Kelly Tomkies

Tuesday, 02 September 2003 06:33

Government business

With 365 attorneys, the state's attorney general's office is one of the largest law firms in the state. And Attorney General Jim Petro says he runs the office that way.

"We have seven divisions and division chiefs, which operate very much like professional services groups," Petro says. "It's a model similar to what you'd find in a large law firm and a firm's executive committee."

Despite its size, Petro stays involved in the day-to-day operations thanks to effective communication with the division chiefs.

"The best-managed businesses have the best organizational structure," Petro says. "And communication is key."

Petro, who served eight years as auditor of state before being elected attorney general last November, draws on 21 years of private sector experience in law and other businesses when it comes to organizing and improving efficiencies in the office.

"When you have an efficient structure, it gives you time for innovation," he says.

That allows the attorney general's office to be proactive. For example, it has developed model contracts for some government branches it serves that improve the enforceability of the contracts.

"And we do it all without charging billable time," Petro says. "Although some of our clients do pay for the services they receive."

But the attorney general's office has to take a broader view of the cases it handles.

"In some circumstances, we tell the client that we can't take the line of action they are requesting because it wouldn't be in the best interest of the people of Ohio," says Petro. "We represent the people of Ohio, so we have to be independent."

Petro talked with Smart Business about the challenges he faces as attorney general.

How is leading the attorney general's office like running a business?
I took this office with an eye toward reshaping it. In doing that, I'm drawing from my experience as a lawyer for 21 years.

I was a partner in a 150-lawyer firm as well as an owner of small businesses. I had a restaurant with 60 employees. So I see opportunities to change the structure and improve efficiency in every office I've served.

On the organizational side, we're not dissimilar to a firm. We developed divisions and I have direct reports responsible to each division, very much like a professional services group.

We are like a well-run firm with lines of authority and accountability. Our division chiefs operate like the executive committee that you'd see in a large company and law firm. We understand that our success is measured by our client service and meeting the needs of our clients, so my goal was to respond to our clients as timely as possible and broaden our services where see we can help.

We have multiple funding sources and some of our clients do pay for the services they receive. Even our billing system has similarities to a law firm's, and we do have a bottom line; we have to meet our budget. We have an extra large investigative component. We assist investigators with crime scene support and lab work.

We have the biggest crime lab in the state. We do DNA testing for local agencies.

How is it different?
All of our lawyers make less than in private firms. And we have an advocacy responsibility that private firms don't. We have to be setting a standard or example for other attorneys in the state and demonstrate integrity in all that we do.

We look at our cases more broadly than the client's interest. We represent the people of Ohio and we look at how cases impact the people of the state. But operationally, we are very similar to a law firm.

With so many divisions, employees and offices, how do you stay on top of the operation?
I get daily input from my senior team and we meet regularly -- weekly on routine business and daily on important issues. I become engaged in case matters and help develop our strategy.

Communication is key. The bulk of things that should come to my attention do -- and quickly -- and I help fashion remedies. I have more private sector experience than most elected officials, which allows me to take a more involved role in cases and strategy and helps with quick decision-making.

What are your biggest challenges as attorney general?
Retaining a high degree of timeliness. Things can lag before a decision is made. We try to keep things moving quickly.

For example, one of our tasks is collection work for various state agencies like workers' compensation premiums, OSU hospital billings and overdue income taxes. Since we've developed protocols for collections, we're collecting $600,000 more per week than historically in that office.

We focus on strict timelines, quick decision-making and action, proactive stances. As a result, we get a matter closed faster and move on. One function of the office is to publish the attorney general's legal opinion.

It used to take a year to get an opinion rendered. We are now doing it in 90 days, and I hope to bring that down to 60.

What do you like most about your job?
I like getting involved in case strategy. Where the state has a case to pursue, like consumer fraud, I like getting a deeper understanding of the applicable laws and being involved in strategy sessions.

Having private practice experience gives me a comfort level. The attorneys look at me like, 'You've done this before,' and I have, so they listen to my advice. It's nice.

How does the state's shrinking budget affect your office?
Our budget has been cut dramatically, and I haven't welcomed all of the cuts, but I have welcomed the reduced overhead. We are operating more efficiently.

My view was to shrink the size of the organization and operating costs. We have 50 fewer employees and 35 fewer automobiles now. I hope to see in my four-year term a $4 million savings. Part of our savings was achieved in space consolidation.

How does being an elected official affect your ability to accomplish your goals?
I feel like a lot can be accomplished in eight years, the term limit of the office. Even in a large law firm, you don't often find a managing partner that serves in that capacity for too much longer than that.

I take pride in the office, and as long as I'm in charge, I'll continue to provide leadership with the themes of innovation, integrity and efficient operations in mind. You can effect change in my office more than a firm, because our clients are all-powerful -- the people.

I understand my obligation to a broad client base, and we advocate changes in the law to serve those clients. Others can't do as much as we can. How to reach: Ohio Attorney General, (614) 466-4320 or www.ag.state.oh.us

Tuesday, 26 August 2003 11:16

Back to basics

In the mid '90s, electric utility companies feared -- then welcomed -- deregulation of the industry, knowing it was inevitable.

