The Patient Protection and Affordable Care Act, often called the Affordable Care Act or just Obamacare, represents one of the most far-reaching government overhauls of the U.S. healthcare system since 1965 when Medicare and Medicaid came into being. It will be phased in over time, with the majority of the changes taking effect in 2014.

The act focuses on increasing the rate of health insurance coverage for Americans and reducing health care costs. Here’s what some area businesses have on their minds about health care reform as the time nears for the full impact of the ACA:

  • Steve Brubaker, chief of staff, InfoCision Management Corp.
  • Craig Shular, chairman and CEO, GrafTech International
  • Alan P. Jacubenta, president and CEO, Mango Bay Internet
  • Rick Hull, president and CEO, Premier Bank & Trust
  • Chuck Abraham, executive vice president/CFO, Hitchcock Fleming & Associates Inc.
  • Rick Solon, president and CEO, Clark Reliance Corp.
  • Andy Zynga, CEO, NineSigma Inc.
  • Jodi Berg, president and CEO, Vita-Mix Corp.

1)      How is your company preparing for changes associated with health care reform?

 

Brubaker

  • With more than 4,000 employees, education is key and our priority is to make sure we provide everyone with the knowledge they need to make informed decisions. There are a lot of changes on the horizon and it’s important we communicate these changes in a timely manner. We are doing this though our internal communication channels such as our employee newsletter, employee intranet and face-to-face meetings.

Shular

  • GrafTech has always provided an excellent health care plan to its team members. We are well-positioned to comply with the PPACA. Our plan is affordable for our employees; therefore, no one will be eligible for government subsidies and GrafTech will not be assessed a penalty.

Jacubenta

  • We are in constant contact with our benefits agent whom we have worked with for a number of years and have been very pleased with his knowledge and service. He attends all the latest classes and seminars available to keep us apprised of the latest laws. He will let us know what's changing with the different carriers and how it might have an impact on our current and future coverage.

Hull

  • Most importantly, we are making sure we stay educated on the changes. It is important that we are able to answer our employees’ questions and also be supportive of their needs. Our budgeting process is robust, and we spend a lot of time in this area making sure we are making the right choices for our employees and our company.

Abraham

  • For more than three years, we have been learning about the requirements since the ACA was passed in March 2010. We will review our current plan design with our benefits consultants this summer. At that time, we will assess any changes that may be required for our 2014 renewal, including the possibility of adding a high-deductible option to our current plan.

Solon

  • Our preparation for health care reform has consisted of our human resources staff reviewing the law with our health care providers and consultants. In addition, our legal counsel has reviewed our existing health insurance programs to insure compliance.

Zynga

  • We are working closely with our brokers, Oswald Cos., for frequent and regular updates regarding health care reform and the related steps of adoption. Oswald advises us of both milestones and compliance requirements so we can plan for and execute on each. Staying informed is most of the battle for us right now as we ramp up toward 2014.

Berg

  • We have been educating ourselves regarding the elements of the law through articles, seminars and benefits affiliations. We offer a fairly comprehensive health plan to our employees today and are constantly monitoring the progress, changes and evolution of what is available in the insurance marketplace. So far we do not believe that the changes will have a large financial impact on Vitamix.

 

2)      What are you doing specifically to contain health care costs for your employees?

 

Brubaker

  • As a self-insured employer, we’ve always placed a high value on providing our employees with comprehensive health and wellness programs. Reducing our claims is a priority by ensuring our employees have convenient tools like on-site wellness clinics and fitness facilities to promote healthy decisions, and decrease employer out-of-pocket expenses. Where many companies are cutting back on amenities, we embrace the concept as a driver of employee engagement.

Shular

  • GraFit is a company-sponsored wellness program that includes free biometric screenings and incentives to make healthy lifestyle choices.

We offer employees the opportunity to purchase fresh produce from a local vendor who delivers to our site every week.

Our leadership team helps shoulder the burden of health care costs too. Mid-level managers each pay an additional $150 per month for health insurance; senior-level executives pay an additional $200 per month.

Jacubenta

  • Every year, we go through a process to get health care quotes from different providers. We compare their offerings in order to get the best coverage for the best price. If a change is warranted and it is cost effective, we do it with the least amount of coverage change as possible. The current provider usually matches what we were able to find through quotes, decreasing the overall increase in price.

Hull

We have opted to continue to pay a larger portion of the overall cost rather than pass that on to the employees. In addition, we shop our benefits annually to make sure we are receiving the best possible coverage at the lowest cost possible. We continue to search for new tools to add to our offering that will allow the employees to have all the benefits they need. We also have a wellness program that is aimed at preventive care.

Abraham

  • Even though not required to at the time, our plan implemented coverage for Essential Health Benefits (basic preventive/wellness services), elimination of pre-existing condition exclusions, and an expanded definition of dependent. Additionally, we have tried to raise “wellness” awareness through a number of efforts: encouraging participation in the Heart Walk and other types of exercise, administering “weight-loss challenge” initiatives and sponsoring yoga and meditation classes at the agency. We also discuss regularly with our associates the importance of wellness, use of network providers, requesting generic drugs when available and proper use of urgent care facilities — in short, being wise consumers of health care.

Solon

  • We started several years ago to educate our employees on the types of activities and choices that drive health care costs. We utilize our health care providers and consultants to propose innovative programs to help us control costs, and we have gone to a wellness program to promote individual health care improvement.

Zynga

  • We have a high-deductible HRA plan in place. We have taken the deductibles up to $5,000/$10,000 for premium reduction. We cost-share the premium with employees — the company pays 75 percent and the employees pay 25 percent of the premium. Further, within the high-deductible plan, we set a sub-deductible of $500/$1,000 for each employee, after which the company reimburses 80 percent of claims until the plan deductibles are met. It may sound complicated, but it’s kept us in the top quartile when compared to our peers for affordability of our plan to employees. We are also in the early phases of a wellness program, which we expect over time will help control/reduce cost increases. The biggest motivation for us to have such a plan is simply to provide resources that keep our employees feeling as healthy and energetic as they can, which we hope translates into more fulfillment while at work.

