For example, Sally Jackson resigned as president and CEO of the Greater Columbus Chamber of Commerce, and Mayor Michael Coleman's Chief of Staff Ty Marsh stepped in, putting him in a position of even greater influence.
While most of last year's top 10 hold fast to their positions, a large number of the remaining people on the list have moved positions or are new this year.
The revitalization of downtown over the next several years will be a major focus, and real estate and commercial developers will be at the forefront of the charge. Mayor Coleman and others with political clout will play a significant role in reshaping Columbus, its business environment and its skyline.
Here is this year's Power 100 list. Last year's rankings are in parentheses.
1. Les Wexner
Chairman and CEO, Limited Brands Inc. (1)
With no close contender for this top spot, Wexner ably controls his company, and has accumulated a $2 billion cash reserve and positioned it to make some healthy acquisitions. While there are no signs that Wexner intends to relinquish control, he did name Leonard Schlesinger vice chairman and COO of Limited Brands.
2. John F. Wolfe
Chairman, publisher and CEO, The Dispatch Printing Co. (2)
Wolfe's influence is felt throughout his media conglomerate, which includes magazines, newspapers, television, the Ohio News Network and radio stations. Wolfe also has part ownership in the Columbus Blue Jackets.
3. Bob Walter
Chairman and CEO, Cardinal Health Inc. (3)
It's been another good year for Walter's $50 billion company, which continues to gobble up other businesses - including United Kingdom's Intercare plc - to expand its product and service offerings and reach. Walter also lends his expertise to the boards of Bank One Corp. and Viacom Inc., as well as to Battelle Memorial Institute and Ohio University.
4. Thomas Hoaglin
President and CEO, Huntington Bancshares Inc. (7)
Despite SEC concerns of improper reporting of its auto lease portfolio, Hoaglin led the $30 billion regional bank to continued profitability last year. His impact on the community is epitomized by his leadership roles on the boards of The Columbus Partnership, Columbus Downtown Development Corp., Greater Columbus Chamber of Commerce, Ohio Business Roundtable, COSI and OhioHealth.
5. Jerry Jurgensen
CEO, Nationwide (6)
Jurgensen battled a tough financial year in 2002 by stepping up advertising in 2003. Today, Nationwide's bottom line is improving. Jurgensen shares his leadership responsibilities with new Chairman Arden Shisler, but he remains one of the most influential leaders in town, advising the Greater Columbus Chamber of Commerce, Law Enforcement Foundation of Ohio, Children's Hospital, Columbus Downtown Development Corp., the Ohio Business Roundtable and Financial Services Roundtable.
6. Alex Shumate
Managing partner, Columbus and Cincinnati offices, Squire, Sanders & Dempsey (4)
Shumate was recognized as the American Red Cross of Greater Columbus' Humanitarian of the Year, and his counsel is sought by the boards of Nationwide Financial Services Inc. and the William Wrigley Jr. Co. He is a trustee of the Columbus Partnership, the John Glenn Institute and the Wexner Center for the Arts.
Chairman and CEO, The Pizzuti Cos. (5)
With the commercial real estate industry's anticipated rebound this year and downtown development plans, Pizzuti's company is positioned to take advantage of the expected growth.
8. Michael Coleman
Mayor, city of Columbus (11)
The mayor continues to demonstrate his dedication to and focus on business development, especially on recharging the ailing downtown. Coleman's proposed initiatives could create 7,000 new jobs over the next 10 years.
9. Jack Schuessler
Chairman and CEO, Wendy's International (10)
Schuessler battled slow sales at Wendy's restaurants early in the year by instituting initiatives such as accepting credit cards and offering higher protein items and more choices for children.
10. Jay Schottenstein
Chairman, American Eagle Outfitters; chairman, Retail Ventures Inc. (12)
Schottenstein owns more than 75 percent of the recently renamed Retail Ventures Inc., which posted 2003 revenue of $1.2 billion, and holds stakes in other Schottenstein family companies.
11. Ty Marsh
President and CEO, Greater Columbus Chamber of Commerce (NEW)
This former chief of staff for Mayor Coleman walks into one of the city's top business leadership positions with a formidable Rolodex already in place. He has worked closely with other high-profile agencies, including The Columbus Partnership.
12. Jack Kessler
Chairman, The New Albany Co. (14)
In addition to developing one of the hottest residential areas in the region, Kessler is on the board of trustees of the United Way of Central Ohio and the board of directors of Bank One.
13. Tanny Crane
President and CEO, Crane Group Inc. (32)
Crane is one of the most influential business leaders in the region. In addition to running one of the largest family owned companies in Columbus, she was recently named a board member of Wendy's International, is on the chamber's board (and its nominating committee), and serves on the board of trustees of the United Way of Franklin County, as well as on the Dean's Advisory Council at OSU's Fisher College of Business.
14. Robert Werth
Managing partner, Vorys, Sater, Seymour and Pease LLP (28)
Werth ably leads the largest firm in the city -- one with attorneys who continue to receive awards and recognition and provide leadership on community boards including the Airport Authority Board and the Ohio State Bar Association.
15. John Beavers
Chairman, corporate department, Bricker & Eckler LLP (16)
Beavers' advice has been sought by organizations such as the Economic Club of Columbus and the Mayor's Steering Committee for Operations and Efficiency Review of the City of Columbus. Beavers is also a member of the Columbus Foundation Arts Advisory Committee.
16. Mark Barbash
Director, Columbus Department of Trade & Development (17)
It's been a busy year for the department, with trips to China and Germany, among others. With the emphasis on development intensifying, Barbash's importance will increase.
17. Friedl Bohm
Chairman, NBBJ (19)
Bohm leads the third largest architectural firm in the world, putting Columbus on the architectural map. NBBJ won national recognition for health care design for the Naval Hospital Bremerton, Clinic Addition and Renovation. Clients include Novartis and Reebok.
18. Don M. Casto III
President, Don M. Casto Organization (20)
Casto's company is one of the largest developers and property management companies in the city, and his advice is sought by the boards of the Chamber of Commerce, Huntington Bancshares and the Columbus Airport Authority Board.
19. Curt Loveland
Partner, Porter, Wright, Morris & Arthur LLP (19)
Loveland's legal and business counsel are preferred by clients including Too Inc. and Max & Erma's. He serves on the executive advisory board of the Ohio University College of Business and the board of directors of the Business Technology Center.
20. Rich Langdale
Founder, NCT Ventures; executive director, OSU Center for Entrepreneurship (21)
Langdale fosters entrepreneurship through his efforts at The Ohio State University. After NCT purchased Retail Planning Associates Inc., it landed a multimillion contract with Sprint. Langdale was recently elected to the board of the Chamber of Commerce.
21. Bob Taft
Governor, State of Ohio (8)
Despite the governor's Third Frontier Project, many businesses are not thrilled with recent tax changes that are not considered "business-friendly." Taft's star is clearly falling in his final term as governor.
22. Bea Wolper
Partner, Chester, Wilcox & Saxbe LLP (22)
Wolper's knowledge and support of businesses have earned her awards such as the Entrepreneur Of The Year Award (Support Category) and the YWCA Women of Achievement Award. She is a founder and president of the Women's Business Board and a board member of the Wexner Director's Circle Council and Mt. Carmel College of Nursing.