"The deregulation charge was led by large industrial users who wanted to expand the market where they get power," says Alan Schriber, chairman of the Public Utilities Commission of Ohio. "The electric companies jumped in to cover themselves."

By January 2001, deregulation was a fact, and residential, commercial and industrial power users had a choice of where to buy power.

American Electric Power, based in Columbus, was poised to make the most of deregulation after proactively launching its wholesale trading division in the mid '90s. But AEP Chairman, President and CEO E. Linn Draper says it wasn't just deregulation that led the company to begin its wholesale operation.

"We launched an aggressive wholesale growth strategy in order to successfully compete for capital with companies ostensibly offering high growth rates for the future," Draper says.

Those were the days before the dot-com and tech stock bubble burst, Draper says, when AEP was competing with the likes of Microsoft and IBM.

"Investors were clamoring for growth back then," he says, "even in the relatively stable energy industries."

Following deregulation, AEP didn't lose a large number of customers, due to its abundance of power and low prices. According to Schriber, the biggest hit, not unexpectedly, came from commercial and industrial users.

"Twenty percent of the commercial and industrial load throughout the state switched to alternate power sources," Schriber says. "And in Northern Ohio, where the prices were higher, 20 percent of the residential load switched."

In the rest of the state, the percentage of residential load that switched sources was near zero.

"We've not lost very many customers," confirms Thomas Shockley, AEP's vice chairman, "because our prices were very competitive to begin with."

Shockley says after deregulation, new companies called Retail Electric Providers were formed to supply end users. And many of these purchase power from wholesalers.

"Trading is basically a tool or technique where, instead of just generating electricity, you have the ability to buy it from third parties and sell it to third parties, and the power is not tied to your assets," Shockley says.

One benefit of trading is that the company could buy power from other suppliers when it was cheap and use or sell it during periods of more expensive peak demand.

"We used trading to minimize our risk and for profit," Shockley says. "We could get power when it was low in price and sell it to others when the price went up."

Then the bubble burst

In the early years of AEP's wholesale business, life was good.

"AEP's wholesale operations -- including power generation, associated assets and related marketing activity -- were highly profitable for the company for several years," Draper says.

Then two major events -- the California energy crisis and the collapse of Enron -- caused huge upsets in the industry and a general loss of confidence in wholesale energy markets.

"The collapse of wholesale energy markets began with California's ill-conceived restructuring plan that was vulnerable to manipulation," says Draper, referring to California's deregulation plan. "A supply/demand imbalance, a severe drought and other factors led to extreme price volatility in California and the bankruptcy of the state's largest electric utility [Pacific Gas & Electric Co.]."

While AEP had few business interests in California, Draper says it still felt the effects in the form of dwindling wholesale income. Then the situation went from bad to worse with the unfolding of the Enron scandal.

"The demise of Enron devastated wholesale electricity and natural gas markets," he says. "Many participants found it nearly impossible to get credit and left the market or scaled back activity drastically."

Draper says total volumes of power traded on the Intercontinental Exchange hit a peak of 385 million megawatt-hours in March 2002 before declining to just 51 million megawatt-hours in December 2002. This decline both in the United States and abroad cut significantly into AEP's wholesale earnings.

Draper says it became painfully clear in late 2002 that the market was rethinking its demand for high-growth stocks.

"Investor expectations and goals changed," he says. "It was clear that the market would no longer reward the scope and scale of our trading and marketing business. Instead of demands for growth, investors developed an appetite for stable earnings and the reliable, traditional strengths and rates of return of regulated utility operations."

In August 2002, the Securities and Exchange Commission requested information from AEP regarding any "wash" or "round-trip" trades -- simultaneous, prearranged buy/sell trades of energy with the same counter-party, at the same price and volume, over the same term, resulting in neither profit nor loss to either transacting party. In April of this year, the company received a subpoena from the SEC for additional information as part of its ongoing investigation of power trading activities nationwide.

The company has complied with SEC requests and reviewed its trading activities from Jan. 1, 1999, through March 31, 2002, and says that less than approximately one-quarter of 1 percent of total trading transactions could fall into this category. The company believes that substantially all of these transactions involve economic substance and risk transference and do no constitute "round-trip" or "wash" sales.

At the end of 2002, despite slow, steady growth (about 1 percent a year) of regulated utility revenue, the company reported a loss of 12 percent in income and an ongoing loss of 14.5 percent in earnings per share. So it steeply downsized its marketing and trading operations, only trading in areas where it would maximize the value of its physical assets, namely where it can maximize power generation and gas pipeline operations. And it is returning to its roots: regulated power and energy supply.

"The business of producing, transmitting and delivery of electricity continues to be a solid business, despite the soft economy," Draper says. "And it's a business in which we have always excelled."

AEP comes full circle

When Draper says the company is refocusing, he isn't kidding. All of its businesses, except those that produce, transmit and generate electricity, are for sale.

"The assets we are seeking to divest include international and domestic unregulated generation, as well as natural gas pipelines, a coal mining business and a communication business," says Draper.

But the company is taking divestiture one step at a time.

"This isn't a fire sale," he says. "We will undertake our divestitures in a disciplined, orderly fashion."

Draper says proceeds from the sales will be used to reduce the company's debt.

So where will future growth come from? Draper expects to see a lot of industry consolidation in the next few years.