Berg

  • We take a Total Wellness Approach to our employee benefit plans. We were early adopters of an outcome-based medical benefits coverage that encouraged positive healthy behavioral changes among our employees. Through a combination of biometrics, education, fitness programs, and financial incentives driven by wellness promotion, we will experience the benefit in overall reduced health care costs for the long term. We started a tobacco-free campus in 2012, and do not hire tobacco users. Vitamix still pays 100 percent of its employee medical premium; however, we have implemented a high deductible plan that employees can reduce to zero if they meet the criteria for modified NIH biometrics targets. For example, an employee who meets all target range biometrics for blood pressure, cholesterol, body mass index and smoking, along with participating in health education, training, or regular physical exercise, will incur no deductible for the year.

 

3)      Do you foresee having employees pay a larger share of company-offered health care coverage?

 

Brubaker

  • We’ve always taken a strategic approach to employee health and wellness. What that looks like right now is adapting our offerings to not only comply with the new requirements, but also to provide our employees with coverage that meets their family’s individual needs. We continue to monitor and will comply with all of the reform’s expanded coverage choices so we can provide our employees with effective and affordable options.

Shular

  • That is not our current intention, but we will continue to monitor and evaluate if a change in the cost share model is required. Over the last 10 years, we have managed our program to an annual average inflation rate of 3.7 percent. This compares favorably to the national average of 6.3 percent over the same period. Our concern is that elements of PPACA do not lower insurance costs, but in fact cause the rates to go up.

Jacubenta

  • Things are unpredictable other than we know that there is a good chance that prices will continue to skyrocket. If we had to, we would ask our employees to pay a share of the expense for health coverage. It depends on what happens in the beginning of 2014 with community rates and what they offer versus staying with private insurance and the cost to the company.

Hull

  • Not at this time. Our goal is to allow our employees continued benefits while keeping them affordable to the employee.

Abraham

  • Our goal would be to minimize having employees pay a larger share. Since we are in a service industry that relies heavily on high-caliber talent, our benefits plan is one of several tools used for recruitment and retention. Our goal would be to continue to make the health benefits as affordable and attractive as possible to our employees.

Solon

  • We have always believed that paying a substantial portion of the health insurance premiums is helpful to recruiting the best people. We do not contemplate increasing the percentage that our employees pay.

Zynga

  • We pride ourselves with trying to have a healthcare plan in place that is affordable yet quality coverage for our people. While I think it is too soon to draw a line in the sand about the cost sharing, I can say that philosophically we are opposed to increasing the burden on our employees.

Berg

  • We do not foresee this happening in the future; however, until the full impact of the ACA is discovered, we will reserve our opinion on the matter. Some pundits say it will definitely increase overall costs, while others say more competition will reduce costs long term. We are unsure what our health care insurers will do; however, our focus will continue to be on what we can control, and for now that is our wellness offerings and employee incentives toward better health.

Published in Akron/Canton

“A ship in port is safe, but that’s not what ships were built for,” is a quote that hangs in Brig Sorber’s office at Two Men and a Truck in Lansing, Mich. Sorber uses that quote to define the new direction in which his company has been moving.

“I love that quote because this ship, Two Men and a Truck, has been in port for too long,” says Sorber, CEO. “We’ve got to get this into deep blue water. There are a lot of challenges out there and a lot more risk, but that’s where business is done. We need to start moving forward and accept the challenges.”

Sorber and his brother, Jon, started Two Men and a Truck International Inc., a moving company, in the early ’80s as a way to earn money using their ’67 Ford pickup. Today, the business has x4,500 employees, more than x1,400 trucks, more than x200 franchises in x34 states, Canada, the U.K. and Ireland, and 2012 revenue of x$361 million.

“We did it to make beer and book money for college,” Sorber says. “We really never thought that it would get to this point.”

However, in getting to this point, the company had neglected to make necessary changes in order to keep the operation aligned and running well.

“One of the challenges we have had is going from a mom-and-pop-type business to having to grow up and become more corporate,” Sorber says. “We needed to bring in newer and stronger skill sets.”

Here’s how Sorber has helped Two Men and a Truck grow up.

Growing pains

Two Men and a Truck incorporated its first business in Lansing, Mich., in 1985 and began franchising in 1989. The company at this time was run by Sorber’s mom since he and his brother were in college.

Upon graduation, Sorber worked as an insurance agent and also operated his own Two Men and a Truck franchise. He returned to the company in the mid-’90s, became its president in 2007 and CEO, the title he carries today, in 2009. In that time the company had grown significantly, but it wasn’t running as well as it could be. Starting in 2007, Sorber’s job was to help restructure the business.

“We had to take a look at ourselves internally,” Sorber says. “There came a time that I just knew things were broken here.”

Because the company was growing so fast there was no organization chart. It was very loose on who reported to whom. It wasn’t that people weren’t working hard, but things were not getting measured.

“I had an epiphany that something had to change big time,” he says. “I made up something that resembled an org chart on a big piece of paper in my office. I brought in five people that I greatly trusted and had confidence in and gave them three markers — green, which meant that person or that job was important; yellow, which meant I didn’t have an opinion either way about this person or about this job; and red, which meant that this job makes no sense.”

Sorber used that as a starting point to help him identify where the company could restructure and cut costs.

“I wanted to give big bonuses to everyone at the end of the year and share the winnings, but we had to prime the pump first,” he says. “We went from 78 employees down to 51 employees after I went through that chart.

“That wasn’t because we were losing money. It was because by the time we realigned everything, there were some people here who weren’t doing anything.”

To avoid issues such as this, you have to have metrics that you measure to make sure whether you’re doing well or not.

“My metrics are No. 1, customer satisfaction,” Sorber says. “Find out how every one of your customers feels about their service. No. 2 is trucks and driveways. We want to put more trucks in more driveways every year.

“No. 3 is franchisees. Make sure your franchisees are profitable and have the tools to grow. No. 4 is giving back to the community.”

Metrics are a crucial aspect of success, but so is a mission statement that helps employees and customers know what the business is about. It also makes your decisions as a CEO simple.

