For many folks, there’s something about Northeast Ohio that can’t be replicated by any other place in the U.S. Northeast Ohio is home. That makes the area unique to so many who have left to explore opportunities elsewhere only to return, and for those who go to great lengths to make their hometown a wonderful place to work and live.
Para M. Jones, president of Stark State College and the subject of this month’s cover story, is a boomerang resident. She was born in Canton and spent 22 years at Stark State, working her way up to vice president before leaving to become president of Spartanburg Community College in South Carolina.
But something brought her back. As she told me in our interview, “I had a wonderful opportunity, wonderful college, wonderful students, wonderful team, but when this presidency (at Stark State) opened, I was very drawn to come back to Northeast Ohio, and of course the college where I had spent so much time and invested so much and where I really believed in the mission, understood the students and really wanted to be leading in workforce and economic development.”
Dave Michelson, president and CEO of the Richfield-based National Interstate Corp., is also looking to build up the region’s workforce. He was audibly excited about what Northeast Ohio has to offer job candidates when we talked in preparation for this month’s feature.
Michelson divulged how he actively promotes his company and the region, saying, “Northeast Ohio, in my view, is a great place to have a company. It’s a great place to raise a family. Between having access to wonderful public school systems, an abundance of private schools, lots of upper level education here in Northeast Ohio and throughout Ohio, the park system, the arts, the sports teams …
“If you can get by the cloudy weather that exists here, this is a great place to have home offices and raise a family.”
Building on the idea of growth in the region, one of this month’s columnists, Akron’s Mayor Don Plusquellic, highlights the achievements and proliferation of the Akron Global Business Accelerator, noting that it has been the longest running and top-performing incubator in Ohio based upon investment, client revenues and job creation.
Both Jones and another one of this month’s columnists, Luis M. Proenza, president of the University of Akron, talk about how institutions of higher learning are fostering growth in the region by partnering with local businesses to help them succeed in the market.
Outside of the realm of business, this month’s issue also highlights the Kent State University Museum and the Tuesday Musical Association. Both organizations hint at the diverse interest of our communities and how the region has much to offer its residents beyond economic opportunities.
The message is clear from those living and working in the region I’ve talked with this month — Northeast Ohio is a great place to stay, or even come back to. •
Adam Burroughs is assistant managing editor & digital managing editor at Smart Business. He writes for Smart Business Akron/Canton and is interested in the people and businesses making a difference in the Akron/Canton area. Reach him at (440) 250-7062 or email@example.com.
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The Tuesday Musical Association has been providing classical music concerts to the Akron community for more than 125 years. Its mantra, “Presenting the Finest,” is exactly what it does, according to Jarrod Hartzler, executive director of the association.
“Most of the world’s most successful and acclaimed musicians have appeared on our concert stage. Annually, musical legends such as Yo-Yo Ma, Joshua Bell, Renée Fleming and ensembles such as The Academy of St. Martin in the Fields, and the Vienna Boys Choir comprise our concert season,” he says.
In addition to its six-concert main-stage series, the TMA offers a broad range of education programs and partners with community organizations.
Programs include a complimentary student ticket program that makes concerts free to students of all ages; master classes and student workshops for local elementary high school and college students presented by guest artists; and collaborations with other arts organizations including the Akron Symphony Orchestra and Akron Art Museum.
In addition there is a scholarship program for college-aged music students and the Brahms Allegro Junior Music Club that provides performance opportunities for students ages 5 to 18.
“All of these programs combined help the TMA provide classical music and music education experiences to thousands of area residents annually,” Hartzler says.
Smart Business spoke with Hartzler to learn more about the association and its activities in the community.
SB: How does the association measure its impact on the communities in which it operates?
JH: Quantitatively, the TMA looks at the number of people in the audience at concerts: paid, subscribers, students and others from the community. Qualitatively, we listen to audience feedback from our concerts, education programs and community partnerships. When something is observed to be meaningful by the majority of those who participate, we know our programming is hitting the mark.
SB: What are the most important events the association holds in a year that help create awareness and generate support?
JH: The TMA’s main-stage concerts at E. J. Thomas Hall generate the most awareness simply because they have the most public interaction. Through print, radio and electronic media, people hear of the guest artists and, in turn, of the TMA. After that, our education programs find support from students, parents and music educators, many of whom become subscribers, ticket buyers and members.
SB: How is the association working with the business community and business leaders to better fulfill its mission?
JH: The TMA works with business leaders to help enrich the quality of life in the Akron region. The arts not only provide opportunities to relax, learn and be creatively stimulated, they also drive the economy.
The TMA brings thousands of people to downtown Akron for performances and activities. These patrons do much more while they are here; they eat in local restaurants, shop in local stores and make other purchases, all stimulating the local economy.
The TMA is recognized nationally as a premier concert series, lending national recognition to Akron.
SB: What, besides funding, is the most significant challenge the association currently faces?
JH: As is the case with most presenters of classical music, one of our biggest challenges continues to be engaging younger, more diverse patrons. Of course, this problem is not new. Factors like ticket cost, the reduction and elimination of arts and music programs in public schools, and vast offerings of entertainment alternatives all compound to cause this challenge.
SB: What can businesses and business leaders do to help the association achieve its goals?
JH: The opportunities are endless. The TMA is always looking for the expertise of business leaders when recruiting people to serve on our board of directors. In addition, businesses supporting their employees, taking time for meaningful experiences in their lives, including participating in the arts, will help to nurture younger audience members. ●
Learn more about the Tuesday Musical Association at:
How to reach: Tuesday Musical Association, (330) 761-3460 or www.tuesdaymusical.org
Describing what has stayed the same during National Interstate’s first 25 years is easier than listing everything that’s changed, according to Dave Michelson, the company’s president and CEO.
Today, National Interstate Corp. remains an underwriter of passenger transportation operators across the country.
“But really almost everything else to some degree has changed,” Michelson says.
National Interstate has gone from a private company to a publicly traded one, has expanded beyond passenger transportation into half a dozen wheels-type niches and has gone from a target of acquisition to an acquirer. Back when Michelson was hired, he was the company’s 20th employee, now there are 580.
This year, the company celebrates a quarter century in business. As it has grown over the years, so has Michelson’s role. When he joined the company in 1992, three years after it was formed, he was the company’s second vice president of underwriting — the No. 2 role.
In 2008, he was appointed president and CEO following a progression of roles with gradually increasing responsibilities.