"As our financial picture continues to improve, I imagine we would look for opportunities to grow our earnings, perhaps through mergers or acquisitions in our core business," he says. "AEP is the largest generator of electricity and one of the largest distributors of electricity in the United States, yet we only have 5 percent market share."

AEP also launched a thorough expense-cutting program.

"We examined every part of the company and sought input from every employee to identify ways to save operation and maintenance costs," says Draper.

Any item that didn't jeopardize employee safety or the reliability of the system was open for cost-cutting discussion.

"There were no sacred cows," he says.

The result was the reduction of AEP's work force by nearly 5 percent -- approximately 1,300 positions -- and outside service expenses by $125 million. The company also reduced its capital expenditures by more than $200 million and suspended 2002 bonuses for the senior executive management team.

Still, it faces many challenges. Its stock price is low compared to previous years, although it has rebounded somewhat.

"Although SEC inquiries and other issues related to our industry have affected investor confidence in AEP and other companies in our sector, things seem to be improving," Draper says. "Our stock was up 40 percent between March 15 and June 16, which would seem to indicate that consumers and investors have increasing confidence in the value of investing in our company."

And when Draper retires in April 2004, the new CEO will face the continued evolution of the industry and myriad new environmental regulations.

"The challenge will be to help AEP grow in a logical way that increases shareholder returns while maintaining the attributes that have served this company, its employees and shareholders well for nearly 100 years," Draper says. "I look forward to watching what happens from the sidelines." How to reach: American Electric Power, (614) 716-1000 or www.aep.com; Public Utilities Commission of Ohio, (800) 686-7826 or www.puc.state.oh.us

Tuesday, 26 August 2003 11:12

Decisions, decisions

Making the decision to build your dream home is huge, but just wait -- you have hundreds more decisions ahead of you.

Choosing the right builder at the start of the project can make the entire process -- including all those decisions -- easier.

Jason Heitmeyer, business development executive with Heitmeyer Homes in Pickerington, advises prospective clients to do a lot of research on the builders they are considering.

"Ask for a referral list, and talk to both current and past clients," Heitmeyer says. "Make sure you talk to a client that has lived in his home for at least one year."

That way, he says, you'll get a complete perspective of how the builder services the client throughout the entire process and afterward.

William Fannin Jr., vice president of Gahanna's William Fannin Builders Inc., agrees.

"Talk to clients that have lived in their homes three, four, even 10 years," he says. "And ask, how did the process go? Was the builder on budget? Did you feel you received good value for the money? Did he do what he said he would do?"

Don't judge the quality of a builder's work by the company's model homes, cautions Eric J. Schottenstein, founder, president and CEO of Joshua Homes.

"The model doesn't give you a feel for how the builder will work on your house. Anything can be assembled for a model," Schottenstein says.

Real Living CEO and managing partner Harley Rouda says the builder's reputation is everything, and one way to get an unbiased opinion of a builder's work is to ask a Realtor you trust.

"Realtors see the work of many builders and can tell you the differences they see in their homes," says Rouda.

A Realtor can also tell you whether a builder's taste and style are similar to those you are looking for.

Once you've narrowed your list based on builder reputation, visit current building sites. They can tell you a lot about how the builder works.

"One thing it can tell you is whether the builder is a slob or tidy," Heitmeyer says.

It's also a good time to chat with the subcontractors.

"Good subs like to talk about the builder and are proud to work for him," Heitmeyer says. "If you consistently see the same crews on various jobs, it's a good sign."

Another element to consider is the builder's financial stability. One way to evaluate this is through relationships with creditors, says Heitmeyer.

"Ask the builder for a list of his major suppliers," he says. "His payment history is a tell-tale sign of his stability."

Also look at the volume of homes the builder is dealing with.

"You want the builder to have the experience to meet your needs," says Rouda. "But you don't want him so busy he can't get your project done in a timely manner."

Schottenstein agrees.

"Typically, the higher the volume, the less flexibility you'll have in material choices and upgrades," he says.

Next, talk project costs with prospective builders, but stay away from the "Let's Make a Deal" mentality and approach each bid with an eye for the value you are receiving for the money.

"The best way to get an accurate cost for building your home is to know your specs," says Fannin. "Know what kind of door trims you want, window casings, kitchen finishes and countertops. All of that can have a big impact on the price."

"You can't make an apples to apples comparison when it comes to cost," says Heitmeyer. "Even if you're using the same set of plans with each builder, you will get variations and differences. If you like the value of what a builder offers you, it's always the best way to go."

Finally, choose a builder who gives you the highest comfort level.

"A lot of time it boils down to individual chemistry," says Rouda.

"Find a builder you're comfortable, with even if his cost is higher," Fannin says. "You can always cut back." How to reach: Heitmeyer Homes, (614) 837-4206; Joshua Homes, (614) 428-5555; William Fannin Builders Inc., (740) 654-3408; Real Living Realty, (614) 459-7400

Monday, 28 July 2003 05:44

Government business

With 365 attorneys, the state's attorney general's office is one of the largest law firm in the state. And Attorney General Jim Petro says he runs the office that way.

"We have seven divisions and division chiefs, which operate very much like professional services groups," Petro says. "It's a model similar to what you'd find in a large law firm and a firm's executive committee."