“If your mission statement is strong, it should be limitless,” he says. “For us, we had our mission statement when we had 25 franchises, and now we’re well over 200 and it still applies. You also need core values that comprise what’s important to your company. Once you have those, you have to stay within the confines of your core values.

“When I was a younger executive I thought that was stuff you say to be nice. It’s something that’s serious. You can’t go into work and keep turning the wheel and expect better things to happen. You’ve got to maintain your mission statement, core values, measure what you’re doing, and then you have to look for ways to make things better.”

Bring in key people

As Two Men and a Truck went through these necessary changes, new employees and executives had to be brought in to give the company the right skill sets to continue growing.

“Sometimes we hold onto our executives too long, and we get comfortable with them,” Sorber says. “They may not question what you’re doing. Not all of them, but many of them can be fine with the status quo and as the world is changing they’re not forcing you as a CEO to question what you’re doing.”

You can’t settle for the people who are in your key positions. You need to find people with the right skill sets and make sure they stay within your mission statement and core values.

“Bringing in new individuals is kind of like working on an old house,” he says. “You think if you put new windows on the house it’s good, but then the siding looks really bad. The same thing happens in business when you get somebody that’s great in a department. You start to think, ‘What if I had someone like that in marketing?’”

Sorber brought in executives to fill his company’s voids, and they began offering all kinds of new ideas for the business.

“When I started bringing in these key executives, they wore my carpet out because they have fresh eyes for the business,” he says. “They asked why we did this or that. Many of the things we were doing were the right things, but it’s good for you to make your point about why you do it.

“The new executives will say, ‘That makes sense’ or ‘That’s different.’ Other times they’ll say, ‘OK, but did you ever think about doing this?’”

That is how your business goes through an evolution, and it starts bringing in more modern thinking and different approaches. A business will have a life cycle of only so long, and you need to continually reinvent it because your customer is changing. If you bring in new people they may bring the great ideas you need.

“It’s really important as a president or CEO to hire people who are smarter than you in their specific fields,” Sorber says. “Our job as president or CEO is to look more strategically at where we want the business, make sure the executives play nice together, ensure there’s harmony in the business and keep an eye on those important metrics.”

During the course of the past six years, Sorber has been able to successfully do all those things within Two Men and a Truck. Randy Shacka became the company’s first non-family member to serve as president in 2012. Now, Sorber and Shacka are looking at the future outlook of the business.

“We think we will be a $1 billion company by the year 2020,” he says. “In the last few years we’ve been doing a lot of internal work on fixing where we are broken and getting the right people in here. Now we want to be more than just a moving company. We want to be a company for change.”

How to reach: Two Men and a Truck, (800) 345-1070 or www.twomenandatruck.com

Published in National
Sunday, 30 June 2013 12:00

Health care reform: In like a lion

Depending on the source, the Patient Protection and Affordable Care Act, a recently enacted law designed to reform the health care and health insurance systems, is either a bold step toward improving health care in the U.S. or a growth-stunting nightmare that upsets 60 years of progress in employer-provided health insurance. Either way, the legislation is becoming a reality and is quickly pushing businesses closer to the administrative equivalent of the fiscal cliff.

“What I tell people is that PPACA is really the most significant health care legislation since Medicare was passed in 1965,” says Marty Hauser, CEO of SummaCare Inc.

The law is an attempt to reform the insurance industry, he says, eliminating certain practices such as refusing coverage to those with pre-existing conditions, and improving access while bringing greater transparency and accountability to health care delivery.

“These are monumental changes,” says William Hutter, founder and CEO of Sequent. “This is one of the largest government overhauls ever. It’s going to dramatically impact employers and the employer-based distribution system for health care.”

With that, employers will need to better understand the administrative requirements they’ll face, which is not simple.

“It’s a vastly complicated law,” says Joe Popp, JD, LLM, tax supervisor and affordable care act implementation specialist at Rea & Associates. To illustrate its complexity, Popp says the PPACA is being administered simultaneously by the IRS, Department of Labor, Health and Human Services and the Occupational Safety and Health Administration.

“All in, it’s going to take eight years of change,” Hutter says. “And most of the rules and the regulations that are going to govern how this is enacted aren’t even written yet.”

“It’s kind of like trying to change the tire on your car while you’re driving 70 miles per hour down the highway. Things are changing almost daily,” Hauser says.

Furthermore, business owners are going to have to cope with the increased costs.

Paul Jackson, a partner at Roetzel & Andress says there will be 21 increased taxes or fees that business owners or employers have to pick up.

“The Congressional Budget Office estimated that those will be more than $1 trillion each year — that’s trillion with a ‘T,’” he says.

Waiting for guidance

While there is some guidance on how businesses can prepare for health care reform, service providers who spoke with Smart Business said their employer clients complain about a lack of regulatory clarity. In fact, that was a concern for Sen. Max Baucus, a major contributor to the act. At a meeting of the Senate Finance Committee, he expressed concern over the gap in understanding of the PPACA by small businesses, which led him to say, now famously, of the act’s implementation, “I just see a huge train wreck coming down.”

And there certainly is reason for businesses to worry because a misstep on the side of the administration can lead to significant penalties.

“What I’m hearing most from clients is they’re concerned with compliance,” Jackson says. “They’re concerned about whether they fall within the pay or play, but also concerned about the penalties.” For example, he says employers can be fined $100 per day per individual for not providing the summary of benefits and coverage statement to employees, which is one of the new disclosure documents required by the act.

Another significant concern is confusion.

“Without clarity on how this affects them as an employer, employers are really grasping at straws,” says Kevin Cavalier, vice president of sales at SummaCare,

Still, some businesses wonder where they should begin.

“There are companies that have been on top of this for a long time, they’re ready to go and they’re waiting just like we are for guidance coming out from the IRS and HHS, and they are ready; they’ve done their implementation work,” Popp says.”But for most businesses, they haven’t really started or they’re not very far on the path.”

Cavalier says in the fall, the government will begin public service announcements and education to the employer community.

“I think then you’ll start to see advice for an employer based upon their specific situation,” he says.

However, quickly approaching is the enactment of one of the more complicated provisions, referred to as “pay or play,” which will require tough choices.

“The employer needs to make decisions on how it impacts them and what to do come 2014,” says Cavalier.