23. Michael Fiorile
President and CEO, Dispatch Broadcast Group (33)
The Wolfes may own the company, but Fiorile wields a great deal of power as president and CEO of this media conglomerate and as chairman of the Columbus Chamber of Commerce.
24. & 25. Paul Tipps & Neil Clark
State Street Consultants (23 & 24)
Tipps' and Clark's client list reads like a Who's Who of Columbus businesses. Limited Brands Inc., Cardinal Health and Bank One are just a few of the companies that have solicited the pair's political and lobbying prowess.
26. Roger Geiger
State director, National Federation of Independent Business, Ohio (25)
From fostering entrepreneurship through scholarships to lobbying for overtime regulation reforms, there is no underestimating the NFIB, its influence and Geiger's role in supporting a growing number of members. Geiger was also appointed to the Ohio Commission to reform Medicaid.
27. Julie Kunkel
Managing partner, Columbus office, Ernst & Young (NEW)
First Kunkel was transferred to Columbus to handle the Limited Brands account. Then she was named Ernst & Young's managing partner. She's earned a lot of clout and respect in a very short time.
28. Curt Moody
President and CEO, Moody/Nolan Ltd. (26)
Moody heads one of the city's largest architectural firms, and his expertise led to his appointment to head the chamber's infrastructure steering committee. The architectural future of the city is in Moody's hands.
29. Kurt Tunnell
Partner, Bricker & Eckler LLP (28)
The Ohio Republican Party, the Ohio Manufacturers' Association and the Association of Ohio Life Insurance Companies have turned to Tunnell for legal and legislative expertise. In his spare time, he serves as treasurer and board member of the Ohio Public Expenditure Council and is a member of the board of trustees of Maryhaven Inc.
30. Larry Hilsheimer
Managing partner, Columbus office, Deloitte & Touche LLP (80)
Hilsheimer is among the heavy hitters who chose the new chamber president. He is on the chamber's nominating committee and the Dean's Advisory Council at the Fisher College of Business.
31. Robert Eversole
President and CEO, Fifth Third Bank, Central Ohio (NEW)
Eversole replaces Tim O'Dell, who retired from the bank in September after a Securities and Exchange Commission inquiry. He's already making a place for himself in the community, filling O'Dell's seat on the chamber's board of directors as well as at the bank.
32. Jeff Keeler
Chairman, The Fishel Co. (30)
This Junior Achievement Business Hall of Fame member and Entrepreneur Of The Year sits on the board of Ruscilli Construction, Metatec and Sports Imports and contributes to the boards of Bank One and AirNet.
33. Carl F. Kohrt
President, Battelle (46)
Admiration for Kohrt in the business community is growing. He founded a $150 million venture capital fund for Battelle technologies and recently stepped into Dimon McFerson's shoes as chairman of the board of COSI.
34. Leonard Schlesinger
Vice chairman and COO, Limited Brands Inc. (76)
This former Brown University professor is second-in-command at Limited Brands and serves on boards at the Columbus Foundation, Harvard University and The Ohio State University Medical Center, where he is part of the strategic advisory group.
35. Curt Steiner
Co-founder, Steiner/Lesic Communications (31)
Steiner advises some of the top execs in town. His client roster includes OhioHealth, Mount Carmel, Nationwide and Squire Sanders & Dempsey. The two-year-old PR firm continues to grow and add clients.
36. Tami Longaberger
President and CEO, The Longaberger Co. (34)
Longaberger's business expertise is used by the Ohio Business Roundtable and The Ohio State University Board of Trustees. She is contemplating expanding the company's territory and reviving its growth by venturing outside the United States.
37. Melissa Ingwersen
President, Bank One NA Columbus (36)
Ingwersen's involvement in Columbus includes board memberships at the Greater Columbus Chamber of Commerce, Greater Columbus Arts Council, Franklin University, YWCA of Columbus, Grant/Riverside Foundation and I Know I Can.
38. Brad Beasecker
President, Helston Capital Group (37)
With less venture capital available to entrepreneurs, Helston Capital Group is more important than ever. Beasecker's connections with Battelle Venture Partners and the Columbus Investment Interest Group make him an important man to know.
39. Cheryl Krueger
President and CEO, Cheryl&Co. (38)
Revenue of $25 million represents a lot of cookies, so Krueger is definitely doing something right. You'll find Cheryl&Co. cookies on airlines such as Delta and US Air, and her Cookies for A's Program is going strong.
40. Karen Holbrook
President, The Ohio State University (44)
Holbrook continues to gain respect as she tightens OSU's economic belt and takes measures to keep the institution in the black.
41. Lewis Smoot Sr.
President, Smoot Corp. (39)
Smoot's firm is not only a contender in Columbus; this smart businessman is also taking advantage of lucrative Washington, D.C., and Indianapolis markets. He sits on the Huntington Bancshares and Columbus Foundation boards.
42. Jack Ruscilli
CEO, Ruscilli Construction Co. Inc. (40)
This newly elected Chamber of Commerce board member's company is one of the city's largest construction firms and is ready to take advantage of the projected commercial construction upswing.
43. Blane Walter
Chairman and CEO, inChord Communications Inc. (48)
Walter's firm boasted capitalized billings of $695 million in 2002, and he was recognized by business heavy hitters when he received the 2003 Robert S. Crane Jr. Young Philanthropist Award, hosted by Abigail and Les Wexner at their home.
44. John B. Gerlach Jr.
Chairman, president and CEO, Lancaster Colony Corp. (67)
Gerlach's company is one of only 23 in the country to increase its cash dividend each year in 41 consecutive years. He sits on the Dean's Advisory Council, Fisher College of Business, and the board of directors of Huntington Bancshares Inc.
45. Walter Cates
Founder and president, Main Street Business Association (41)
With the increasing focus on downtown, Cates' power will also continue to grow.
46. Dwight Smith
President and CEO, Sophisticated Systems Inc. (46)
Smith was on the search committee to find the chamber's new president, is on the steering committee for the Ohio Business Gateway and was elected president of Columbus State's board of trustees.
47. M. Valeriana Moeller
President and CEO, Columbus State Community College (47)
Columbus State's enrollment has grown 35 percent since Moeller took office. Her influence is also felt at COSI, United Way of Central Ohio, the Chamber of Commerce, Columbus Technology Council, Franklin County Workforce Policy Board and Fifth Third Bank.
48. John P. McConnell
Chairman, Worthington Industries Inc. (42)
Worthington Industries was hit hard by a slow economy the last few years, reporting an overall sales drop of 5 percent. But McConnell is a force to be reckoned with, serving as chairman of the Workforce Development Committee of the Columbus Chamber and as a member of the Downtown Business Plan Advisory Committee and the Ohio Business Roundtable.
49. Roger Blackwell
President, Blackwell Associates Inc. (13)
The SEC filed insider trading charges against Blackwell early in 2003, which Blackwell denied. Despite the charges, he continues to thrive. His book "Brands That Rock," coauthored with Tina Stephens, was released in October, landing him a spot on CNN and receiving positive remarks from the likes of Calvin Klein and Christopher M. Connor, chairman and CEO of The Sherwin-Williams Co.
50. Nancy Kramer
President, Resource Marketing (49)
Kramer was chosen to head the chamber's marketing steering committee and is charged with creating a national image for Columbus. She also bought back her company, Resource Marketing, from Ten United this year. The agreement gave her three years to buy back the company; she did it in one.