Despite its size, Petro stays involved in the day-to-day operations thanks to effective communication with the division chiefs.

"The best-managed businesses have the best organizational structure," Petro says. "And communication is key."

Petro, who served eight years as auditor of state before being elected attorney general last November, draws on 21 years of private sector experience in law and other businesses when it comes to organizing and improving efficiencies in the office.

"When you have an efficient structure, it gives you time for innovation," he says.

That allows the attorney general's office to be proactive. For example, it has developed model contracts for some government branches it serves that improve the enforceability of the contracts.

"And we do it all without charging billable time," Petro says. "Although some of our clients do pay for the services they receive."

But the attorney general's office has to take a broader view of the cases it handles.

"In some circumstances, we tell the client that we can't take the line of action they are requesting because it wouldn't be in the best interest of the people of Ohio," says Petro. "We represent the people of Ohio, so we have to be independent."

Petro talked with Smart Business about the challenges he faces as attorney general.

How is leading the attorney general's office like running a business?

I took this office with an eye toward reshaping it. In doing that, I'm drawing from my experience as a lawyer for 21 years.

I was a partner in a 150-lawyer firm as well as an owner of small businesses. I had a restaurant with 60 employees. So I see opportunities to change the structure and improve efficiency in every office I've served.

On the organizational side, we're not dissimilar to a firm. We developed divisions and I have direct reports responsible to each division, very much like a professional services group.

We are like a well-run firm with lines of authority and accountability. Our division chiefs operate like the executive committee that you'd see in a large company and law firm. We understand that our success is measured by our client service and meeting the needs of our clients, so my goal was to respond to our clients as timely as possible and broaden our services where see we can help.

We have multiple funding sources and some of our clients do pay for the services they receive. Even our billing system has similarities to a law firm's, and we do have a bottom line; we have to meet our budget. We have an extra large investigative component. We assist investigators with crime scene support and lab work.

We have the biggest crime lab in the state. We do DNA testing for local agencies.

How is it different?

All of our lawyers make less than in private firms. And we have an advocacy responsibility that private firms don't. We have to be setting a standard or example for other attorneys in the state and demonstrate integrity in all that we do.

We look at our cases more broadly than the client's interest. We represent the people of Ohio and we look at how cases impact the people of the state. But operationally, we are very similar to a law firm.

With so many divisions, employees and offices, how do you stay on top of the operation?

I get daily input from my senior team and we meet regularly -- weekly on routine business and daily on important issues. I become engaged in case matters and help develop our strategy.

Communication is key. The bulk of things that should come to my attention do -- and quickly -- and I help fashion remedies. I have more private sector experience than most elected officials, which allows me to take a more involved role in cases and strategy and helps with quick decision-making.

What are your biggest challenges as attorney general?

Retaining a high degree of timeliness. Things can lag before a decision is made. We try to keep things moving quickly.

For example, one of our tasks is collection work for various state agencies like workers' compensation premiums, OSU hospital billings and overdue income taxes. Since we've developed protocols for collections, we're collecting $600,000 more per week than historically in that office.

We focus on strict timelines, quick decision-making and action, proactive stances. As a result, we get a matter closed faster and move on. One function of the office is to publish the attorney general's legal opinion.

It used to take a year to get an opinion rendered. We are now doing it in 90 days, and I hope to bring that down to 60.

What do you like most about your job?

I like getting involved in case strategy. Where the state has a case to pursue, like consumer fraud, I like getting a deeper understanding of the applicable laws and being involved in strategy sessions.

Having private practice experience gives me a comfort level. The attorneys look at me like, 'You've done this before,' and I have, so they listen to my advice. It's nice.

How does the state's shrinking budget affect your office?

Our budget has been cut dramatically, and I haven't welcomed all of the cuts, but I have welcomed the reduced overhead. We are operating more efficiently.

My view was to shrink the size of the organization and operating costs. We have 50 fewer employees and 35 fewer automobiles now. I hope to see in my four-year term a $4 million savings. Part of our savings was achieved in space consolidation.

How does being an elected official affect your ability to accomplish your goals?

I feel like a lot can be accomplished in eight years, the term limit of the office. Even in a large law firm, you don't often find a managing partner that serves in that capacity for too much longer than that.

I take pride in the office, and as long as I'm in charge, I'll continue to provide leadership with the themes of innovation, integrity and efficient operations in mind. You can effect change in my office more than a firm, because our clients are all-powerful -- the people.

I understand my obligation to a broad client base, and we advocate changes in the law to serve those clients. Others can't do as much as we can. How to reach: Ohio Attorney General, (614) 466-4320 or www.ag.state.oh.us

Monday, 28 July 2003 05:29

Reinventing Buckeye town

When most people think of The Ohio State University, the first images that come to mind are its football team, basketball team, golf team ... in short, athletics.

The OSU administration is the first to admit that the university is more known for its athletics than for its academic programs, something President Karen Holbrook is determined to change.

Holbrook, who took office in October 2002, steers the university with two primary goals: To increase academic excellence, and to increase faculty and student diversity.

With 31,721 employees and its own police force, telephone system and television station, Holbrook compares the university to a city.

"It's basically a city of its own," she says. "You rely on a lot of people to be part of the team."