Pay or play

Most affected by the law will be employers with about 50 employees. According to the DOL, a large employer, defined as one with 50 or more full-time equivalent employees — those working an average of 30 or more hours weekly — could be assessed a tax for not offering its full-time employees the opportunity to enroll in a health insurance plan that offers minimum essential coverage.

This means employers have to make a choice whether to offer affordable coverage or pay the tax penalty, which has led some employers to question the value of providing health insurance. According to Jackson, “We have a number of clients that are seriously considering dumping their health care and just saying, ‘OK, we’re going to pay the $2,000 per year, per employee penalty because we can’t obtain health care coverage for employees for that amount of money.’”

Companies with between 40 and 60 employees have a tough decision to make.

“For those companies, some of the struggles are, is there a way you can get under 50 so that you don’t have to take on some of these other burdens,” Popp says.

Those trying to operate with fewer employees could implement lean processes, work with fewer people or outsource responsibilities such as payroll.

However, Cavalier warns of the repercussions of not offering health insurance.

“The con is if the employer chooses to do that, what does it do for employee morale?” he says. “What does it do for retention of good employees, especially if you’re in an industry that’s competitive in regards to obtaining new employees that have skill sets that you need?”

Beyond the pay or play decision, employers will also have to deal with individual market reinsurance fees, changes to W-2 reporting requirements, minimum essential coverage requirements and the implementation of health care exchanges.

“The administrative and compliance demands of ACA are very confusing and very expensive,” Hutter says.

Silver lining?

While it’s certainly easy to see the PPACA as a dark cloud, there are positive aspects to the law. Hauser says, when looking at the act broadly, it is attempting to address pressing issues. “Regardless of whether you support or oppose the health care law, I think everyone would agree that the current way we do health care in America is pretty non-sustainable, especially in a world economy.”

He says the act has brought more focus to prevention by creating incentives for employers to offer more wellness and incentive programs “so that we can move from a sick-care model to a real health care model.”

Though discussions of the costs associated with the act have been at the forefront, there are other considerations for employees.

“It’s not numbers. The numbers are going to be what the numbers are, and there’s nothing anyone can do about that,” Hutter says. “Knowing that, now you have to figure out what the best thing to do for your organization is.”

He says the most important asset companies have is the thinking and creative abilities of their employees.

“Companies are going to have to think long and hard about whether they want to undermine the relationship with that most valuable asset of any company, which is its people.”

Published in Cleveland

When Gary Shamis, Bob Littman and Mark Goldfarb created the accounting and business consulting firm SS&G Inc. in 1987, the trio had a vision that defied the traditional accounting world.

Their radical idea:  Focus on people.

“It was a real sweatshop kind of mentality for the profession,” Goldfarb says. “You worked 3,000 hours a year [eight hours a day, every day of the year]. We opened it up and created opportunities for people who worked part-time.”

That was the genesis of the partners’ philosophy that today continues to define how SS&G differentiates itself from the competition:  growth, client service, and an employee-centric culture.

“All three work together harmoniously,” says Shamis, senior managing director. “If you have them all going, and you focus on it, the results can be very positive.”

You’ll notice that absent among the three is the notion of operating with a generous supply of black ink.

“We always felt that partner profitability and things like that were going to be a byproduct of doing all the other things right, so we didn't focus our business on enhancing the bottom line of the owners,” Shamis says. “We focused our business on cultural aspects that we thought would be good for our people, good for our clients, and in the end, what we thought would be good for us.

“We publish stories about client service going above and beyond in terms of, say, driving through a snowstorm to deliver a tax return,” says Goldfarb, senior managing director. “We really try to make that part of the culture, so that when somebody calls, everyone knows here, you had better call that client back; if not immediately, certainly within the next business day.”

This mentality has helped the partners and their teams spark significant growth over the past few decades. From a small firm with about 10 employees, SS&G has grown to more than 500 employees at 12 offices in eight cities in four states, including new offices in Chicago. With annual revenue of $70 million, SS&G ranks among the top 100 independent accounting firms in the U.S., including being named the 41st largest U.S. accounting firm by Accounting Today.

Here’s how Shamis, Goldfarb and Littman grew the firm by emphasizing its differentiation and is taking steps to ensure SS&G continues long into the future.

Get the talent

Accounting had been a traditionally male-dominated industry until the 1980s, when it reached parity. In recent years, however, women have been rapidly joining the ranks.

So with an eye on whom and where the talent was coming from, SS&G years ago established a plan that fit lifestyle concerns and issues into the firm’s culture.

“Most of our offices are suburban,” Shamis says. “Many other large accounting firms are downtown. Suburban locations make it a lot easier for somebody who is female and raising a family to be more accessible to what she needs access to — and it really became a focus on being able to try to hire these professionals who were women in their family-raising years.

“We have been able to get this incredible, top-notch talent, but we had to create an environment that was slightly different,” he says.

And, Goldfarb says, this has contributed to such a positive work environment at SS&G that it has become genetic.

“We are told all the time from people we hire that this is such a great, warm environment here compared to where they worked in a previous life,” he says. “It's something that is really part of our DNA.”

With a powerful corporate DNA in place, you can then develop a culture that attracts talent by which you can grow a company.

“It’s important that everybody here understands the culture; it's important that we follow it, we preach it,” says Littman, SS&G’s managing director. “Our organization is obviously about people. And to attract key people, you have to grow. If you don't grow, you can't find the talent and you can't keep the talent. Growth has been important, and that is why we have been a Weatherhead 100 company more than 10 times.”

Be creative in your growth

Creativity comes in many forms. SS&G looked at the kind of organic growth it had achieved over the years and took an entrepreneurial path.

First, the partners began to develop specialized divisions.

“We formed a wealth management business almost 20 years ago,” Goldfarb says. “Health care consulting, probably 15 years ago; payroll, 30 years ago; SS&G Parkland, which is our consulting division, was created last year.”

In an effort to strengthen this differentiation, SS&G opted to mold itself as a one-stop shop for clients and their financial service needs.

“These businesses share the same culture of being employee-centric,” Goldfarb says. “All share the same client service culture and growth for the purpose of creating opportunities for employees.”