He’s also grown personally, finding a work/life balance that puts family first and his role at the company a close second.
“I still work a ridiculous number of hours, but that’s really self-imposed,” he says. “National Interstate and the National Interstate family are very big parts of my life, and I think they are a very big part of our employees’ lives.”
As head of that family, his effectiveness impacts the personal and professional opportunities of his employees.
“I’ve learned over my tenure as CEO in particular that if myself and the rest of the management team do our jobs well, that we actually become, in a related way, a part of everyone’s lives here. I’ve learned to appreciate and take that responsibility very seriously. And it actually makes my job more rewarding,” he says.
A disciplined approach
The market in which National Interstate operates has also grown. Michelson says the insurance marketplace moves, rather rhythmically, through hard and soft market cycles where the insurance supply either shrinks, causing prices to rise, or grows, causing prices to drop.
“As a part of one of these cycle, in 1994, we lost five of our 10 largest premium-paying customers. In 1995 we lost the other five. So in two underwriting years we walked away from our top 10 largest accounts,” he says.
The result of this turbulence was the recognition that it was vulnerable because of its narrow market focus. So the company looked to diversify.
“There were several things that we entertained back in the 1995 to 1996 time frame that allowed us to diversify,” Michelson says. For example, it moved into recreation vehicle insurance and captive insurance.
The company also happened upon an opportunity to move into a new market: Hawaii.
“There was another insurance carrier in that state that was doing a lot of business and it decided to pull back a little bit, and actually exit the state,” Michelson says. “And what ended up happening is it opened up an opportunity for us to establish a Honolulu, Hawaii, office back in the fall of 1995.”
National Interstate started by servicing and underwriting clients in Hawaii via its home office in Ohio and a two-person marketing office in California. Soon, it established a full office in Honolulu. The company also expanded its product offering there to include truck insurance, taxicab and small business owners.
An influx of what Michelson calls “naive capital,” investments made by investment bankers who may not fully understand the insurance business like insurance experts, means the competition is acting more unpredictably, making forecasting difficult.
“We just never know from one day to the next who is going to enter and who is going to exit,” Michelson says. “What we’ve done is we stay with underwriting discipline as a focal point in the marketplaces that we’re in.”
That approach encouraged the company to look for other market opportunities, which led it into other niches such as waste operations, energy, tow truck, excess liability and ambulance. It also led it to acquire Vanliner Insurance Co. in 2010.
“All of those different mechanisms we’ve used to maintain that growth trajectory while still staying focused on underwriting profitability. Without it, we really can’t be a long-term, viable, profitable organization generating the necessary return for shareholders,” Michelson says.
Growing the family
One of the things Michelson says he has come to appreciate during his time at National Interstate is that the company’s success is about everyone individually doing their job and working together.
“Our needs, our biggest resource going forward, is human capital,” Michelson says. “If I lose sleep over anything, it’s our ongoing ability to hire, train and retain the very best employees, wherever we have employees located . . . . It’s all about the people. And we’re focusing on it all the time.”
The company approaches the challenge by casting a wide net. It recruits on campuses, runs internship programs and hires seasoned insurance veterans. The company has also partnered with Kent State University to establish its first scholarship program.
“We’re just doing anything and everything we can to engage with the existing employees, as well as what can we do to hire, train and retain new talent brought into the organization. Because the 580 employees we have today are not going to be enough next year to do this business because we’re going to grow,” Michelson says.
But casting such a wide net — and drawing in a multigenerational workforce — presents its own challenge.
“One of the things I know we’re focusing on is how do you engage with employees who are across generations in your organization? We’ve got a wide range of ages and priorities here and that’s challenging,” he says.
Each generation has different career priorities, which the company has to balance with what it can provide while being mindful that it still has to provide an appropriate return to its shareholders.
“It’s a challenge. I think we do some things in that area well, but I’m not going to presume that we’re perfect because I know that we’re not. We’re always looking for ways to do and try new and different things,” Michelson says.
In the year 2039
When National Interstate celebrates its 50th anniversary, Michelson, if still at the helm, says he would hope to be able to say he was part of something special 25 years ago, and that it’s still special.
“I know that if I was given 10 tries at writing the story of National Interstate over its first 25 years I would have not written this story in any of those 10 tries,” Michelson says. “It has been a really fascinating, exciting, challenging first 25 years.”
He says he hopes the things the company is proud of now — its financial results, fostering an environment of collaboration, creating career opportunities for its employees — are the same things the company would be able to boast about again when the clock rolls forward from 2014 to 2039.
“It’s just that we’d be bigger and better at it.” ●
Learn more about National Interstate at:
How to reach National Interstate Corp.: (330) 659-8900 or www.nationalinterstate.com
Stark State College is focused on preparing students and graduates for the jobs that exist in its environment, says Para M. Jones, the college’s president. In order to adapt to the ever-changing needs of the community, however, the college must be able to pivot itself and its 500-plus employees to meet the needs of today’s businesses.
“We’re continuously scanning the environment, talking to businesses,” Jones says. “We’ve got an ongoing dialogue about what are the needs of business, and then our job, our mission, is to develop programs and develop the workforce to respond to those needs.”
Jones, the college’s first female president, has been at the helm of Stark State since 2012. She spent 22 years working her way up through the organization before leaving for a brief stint as president of Spartanburg Community College in South Carolina.
Jones says it has been necessary to prepare the college to take advantage of today’s opportunities, identify the right leadership to understand the needs of the community, and then determine what its role could and should be to serve its students, the businesses in its community and the region.
With so many approaches to take, prioritizing the different opportunities is essential, Jones says. Determining where one initiative fits in with the rest of what the college is doing is part of the challenge.
Finding its fit
Upon returning to the college, Jones says her immediate challenge was to listen. She says she had to set aside her history at Stark and use her experience from the Spartanburg presidency — a brand new community where she had to build new relationships — to help reacquaint herself with the college, the community and the needs of both.
“I did not fall into the trap of assuming anything,” Jones says. “So I spent a lot of time talking to students, to our trustees, to our faculty, to our staff, to businesses and organizations in our community to really get a sense of the needs and where we are and what’s happening and what’s on people’s minds, and actually I’d say that I really had an opportunity in that the college had not had an updated strategic plan.”
Because it hadn’t had such an approved plan, Jones was able to develop a shared vision and mission that would better define the plan in the context of today’s needs.