That's a big change from her experience at the University of Georgia, where she served as senior vice president for academic affairs and provost.

Holbrook says her role at Ohio State is to keep track of the big picture.

"I have to understand what everyone is doing," she says. "And I need to be a spokesperson to outside and inside constituencies."

Given the size of the university, the big picture is billboard-sized and complicated. But Holbrook shrinks it down to size by staying focused on the two goals.

In June 2002, OSU compared itself to nine benchmark schools, state schools similar to it in size and scope -- Arizona, Illinois, Michigan, Minnesota, Penn State, Texas, UCLA, Washington and Wisconsin -- and found itself lacking in areas including research dollars awarded, freshman retention rates, and staff and student diversity. By examining where it was, the university formulated a plan of where it wants to be by the end of 2010 -- in the top tier of America's public research universities, with 10 undergraduate and graduate programs ranked in the top 10 in their respective disciplines and 20 programs ranked in the top 20.

OSU has a steep hill to climb to achieve these rankings. According to the most recent rankings published by U.S. News and World Report -- which just included graduate schools, only one OSU program, the college of veterinary medicine, was in the top 10 (sixth in the nation) and eight were in the top 20.

On the road to change

With 48,477 students -- second only to the University of Texas in student population -- you might wonder why the administration feels it needs to change. But Holbrook and her administration say raising the academic bar is important for both the university and Ohio's economic development.

So what roadmap is the university using to get there?

Holbrook says the approach is to attract top-rate faculty and a more academically successful student population.

"There hasn't been a lot of competition to get access into state schools," she says. "We want to become one of the public elite."

The application process has become tougher, and it is now harder for students to get admitted than it was in the past. Holbrook says a big part of her focus is on "incentivizing," recruiting and retaining academic talent, not easy given the university's economic climate.

"Our No. 1 asset is our faculty," Holbrook says. "We need to listen to them to understand how we can reward them and do everything we can to bring in new talent as well."

The university plans to hire in the next three to five years 12 faculty members who have attained or have the potential to attain the highest honors in their disciplines. To accomplish this, OSU is developing a merit-based compensation plan to offer recruits that is more competitive with the benchmark institutions.

The school has set aside a pool of money in its endowment fund, along with matching funds from the university. The compensation package offered to each potential faculty member will vary based on market conditions, but can include competitive salary, laboratory facilities and graduate students for assisting in research.

Holbrook says another way to bring in talent and more research dollars is to create consortiums and research centers to address unmet research needs.

"For example, the government just announced a $29 billion budget for homeland security," she says. "Where can we institute programs to capture those funds?"

Universities could qualify to receive the government funding if they launch research projects to develop better, more efficient weapon detectors for airports or other, similar products.

The university also plans to increase its own funding and space for these centers and academic initiatives.

Bumps in the road

In addition to the challenges most universities face -- including cost and affordability, diversity, alcohol use and changing student expectations -- OSU adds prioritizing activities in a constrained budget environment while still meeting its academic goals.

"It's getting a lot harder to raise money," Holbrook says. "We are looking harder to find new sources of revenue, and we are getting more aggressive in getting external support for research."

Holbrook says the university is also getting more aggressive when seeking private support for programs and facilities.

"We're thinking creatively about how we can do more for ourselves," she says.

State funding represents just 18 percent of the university's $2.54 billion budget, "so a fair amount of our budget is self-support," says Holbrook.

Part of prioritizing where to spend the money is choosing which academic programs the university offers and which it cuts. Holbrook is taking a different approach to this than her predecessors did.

"It makes no sense for me to say I don't want to see a class offered because it has a small number of students," she says.

Instead, she leaves these decisions to program chairs and college deans.

"They know their strengths, they can make the decisions," she says.

It's part of her performance-based, responsibility-based budget.

"We decide where to invest central funds, but they make the determination which programs can be downsized," she says.

Another challenge is finding ways to improve the student experience.

"Students have different expectations, lifestyles and needs today," she says. "They expect better facilities and access to technology and the library 24 hours a day."

And they are less interested in sitting in large lecture halls with hundreds of other students.

"Our facilities are aging, and large lecture halls are less attractive, so we want to renovate some of our buildings," she says.

Once students have graduated, keeping them in the state presents another challenge.

"We want them here, well-prepared," she says. "This is an important goal that should be Ohio's goal as well."

Holbrook says the state can take a step toward accomplishing the goal by building a diverse economy.

"Investing in education at all levels helps, too," she says. "A highly educated work force attracts business and industry."

Holbrook is confidant that OSU can overcome the obstacles and achieve its goals.

"One thing I've found is that everyone here is committed and passionate about what they do," Holbrook says. "And we will continue to engage well-prepared, committed people." How to reach: The Ohio State University, (614) 292-6446 or www.osu.edu

The Ohio State University -- facts and figures

Enrollment, Columbus campus, autumn 2002: 48,477

Annual tuition, undergraduate: $5,664

Number of undergraduate majors offered: 174

Number of master's degrees offered: 111

Number of doctoral programs offered: 93

Estimated number of courses offered each year: 12,000

Payroll for all employees: $1 billion

Number of buildings: 859

Total acreage of all campuses: 15,236 acres

Endowment: $898 million

Fund-raising: $210.6 million

Total research awards received 2001-2002: $348.5 million

OSU 2003 Rankings

Fisher College of Business tied with Purdue University at No. 14 in U.S. News and World Reports' ranking of business school in the United States.