Athletic director, The Ohio State University (50)
Geiger is raising awareness of the university's athletic departments and was named Street & Smith's Sports Business Journal National Athletic Director of the Year.
52. James Conrad
Administrator and CEO, Ohio Bureau of Workers' Compensation (51)
There is no disputing the political clout associated with this post and the power Conrad has over Ohio businesses.
53. Frank Kass
CEO, Continental Real Estate Cos. (52)
Kass will be a big player in the redevelopment of downtown and throughout the country, thanks to his real estate and development interests.
54. Michael Petrecca
Managing partner, Columbus office, PricewaterhouseCoopers (53)
Petrecca's financial and accounting expertise give him entree with many of Columbus' business elite.
55. Dick Emens
Partner, Chester, Wilcox & Saxbe LLP (54)
He literally wrote the book on family business and advises many of the city's top companies. This year, he was appointed to the Whittier Peninsula advisory board, a board planning to turn the area into a Metro Park.
56. Zuheir Sofia
Chairman, Sofia & Co. (65)
This former president and CEO of Huntington Bancshares is the chairman of The Ohio State University Board of Trustees and was appointed to the Ohio Banking Commission.
57. Herb Glimcher
Chairman, president and CEO, Glimcher Realty Trust (55)
Glimcher has done a lot of buying and selling, acquiring a new mall in North Carolina and Eastland in Columbus, which he plans to update. He hopes the new Eastland will be more competitive with Easton.
58. Kyle Katz
President, The Katz Interests Inc. and New World Restaurants Inc. (56)
Katz is a developer who will profit from downtown revitalization. His Buggyworks offices and condos on West Nationwide Boulevard are pulling in reservations with very little marketing effort.
59. Bob Weiler Sr.
Chairman, The Robert Weiler Co. (54)
Weiler, a former Columbus City Schools board president, owns several key properties in downtown and at Polaris.
60. Jim Grote
Founder, chairman and CEO, Donatos Pizzeria (NEW)
At the end of 2003, Grote and his family reacquired the business from McDonald's, placing him back in control of the 182-location restaurant chain that he sold to the restaurant giant in 1999.
61. Sam Gresham Jr.
President and CEO, Columbus Urban League (57)
Gresham carries out the Urban League's mission of supporting black businesses. He is a member of the Committee for the Master Plan for the City of Columbus and a former President of the National Association of National Urban League Executives
62. Jan Allen
Owner, Jan Allen Consulting (60)
Allen's deep political ties help her land clients. She coaches CEOs, and she and husband, Curt, work directly with all of Ohio's public university presidents to elevate the importance of higher education with public policy makers.
63. David Milenthal
Chairman, HMS Partners (NEW)
This 2003 Junior Achievement Business Hall of Fame member serves or has served on boards including those of OhioHealth Hospital System Foundation, Capital University, The Columbus College of Art and Design, the Columbus Urban League, The Ohio State University Development Committee and BalletMet Columbus.
64. J. Daniel Schmidt
President, JDS Cos. and Downtown South Association (72)
Schmidt is a former Oldsmobile dealer who quietly purchased 12 acres of downtown properties, which he is developing with the approval of Mayor Coleman. He may be the No. 1 player in the area's revitalization.
65. David P. Blom
President and CEO, OhioHealth (81)
Blom's focus on improving operating efficiencies is paying off. This year was the first in several that the system operated in the black, with revenue of $1.48 billion.
66. Terry Foegler
President, Campus Partners for Community Urban Redevelopment Inc. (62)
Foegler's $100 million University Gateway Center project is attracting attention and should re-energize and reinvent North High Street along The Ohio State University campus.
67. Phil Urban
President and CEO, Grange Insurance (63)
Grange's bank has doubled its office space, and Urban gives his expertise to the Dean's Advisory council and Fisher College of Business.
68. John Christie
President and COO, Worthington Industries (64)
Christie's present and past connections include those formed at Battelle and the chamber. He serves on the advisory board of Battelle Memorial Institute Pension Plan, The Fishel Co. and Ruscilli Inc.
69. E. Linn Draper
Chairman, AEP (43)
Draper retires in April but is still a powerful man. He sits on the board of directors of the University of Texas and Sprint Corp.
70. Doug Borror
Chairman and CEO, Dominion Homes (68)
Dominion Homes posted record sales, and Borror has his hand in the downtown redevelopment as a board member of Capital South Redevelopment Corp. He's also on the board of The Wellington School and the advisory board of Goodwill Industries.
71. Pat Dugan
Partner, Squires, Sanders & Dempsey LLP (70)
For acquisitions and mergers, Dugan is your man. He serves on the executive committee of the Columbus Venture Network.
72. John Rosenberger
Executive director, Capital South Community Urban Redevelopment Corp. (71)
Within the next 10 years, Rosenberger plans to revitalize the downtown and will be at the forefront of development.
73. Patrick Grabill
Chairman and CEO, Homestead Communities (66)
Grabill is still a player in the real estate market, having joined up with Frank Cass and Continental Real Estate Cos.
74. Dimon McFerson
Retired chairman, Nationwide (69)
McFerson is slowly withdrawing from his community involvements but is still a strong presence, especially at The Ohio State University, where he is a trustee.
75. Sandy Harbrecht
President, Paul Werth Associates Inc. (73)
Harbrecht's firm represents clients including the Columbus Technology Leadership Council and Squire, Sanders & Dempsey. She also serves on the Dean's Advisory Council for OSU's Fisher College of Business.
76. Robert Schottenstein
President, M/I Schottenstein Homes Inc. (75)
Schottenstein's company reported record sales in 2003, and just donated $1 million to The Ohio State University.
77. and 78. Alan Wasserstrom & Rodney N. Wasserstrom
Co-presidents, The Wasserstrom Co. (77 & NEW)
These grandsons of founder Nathan Wasserstrom continue to grow the company, whose clients include Wendy's International, Long John Silver's, California Pizza Kitchen and Panera Bread Co.
79. Linda Hondros
President, Hondros College (74)
Hondros' powerful real estate and business connections keep her a powerful influence.
80. Todd Cameron
CEO, Retail Planning Associates Inc. (NEW)
Cameron navigated the advertising/branding firm through the last few years to its most profitable in the 27-year history of the company while sweeping most creativity awards in the marketplace.
81. Karen McVey
CEO, Women in New Growth Stages (78)
Both through her company and personally, McVey serves as a mentor to women business owners.
82. Paula Inniss
President, Ohio Full Court Press (80)
Inniss created a $4 million company in less than 10 years and has won many awards and much recognition, including placement on the Inner City 100 list and the JA Business Hall of Fame.
83. Bill Habig
Executive director, Mid-Ohio Regional Planning Commission (82)
With the chamber's focus on expanding Columbus' presence in the logistics industry, this commission and Habig will increase their clout.
84. Artie Isaac
President, Young Isaac Inc. (83)
Isaac's expertise pulls in clients such as Battelle Healthcare Products and COTA.
85. Maury Cox
President, The Ohio Partners LLC (35)
This former CompuServe CEO manages Ohio Partner's funds for The Columbus Dispatch.
86. Robert Massie
Director and CEO , Chemical Abstracts; chairman, Columbus Technology Council (84)
Massie was appointed co-chairman of the chamber's steering committee to save the government's Defense Supply Center in Columbus.
