with Colonial Tax, Fromal worked in a similar processing intensive environment as the executive vice president of strategic development and corporate communications for TRX Inc. Prior to TRX, he spent more than 13 years in various management positions at American Express Travel Related Services.
Coca-Cola Enterprises' board of directors elected William W. Douglas vice president, controller and principal accounting officer. He succeeds Rick L. Engum, who will assume the post of vice president of finance for the company's North American Group.
Douglas has spent the past 13 years in various senior European roles within the Coca-Cola system. He has served as CFO of Coca-Cola HBC, one of the world's largest Coca-Cola bottlers, since February 2000, and prior to that was corporate controller of Coca-Cola Beverages PLC, based in London. He began his career in the Coca-Cola system in 1985, joining The Coca-Cola Co. after three years with the accounting firm of Ernst & Whinney.
Engum began his career with Coca-Cola in 1974. Prior to his most recent assignment, he served as vice president, finance and administration for the company's European Group, and earlier as vice president, information systems.
Digital Envoy named William J. Calpin CEO.
Calpin brings more than 25 years of sales and management leadership experience in the financial services industry, as well as the information services and technology sectors. Calpin assumes his leadership role from Dave Keller, who stepped down to accept a COO position with Humanizing Technologies, a technology start-up in Indianapolis. Before joining Digital Envoy, Calpin partnered to launch Ocean Cove Associates. Before that, he was general manager and senior vice president of Sales for X.HLP Inc., a global software and services company. He also served as CEO for Abridge, an Internet technology company.
Prior to Abridge, Calpin was a member of Equifax's executive team, starting in 1995 when the global information services firm acquired his company, UCB Services Inc. He was president and COO for UCB Services of Chicago and served as vice president of Citicorp Mortgage in St. Louis.
HOFFMAN NAMED WOMAN OF THE YEAR FINALIST
Sandy Hofmann, CIO and chief people officer of MAPICS Inc., a global provider of enterprise solutions for world-class manufacturers, was named one of seven finalists for Women in Technology's "Woman of the Year in Technology" award. The distinction recognizes a Georgia female executive for her leadership both within her company and her community.
Hofmann was one of 43 nominees. Other finalists were Linda Beck, executive vice president of operations for EarthLink; Becky Blalock, senior vice president and CIO for Southern Company Services; Raleigh Burgess, president and founder of Seventh Wave Technology; Margaret Godsea, CIO for AFC Enterprises; Kristin Kirkconnell, CIO for AGL Resources; and Mylle Mangum, CEO of International Banking Technologies. Finalists and nominees were honored during the Fifth Annual Woman of the Year Awards Gala held at the Fox Theater in Atlanta April 15.
"I am proud to be honored for my efforts and the efforts of my team and to be in the company of such capable and outstanding women," says Hofmann. "Awards such as this recognize what a significant asset our women executives are to the Georgia business community. The growth in numbers of nominations year over year is a positive sign that Georgia businesses are continuing to invest in our female executive leadership."