In business specialties:

Accounting: 14

Finance: 12

Management: 11

Marketing: 13

Production/operations management: 9

Supply chain management/logistics: 3

In academic programs, Ohio State is:

No. 7 in first year experiences, tied with University of Notre Dame and William Jewell College

No. 18 in learning communities

No. 27 in service learning

Source: U.S. News and World Reports

Monday, 28 July 2003 05:26

Choosing the best

Choosing a law firm to represent your business is not an easy task. You want the best representation possible, without overspending. You want a firm knowledgeable in your industry and with a strong case record.

But how do you find the firm that fits your needs and your budget?

Sally Bloomfield, partner with Columbus' Bricker & Eckler LLP, says you must first develop a list of firms to consider.

"Contact colleagues that have similar legal issues and ask them who they use," she says. "That will be a good way to get started."

"Assess your needs and find firms that practice in these areas," says Kimberly C. Shumate, associate legal counsel at The Ohio State University in Columbus.

For example, does your business operate solely in Columbus, statewide or nationally? You'll need a firm that can represent you in every state you serve.

Once you have your candidates, the real work begins. A thorough examination of the firm and its partners, associates and cases will help you determine if it is a fit for your needs.

"Look at the firms' Web sites," says Shumate. "Know what the practice areas are, who the partners are, and talk to the people listed as references."

And make sure you dig below a firm's marketing hype to get an accurate picture of its experience.

"Some tout experience in a certain field because they handled a case 10 years ago," Shumate says. "You need to see all the facts."

Once you've narrowed your list, it's time for what Bloomfield calls a "beauty contest," conducting personal interviews with the firms' representatives.

"Then you look at things like how well did they prepare for the interview, and how was the personal chemistry," she says.

Shumate agrees.

"Once you've screened through the big issues, it's also important to hire someone you can work with," she says.

David Goldberger, professor of law and director of clinical programs at the Moritz College of Law, The Ohio State University, says questions to ask during interviews include "Who are the firm's clients?" "What kind of cases do they handle routinely?" "Is the firm big enough to handle the work or too big to give you the attention you need?"

Goldberger says some companies make the mistake of hiring a large firm simply because it seems the safest thing to do.

"It depends on the company's needs and comfort level," he says. "A big firm's overhead is higher and may bill more, but your work might be handled by an associate that costs less."

Ask who will be handling the majority of the work, don't assume it will be a partner or leading attorney with the firm.

Shumate says another indication of a firm's standing in the legal community is how often its partners are asked to speak at meetings.

"When associations and others ask you to speak, it is recognition of your expertise," she says. "It's an indication that the person has important experience beyond the academic."

When it comes to fees, make sure you're comparing apples to apples.

"You can't really judge how expensive a firm is based on the hourly rate," Bloomfield says. "An experienced attorney or partner might charge $250 but get the work done in two hours, while a less experienced associate charges less but takes 10 hours to complete the work."

And ask what kind of billing detail you'll receive.

"Always ask for a monthly billing statement," Bloomfield says. "And you want some description of what they've done for auditing purposes."

For example, if the firm has billed you for the time of three associates, ask why it took three people to do the work. How to reach: The Ohio State University Office of Legal Affairs, (614) 292-0611 or www.osu.edu; Bricker & Eckler LLP, (614) 227-2300 or www.bricker.com; Moritz College of Law, (614) 292-1536 or www.law.ohio-state.edu

Monday, 28 July 2003 05:22

Customer-driven strategy

Cheryl&Co. didn't have a choice when it came to launching a Web site, says President and CEO Cheryl Krueger. Customers of the baked goods company were demanding it.

"First customers asked for a catalog, and then they wanted to be able to order online," Krueger says, "especially our corporate and business clients. If you don't offer all possible channels today, business won't grow."

Krueger says the Web site offers advantages both to customers and the company.

"If a customer wants to place an order at 2 a.m., she can," says Krueger. "The Web is open 24/7, and customers can order from all over the world."

Krueger says the catalog and Internet channels work well together.

"We find that our customers are mainly women, and they like to take the catalog to soccer games or dance lessons, circle the product they want, and then order online when they get home," she says.

The Internet also allows the company to test the marketability of new products in a cost-effective way.

"We can design a basket for sale one day and put it online the next," she says. "It's a great testing vehicle."

Internet sales are so brisk that Krueger expects them to overtake catalog sales in the next two years.

"Our Internet sales are our fastest growing segment," she says. "We project that they will represent a third of our sales by next year."

Keeping the site fresh and easy to use is a full-time job, says Brent Kelly, vice president of sales and marketing.

"The Cheryl&Co. Web site is an extension of our brand, and we want our customers and guests to have an enjoyable experience so they will visit again," Kelly says. "We want people to be aware of CherylandCo.com for shopping, and we do this through use of search engine marketing and partnerships with a select group of other sites, such as Hallmark.com and catalog city."

The company also uses e-mail to help customers who have requested gift ideas and reminders. Site statistics are reviewed to make adjustments to the buying experience, and the company's staff responds to customer e-mails and questions.