87. Tom Button
Vice president, Park National Bank, Columbus, (85)
Button provides a strong Park National presence in Columbus and is working to make it stronger.
88. and 89. Cameron James & Ken Mills
CEO, president, Mills/James Productions Inc. (86 and 87)
Mills' and James' company continues to expand its markets and is delving into television production.
90. Abigail Wexner
Founder, Columbus Coalition Against Family Violence (NEW)
The wife of Les Wexner, her influence in the community cannot be overlooked. Since she founded the Coalition, she has raised $6 million to benefit it. She also serves on the boards of Limited Brands, Children's Hospital, The Wexner Center Foundation and the Columbus Academy. Wexner recently concluded her chairmanship of the Columbus Foundation.
91. Daniel Slane
President, Slane Co. (89)
This former law partner is a leading shopping center owner and rubs elbows with the city's most influential leaders as an OSU trustee.
92. Brian Ellis
President, Nationwide Realty Investors (90)
Ellis controls this company that owns approximately $1 billion in real estate investments and is the key developer of the Arena District.
93. Cameron Mitchell
President, Cameron Mitchell Restaurants LLC (91)
Mitchell was voted to the chamber's board of directors, and despite the slow economy, he's expanded outside the Columbus area into Cleveland and outside the state to Michigan.
94. Sue Doody
President, Lindey's Grant Avenue Investments (92)
It's full steam ahead for Doody and the family's Bravo Development. Through 2006, Bravo Development plans to open 40 Bravo Cucina Italiana and Brio Tuscan Grille restaurants.
95. Robert C. White
Founder and chairman, The Daimler Group (93)
Business is booming for Daimler. There is continued interest in White's Westar, and the company won the $9 million St. Ann's addition project. Clients include Blane Walter and Don Casto.
96. George Skestos
Founder, Homewood Corp. (94)
Skestos serves on Huntington Bancshares board and the Columbus Regional Airport Authority board.
97. Gene T. Harris
Superintendent, Columbus Public Schools (95)
Harris was successful in bringing the school system off the list of Ohio schools in a state of academic emergency.
98. Janet Jackson
Executive director United Way Central Ohio (96)
Jackson's former political connections serve her well as she works with the city's top business leaders.
99. Bill Schottenstein
Owner, Arshot Investment Corp. (97)
Schottenstein is another developer who will profit from the redevelopment of downtown.
100. Doug Kridler
President and CEO, Columbus Foundation (98)
Kridler manages a $700 million fund and works with Abigail Wexner, Dimon McFerson John Gerlach and others.
Born: Mishawaka, Ind.
Education: B.S., Ball State University
First job: Mail boy at Wheelabrator Frye, Mishawaka
Career moves: Public accounting, Deloitte & Touche, nine years; Duke Realty, 17 years
What was your greatest challenge in business, and how did you overcome it?
The biggest challenge in business is an ongoing one of making sure we hire and train the best and brightest people and put them in a position to make maximum use of their skills. Even though we are in the real estate industry, our business is still driven by our great people and how we serve our customers.
Past or present, whom do you admire most in business and why?
I admire all companies that are able to take a concept and, through a team effort, grow it into a thriving business. That is what a great group of people have been able to accomplish at Duke Realty.
What is the greatest lesson you've learned in business?
Always trust your gut instinct.
But it's all in a day's work for Blom, who's worked for OhioHealth since 1982 and has risen through its ranks to its top spot.
"The rate of change in the industry and the sheer complexity of it all is a huge challenge," he says. "Medical technology is changing, but unfortunately, reimbursement systems haven't kept up."
Blom's job -- to accomplish OhioHealth's mission to be the place where people want to work, doctors want to practice and patients want health care -- isn't an easy one, considering the complex and unpredictable future of the health care industry. And, because the organization is no-for-profit, it depends on government resources to make ends meet.
"More than 50 percent of our funding comes from the government," says Blom. "There's no negotiation, and increases are small and unpredictable."
Add to that an intensifying shortage of medical workers, rising malpractice costs for physicians and hospitals, and increasing labor costs largely due to a labor shortage, and one might find it a battle not worth fighting.
But Blom and the OhioHealth network appear to be winning not just each battle, but also the war.
The system, which admits more than 100,000 patients each year and averages more than $2 billion in gross patient revenue, operates a well-planned combination of inpatient and ambulatory (outpatient) services, including the McConnell Heart Health Center, Grant Health and Fitness Center, and the Senior Health Center.
And expansion plans are in the works to meet community needs well into the future.
"We have a very sophisticated plan in process," Blom says. "We are doing our best to meet the needs of a growing elderly population and be good stewards of the community's resources."
Putting on the gloves
At the heart of OhioHealth's fight to provide high-quality care despite rising costs are its employees and physicians. Blom says it's essential to attract the best possible doctors and staff members then keep them happy for the continued success of the network.
"We work hard at recruitment," Blom says. "And we offer competitive compensation."
The awards and recognition the organization has received, with two of its hospitals -- Riverside Methodist and Grant -- ranking nationally in U.S. News and World Report's Top 100 lists, help attract high-quality physicians and health care workers.
"But what's more important is how the teams interact with each other," says Blom. "To keep morale high takes a positive work environment and processes that run smoothly and are well-managed."
Blom points to improving turnover rates and decreasing number of absences as indicators that OhioHealth is doing well in both areas.
"You can feel when morale is slipping by absences and turnover," he says. "And I can feel it when I'm walking down the hall in one of our facilities."
The organization measures employee satisfaction with an annual survey, and the results indicate that OhioHealth workers are increasingly satisfied with their work life.
"We make sure that employees have a voice in how the organization operates," Blom says proudly. "We have a formal, frequent communication program used by managers and vice presidents. Patient care is definitely a team effort."
To keep staff and patients happy, as well as to reduce costs, OhioHealth has applied Six Sigma and lean principals to streamline its processes. One outcome was the decision to route all high-volume laboratory work through one lab.
"We were able to reduce the square footage we needed for lab work and our labor costs; and we increased the turnaround time for lab results," Blom says,which resulted in increased patient and physician satisfaction. "We reduced costs and are still delivering great quality care."
Another example of how the organization is making the most of its resources is the laundry facility OhioHealth is building in conjunction with Mt. Carmel Hospitals, which will open in spring 2004. Sharing the facility will keep costs down for both organizations.
Beyond that, expansion plans are designed to prepare OhioHealth to meet the needs of the aging baby boomer population. While it's clear that there will be a need for an increasing number of health care facilities, whether those will be inpatient or outpatient remains to be seen, Blom says.
Because of medical technology that allows physicians to treat patients less invasively, outpatient care is becoming increasingly more popular.
"There are a lot of disparate opinions as far as whether hospitals will need more inpatient beds or how many," Blom says. "The trend we're seeing is that the acuity of inpatient care is rising. And more patients are being treated at outpatient facilities.".
OhioHealth is playing it safe, expanding both its inpatient and outpatient facilities. With Riverside Hospital's new heart treatment tower, Grant's emergency room expansion, and surgical center and cardiology floor expansion at Doctors Hospital, Blom expects the system to be in a position to meet the needs of a larger geriatric population.
"We also have ambulatory facilities all over the city so patients can be treated where it is convenient for them," Blom says. "Those are diagnostic, therapeutic and some surgical offices that are close to where people live."