“It was an opportunity for us to quickly get ahead of some of the opportunities, like shale for oil and gas, that were emerging that we were beginning to look at but didn’t really have a plan for how to address,” Jones says.
In addition to talking with students, faculty and staff, she also talked to the broader community — businesses, organizations and stakeholders — about what was happening externally. Those conversations made it clear that oil and gas needed to be a priority.
Under the leadership of one of its faculty members, Stark State put together a plan to prepare a workforce for Ohio’s burgeoning oil and gas industry.
“That took initiative on our part to say, ‘Let’s look at what’s happening, let’s position to help our college be a leader in education and training,’” Jones says.
Part of putting the college in a position to take advantage of the need for education in oil and gas was leveraging Kathleen Steere, Stark State’s coordinator of oil and gas programs.
“She was working in our chemistry labs, but we knew that she has an excellent background,” Jones says. “She’s a petroleum engineer and a geologist from Marietta College, and so we immediately brought her forth and asked her if she would help lead the development of our programs in shale, and she has done a remarkable job over the last two years.”
As a comprehensive community college, part of Stark State’s role in the marketplace is defined through advisory committees of business and industry professionals.
“We meet with them on an ongoing basis,” Jones says.
Businesses from that industry were brought in so the college could ask what it should be doing.
The number of companies on the oil and gas advisory committee has continued to expand with the addition of Chesapeake Energy, Kenan Advantage Group and The Timken Co.
“That’s one way we obviously live out that mission of workforce and economic development, by making sure we’re having that ongoing dialog with business and keeping up with needs of current and emerging industries,” Jones says.
She says Stark State is now a leader in shale education and is working with two colleges in the Marcellus shale area in Ohio, and the Barnett and the Eagle Ford shale areas of Texas as part of a U.S. Department of Labor grant to develop the first national curriculum in oil and gas.
The college is also working with Chevron, Chesapeake, XTO, Anadarko, Shell and other major companies to develop the curriculum. Stark State is also serving the northeast Ohio region as well as West Virginia, Michigan and Illinois with that curriculum.
Evolving the college is a perpetual challenge, but it gets continuous feedback from its students about the quality of the education they’re receiving every semester through class evaluations and student surveys to gauge the balance of resources across the growing number of programs and needs so they can be adjusted based on market demand.
For example, the college’s dental hygiene program had to be scaled to produce only the number of graduates that the market needed. Its nursing program, conversely, was expanded because there was a great demand for nurses, “so we’re constantly looking at the hiring,” Jones says.
All that data feeds back into the college’s planning and budgeting, from how many of its students are employed to all the employment market data. It’s constantly being reviewed at the academic levels so resources and program sizes can be adjusted accordingly.
But with 15,000 students, some 500 employees and a $70 million annual budget — Stark State is the fourth largest of the 23 community and technical colleges in the state — the challenge for an organization of its size is remaining responsive.
“How do we remain nimble? How do we remain agile and change gears to meet the needs of business and industry? It takes a lot of communication to change gears. It takes systems and processes that are aligned to change gears, so it’s a challenge,” Jones says.
“It takes a lot of organizational leadership, and I think one of my ongoing challenges is how do we continue to improve our organizational operations as we grow,” she says. Her answer is to have ongoing communication.
Faculty members need to focus daily on their students, she says. They don’t always have the opportunity to stop and look at the big picture and changes in the environment, so the college relies on its leadership to communicate clearly with everyone through email newsletters, face-to-face meetings with all faculty and staff, and all-college meetings each semester.
“So basically every five weeks I am in front of all faculty, all staff,” Jones says. “I meet regularly with classes and students. I feel that’s part of my job, but I also encourage all the leaders of the college to do that so that we can continuously share what’s happening.”
Communication helps lay the groundwork for organization shifts.
“We try not to change direction completely by surprise, but we’re in a dynamic environment,” Jones says.
“The best environmental scanning and input we get, both on the macro level and at the program level, is from our business and industry partners,” she says. “They tell us exactly what’s going on. They help us make plans for adapting to changes.”
Jones says her challenge is to find better ways of ongoing organizational learning that’s accessible and makes available all the things Stark State has learned organizationally.
“So we’re looking at documenting best practices and different strategies for doing that as we grow because we are a big organization,” she says. “You know, we can’t always be perfect in everything we do, but how do we continue learning from our decisions and make sure that we’re documenting what we’ve learned so that next time we’re faced with something similar we have better data?”
To measure efficacy, the college looks at enrollment, how its students are doing and its job-placement rates to ensure it’s offering the programs that businesses and industry needs “because when we do that, then we have high placement rates.Our students find jobs, they find internships,” Jones says.
The college also benchmarks.
“We don’t just measure Stark State against Stark State,” she says. “We measure Stark State and benchmark with our peers in the state and in the nation.”
Jones says that ultimately Stark State is focused on insuring that its students succeed.
“Our business is students,” she says. “For us it’s all about providing quality education at an affordable cost that will lead to rewarding careers for our students, and in the process of doing that, being a major force for economic development.” ●
- Communication with stakeholders is key.
- Continuously monitor efficacy.
- Research your market to understand your best fit.
The Jones File:
Name: Para M. Jones
Company: Stark State College
Education: At Mount Union College she earned undergraduate degrees in English, communication and Spanish, graduating magna cum laude with three majors in three years and one quarter. She earned her master’s degree in business administration with honors at Ashland University and a doctorate in higher education leadership at the University of Nebraska.
What’s your favorite book? I love anything Malcolm Gladwell writes.
On the fiction side, anything John Updike, anything Isabel Allende. I love South American writers because they always have ghosts in their stories; they’re very spiritual. They just transport you.
What’s one thing you love to talk about but never get the chance to? I want to tell people (about Stark State’s students). They come from all these vastly different worlds, and they’re all trying to learn and improve and strive for new challenges and new careers and new ways to reinvent themselves. So I don’t often get a chance to talk about those things, and I’d like to.
The other thing I’d love to talk about are my children, and I try not to do that too much. I do that with my husband — just what they’re doing and what they’re achieving. That’s always fun.
What is the best business advice you ever received? Be prepared, know what’s happening and work very hard.
Learn more about Stark State College at:
How to reach: Stark State College, (800) 797-8275 or www.starkstate.edu
As the availability and use of 3-D laser based printers proliferate, IP related issues need to be considered.