In addition to creating new divisions, SS&G also played a large part in creating an association of accounting firms. Shamis led the formation of the Leading Edge Alliance, of which SS&G has been a member for 10 years.

Leading Edge firms share best practices. Goldfarb says it has been an invaluable asset — not just to SS&G but to all the organizations and their respective clients.

Develop a succession plan

While your company may have established a name for itself through differentiation, all the years of building that reputation can be lost in a flash if, for example, a new leadership team comes in with different ideas. Thus the need for a succession plan.

SS&G recently completed a reorganization of the firm’s leadership, and then spent more than a year preparing the company for the transition.

The plan signaled to SS&G employees that Littman, Shamis and Goldfarb were focused on the long-term future of the firm and intended to protect it from the confusion and disorder that often happens whenever there is a shakeup of any size.

Doing so also allowed the trio to help boost morale, motivation and satisfaction among employees since more than likely there will be other changes, such as promotions and movement across positions. Also, it helps clients reduce any fears that the team they’re used to working with will still be there for them.

Under SS&G’s succession plan, Littman assumes the managing director role. Shamis and Goldfarb take on lesser roles, but remain very involved with the firm.

“I have been the managing partner for close to 30 years, and I’ve had a great run,” Shamis says. “It is a lot to give up, but I am starting to realize that there is a lot to look forward to in terms of Bob running this organization.”

And that optimism extends to how SS&G will continue to differentiate itself from the competition.

“I am really excited to see what this place is going to look like down the road,” Shamis says. “I think it is even going to exceed where it is today.”

How to reach: SS&G Inc., (440) 248-8787 or www.ssandg.com

 

Takeaways

Getting the talent is a priority.

Be creative in finding growth options.

Draw up a succession plan and live by it.

 

The File

 

Mark Goldfarb, senior managing director

Bob Littman, managing director

Gary Shamis, senior managing director

SS&G Inc.

 

Born: All in Greater Cleveland/Akron

What was your very first job and what did you learn from it?

Gary: My first job was in a place called Mr. Junior's on Cedar Road in University Heights. I sold boys clothes. I think I learned if you work hard, and make the commitment, then good things will happen.

Mark: A caddy at Fairlawn Country Club. Certainly you learned etiquette and you learned service.

Bob: I was a tennis instructor. What I really learned from that was dealing with people, trying to help people.

What is the best business advice you ever received?

Gary: Try to work on your business instead of in your business. That was a big change for me and for our firm years ago. The firm allowed me to begin working on the business. And in that time frame, I think our firm has grown probably 600 or 700 percent.

Mark: People do business with people they like. Relationships are very important in the business world. That was from my father, Bernard Goldfarb.

Bob: I don't want to copy off Mark, but relationships are really important to me as is taking time to get to know people and build meaningful relationships.

What is your definition of business success?

Mark: If you do a great job for your clients, and you treat your employees well, success will follow.

Bob: I certainly think similar to what Mark has said and that's building relationships, creating an opportunity for other people in this organization so they can do the same and also being able to go to work, personally anyways, and have fun and enjoy it. It's not a job; it's a career.

Gary: I have a really narrow view of this and people know that. For more than 32 years, I have always felt that if you can be a little bit better next year than you were last year then that is going to drive success. I think constant improvement, the ability to continually try to get better, to not be satisfied with the status quo, has really been a huge driver for me.

Mark on the succession plan:

It's just been a tremendous ride for all of us the last 26 years. I will continue to be responsible for managing the firm’s Akron office, serve on the firm’s executive committee, chair the firm’s finance committee, act as the liaison to SS&G Healthcare and SS&G Parkland, develop larger business opportunities and continue as a client service partner

Bob on the succession plan:

Mark and Gary are not retiring. This is part of the succession plan and they still have very, very important roles here with the firm to help execute certain growth strategies and still be involved in the management of the organization. We have viewed the succession as an evolution and not an event from the beginning. Gary will be actively involved in leading the firm’s growth strategy, including geographic and existing office.  He will also focus on a restaurant initiative and other large opportunities.

Gary on the succession plan:

I really think Bob has the abilities to drive this firm to even more successful and higher levels than we've operated at in the past. I just think that this firm happens to be incredibly lucky, blessed, or whatever you want to call it, to have Bob Littman take over the practice.

Published in Cleveland

Over and over again, Lorry Wagner has heard Northeast Ohio business and government officials asking, “Why offshore wind and why Ohio?” Wagner and his team at Lake Erie Energy Development Corp. are asking those people, “Why not?”

Lake Erie Energy Development Corp. or LEEDCo, is a regional non-profit and economic development organization building an offshore wind energy industry in Ohio. Offshore wind refers to the construction of wind farms in bodies of water to generate electricity. Wagner, a seasoned wind energy engineer and a longstanding member of the Great Lakes Energy Development Task Force, is president of Cleveland-based LEEDCo, a position he assumed in May 2010.

“The Cleveland Foundation had been looking at expanding their role in the community through economic development and they identified energy as one of the areas that made sense for them to support,” Wagner says. “The particular aspect of the energy industry that fit our skill set the best was offshore wind.”

From 2004 until 2009 when LEEDCo was formed, Cuyahoga County and Lorain County officials were involved in an energy task force to explore whether or not this idea made sense. They concluded that there was no reason not to develop offshore wind in the region.

“LEEDCo was an outgrowth of the task force because they realized they needed a business to push this forward,” Wagner says.

Now Wagner and his team are fighting for federal funding as well as the support of local officials to help people realize the benefits of offshore wind to the Northeast Ohio region.

One of the biggest obstacles standing in the way of LEEDCo’s efforts is the standoffish attitude of some key people who could help bring offshore wind to the region.

“The biggest challenge is that many people around here think that if we just work harder and the economy comes back, life will be like it used to be,” Wagner says. “In 1950, we had 914,000 people in Cleveland. Today we’ve got 393,000 and we went from No. 7 to No. 47 in the country because of that thinking.

“We just keep skating where the puck is instead of skating to where the puck is going to be.” That’s the biggest challenge facing LEEDCo — the attitude of people who refuse to see the benefit of a new energy source that is booming in places like Europe.