And it's not just about treatment, but also prevention.
"We have the McConnell Heart Center and the Gerlach Center that offer preventive services," he says, adding that each facility relies heavily on nurses to staff them. "We hired 575 nurses last year. That's more than we've ever hired."
For-profit vs. OhioHealth
The new enemy facing OhioHealth -- which delivered $85.6 million in charity care, uncompensated services and bad debt in 2001 -- threatens the organization's financial security. Throughout the country, for-profit surgical centers are thriving, offering physicians an easier lifestyle.
"There are no regulatory hurdles that prevent these for-profit niche hospitals," Blom says. "They are an investment opportunity for physicians," a way to replace income lost in part due to rising malpractice costs.
To combat these rising costs, physicians are both investing in the centers and working for them. And, for-profit hospitals can choose the cases they treat, picking the most profitable ones that present the least chance for complications.
Columbus will experience this firsthand when a for-profit surgery center opens by year's end in New Albany.
"Community hospitals rely on those cases to fund the departments that do not make money," says Blom. "It is the high-end general surgery cases like heart surgery and orthopedics that pay for the trauma centers and indigent care."
Blom, who serves on the Ohio Hospital Association's board of directors, is working with others in the state to change legislation so that these for-profit centers have a few more regulatory hoops to jump through.
Currently, physicians are legally forbidden to refer patients to nursing homes and similar facilities in which they have ownership. Blom and others want for-profit surgical centers to be added to that list.
But he knows that legal remedies are not the only answer.
"Part of the popularity of these centers for physicians is how easy they make life," he says. "We are partnering with physicians to make things here as efficient and effective as possible."
When the smoke clears, Blom wants to keep offering services that the community needs.
"I just want us to be able to continue serving this community," he says. "Just as we've done for over 100 years." How to reach: OhioHealth, (614) 566-5000 or www.ohiohealth.com
The Blom file
Born: Aug. 13, 1954
Education: B.S., The Ohio State University, M.S. in health care administration, The George Washington University, Washington, D.C.
First job: Dusting caskets and washing windows in a funeral home in Lisbon, Ohio
Career moves: Joined OhioHealth in 1982, worked his way up through the ranks
What was your greatest challenge in business, and how did you overcome it?
My biggest challenges come when we decide to close a hospital. We've had to do it three times, and each time it is a gut-wrenching decision. But each time, the hospitals remaining in the community become stronger, so there have been long-term benefits.
Past or present, whom do you admire most in business and why?
I can't single out any one person. I feel that you learn from everyone you work with -- colleagues, board members -- everyone.
What is the greatest lesson you've learned in business?
You need to have a strong set of values that are unwavering, because it is that value system that will see you through the challenges as well as the successes.
By the numbers
* 11,074 babies were born at Riverside, Grant and Doctors last year.
* 195,877 patients were treated in the Riverside, Grant and Doctors Hospitals emergency rooms.
* 16,255 people are employed systemwide.
* 111,783 patients were admitted.
* 43,682 outpatient surgeries were performed in Central Ohio.
* 500-plus research trials are going on at any given time at the three Columbus hospitals.
* 15,316 cardiac surgeries, diagnostic heart catheterizations and angioplasties at were performed at Riverside, Grant and Doctors, more than all other adult hospitals in Columbus combined.
So three years ago, the company, which includes the Columbus-based division Ross Products, launched a companywide work-life survey to find out what issues its employees were concerned about and how it could help them. At the top of the list were family-related concerns.
"We found that a large number of our employees have older children in elementary, middle school and high school," says Kathy Smith, director of diversity, inclusion and work life, at Ross Products.
As a result, Abbott began developing initiatives to improve the work-life balance in its divisions.
"We got a very clear commitment from the top to implement these policies as soon as possible," says Smith.
The company formed committees comprised of employees at various levels to develop policies to help employees deal with issues such as dependent and adult care, and flexible scheduling. The top issues were addressed in six months to a year.
"Now we have a whole range of options when it comes to flexibility," Smith says. "Employees can work flexible hours on site, compress the work week, work part-time with benefits or telecommute."
Employees can arrive early and leave early or adjust their schedules in other ways to accommodate outside activities such as involvement in their children's school activities and in the community. Currently, more than 24 percent of U.S. employees of Abbott participate in some type of flexible work options, which include flexible start/stop times, part-time work, job sharing, compressed and extended work weeks, telecommuting and shift trading.
"People aren't afraid to talk about the flexibility," says Monica Hysell, regional sales manager.
Hysell, a mother of two middle school students, used to use vacation days to volunteer at her children's school. Now adjust her schedule instead. But she doesn't let outside activities interfere with her job.
"The business need has to be met first," she says. "I won't take off the day before a big meeting."
Hysell says working a flexible schedule has had a positive effect on her work.
"My supervisor wants a balanced employee," says Hysell. "We can interact with customers better when we have that balance."
Smith says neither the company nor the employees have suffered any negative impact as a result of flex time.
"It's great that people can take advantage of the flexibility and still advance; it hasn't sidetracked their careers," Smith says.
The company has a high rate of retention, and in the past five years, the number of women advancing up the career ladder has increased 68 percent, in part due to the availability of flex time, Smith says.
To improve morale and keep its employees happy, Abbott also implemented programs including an on-site massage therapist, exercise and yoga programs, and book fairs. Those efforts have paid off -- Abbott was ranked by Working Mother magazine as one of the Top 10 Best Places to Work in 2002 and 2003. The list is based on options and benefits that companies provide for child care support, work flexibility, work/life balance, adoption assistance, leave for new parents, percentage of women in the work force and advancement of women.
"We've also been recognized for our diversity," Smith says. "It's not just about making our current employees happy; we're also attracting quality employees."
Smith says the company has a high rate of retention and in the past five years, the number of women advancing up the career ladder has increased, in part due to the availability of flex time.
"Women in management have increased 68 percent," she says. "And the number of minorities in management has increased 78 percent."
How to reach: Ross Products Division, Abbott Laboratories, (614) 624-7485 or www.ross.com.
Corna, president of Columbus-based commercial construction firm Corna/Kokosing Construction Co., instead takes a proactive approach to the sluggish market, saying it keeps him on his toes.
"In the boom years, it was easier to win jobs," he says. "Now, it's a lot of work. We have to plan very hard."
Corna says the company strives to achieve high-quality results in its projects while making the most efficient use of its resources: labor, equipment and time.
"We look at ways to schedule the work so that we can reduce the time and costs involved," Corna says. "We try to find different ways to do the same task that will take less time and money -- it takes a lot of thought and planning."
The commercial construction industry has gone through significant changes since Corna stepped onto the scene in 1978.
"When I first joined the Associated General Contractors association in Columbus, there were 17 members [representing 17 companies]," he says. "Of those original 17, only three are still in business today."
Why so much attrition? Corna chalks it up to companies that weren't willing or able to change with the times.
"You have to be flexible, competitive and maintain a good reputation," he says.
In the 1970s, projects were awarded exclusively to union contractors. Today, projects are awarded based solely on the merit of the bid -- whether the contractor uses union workers or not.
And, Corna says, about half of all the work available is open for negotiation and not necessarily awarded to the lowest bidder. So marketing your company is an important part of landing any project deal.