The use of lasers for rapid prototyping has existed for a number of years as a process of making molds and models in the early stages of production. However, with improved technology 3-D printers are becoming used as a means to make finished products.
For patent owners, the ability of large numbers of individuals (with 3-D printers) to produce products will increase the difficulty of enforcing patent rights. Particularly, 3-D printer technology will act to fragment the target of potential patent enforcement, says Mark Svat, a partner attorney at Fay Sharpe LLP.
For example, an infringer who produces 5 million patented widgets is a clear target for the patent owner. If, however, 5 million people can produce that widget on their own, the patent owner might need to target each individual infringer to put a stop to the infringement.
Additionally, there are concerns about 3-D printing related to other types of intellectual property, including, for instance, copyrights such as found in artistic works. Artists can have their designs lifted and potentially turned into any number of products, reducing the market for their merchandise.
Smart Business spoke with Svat about the threat 3-D printing creates for businesses.
Why might the ability of companies to protect their patents be insufficient now that 3-D printing is more available?
A patent owner often looks to a party that is directly infringing its patent. As 3-D printing becomes more common, the direct infringer often will be an individual that is operating a 3-D printer in his/her own home. Stopping each individual infringer can be quite an onerous task.
A more efficient manner to stop the infringement would be to stop the party providing the data files used to create the infringing product. This could be the person running the website through which the data files are made available and/or it could be the party that created the data files being used to print the infringing product. However, neither of these entities is directly creating the infringing products. Their actions are therefore more likely an indirect infringement, which is often more challenging to litigate.
Particularly, indirect infringement may require an additional level of proof, which means more obstacles must be overcome to prove indirect infringement. This extra burden increases the costs associated with a lawsuit and allows for more defenses to be presented, further complicating an already complex process.
What other challenges might arise as 3-D printing becomes more common?
In addition to patent-related issues, 3-D printing also raises issues related to copyright infringement. For example, widespread use of 3-D printing could cut into licensing opportunities for creators of artistic works. A third party might generate a data file for a copyrighted work and then place it online where others would generate unauthorized 3-D printed versions, cutting out the creator for merchandise revenue.
To stop unauthorized use, if the data file is from the creator or inventor, he or she may attempt to use technologies similar to a digital rights management (DRM) system to combat piracy. In one embodiment, DRM systems embed code into the data files, only allowing reproduction if proper credentials are used.
Other issues with 3-D printing include the possibility of expanding the physical locations around the world where counterfeits can economically be produced. Similarly, where now a counterfeiter might ‘specialize’ in, say counterfeit shoes, an advanced 3-D printer would allow the counterfeiter to easily switch among a large number of different products.
What should companies that are vulnerable because of 3-D printing do to ensure their patents are enforced?
Companies should pay attention to advancements in 3-D printing, such as new materials that would allow the printers to make one of their products.
Another step is to consider monitoring websites such as www.thingiverse.com that permit individuals to share 3-D printing designs.
Mark Svat is a partner attorney at Fay Sharpe LLP. Reach him at (216) 363-9000 or firstname.lastname@example.org.
Insights Legal Affairs is brought to you by Fay Sharpe LLP
Some 45 percent of executives are on the move these days, actively looking for new job opportunities, a trend that should concern employers, says Joe Crea, president of Benefits Resource Group.
“Often an executive is just not engaged, he or she has decided there’s more money to be made elsewhere, or they’re dissatisfied with the company,” Crea says.
Smaller companies that lose a key executive are the most affected. “On average, it costs companies 2.5 times the salary of the executive lost in order to find and hire their replacement,” Crea says. However, there are strategies employers can use to keep key executives around for the long term.
Smart Business spoke with Crea about executive retention programs and how they benefit employers.
What can happen when an executive leaves?
There can be real concerns from clients when they learn a key executive is leaving. Many will wonder why the person is leaving, what’s going on with the company that might have caused the executive to leave and if that loss will affect company productivity.
In instances where an executive is essential enough to a business, that business’s lending institution might have worked covenants in existing loan agreements that could be affected by an executive’s exit.
There’s also the time and cost to a company to replace the executive, such as the cost of a headhunter and time spent on training a replacement.
What are the issues executives have?
Executives can be unhappy with their current compensation. Perhaps they have the sense that the company lacks direction, there’s uneasiness at the office or they have a crazy boss. While many younger executives may wait for changes to happen, those who are older would rather not stick around until things settle, so they seek a better fit.
What can be done to retain these folks?
Essentially benefits can be used by a company to try to lock-up their key executives in some way — vesting programs that offer greater rewards for sticking around. Very few people today have confidence that they’ll be able to retire with an income that’s consistent with what they earn today. There are programs that help supplement retirement income, which puts executives’ minds at ease knowing they’ll have something for the future
These benefit programs meet three key executive concerns: Do I have enough to retire? What happens if I’m disabled? Will my family have enough money if I die prematurely?
Among these programs are split dollar arrangements that are life insurance policies that are owned in part by the company and in part by the executive.
There are restrictive endorsement bonus programs whereby special company bonuses are released on a vesting schedule.
A salary continuation program allows a company to designate a salary continuation amount paid over a defined period in the event of disability, death or retirement.
A phantom stock program is an agreement between the executive and a company whereby a value is attached to a ‘share’ of the company, though no true stock exists, and a payout is given in the future based on the value and number of ‘shares’ owned.
Supplemental executive retirement programs offer a defined retirement benefit in the future that’s offset by what the executive will receive in Social Security or other retirement programs.
Also, there are Section 162 programs that are special company-sponsored life insurance programs that offer executives death benefits and income prior to or at retirement. And there are many others.
How can a retention plan help?
Employers need to develop an awareness of issues at hand. Often times these issues are left unaddressed in lieu of day-to-day needs.
For example, a client in Texas had three executives but only had two of them under a non-compete agreement.
To avoid creating a situation where the executive could leave and take a block of the company’s business out the door, the client decided to implement a supplemental retirement program to lock the person up. Understanding the problems that might occur could mean the difference between losing or retaining an employee who’s crucial to your company’s success. ●
Joe Crea is president of Benefits Resource Group. Reach him at (216) 393-1818 or email@example.com.
Insights Employee Benefits is brought to you by Benefits Resource Group
Deborah Cannon understands how the world of private, for-profit business works. She was president of Bank of America for the Houston region before retiring with 30 years in the industry.