“We’re trying to do something that’s a $200 billion business around the world,” he says. “Wouldn’t you think that somebody would say, ‘It’s a $200 billion business and all these major companies around the world are doing it, shouldn’t we try it and see if it works?’”

Offshore wind energy is a matter of doing something that this region is going to benefit from.

“It is a proven job generation engine,” he says. “Over 50,000 jobs in Europe have been created and given the pathway Europe is on now, it will probably create upward of 200,000 jobs. If it can be competitive, there is no doubt it will create jobs.”

The kind of jobs offshore wind would create is mostly in the services industry. They are good paying jobs that can’t be outsourced.

“Once you develop the jobs in a region, they stay there,” Wagner says.

Offshore wind energy is also renewable, cleans up the environment, has a stable price for 20 years, and doesn’t have a fuel cost. It’s a game changer in the utility industry.

“It certainly isn’t the earth-shaking industry that the Internet has been, but look at what’s happened to all of the traditional companies who ruled the world 20 years ago,” Wagner says. “Many of those have changed. We’re in a similar situation when it comes to energy, because the major utilities are used to being a monopoly and running the show. That is shifting.”

According to Wagner, most people under the age of 40 understand offshore wind energy and support the idea. Many retired people do as well.

“The challenge is getting people 40 to 65 to do something different and if I had the answer to that, I’d be king of the world,” he says.

To help push their effort forward, LEEDCo has been on a mission to receive federal funding.

“Right now we have about 12 partners working on the first phase of a federal grant,” Wagner says. “Out of 60-some applicants, seven projects were chosen for Department of Energy funding. We were one of those projects and the only one in the Great Lakes.”

LEEDCo has a target of February 12, 2014 to submit its next proposal to the Department of Energy.

“We compete against six other teams for the final round of funding and three projects will be funded,” he says. “That’s what we are focused on.”

How to reach: Lake Erie Energy Development Corp., (216) 241-9201 or www.leedco.org

Published in Cleveland

When her husband’s commercial real estate development business began to suffer in the late 1980s, Laura K.T. Schriver was concerned for the well-being of her family.

“I had three kids about to go to college, a house and a very nice living,” Schriver says.  “I had to think, me, my Savior and I, what was I going to do? I don’t have a college education, so I couldn’t fall back on my credentials. It was either I was going to open a catering business or I was going to do something with language.”

While she was trying to decide how to employ one or both of her loves, Schriver, a native of Buenos Aires who is fluent in Spanish, was called by a district attorney’s office to interpret for a case. She then received a call from Immigration and Nationalization Services asking if she could recommend a Mandarin interpreter. Immediately she recognized an opportunity and jumped on it. Schriver installed a phone line and set up her kitchen counter as an office and began to recruit and deploy interpreters for clients requesting them.

More than 20 years later, Schriver is leading a business with more than 150 employees and roughly 5,000 independently contracted global linguists. Whether it’s interpreting the spoken word or translating the written word, the company offers services for more than 200 languages.

“The entire company is open to ideas and we listen to them all,” says Schriver, Language Services Associates’ founder, chairman and CEO. “With our IT department, we dream it, and they create it. That’s the best part of knowing that you have these people who are true creators.”

Don’t limit yourself

Technology is at the core of everything that LSA does, and Schriver says her employees are trained that very little, if anything, is impossible.

“We don’t limit our client to the product that we have as is,” Schriver says. “We create a product that will completely take care of the client’s needs. If we don’t have it, we make it. Most of our software is proprietary, with the exception of the standard document, word processing and design products.”

In addition to face-to-face interpretation and text translation, LSA also offers telephonic interpretation services. With Interpretalk, LSA’s clients can access a live telephonic interpreter in less than 30 seconds.

The company continues to enhance its video remote, text translation, American Sign Language and language assessment services.

LSA also continues to find a market in the prison industry by addressing cultural language differences that may arise.

“Hispanics in particular carry two last names,” Schriver says. “So you have Jorge Fernandez-Lopez. They would go out and say, ‘Mr. Lopez?’ And none of them answer because the first last name is the legal last name. It’s Mr. Fernandez. Lopez would be his mother’s maiden name. And people in the United States don’t generally know that.”

Ready to serve

Schriver’s challenge is to stay ahead of the curve and be ready when languages that have not required her services in the past become more prominent. It’s not always easy to match up an independent contractor with the right language and need.

“We not only clear the credentials of all prospective linguists before adding them to our network, but we also put them through LSA’s rigorous verification and qualification process to demonstrate competency in spoken language conversion,” she says. “This allows us to see who the people are that we want to partner with, and who can represent our company in an interpretation situation the best. You really have to search high and low.”

How to reach: Language Services Associates, (800) 305-9673 or www.lsaweb.com

Published in Philadelphia

The changes for tax year 2013 are already in place, but many individuals are still struggling to figure out what the new laws and regulations mean for their investments, estate plans, and businesses, says Steve Foster, a vice president and client adviser at FirstMerit. “With the 2012 tax season behind us, we’re spending a lot of time helping clients understand the significant changes that are taking place for 2013, how they may be affected, and the planning opportunities available to them,” he says.

Will anything change for taxpayers in 2013?

The American Taxpayer Relief Act of 2013, signed into law on Jan. 2, averted the tax increases that would have resulted from the expiration of 2001 tax laws known as EGTRAA, or the Bush-era tax cuts. However, there are changes that will affect all wage earners, while others will impact only those taxpayers in the highest bracket. There are also a number of tax deductions, credits, incentives and tax treatments that were extended and will be a benefit to business owners.

What is the change that will affect all wage earners?

The act did not include an extension of the Social Security payroll tax reduction that began in 2011. As a result, the tax rate for the wage earner reverted from 4.2 percent to 6.2 percent, so in 2013, taxpayers are taking home 2 percent less than they did in the previous two years.

What are some of the other significant provisions of the act?