All this activity, and the company has yet to advertise its site anyplace other than on printed material such as its catalog and bags.

"We don't aggressively advertise the site," Krueger says. "Our partnership with Hallmark works well for us, and we print the site address on everything the customer receives, down to the individual wrapping on the cookies."

But Krueger is not ruling out running banner ads at other Web sites in the future.

"No one can provide hard data that banner ads work, so for now, we'll continue with what's working," she says. "But we are always considering new ways to expand how we reach our customers." How to reach: Cheryl&Co., (614) 891-8822 or www.cherylandco.com

Monday, 30 June 2003 05:55

Technically speaking

Technology can be a blessing and a curse.

According to Mills/James Productions Co-founder and CEO Cameron James, the company's market has expanded thanks to the Internet, but keeping up with technology means continually reinvesting in equipment and software.

"We can work with clients anywhere in the world and post the work on the Web," says 55-year-old James.

And it takes a big chunk of money to stay current -- the company spends about $1 million a year on technology.

Technology also allows the Columbus-based company to collaborate with people around the world, adds Ken Mills, co-founder and president. But it is this capability that has raised customers' expectations.

"The Internet keeps things moving at lightning speed," says Mills, 58. "Customers want that pace. They want you to be creative and work quickly."

The company's geographical market isn't the only one that has expanded. Technology has also had a big impact on the services the company offers. Mills/James offers corporate customers audio/video solutions for meetings and events, video teleconferencing, and training and marketing videos, and also serves independent producers and institutional clients.

What technology has had the biggest impact on your industry and your company, and why?

James: Fundamentally, technology allows us to work at a distance. The Internet has fundamentally changed how we work with our clients.

We can work with clients in another state or anywhere in the world. We can post the work on the Web, whether it's animation, graphic design work or scripts. It's opened a large number of markets to us.

And because of the Internet, the speed of working has changed. When we lived in a postal and fax world, we worked at a slower pace. Now we can collaborate with teams of people around the country and tie the work together via computer.

It keeps things moving at lightning speed. And clients want us to be creative and work quickly.

Mills: We are doing an increasing number of distance meetings. Companies are seeing more advantages to letting meeting participants stay in their own cities and get connected via satellite the Internet or video conferencing.

How do you stay ahead of the technology curve?

James: We have a staff of talented people who want to work with the latest technology. They stay in touch with what's out there through their peers and trade shows, and they are aware of the trends.

They are the ones that push us. They want the latest technology and push it in our faces all the time. To keep us up-to-date, we traditionally spend $1 million a year in new technology. The only way to keep up is to constantly reinvest.

We just spent $300,000 on a new control room. It's easy to spend $500,000 on editing. We've always taken money out of our profits and put a big chunk in technology to stay current. For at least the last five years, we've been involved in a transition to digital. Any new investments we are making are in digital technology.

Mills: The speed of change in technology is faster than it used to be. It used to be that we were purchasing a lot of new hardware. Now technology is becoming more software based, so changes come faster. Digital drives everything these days, although there are certain analog solutions that customers still want to use.

How has technology changed your role with customers?

James: Technology speeds up the work, allowing us to do more, quicker, and with a larger number of clients. Most of our clients have the in-house ability to create videos, but they come to us looking for a particular talent or creative ideas.

Mills: It's a speed issue for the most part. Clients want the work done faster and cheaper. Everything moves much faster in Internet time.

Is it hard to find employees who have the technical skills needed for the work you do, and are schools keeping up with the changing production technology?

James: We started a program called Pre-Pro. It gives a six-month paid job to a person right out of college. We work with a number of colleges and universities and get a lot of resumes from people getting ready to graduate. We pick talented people to see if they have other talents and client skills we can use. Then we can extend the program another six months or hire the person full time.

Mills: We now have a generation that has grown up digitally from a technology perspective. There's a young work force that is technically savvy. Schools are doing a good job with that, and they are turning out technically smart people these days. The people/client skills we can teach.

Has technology changed the company's plans for the future?

James: We have access to technology only dreamed about years ago, and as costs come down, we can use tools that previously only the West Coast or New York City could do. We can do amazing things that were only done in Hollywood before. It's fun for us to be able to do that, and it gives you great opportunities.

Mills: Technology changes so fast, it's hard to plan too far out -- that's one of our biggest challenges. Who can predict in the next five years what tools we will use? Many of the tools we're using now weren't conceived five years ago.

At some point, we developed a culture that embraces change. We have some broad ideas, but new solutions are being developed all the time. Clients are looking to us for a solution to a problem, so we'll use current technology or new technology being developed.

What are the company's biggest challenges in the next five years?

James: It is hard to project out. The industry is in the midst of a revolution. Lots of things are challenging. Long-held beliefs are changing -- understanding where they are taking you is the biggest challenge. But some things don't change, like providing solutions to problems.

Technology is the tool we use to do that. We generally get the best and brightest people in the company together and evaluate new technology together.

We have enough bright people that we don't make too many wrong decisions.

Are there plans to expand into other markets?

James: There's growth potential in many of the areas we're good at -- audio/visual, Web site development and interactive kiosks. We have one of our kiosks at the Jack Nicklaus Museum and another in CNN's world headquarters.