Courted out of retirement by a headhunter, Cannon took the helm of The Houston Zoo, becoming its president and CEO shortly after the floundering city property had undergone partial privatization in an attempt to reverse its financial atrophy.
“The zoo was, frankly, losing ground every year,” Cannon says. “The city was not charging adequate admission fees to be able to do all the things that needed to be done, so you had deferred maintenance that was building up. The zoo was getting worse, not better, every year.”
It wasn’t an issue that the zoo was spending too much money. It just wasn’t making enough.
“To me it was pretty obvious that we really had to increase revenues,” Cannon says, so she began floating ideas on how to generate cash flow.
“Coming from Bank of America ... when we said, ‘Here’s what we’re going to do, here’s why and here’s the impact it’s going to have on you,’ everybody got behind it and said, ‘Fine,’ because your bonus was predicated on this new change of course,” she says.
But that’s not the way things would work at the nonprofit zoo. Her message about raising revenues was met with resistance.
“I kept hearing people say, ‘Doesn’t she understand we’re a nonprofit.’ It took a while to get everybody at the same realization that we needed to have a lot more members, that we needed to have repeat visits, that we needed to be able to have more revenues,” Cannon says.
“I didn’t realize how slow change comes in a nonprofit and how important the consensus building among all the groups is before you can start affecting any real change.”
Beat of the same drum
“The single biggest difference we made early on was the change in our employees’ attitudes toward the guests,” Cannon says.
Much like the budget, employee morale at the zoo was sagging from years of working for an organization barely able to make ends meet. That dismal attitude showed up in the way staff treated guests.
She had to take employees from seeing guests as being “kind of a bother” to understanding their importance to the zoo’s future. Without positive employees, the zoo didn’t have happy guests who came back with their friends and spent money.
“That’s where guest experience came in, creating that really great guest experience so that people wanted to come back,” Cannon says.
To get staff focused on the guest experience, the zoo designed its own training program. It assigned new employees a “buddy,” a current staffer not in the department of the trainee, to get them acclimated to the grounds and begin to convey the values the zoo wants in its staffers.
It was also important for the staff to understand where the company was going, how it would get there, and what role they play in order to build consensus and get shared buy-in.
To do that, Cannon began gathering the entire staff together five times a year for a general meeting. The budget, conservation efforts and ongoing capital improvements are among the topics discussed, and staff is given presentations from departments ranging from development to elephants.
“So it’s just keeping people informed, keeping them part of the team,” she says.
The improvement in attitude from these changes has been noticeable, according to Cannon. Smaller, early morning meetings used to be a place where staffers would vent their frustrations. But now staffers offer suggestions on how the zoo could be improved.
“It was a very different kind of conversation,” Cannon says. “They were really looking at things from the guests’ side.”
Convincing, growing the base
Improving the guest experience at the zoo was critical, but more was needed in order to raise revenues.
Prior to privatization, admission prices at the zoo were low — 50 cents for children and $2.50 for adults. And the tax dollars from the city and revenue from concessions put constraints on the zoo’s income stream that left no room for additional investments, or even basic preventative maintenance.
“There just was vastly inadequate funding coming to run a good zoo,” Cannon says. “We were frankly in danger of losing accreditation if something wasn’t done.”
Generating more revenue through increasing membership and doing more special events happened fairly quickly. The harder piece, however, was raising money through donations.
“We needed to increase the number of donors we had,” Cannon says, which was a tough thing to do considering she was starting from scratch.
The zoo undertook a capital campaign to pay for the first phase of its African Forest. Cannon says it was originally estimated that the campaign would take two years to complete — it took more than four.
“It took a lot longer because we didn’t have a track record,” she says. “We hadn’t proven that we could do this and do it right and do it on time, on budget.”
The construction of the first phase of the African Forest on time and on budget made raising $27 million for the second capital campaign quicker, it took a little less than two years.
“We’ve established the fact that we’ve made money every year for the last eight years and generated a very good positive cash flow,” Cannon says. That along with seeing the physical improvements gave donors the positive track record they needed to believe in the zoo’s ability to make good on its promises.
Cannon was also seeking donors not for big capital but for the zoo overall. So the first donor club, called the Asante Society, was formed with an annual membership minimum of $1,200 per year. It grew from zero members to about 280 members today.
The zoo also started two additional donor clubs for younger professionals that sought intermittent donations, and used mailings to solicit new donations.
“We hired a completely different staff for our development office — we’ve got a really good staff right now. We have done some different things in terms of membership. So it’s a question of just continuing to build that brand and continuing to make contact,” Cannon says.
Because of these efforts more than $100 million has been invested in the zoo since privatization in 2002. This has meant new exhibits, a new restaurant, gift shop and restrooms. It’s also helped with the $29 million gorilla project and a $3.5 million bughouse, both of which are under construction.
Besides allaying the concerns of hesitant donors, Cannon and the zoo had other concerns to address related to the privatization — continued affordability for the general public.
Today’s prices are much higher compared to 2002 levels, with children’s admission costing $11 and adult admission at $15.
“We undertook some programs to ensure that even though we we’re raising prices, albeit slowly, we developed a couple programs so that people who really couldn’t afford to come could still come, and we built some support for that, too. So they realized that the zoo is really a zoo for all,” Cannon says.
The workforce at the zoo has more than doubled since privatization in all areas, growing from around 150 to almost 400, with a significant increase in rangers, a position totally dedicated to guest services.
It’s upped its marketing efforts online, dedicating a four-person team to take advantage of all the major social media channels. It has had particular success on YouTube where millions have viewed videos of a range of its animals, including two bathing baby elephants.
These investments have paid off. Annual attendance has improved from roughly 1.2 million visitors in 2002 to 2.15 million in 2013. And last year the zoo generated 26 times the cash flow it generated the first full year after privatization.
But the zoo is just getting started.
“We’re in process of doing design development, our schematic design, of two huge projects, which will probably total something north of $100 million, and that’s over and above the $7 to $8 million we will spend every year out of earnings that we make for rehabbing the existing facilities,” Cannon says.
The plan is to redo the front entry, move the existing sea lion pools near the entrance and enhance them. A restaurant would be built where the sea lions are today that would accommodate a number of public and private functions simultaneously.
Another piece of the project would transform roughly seven acres of the zoo into a series of exhibits featuring African animals to complete the African Forest area.