"Those contractors [the ones no longer in business] didn't want or know how to do business development," Corna says.
The role of construction managers has also changed.
"Construction managers influence how business is done," says Corna. "Previously, owners hired architects to prepare the contract, bids, and basically coordinate the project. Now, construction managers are expected to perform these duties."
Corna says the former system -- called design-bid-build -- has been replaced by one that has completely changed the roles of both the architect and the builder.
"Now the builder has become much more of a broker," Corna says. "Instead of doing a lot of the work himself, he hires subcontractors and becomes much more involved in the pre-construction and planning process. A lot of contractors didn't want to change."
A rep to protect
The 1990s were the boom years, when commercial projects were abundant. That time, however, is gone.
"The market in the Columbus area for the past three years can best be described as slow and steady," says Richard Hobbs, executive vice president of the Associated General Contractors of Central Ohio. "The construction boom for the previous 10-year period is over."
Hobbs says The Ohio State University and the state's public school system will provide the lion's share of building projects in the next 10 years.
"The only market area of growth is in the public school construction market," Hobbs says. "The Ohio State University continues to grow and construct. It will continue to fuel the local construction economy. Over the next 10 years, the Columbus Public School system will spend millions upon millions of dollars on new build and some renovation."
Retail and office space construction will not be in demand. Corna/Kokosing is reacting to the changing market by targeting two specific areas in its marketing efforts: education and continuing care.
"The kindergarten through 12th grade building program is booming throughout the state," says Corna, "because there's been no serious building there for 20 years, and many of the school systems have growing student populations."
And because the baby boom generation is getting older, Corna sees opportunity in continuing care facilities.
Targeting two market segments reduces the company's risk because public school projects are open bid -- the lowest bid wins the project in all instances -- and the market is very competitive.
"We've gotten our share of those projects," Corna says. "But no one is dominating the field. Private projects [like continuing care projects] are open for negotiation, and our experience and reputation help us there."
Corna says the company's reputation is responsible for its success and helps it maintain a competitive edge. In business since 1956, Corna/Kokosing got its reputation by doing the "right thing," says Corna.
"We live up to our commitments as far as budget and schedule," he says. "We treat people fairly, honestly and with respect."
He says the company instills these values in its 600 employees through constant communication.
"We have signage throughout the office with our core values and mission statement, and we reinforce them in newsletters and meetings," he says. "You have to walk the talk and lead by example."
Doing what it takes
Despite its successes, the company has felt the financial pinch of the slow market and reacted by drastically cutting expenses, as well as expanding its services offerings.
"For the first time in our 47-year history, we had to lay off employees and reorganize the company," Corna says. "And we drastically reduced our costs. Anything that didn't add value to the operation or service to the customer, we cut loose."
Upper management teams met bi-weekly for three months to identify ways to save money, including reduced cleaning services and receptionist hours.
"No stone was left unturned," he says.
And about two years ago, it launched its site development division, which has already positively impacted sales.
"Site development has picked up the slack," Corna says, accounting for $30 million of the company's $130 million annual revenue. "Our site development division puts in sewers, streets, utilities, curbs and sidewalks so the site can be sold to apartment, condominium or housing developers. It is definitely a growing market."
But despite these changes in some areas of the company, Corna says the one thing that will remain the same is its self-perform capabilities.
Corna/Kokosing proclaims itself to be the largest self-performing general contractor in Central Ohio, with more than 350 field associates and $7 million in equipment resources dedicated self-perform functions, including concrete, masonry, steel erection, carpentry, mill work and pre-engineered metal building erection.
Corna says the company is sold on the benefits of offering these services, even though it requires a huge investment to maintain a staff of skilled personnel and the latest equipment.
"It puts us in an ideal situation," he says. "We can guarantee the safety, quality of work and scheduling of the project. And it enhances our competitiveness because we can control productivity."
Slow market and extensive cost-cutting measures aside, Corna is optimistic. He believes his business, along with the economy, is improving.
"I think everyone is still waiting to see what happens on a national level with the economy and politically," he says. "Investors are still cautious, but I hope the worst is behind us."
Hobbs, of Associated General Contractors, says the most successful builders have always been able to identify their market niches and plan accordingly, no matter what the economic conditions.
"If you're a retail construction firm and you try to become an industrial firm, the dynamics are very different and complicated," he says. "Likewise if you're a company that specializes in churches versus some other construction market. Know what you can do and do it.
"A successful firm will identify trends and market swings. Having a ready, trained work force is extremely important in today's construction economy."
Corna is confident that the company's flexibility, creativity and determination to do whatever it takes to succeed will keep it successful.
"It's a tough business," he says. "I don't know any way to get around the hard work it requires. It takes a lot of creativity and energy to stay competitive. There will always be some building going on; there has been ever since man crawled out of caves.
"And as long as there is, we'll be here." How to reach: Corna/Kokosing Construction Co., (614) 901-8844 or www.corna.com; Associated General Contractors of Central Ohio, (614) 486-6446 or www.centralohioagc.com
Al Taylor, executive director of this organization that provides care and education for people with multiple disabilities, says Heinzerling chose a golf outing as one of its primary fund-raisers because of golf's broad appeal.
"Golf's a big thing in Central Ohio," Taylor says. "If you don't have a golf outing, you're no one around here."
While the foundation is Medicaid funded, those dollars don't cover the extras that Heinzerling likes to provide its residents, like clothes or a special wheelchair.
"Plus the outing brings the community together and gives people something to focus on," Taylor says.
Hoblitzell says the golf outing also helps extends the foundation's exposure.
"A majority of our funding comes from businesses," he says. "When these businesses involve their clients and vendors, it extends our exposure even more."
But making the outing a success takes a lot of planning.
"Organization is the key element for success," Hoblitzell says. "The event has to run in a timely, smooth manner to keep the golfers happy."
Hoblitzell recommends paying the extra cost to book top-notch courses and offer great food.
"Some golf outings are held on less than superior courses and the golfers get a hot dog, chips and pop," he says. "It's an OK way to spend the day, but nothing to brag about."
If you want your event to go off like clockwork, create a schedule and stick to it.
"Give the golfers what you promise -- get them on and off the course quickly. They appreciate that," Hoblitzell says.
You're sure to have dissatisfied golfers and fewer people attending the following year if golfers are still at the course at 9 p.m. because of poor organization, he says.
Hoblitzell recommends planning your event a year in advance. He reserves the golf course at that time, then develops the mailing list for invitations.
"There is a natural amount of attrition, so you'll need to continually add names to the list if you want a good turnout," he says.
But with the proper organization, the event will be worth the work.
"We're in our 17th year, and we sold out with 144 golfers," Hoblitzell says. How to reach: The Heinzerling Foundation, (614) 272-8888 or www.heinzerling.org
The chain of eight restaurants began operations with its first location in Columbus. That's not surprising when you consider that both Turner and McKerrow are familiar with the Ohio market -- Turner grew up in Cincinnati, and McKerrow graduated from The Ohio State University.
And while the restaurant business may appear to be outside Turner's realm of expertise, he says the opposite is true.
"It's all about happy customers," says Turner. "That's what television viewers and restaurant customers have in common. If they're not happy, they won't tune in or come back."
So far, customers and critics alike are happy. Ted's Montana Grill was named Best New Concept for 2003 by Nation's Restaurant News, and sales are brisk. And there are plans in the works to open an additional Columbus location at Polaris, and possibly in the Easton area and at Tuttle Crossing.