While the income tax brackets enacted in 2001 — ranging from 10 to 35 percent — are now permanent, a new 39.6 percent income tax bracket has been added for high-income earners. In addition, those in that higher tax bracket — singles with taxable income over $400,000 and joint filers with taxable income in excess of $450,000 — will now have capital gains and qualified dividends taxed at 20 percent, compared to 15 percent previously. Other changes include reinstated phase-outs of personal exemptions, new limits on itemized deductions and increased adjusted gross income limitations for deducting medical expenses. In summary, it will primarily be the higher income earners who will feel the pain of both higher tax rates and reduced tax deductions.

What provisions could positively affect taxpayers?

In addition to maintaining existing income tax rates for the majority of taxpayers, numerous credits and exemptions were also extended or made permanent, including the alternative minimum tax exemption amount, which has been permanently patched and will be indexed for inflation. Additionally, the child tax credit was also made permanent, as well as a number of tax incentives pertaining to higher education.

In addition, the estate tax exemption remains at $5 million per person and $10 million per married couple and will be indexed for inflation. The exemption amount also remains portable to spouses, who previously had to use it or lose it. The downside is that the top estate and gift tax rate will increase from 35 to 40 percent. Lastly, the act extended the provision allowing tax-free distributions from individual retirement accounts directly to public charities through 2013.

How does the act affect business owners?

The act extended a number of tax deductions for businesses that were set to expire, including the enhanced code Section 179 business expensing and 50 percent bonus depreciation on qualified property. Both provisions allow businesses to take larger deductions now rather than waiting until future years.

Are there any other tax changes in 2013 that are not part of the act?

Yes. In 2013 taxpayers may now be subject to an additional income and capital gains tax under the Patient Protection and Affordable Care Act (PPACA) — a.k.a. Obamacare. Under PPACA, there is an additional 3.8 percent surtax on capital gains, dividends and other investment income for certain taxpayers — singles with more than $200,000 in modified adjusted gross income and joint filers with more than $250,000 — which also includes trusts and estates. Therefore, the effective top rate on capital gains and dividends is now 23.8 percent.

For more information, contact Steve Foster at steve.foster@?rstmerit.com. FirstMerit does not offer tax advice. Please consult your tax professional.

Published in Cleveland

The changes for tax year 2013 are already in place, but many individuals are still struggling to figure out what the new laws and regulations mean for their investments, estate plans, and businesses, says Steve Foster, a vice president and client adviser at FirstMerit. “With the 2012 tax season behind us, we’re spending a lot of time helping clients understand the significant changes that are taking place for 2013, how they may be affected, and the planning opportunities available to them,” he says.

Will anything change for taxpayers in 2013?

The American Taxpayer Relief Act of 2013, signed into law on Jan. 2, averted the tax increases that would have resulted from the expiration of 2001 tax laws known as EGTRAA, or the Bush-era tax cuts. However, there are changes that will affect all wage earners, while others will impact only those taxpayers in the highest bracket. There are also a number of tax deductions, credits, incentives and tax treatments that were extended and will be a benefit to business owners.

What is the change that will affect all wage earners?

The act did not include an extension of the Social Security payroll tax reduction that began in 2011. As a result, the tax rate for the wage earner reverted from 4.2 percent to 6.2 percent, so in 2013, taxpayers are taking home 2 percent less than they did in the previous two years.

What are some of the other significant provisions of the act?

While the income tax brackets enacted in 2001 — ranging from 10 to 35 percent — are now permanent, a new 39.6 percent income tax bracket has been added for high-income earners. In addition, those in that higher tax bracket — singles with taxable income over $400,000 and joint filers with taxable income in excess of $450,000 — will now have capital gains and qualified dividends taxed at 20 percent, compared to 15 percent previously. Other changes include reinstated phase-outs of personal exemptions, new limits on itemized deductions and increased adjusted gross income limitations for deducting medical expenses. In summary, it will primarily be the higher income earners who will feel the pain of both higher tax rates and reduced tax deductions.

What provisions could positively affect taxpayers?

In addition to maintaining existing income tax rates for the majority of taxpayers, numerous credits and exemptions were also extended or made permanent, including the alternative minimum tax exemption amount, which has been permanently patched and will be indexed for inflation. Additionally, the child tax credit was also made permanent, as well as a number of tax incentives pertaining to higher education.

In addition, the estate tax exemption remains at $5 million per person and $10 million per married couple and will be indexed for inflation. The exemption amount also remains portable to spouses, who previously had to use it or lose it. The downside is that the top estate and gift tax rate will increase from 35 to 40 percent. Lastly, the act extended the provision allowing tax-free distributions from individual retirement accounts directly to public charities through 2013.

How does the act affect business owners?

The act extended a number of tax deductions for businesses that were set to expire, including the enhanced code Section 179 business expensing and 50 percent bonus depreciation on qualified property. Both provisions allow businesses to take larger deductions now rather than waiting until future years.

Are there any other tax changes in 2013 that are not part of the act?

Yes. In 2013 taxpayers may now be subject to an additional income and capital gains tax under the Patient Protection and Affordable Care Act (PPACA) — a.k.a. Obamacare. Under PPACA, there is an additional 3.8 percent surtax on capital gains, dividends and other investment income for certain taxpayers — singles with more than $200,000 in modified adjusted gross income and joint filers with more than $250,000 — which also includes trusts and estates. Therefore, the effective top rate on capital gains and dividends is now 23.8 percent.

For more information, contact Steve Foster at steve.foster@?rstmerit.com. FirstMerit does not offer tax advice. Please consult your tax professional.

Published in Chicago

Ronald McDonald, the red and yellow M&Ms, the Budweiser frogs and the Energizer bunny have all helped their respective brands to gain the attention of the consumer. These characters make content interesting, engaging, fun, and most importantly, memorable.

That kind of content is what Sway, a new Cleveland-area content and production studio, is helping companies achieve. David Walker, vice president of interactive, and Tom Megalis, chief creative officer, started Sway with the intent of helping companies make the connection between their brands and the content they produce.

“What we’re finding is a lot of companies that we go into have invested time to do social media and content and a year later they don’t have any Facebook followers, no one is going to their YouTube channel and nothing is happening,” Walker says.

“We go in and look at their content and it’s boring, uninteresting, and it’s not engaging. You have to think about how you create something interesting, engaging and fun that people want to look at.”