Reflecting on progress
When Cannon visited the zoo before being named its president, she says, “It was not a great zoo at that point in time.” But she was intrigued by the project and thought it was a great opportunity to build something really good for the city. If given the chance to go back in time and give herself advice at the outset of her involvement with the zoo, she would emphasize the need to build consensus.
“The fact that you can’t just change things overnight. The fact that you need to spend a lot more time getting people on board with what we needed to do,” she says.
“I don’t know that it would have made a big difference in the long run. I don’t know that we would have done it any faster. We just would have done it with a little less resistance.” ●
- Employee attitudes translate to customer service, good or bad.
- Investors need proof of success or they will remain hesitant.
- Shared buy-in is critical to implementing organizational change.
The Cannon File:
Name: Deborah Cannon
Title: President and CEO
Company: The Houston Zoo
Education: She began at Georgetown University and transferred to Southern Methodist University where she earned a bachelor’s degree in business administration.
Born: St. Louis, Mo.
If you could spend a day as an animal in the wild, which animal would it be? A lion. They’re less hunted than elephants and rhinos. They have fewer enemies, they’re not the prey of many animals other than people, and they’re really not shooting lions at the same rate that they are elephants and rhinos. I would be a male because females do the hunting and bring the males the food to eat first.
Which animal would you least like to be? The impala seems to be everybody’s dinner in Africa. They’re beautiful, but the impala and maybe the wildebeest; everybody eats them.
What about your perspective has been most affected since you took your position at the zoo? I have a much greater appreciation for the peril these animals are in in the wild. I had no idea how hunted and persecuted they really are.
What’s the one piece of advice you’ve passed on most often to others? I always tell people don’t burn bridges. It’s amazing how many people do that.
What’s one thing you love to talk about but never get the chance to? In Houston, people do not realize how much The Houston Zoo does from a conservation standpoint, conserving animals in the wild — animals and local people — helping local people find other means of supporting themselves than just slaughtering animals. So we need to find a better way to educate the Houston population about all that we’re doing to save animals in the wild and get people to help us do that.
Learn more about The Houston Zoo at:
How to reach: The Houston Zoo, (713) 533-6500 or www.houstonzoo.org
The way children are accessing Highlights for Children’s products have changed, which has changed how the company thinks about the Web and uses digital platforms.
“Of course, the children today have so many more choices across a bunch of different platforms. But to take it to the higher level, I think we’re competing for time — we’re competing for children’s time today,” says Shelly Stotzer, executive vice president and chief marketing officer for Highlights For Children. “Anything that’s a use of their time, whether it’s after school activities, sports, books, apps, computers, TV, all the things that children do today, we hope that they find the time to engage in positive products and stories, things that we reflect in our product experiences.”
Highlights believes there is a place for all its different products, but it’s important to make sure the company reaches children with the content that is right for them in a format that is good for them.
“Sometimes they want to play on a computer,” Stotzer says. “I have a 7 and 9 year old, and sometimes they want to read on their Kindles. Sometimes they want to play on my PC. But sometimes they want to snuggle in their bed with a book, and sometimes they want to read a magazine in the car, and sometimes they want to do a puzzle book at the restaurant. “We believe there is a place for all these things.”
So, how can companies re-position themselves to meet customer needs through all of the different platforms available today like Highlights recognized it needed to do at least a decade ago?
First, Stotzer says it’s important to recognize that the consumer, the customer is in control.
That’s especially true with technology, which changes so quickly. Understanding the needs of your clients — in this case, children — is imperative.
“If they don’t have a positive consistent brand experience, they have a lot of influence. They have a lot of control. They have a lot of opportunity to help you or hurt you,” she says. “I think finding your advocates is important, and listening to those who have some feedback for you is important — adjusting and learning along the way, putting the customer at center, so they have the control.”
Then, start with what you’re trying to accomplish. Don’t think of all of these social channels as one big channel. Twitter has a different place than Pinterest, which has a different place than Facebook and even a different place than Instagram and all the other unfolding new technologies, Stotzer says.
Ask yourself: why are you there? What do you want to accomplish? And that’s what really should drive what you do.
“In our case we have great people who care about kids engaging in our content. It’s a little different than what I’m guessing a different type of organization — a b2b organization, or an organization not focused on consumers or an organization not focused on children — might do,” she says.
Opportunities in social media
The social media space is another chance to have more dialogue with customers. And your social media strategy needs to consider numerous angles, such as engagement, customer service and sales, before launching into it.
Highlights doesn’t see social primarily as a sales channel. It’s about building a relationship, building really positive interactions with customers and being in a space where you are top- of-mind with them.
“If you move beyond just Facebook and you think about Pinterest and other sources as well, there are a lot of families engaged in that space,” Stotzer says. “What we’ve found is that the followers we’ve obtained, or the friends that we’ve earned are very, very engaged in our brand and in our social media content.
“We focus a lot on making sure we’re giving them good content, good information, engaging them through jokes and riddles, getting them to participate by getting pictures and their thoughts on things. We’ve found that the customers who we are engaging with seem very appreciative and it’s growing, it’s growing at a substantial rate.”
Legal and privacy challenges
Stotzer says there always studies coming out to tell Highlights what should be done at different ages and how much times online is good for children. The company wants to be conscious of that as it decides what to launch and in what format.
“We do what’s right regardless of what government regulation says — what I mean by that is of course we’re not going to break law, but in fact we might be more strongly self regulated than the law would require,” she says.
“We always put the children and the family and the long-term customer experience at the forefront of our decisions. And so we are very careful in that space. I want to wake up every morning and feel like I’m doing the right things regardless of what the law says.”
For example, Highlights was one of the first COPPA certified websites, which relates to children’s privacy and ensuring companies aren’t collecting inappropriate information on kids.
“We adopted that way before most because we knew it was the right thing to do,” Stotzer says. •
Find out how Highlights for Children is leveraging customer data to provide great experiences worldwide
Learn more about Highlights for Children, at:
When Gordy Opitz talks about ComDoc Inc., he starts at the beginning, explaining matter-of-factly that Walter G. Griffith founded the business equipment sales and service company in Akron in 1955. He traces its financial growth into the millions of dollars and outlines its industry’s evolution.
But the part of the story that elicits the most enthusiasm from Opitz involves the ComDoc employee stock ownership plan, which took 21 years to make its 615 employees 100 percent owners.