Then Turner and McKerrow will consider opening a Ted's Montana Grill in Cincinnati. They plan to double the number of locations every year, opening six in the first year, 12 this year, 24 next year, and so on.
The restaurant business is a good fit for Turner's business portfolio because it allows him to sell the bison he raises on his Montana ranch.
"Turner's ranch is one of the largest commercial bison ranches in the world," says McKerrow -- and bison figures prominently on the restaurant's menu.
Smart Business sat down with Turner and McKerrow to discuss the restaurant chain and their plans for its growth.
Of all the restaurant locations, which is doing the best, and why?
Turner: I think the one that's grossing the most is in Littleton, Colo., by a little bit. They're all doing well, but Littleton has been the most successful.
Denver is where the National Bison Association is headquartered. It's been historically the center of the bison industry. It's right out there in the middle of the Rocky Mountain time zone where the bison are most prevalent.
McKerrow: The No. 1 consumption of bison in the country has been in Denver for some time and continues to be. We happened to hit on a great location in an upscale lifestyle center. People have been coming since the day we opened.
In our business, we try to guess which locations will work. Sometimes a location is less busy than you expect, others are super busy. Ted had a party there with all his cable buddies, and that started the location off right.
How does Columbus fit in to the picture?
McKerrow: Columbus does well as our first location downtown. It's sporadic; all of our downtown locations are. We're in downtown Denver, and we'll be in downtown Atlanta shortly.
It's an event-driven restaurant down there. When there are events -- like when the Dixie Chicks were in town -- we had hundreds of people waiting out the door and around the corner. And then we do routine casual business at night. Lunch is very consistent.
This restaurant's brand new. We never told anyone we were here. Unfortunately, the city wasn't very cooperative with signage, so we don't have a lot of street visibility.
We're hoping people continue to find us.
We are growing sales here every day. Columbus is right on target -- it's not exceeding, but it's not under target. And the downtown location is busier than it was last year.
Turner: We're learning, as a lot of other restaurants have, that the suburbs are generally a more fertile area for casual dining business than an industrial business area downtown, which is, to a large extent, vacant at night when people go home.
But we're still successful, even in those locations. It's just that the grosses aren't quite as high as when you're closer to where people live. It's a lot easier for them to jump in the car and drive a couple of blocks instead of a couple of miles.
Are there plans to expand in Columbus?
McKerrow: We are opening a new location at Polaris, and we're looking actively in the Easton area and Tuttle Crossing. After that, we'll look at Cincinnati. Over time, I suspect, we'll have six to eight restaurants in the Columbus area -- over time.
You have plans to grow very quickly. What are the risks associated with such fast growth?
Turner: Acquiring and training people properly, which is true of just about any business that is expanding.
McKerrow: We started a centralized training facility in Atlanta. It's university style training ... Typically, restaurants offer in-store training, with the new teaching the new.
With our approach, we hope our people will grow into a culture of success -- with high standards. We want to be leaders in the industry and to have a place where people can have fun and know they are respected. At the training facility, Ted can be there and I can be there more regularly and inspire these people.
We hope our people will feel good about what they're doing, work harder and be more successful. We've made a big investment in that university.
Who was your mentor?
Turner: My Dad. I worked for him when I was going to school. I started working for him when I was 12 years old, and in the summer I worked at his billboard business in every area. I was a full-time employee.
He paid me 20 cents an hour under minimum wage. I learned a lot. By the time I was 21, 22, I knew the billboard business inside and out, every facet of it.
Businesses have an awful lot in common. Basically it's the same philosophy: Customers come first, work hard, provide a great service at a competitive price, and then service the daylights out of your customers so they're always happy that they're getting great service.
That's the only way you can be successful over time.
McKerrow: It's not much different here. The only difference for us is we order, receive, manufacture, produce and collect for our product all in one day. Other than that, we follow the same principles as any other business.
Turner: The common thing is happy customers. That's something that television viewers and restaurant customers have in common. If they're not happy, they won't turn you on and they won't be back.
Who are your closest competitors?
Turner: Nobody and everybody. Because every restaurant is a competitor. But no one has the niche that we do. We've got the authentic Old West motif, and we feature bison.
We have all the other stuff too. But we've got a niche and we're all fresh. There are others that use fresh ingredients, but they're all chef-driven and very expensive. At our price point, we're the only restaurant I know of.
McKerrow: At the end of the day it's this -- we did try to create a niche. That's what I did with LongHorn Steakhouse. Just like what Ted did at CNN. It wasn't that news wasn't being broadcast, he just did it a different way.
That's what we're doing here. We're trying to do it a different way, and we're trying to do it better than anyone else. That's what we have in common. We both like to win, and we like to do things better than anyone else, and we're driven to get that done.
Turner: Here, here! I couldn't have said it better myself.
"We asked our employees what we could do to have a meaningful impact on the community," says Blane Walter, chairman and CEO of inChord Communications Inc. Walter says the company had participated in the annual United Way campaign for years but felt its program needed more focus.
"We wanted to continue supporting the United Way but in a more directed way," Walter says.
The company conducted formal and informal surveys and discussions with its 525 employees, and through them, the idea of a customized, focused program was born.
"The creative group came up with our concept, the name and a lot of the program," says Walter.
Since a large part of the company's clients are pharmaceutical companies and others in the health care industry, the idea of creating a fund for senior citizens' medication made sense. Called GRACE (Giving Relief and Care to our Elderly), the program was launched in 2000 and has granted $60,000 to seven Columbus-area nonprofit organizations to provide prescription drugs and medical services to seniors who could not otherwise afford them.
"GRACE is consistent with our culture," Walter says. "This is the business our clients are in; it's a great match for the company, our clients and our employees."
Marcia Frederick, director of corporate communications, administers the program, which continues to grow.
"As the company has grown geographically, we've been able to do it anywhere we have offices through the United Way," Frederick says.
In 2002, the program raised $116,000 and 65 percent of employees participated.
"We have seen a significant improvement in the amount we're giving," says Walter.
Frederick says inChord Communications traditionally sent Christmas gifts to its clients but now donates that money to GRACE in the client's name.
"Our clients are so much more excited to receive the card letting them know of the donation than a gift," she says.
And the company has realized an unexpected benefit, Walter says.
"It brought us together and gave us something to talk about," he says. "So many times these things come from the top down. What made this program a success was to let the ownership come -- from the beginning -- from deep within the organization." How to reach: inChord Communications Inc., (614) 848-4848 or www.inchord.com
"The insurance industry felt that banks were poised to enter the industry in a big way," says Grange Insurance Group President and CEO Phil Urban.
The feeling was a result of pending legislation which would allow banks to offer insurance products. The Gramm-Leach-Bliley Act became law in November 1999, mostly eliminating restrictions on the products and services that insurance and banking companies could offer customers.
But that was OK with Urban, who, in preparation for the new law, had already opened wholly-owned subsidiary Grange Bank in May 1999.
"I feel the best defense is offense," Urban says.
By the following year, Grange Bank was fully operational in the six states where Grange Insurance had agents at the time: Ohio, Georgia, Illinois, Indiana, Kentucky and Tennessee. As Grange Insurance moved into Michigan and completed its affiliation with Integrity Mutual Insurance Co. of Appleton, it made its products available to agents in Iowa, Minnesota and Wisconsin.