Examples of the characters leading advertising today are Flo of Progressive Insurance, Mayhem of Allstate and the Geico gecko.

“They market their stuff with humor,” Walker says. “Why? Because insurance is boring and no one wants to listen to a guy saying, ‘We need to update your policy.’ They create characters and brands, and we’re telling people that same idea whether you’re selling an industrial product or insurance. Sway is all about creating engaging, fun, dynamic content.”

Dos and don’ts

Today, in the world of social media it is all about generating your audience.

“In order for me to do that effectively, I’ve got to give them something they really will latch on to,” Walker says. “That’s where a lot of people have missed. You don’t have to go spend a lot of money, but you have to form an idea, form a brand, form a concept and then start putting that out there.”

When you create a brand — the colors, the typeface, the voice — everything about it has to match.

“I think where people are missing it is they’re not getting good writing, good concepts and good ideas,” Walker says. “There’s very little really good creative thinking and strong marketing execution behind it and part of it is some people just don’t get how to do it.”

When you produce content it has to have the effect that makes people want to share it.

“We put high premium where it really counts and why we believe we’re getting traction is because of ideas,” Megalis says. “The idea has to work for your business, its strategy and it has to hit your demographic with something that’s unique and stands out.

“Sure, anybody can take great pictures or shoot a video, but if there’s no substance it’s not effective.”

A lot of companies want to share education about their business or a particular product. The idea of sharing education through someone talking into a camera is no longer good enough.

“Instead of doing it that way you have to think creatively,” Walker says. “You want people to watch it. A lot of companies just push out content and it’s very instructional, institutional and industrial and we forget about it all. In today’s world, consumers are way too savvy. The old world stuff doesn’t resonate.”

Make it memorable

Today, we are bombarded with messages from all kinds of media. Everyone wants to send a tweet or post on Facebook, so how do you come up with something that is memorable? One of the best ways is with a mascot.

“Once you create that character it transcends to social media, print, broadcast and everywhere,” Walker says. “That becomes your voice because advertising is all about making impressions that stick whether it’s online or offline. Having that mascot or that character helps people make a connection with your brand.”

This isn’t really too different than how advertising has always been. It’s doing the research to understand who that target customer is and who that core audience is.

“What will best appeal to them?” Walker says. “What do you want people to know about your product or service? Who are you trying to get it to? You have to make sure the thing you create and the message that you’re putting out there will catch your audience.”

“If it’s just words being spewed without something attached to the message, people don’t remember it,” Megalis says.

How to reach: Sway, (330) 416-9768 or www.swayideafactory.com

Published in Cleveland

Cleveland may not seem like a city that comes to mind as a banking center in the United States, but nearly 100 years ago, Cleveland was awarded one of the 12 regional reserve banks that make up the Federal Reserve System.

So how was Cleveland chosen as a Federal Reserve Bank city? In 1914, a well-organized campaign led by a group of Cleveland businessmen, financiers and politicians was instrumental in the decision to locate the Fourth District headquarters in Cleveland.

A Federal Reserve Organizing Committee was established under the Federal Reserve Act legislation, says Mark Sniderman, chief policy officer, Federal Reserve Bank of Cleveland.

“Members were appointed and they were charged with determining which cities around the country should be the headquarters for these reserve banks,” he says.

“Cities were invited to apply, so the business and banking communities in the cities that were interested got together and outlined what their resources and strengths were.”

The Fourth Federal Reserve District comprises Ohio, western Pennsylvania, eastern Kentucky and the northern panhandle of West Virginia.

“The reason for the boundaries of Cleveland’s district was due to the fact that it was steel and coal country,” Sniderman says. “It was an economic cycle in this part of the country that was driven by heavy industry.

“When cities were bidding to become headquarter cities, they were thinking about themselves as the center of an economic region of the country that had its own need for credit depending on what was driving those economic cycles.”

The other 11 banks that make up the Fed are Boston, New York, Philadelphia, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Mo., Dallas and San Francisco.

“From a reputation point of view, getting a Federal Reserve Bank in Cleveland elevated the stature of the city … and would be a validation that Cleveland was a major league city in the financial world,” Sniderman says.

At the time the Cleveland Federal Reserve was built, it held total assets of $613.7 million, making it the third largest of the 12 district banks. Today, the bank has assets of some $79 billion, making it the ninth largest by assets.

The Cleveland Federal Reserve location quickly outgrew its original building and in 1921 construction started on a new headquarters for the bank. Two years and $8.25 million later, the bank was completed in August 1923 at the corner of Superior Avenue and East Sixth Street. The 13-story building is a modern adaptation of an Italian Renaissance palazzo, or fortress palace.

When the new Federal Reserve Bank of Cleveland opened to the public, an estimated 40,000 visitors passed through. In 2012, about 10,000 people visited the Cleveland Reserve Bank. That includes individuals who were part of a bank tour and individuals who visited its Learning Center and Money Museum.

While free tours are given in the building today and security measures are aided by technology, back when the building was first established they didn’t have those luxuries and were worried about robberies.

“In the days when the building was built, they were worried about mobsters like the Dillinger Gang breaking in with machine guns and things like that,” Sniderman says.

As a result, steps were taken to provide as much security as possible. The original vault is housed in its own building and was constructed before and completely separate from the main bank because of its size.

The concrete walls are 6½ feet thick, reinforced throughout with an intricate, interlaced type of fabricated steel. The vault door is 5 feet thick and has a 47-ton, 19-foot-high hinge. Yet, despite its 100-ton weight, the door is so precisely balanced that one person can swing it closed.

Today, much of the purpose for the Federal Reserve System remains the same with obvious changes in technology and banking advancements forcing some adaptations.

“What’s happened over time is technology has changed some of the ways we do business,” Sniderman says. “Banks and financial entities have become more complicated. They deal in a much wider range of products. They interact in so many kinds of financial markets that supervising banks has become a more sophisticated endeavor.”

Today, the Federal Reserve Bank of Cleveland supervises 35 state member banks and 285 bank holding companies, financial holding companies and savings and loan holding companies.

How to reach: Federal Reserve Bank of Cleveland, (216) 579-2000 or www.clevelandfed.org

Published in Cleveland
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