“We took an unbelievable amount of pride in being able to say to people that when you are working with ComDoc, you are working with people who own the company,” says Opitz, the company’s president and CEO. “That was an incredibly exciting time for us.”
Those exciting times, however, would come under threat. ComDoc was facing two serious obstacles in 2008: The great financial chill that had befallen the economy, and the loss of its largest product supplier, Ricoh, which was acquired by ComDoc’s biggest competitor, ostensibly pitting the former partners against each other.
Here’s how Optiz lead ComDoc through a turbulent period by ignoring the noise that could have silenced the company.
As ComDoc was moving toward 100 percent employee ownership, it was keeping its eye on Xerox, the industry leader, benchmarking with it to determine a fair share price for its own stock.
“As long as we could stay within 5 to 7 percent of that share price, we were going to keep it as an employee-owned company, which we were able to accomplish,” Opitz says.
ComDoc, at the time, was generating about $125 million in annual revenue. It had a great 2007 and was having a great 2008 when mid-year, Xerox inquired about ComDoc’s interest in being acquired.
Xerox’s midmarket customers had been a target for ComDoc. According to Opitz, “We built our business by going after Xerox placements.” But Xerox adjusted its strategy.
“Xerox recognized that the independent dealers, the ComDocs of the world, were closer to the street, closer to the customer, more effective, more efficient, had better billing processes and better service to their clients — all the things that we had done in building ComDoc,” Opitz says.
Simultaneously, the economy was cooling and ComDoc’s primary product supplier decided to sell direct to the customer. It was then that Xerox made its offer.
“Xerox put something in front of us and we knew it was our fiduciary responsibility to do the right thing for all of our shareholders,” Opitz says. “And we sincerely believed, given the circumstances in front of us, that making sure that our people who had been a part of this organization for many, many years were going to be secure. And that’s exactly what happened.”
ComDoc agreed to be acquired by Xerox, and the deal was finalized in February 2009.
It was a difficult decision to let go of the ESOP the company had worked so long to achieve, Opitz says, but the acquisition had a strong appeal.
“Our employees never had to worry about whether that stock price was going to decrease by 15 or 20 percent in one year, and how long it would take to recoup that drop,” he says.
Xerox was going to allow ComDoc to operate within the culture it had developed over the years, though it was under the new corporate ownership. The move, however, wasn’t without some turbulence.
“As we made the transition, I would say for the leadership group, there was angst involved because we had built succession plans moving forward for the future. Many of us on the leadership team had worked together for 20-plus years. We had been excited about what the future held for ComDoc,” he says.
For the most part, the company was able to retain its key people. Though there was some loss.
“I could probably count on one hand how many people ended up leaving ComDoc because of the transition,” Opitz says.
The hardest transition
While it was able to retain most employees as it transitioned from ESOP to corporate ownership, ComDoc was still facing the loss of its No. 1 product supplier, Ricoh, which, at the time represented about 80 percent of ComDoc’s business.
IKON Office Solutions, a multibillion-dollar company, and ComDoc’s biggest competitor bought Ricoh. Having lost its primary supplier, ComDoc got to work learning the product line of its new corporate owner, Xerox.
Technicians on the service side of ComDoc’s business were somewhat accustomed to servicing different products because there had been many iterations to the company’s product line, which foundationally was 3M, transitioning through Harris 3M, Lanier and Ricoh.
“So we had been used to selling and servicing different products. It was always at our speed, though. In this case, the race came to a quick halt in February 2009, and we could no longer sell Ricoh, so we immediately had to switch to the Xerox product line,” Opitz says. “That was the hardest transition, and I’m going to call it the learning phase — learning the product and then training all our service technicians in being able to service it.”
The task of servicing a brand new product line in a very short time was daunting. Coupled with the company’s sagging morale and the challenge was even more difficult. To get his company headed in the right direction, Opitz had to help his employees manage the problems individually and keep the lines of communication open.
“If you think about communication, it isn’t about all the times when things are going right, it’s also about finding out how people are feeling, what they’re thinking, being able to listen to them and help them understand and provide perspective,” Opitz says.
By having those conversations, he found that what was an issue to some people was irrelevant to others.
“But you’d never know unless you really stopped and asked the question,” Optiz says.
The next step was to reduce all the challenges the company faced into manageable tasks.
“You can’t allow it to become so overbearing that it consumes your thought process,” Opitz says. “We’ve always approached business that way — break it down into its simplest form and take these factors as they’re given to you. What are the pluses? What are the minuses? How do we sort through it? What are the strategies and tactics to push through it? And when you really break a task down, it sure becomes a lot easier to get after it.”
Learning to walk again
That philosophy was applied to training. Service technicians learned the product line at ComDoc’s service training center where they’d work on the product for three to five days to become proficient, and then follow up on their training in the field.
To train its sales force, the company utilized training webinars and developed matrixes of e-learning for each product.
“We would set matrixes up for each of our people with the products. They could do e-learning two hours a night from 5 to 7 p.m. So there was a lot of personal pride, there was a lot of time commitment by our people to get that accomplished.
“We had more than 200 technicians who had fully trained on certain products. I believe the first year we had more than 12,000 hours of training,” he says, which includes both the sales and service sides of the business.
“We had a big vision of what to do and we continued to break that down into small tasks, small focus areas, and we just made our mind up that we weren’t going to let external things influence our company,” Opitz says.
Though it’s a simple philosophy, it was still a very difficult transition. The year the company was acquired was flat compared to the prior one. But once the company started to understand Xerox and its product line, it started to expand, seeing its managed print business grow exponentially during that period.
ComDoc increased its revenues and profitability every year between 2009 and 2013. It grew from $125 million to $155 million in revenue during that time frame and its employee count has increased to 675 employees. ComDoc’s customer base continued to renew and grow year-over-year.
“And every year we just continue to challenge ourselves to continue to get bigger and stronger,” Opitz says.
A tough lesson
Once a company suddenly has the odds stacked against it, there are some simple steps to take to address the issue.
“Communicate early and often with your people,” Opitz says. “Make sure you have shared buy-in for what you’re trying to accomplish, and help people break down their challenges or tasks into small pieces and work hard at getting a resolution to them.
“Don’t let people become overwhelmed with what they believe might happen or what they believe might change.”
Opitz says he just tried to do the best he could every day and tried not to make the circumstances out to be an alarming issue so his colleagues didn’t become overly concerned.