But the bank served its customers from just one branch, located in Columbus.
"We have one branch, and I doubt if we'll ever have more than one," says Robert Mays, president of Grange Bank. "That's all we'll need."
The bank's primary distribution channel is Grange Insurance's independent agents. Agents' customers sign up for banking products through them and can receive 24/7 service through the Grange Bank Web site or through the agent during business hours.
Because the bank does not have branches, its overhead is low.
"With our overhead low, we operate at a low cost and we pass that on to our customers," says Urban, who also serves as chairman of the bank. "We generally offer lower interest rates on loans than other banks and pay higher rates on deposits."
Grange Bank is the first savings bank owned by an insurance company to be chartered to deliver full retail and commercial banking services primarily through an independent agency distribution system, and is only one of a dozen in the country that operates this way. So how well is this business model working?
Grange started four years ago with $7 million in assets and posted $137 million at the end of May this year, and Mays predicts the bank will hit $500 million in assets by 2005.
And it became profitable in 2002, a year ahead of schedule, Mays says.
Despite the company's willingness to jump into uncharted waters, it did not do so before testing them. Grange polled its agency base, which felt the bank would be a good fit for the business.
"They told us they would support it," Mays says. "I would guess that they were really not sure how it would fit into their business model as the actual product set, delivery methods, compensation models, etc., were really not developed until after they recommended we get into this business.
"As we have developed and our agency base has become more comfortable, the adoption and utilization rate has grown nicely but probably not as quick as we thought initially."
Of Grange Insurance's 1,200 independent agents, nearly 850 contracted to represent the bank. Once agents contract with the bank, they go to training to learn the skills necessary to provide service to bank customers.
"But we've worked to make it nonintrusive," says Mays. "Our agents don't want to be bankers."
While agent acceptance was the biggest concern, it wasn't the only one.
"There was nobody out there to copy," Urban says. "We were plowing new ground. We couldn't go to the 'Here's How We Did It' book. We stumbled along doing it ourselves."
And Urban is the first to admit the company didn't get everything perfect the first time.
"We changed technology partners since we started," Urban says. "But the basic systems we developed four years ago are still there."
Urban adds that the usual risks associated with a business start-up were also part of the equation.
"Do we have the right processes, the right people?" says Urban. "Did we have a business model that would work? Of course, there is some financial risk in any start-up venture, but in this case, the start-up costs were relatively modest."
Those risks have paid off, and in some unexpected ways.
"We imagined our bank customers would come from our insurance customers," says Urban. "But some agents use the bank to draw customers into the agency, and then sell them insurance products. It's worked differently than we thought, but in a pretty exciting way."
In addition, says Urban, since the company's agents can and usually do represent more than one insurance firm, offering banking services draws more agent business.
"When we went in to Michigan two years ago, there was no question in my mind that the bank helped us get agent attention," he says. "We have to win their business every day so that they think of us."
A leap of faith
Meanwhile, other banks began offering customers insurance, but according to Ken Reynolds, managing director of the American Bankers Insurance Association in Washington, D.C., not in the way insurance industry executives expected.
"Many banks are selling insurance to customers today, but they are selling them through carriers like Hartford or Allstate," Reynolds says. "They did not buy or start insurance companies, and they are not operating as the insurance company."
Reynolds says that the bigger the bank, the more likely it is to be offering insurance products.
"About 20 percent of small banks that have assets of $500 million or less offer insurance products," says Reynolds. "But about 95 percent of banks with assets of $10 billion or higher offer them."
Reynolds says on the insurance side, statistics are similar, with some larger companies offering financial products. But the real winner in this new environment, he says, is the consumer.
"All of this clearing of limitations was done with a view to improving competition," says Reynolds, "so people receive a wider range of services."
Combining the services only makes sense, he says.
"Banking and insurance industries are about relationships," he says. "With an insurance agent, you've already established a relationship. Why not take advantage of that relationship and sell as many products as you can?"
"The more product you sell to the customer, the longer the relationship will be," he says. "The bank allows us to build additional relationships."
And while Mays says the Columbus bank will continue to act as a traditional branch, the vast majority of its target market is still Grange Insurance agents and their customers.
"It's low-hanging fruit," Urban says. "Our agents are recognized business leaders and trusted advisers."
Despite the success of the Grange model, don't expect a lot more banks or insurance companies to cross over.
"I think there'll be some additional growth, but most big institutions have already started offering insurance," Reynolds says. "And the smaller community banks like to specialize in banking products."
Insurance companies face their own set of challenges, says Reynolds. He compares them to automobile manufacturers, selling to dealers, versus consumers. He says most insurance companies are not ready to change that mode of selling.
"For them to jump out of that mold is really quite a leap," he says. "If Grange can figure out and build a better mousetrap, that's what it's all about."
Joel Houston, chairman and professor of finance at the University of Florida in Gainesville, says Grange's model has some advantages.
"The advantage to this business model is you can economize on facility costs," he says. "I suspect that most customers today, while willing to do a lot of their business online, still like the option of having a physical location to conduct business."
With the agent's office acting as that location, customers get service delivered they way they want it.
But whether or not the threat of significant bank competition is ever realized, Urban says he stands by the decision to start the bank.
"Even though the bank threat didn't pan out, the bank has been profitable for 12 consecutive months now," Urban says. "It's been, and I believe will continue to be, an amazingly good investment for the company." How to reach: Grange Insurance Group, (614) 445-2900 or www.grangeinsurance.com; Grange Bank, (614) 445-2500 or www.bankatgrange.com
"The biggest mistake people make when looking at equipment is they don't look at all their options -- leasing, financing or paying cash," says Warner.
First, consider the equipment and its impact on your business.
"You really shouldn't pay cash for a disposable asset," Warner says, adding that any asset that has a useful life of less than five years is a better candidate for leasing.
Mark S. Young, executive vice president, business development with Bank One Leasing, agrees.
"Know the equipment and its usage patterns," says Young.
Another drawback to purchasing a disposable asset with cash is that it makes people hesitant to upgrade the equipment on a regular basis.
"Once you've made a big investment, it is hard to consider upgrading as often as you should," says Warner.
And, says Young, don't be tempted to buy the biggest and best model just because you can.
"You might want the top-of-the-line equipment, but you might not utilize all the features, so you have spent more money than you should," Young says.
For equipment that has a life of 15 years or more, consider financing or leasing.
"There are tax benefits to leasing that you might not be aware of," says Warner. "You really should get your accountant or tax adviser involved to look at the financial structure in all situations."
If you do decide to lease, don't forget to thoroughly read the lease contract before signing.
"A lease is a contract for use of an asset under specific terms and conditions," says Young. "You can be in a hurry to get the equipment, sign the lease and then notice maintenance or return provisions that add cost."
And when it comes to financing, don't grab the first deal offered.
"Most equipment suppliers provide financing, but it's not always the best or most competitive terms," Warner says.
Young adds that it's vital to know who you're doing business with -- both the supplier and the lessor or financing company.
"It's important to read what you are signing up for, understand the asset and the total cost of ownership, and be comfortable with the supplier and the lease or financing terms," Young says. How to reach: Key Equipment Finance Co., www.kefonline.com, Bank One Leasing, (614) 213-1474 or www.bankone.com