There's huge potential for more business in just that area. We will continue to market all our services and focus on the ones that have the best response.

Mills: I think we're always weighing where the opportunities are geographically and otherwise. We created a new pledge program for PBS that is running nationally and is getting very good feedback.

We're branching into areas that are not what we'd thought we'd be in. We feed the Fox television network the show "From the Heartland" and that is creating other opportunities in broadcasting.

One opportunity leads to another, and you never know where it could lead. We have expanded our audio/visual contracts with major hotels and launched a series of training programs. Seventy percent of what we do is for an internal audience of a company.

There are things we've done that we weren't planning on going into, but we did them because a customer asked us to.

What are your biggest personal challenges in running the company?

James: Both identifying and hiring the right people. We view ourselves as a service business, and we want employees to have good client skills. All the talent in the world is not enough without good client skills.

So finding the best, brightest people who are also fundamentally nice is a constant challenge. And my other big personal challenge is dealing with Ken.

Mills: Personally I have no challenges. I sleep like a baby -- I wake up every two hours and cry. Just trying to balance everything -- staying on top of a number of industries, each with its own issues -- is a tremendous amount to keep up with, especially when change is so rapid. How to reach: Mills/James Productions, (614) 777-9933 or www.millsjames.com

Monday, 30 June 2003 05:51

Take a break

Fewer executives than ever plan to take a vacation this summer, according to a new survey. With the economy struggling to recover and the continuing political and diplomatic uncertainties, a lot of people feel it's best to work until conditions are more favorable.

But people are working longer and harder for every dollar earned. Stress levels are high as decision-makers try to maintain profitability in less than favorable conditions. Employee morale may also be low, so managers are faced with finding ways to encourage and reward employees with smaller budgets.

Then there's the post-vacation work pile-up, which makes the idea of taking time off untenable.

But despite all of this, it's more important than ever to take that vacation and recharge your batteries. Taking a break from the pressures of the moment can lead to fresh new ideas for handling them when you return. Clearing your mind for even a few days can help you see business problems from a different perspective, even objectively, allowing you to think of new creative solutions.

Taking the time to focus on your family is also important. All family members face their own challenges with today's frenetic lifestyle, and slowing down can be rewarding for everyone.

And lastly, taking a vacation means you are supporting your country and its economy. Many states depend on tourism as a major source of income, and that income has dwindled substantially over the past few years. Airlines and hotels are struggling for business.

By packing up the family and heading for your favorite vacation spot, you are not only doing yourselves a favor, but the economy as well.

And that post-vacation pile-up can be reduced if you delegate (it's not a dirty word) some of your responsibilities while you are gone. Handing off tasks to trusted employees can have long-term benefits, since it allows them to see more of what it takes to run the business and how their piece of it affects the whole picture.

So what are you waiting for? Go ahead and schedule that time off and get out of town.

You'll be glad you did.

Monday, 30 June 2003 05:48

High-tech hair

No industry has escaped the impact of high technology, not even the hair care and spa industry.

Charles Penzone Inc., with three grand salons serving more than 100,000 clients in a six-month period, now offers these clients the ability to schedule appointments online.

"What excites me the most about this is that we're the first ones [in our industry] to do this," says founder and CEO Charles Penzone. "I've been asking around, and we are the first to be doing it on this scale."

Penzone says Internet appointment booking is one of several steps the company has taken in the last few years to make the customer's experience easier.

"We have two full-time information technology employees," Penzone says. "I told them to grab ahold of every technology product they can find to make it as easy as possible for our clients and staff to do business."

One of the first steps the company took toward this end was to establish a centralized call center, where clients can book appointments for all three spas. The staff of nearly 20 employees works 12 to 16 hours a day answering the phones and making appointments.

The online booking system should relieve some of the influx of calls, as well as offer clients the ability to book appointments 24/7.

"We hope the online booking feature will reduce some of our call center costs," says Penzone.

Staff members can see their schedules online, and see how many clients have made appointments for the day and the week to date.

"It's a more efficient system," Penzone says.

Michael Falter, director of information technology, says that while online booking is being used by customers, it is not the primary way they are making appointments.

"We had more than 200 people book appointments online the first two weeks the feature was available," says Falter. "We average about 10,000 calls at the call center a week."

But Falter feels online booking will take off soon.

"We surveyed nearly 250 clients in a one-week period, and 51 percent said they would book appointments online if the capability was available," he says.

According to Falter, online booking works best with existing clients.

"Because you have to choose a technician to book an appointment, it helps if you are familiar with the spa," he says.

Falter says the online feature will allow the company to expand without adding call center employees. And online booking offers express checkout service. Online customers must use a credit card to reserve appointments, and can authorize the company to charge their card at the end of the appointment.

"Customers won't have to wait to pay; they will get a receipt as soon as the appointment is complete and go," says Falter.

And Penzone, whose company distributes five internal product lines to salons and spas in the region, says technology will play a role in the company's future marketing plans.

"We're going to expand the site to sell product online," he says. "That's one of our next steps. We'll also piggyback on that site and offer the same capability with the products we distribute.

"Customers and sales reps can order products online," making more efficient use of sales rep and company time. How to reach: Charles Penzone Inc., (614) 898-1200 or www.charlespenzone.com