“In my mind, at that time, ComDoc had more than 20,000 customers that had been great, loyal, ComDoc customers who knew our people personally,” Opitz says. “And if we were doing all the right things by our customers while in a product change, I just truly believed in my heart of hearts, that our people would find a way to work through it.” ●
- Communicate early and often.
- Breakdown challenges into manageable tasks.
- Do what’s best for the company and its employees no matter how difficult.
The Gordy Opitz File:
Name: Gordy Opitz
Title: President and CEO
Company: ComDoc Inc.
Birthplace: Meadville, Pa.
Education: He received a bachelor of arts in education from Westminster College.
What did you learn from your days as the assistant general manager for the Atlanta Braves AA team? It’s very simple. Be willing to do anything. I was a shortstop and third baseman for the Westminster Titans. The front offices for minor league teams 30 years ago were small, so, when I say be willing to do anything, I mean there were some days where we did all the marketing for the club. There were days we helped sell tickets. There were days that if it rained we helped cover the field. It was a ton of fun. I realized it doesn’t matter what your title is. If the job needs to be done, you’ve got to figure out a way to go accomplish it.
Who has done the most to inform your perspective on business? Retired ComDoc Chairman Riley Lochridge and former ComDoc President and CEO Larry Frank. They taught us the business, and all the things I’ve talked about before — let’s make sure we continue to do things the right way, make sure we continue to attract and retain the right people in the organization. And ask, ‘Are we building a culture that is going to allow us to grow and sustain our growth?’
How would you like to be remembered at ComDoc after you retire? I’d like to be remembered as somebody who helped make a difference and helped make ComDoc become a better place; somebody who helped fulfill our vision of being a great place to work and a great place to be a customer.
Learn more about ComDoc at:
Richard Carpenter, professional surveyor and president of Accurate Technologies Inc., can’t understand why 3-D laser scanner technology, used in industrial surveying to create accurate 3-D models of objects or environments, isn’t more prevalent in the U.S. — but he has a few ideas.
“We don’t jump on new technology,” he says. “Some of the people who come out of college in mechanical engineering are lucky if they even took one 3-D CAD class. Some of the architects coming out of school haven’t had a full semester of 3-D CAD. So we’re a little bit slow to get on this, but it’s an incredible technology.”
Carpenter should know. He has been running his own industrial surveying business since 1987, having worked in The Timken Co.’s steel mill engineering facility for 10 years, where he learned the mechanical aspects of surveying.
“Years ago, most industrial firms had their own engineering departments and they provided most of their own services. They really didn’t go to outside people,” he says. When Timken, and other industrial companies, reduced staff in their engineering departments, the mechanical surveying that had once been provided in-house wasn’t available. “It went from a market where 90 percent of the work was done in-house to probably 90 percent of the work now is subcontracted.”
That’s when Carpenter started getting calls to do mechanical surveying work.
“I started getting enough part-time work that within a few months I was busy full time,” Carpenter says.
Finding a niche
When Accurate Technologies first got started it mainly helped install equipment to achieve the higher accuracies that the industrial firms were demanding. The company would work with mechanical equipment installers to put in mill equipment. The contractor would get the equipment within 1/16 of an inch, and then call Accurate Technologies to get the final alignment.
“When you’re dealing with moving parts, heavy equipment and high horsepower motors and gearboxes, misalignment creates problems,” Carpenter says. Misalignment could damage product as it comes off the machines, which means a company could be scrapping product because the equipment is not aligned right.
“And that’s the No. 1 reason people call us,” Carpenter says. “For us a good project is when someone says they’re scrapping 6 to 7 percent of what they run, and we get done and they’re scrapping 0.5 percent or 1 percent. That happens to us quite often with steel mill equipment or any industrial equipment.”
Matching people with technology
In order for the company to grow with the work that was available, it had to train employees to do industrial surveying from within because people with those skills weren’t prevalent in the market.
Land surveyors, those who have the closest skills to industrial, are taught to make ground measurements that are accurate to 1/8 of an inch, far from the 1/1,000 of an inch accuracy needed in industrial work. In addition, much of the equipment and processes used by land surveyors isn’t suited for industrial survey work. Now, with laser trackers and scanners, it’s especially true — the equipment is very different.
The 3-D laser trackers employed by industrial surveyors use laser systems to “draw” surfaces it comes in contact with. It provides 3-D coordinates that translate to 3-D positions in space.
In addition to the tracker, industrial surveyors also have 3-D laser scanners. The equipment can shoot 900,000 points per second for every 1/16 or 1/8 of an inch, and each point has an XYZ position. This results in a point cloud — billions of points interpreted by software that analyzes common features in the points. These commonalities could translate into cylinders, flat surfaces, piping, etc. The result is a 3-D drawing of all the elements of the space being shot.
“Jobs that used to take me one month I’m doing in two days with this scanner, and giving 100 times the information I had before, if not 1,000 times,” Carpenter says.
In the past it took a high-precision surveyor to do industrial work because everything was done with optics. Optics means using traditional instruments — a surveyor’s transit — and relying on a surveyor’s ability to read a scale to 1/64 of an inch.
“But maintaining accuracy with the optics is very difficult,” he says. “When you deal with optics you have to have two instruments, you have to have a transit to shoot a straight line and an optical level to get the elevations. So whenever you’re using optics you’re really not in a 3-D world.
“Probably 90 percent of industrial work is still done with optics. But the laser tracker can far exceed the work you can do with optics. The speed and the ability to 3-D document what you’re shooting versus handwriting things in field books is quite a difference.”
Seeing into the future
The largely digital technology is allowing Accurate Technologies to undertake projects for engineering firms in Canada and Germany. One of its projects, a steel mill, was scanned entirely so it can be designed on three different continents.
“They’re going to have different engineering people all over the world looking at that information and designing it in unison,” says Carpenter.
“I know this is the future,” he says. However, he says not enough people are being trained properly to enter the field.
“We’re going to be in a 3-D CAD world,” Carpenter says. In the bigger picture, he expects the floor plan of a building and its utilities will get interpreted through geographic information systems, or active 3-D models.
Architects and engineers of the future may walk though a 3-D model of a building and see it in its entirety as it exists. It also allows the user to attach databases, drawings and spreadsheets so he or she can access any information about a facility.
“And there’s already software out there that makes that happen in 3-D. If you had a 3-D model of your facility you could have the ability to look up, down and around and see everything in a model. I think we’re really going to get to that 3-D world fast.” ●