The Supreme Court ruled in June that health care reform is constitutional and upheld the Patient Protection Affordable Care Act (PPACA) in its entirety. As a result, health care reform will continue to be implemented as planned and provisions that are already in effect will continue, says Jessica Galardini, president and COO of JRG Advisors, the management company of ChamberChoice.

“The individual mandate requiring individuals to purchase health insurance or pay a penalty is the major component of the law. Because the court upheld that mandate, it did not need to decide whether other provisions of the law are constitutional,” says Galardini.

Smart Business spoke with Galardini about the impact of the PPACA on employers and the benefits that they offer to employees.

What does this ruling mean for employers?

All aspects of the law already implemented will remain in effect. These include the ability for adult children to remain on their parents’ coverage until age 26, no exclusions for children with pre-existing conditions and certain preventive services without cost sharing for nongrandfathered plans. A grandfathered plan is one that has been in existence continuously since before the act was passed and is not required to comply with select provisions of PPACA as long as it meets certain other requirements.

Provisions of the law not yet in effect will be implemented as planned. Although much attention has been paid to the big changes slated for 2014, there are numerous smaller requirements that employers need to be aware of and prepare for now.

For example, insurers have already started issuing rebates to employers with fully insured health plans who qualify due to medical loss ratio (MLR) rules. The MLR rules require insurance companies to spend a certain percentage of premium dollars on medical care and health care quality improvement rather than on administrative costs.

Rebates can be issued in the form of a premium credit, lump sum payment or premium ‘holiday’ during which premium is not required. Any portion of a rebate that is a plan asset must be used for the exclusive benefit of the plan’s participants and beneficiaries, for example, reducing participants’ premium payments.

What other changes do employers need to be aware of regarding benefits?

Effective September 23 of this year, insurers must provide a summary of benefits and coverage (SBC) to participants and beneficiaries. The SBC is to be a concise document with stringent criteria as to the number of pages and print font that provides information about the health benefits in a simple and easy-to-understand format. The SBC will need to be distributed to employees during open enrollment, with any material modifications to the plan throughout the year being communicated at least 60 days in advance.

Additionally, beginning with the 2012 tax year, employers that issue 250 or more W-2 forms must report the aggregate cost of employer-sponsored group health insurance on employees’ W-2 Forms. The cost must be reported beginning with the 2012 W-2 Forms, which are due in January 2013.

What changes are looming for 2013?

Changes scheduled for 2013 include limiting pretax contributions toward flexible spending accounts (FSAs) to $2,500. This limit will be indexed for cost-of-living adjustments for 2014 and later years.

Employers will also be required to provide all employees with written notice about health insurance exchanges and the consequences if an employee decides to forego employer-sponsored coverage and purchase a qualified health plan through an exchange.

Finally, employers will be required to withhold an additional 0.9 percent Medicare tax on an employee’s wages in excess of $200,000, or $250,000 for married couples filing jointly.

What is happening in 2014?

By all accounts, 2014 will be the most significant year. Annual dollar limits for health services will be eliminated, as will medical underwriting and exclusions for pre-existing conditions. Additionally, insurance exchanges will be enacted for individuals and small employers with fewer than 50 employees. This is a key component of health care reform law. Individuals will be required to have health insurance or pay a tax for not having it.

Businesses with 50 or more full-time employees must provide health insurance for employees or pay a tax for not doing so.   And for states that choose not to set up their own exchanges, the federal government will do it for them. To date, Pennsylvania has not passed legislation authorizing its own exchange.

Although the Supreme Court upheld the health care reform law, the future remains somewhat uncertain. Opponents will continue to challenge the law and debate its constitutionality through the November 2012 elections, and the strength of the economy and the response of private insurance companies with innovative products and funding solutions will also impact private and public options for individuals and employers.

What is certain is that health care benefits, funding and delivery are changing.  Employer and employee decisions are far more complex and require educated consideration.  Work with your advisor to learn more about your options and to understand exactly what is required of your company to remain compliant with the law.

Jessica Galardini is president and COO of JRG Advisors, the management arm of ChamberChoice. Reach her at (412) 456-7231 or

Insights Employee Benefits is brought to you by ChamberChoice

Published in Pittsburgh

Dan Neyer entered the period of the past three years the same as anyone else running a business: uncertain what to expect moving forward. As president and CEO of Neyer Properties Inc., a commercial real estate company, he saw that his industry was greatly affected due to the economic downturn. While he didn’t have any secret weapons or information others didn’t, he did have something that kept his company pushing onward — a positive approach to a bad situation.

Rather than hunker down or look elsewhere for business, Neyer gathered his employees to explain the situation the economy had created and how the company needed to operate. If they could stick to the plan, the company would come out the other side ahead.

“One of the most important things is you have to look every employee in the eye and be very clear and don’t sugarcoat the facts,” Neyer says. “Just tell them the way it is. Tell them the challenges that will lie ahead and tell them what you’re planning to do.”

Neyer took a strategic approach to business during the recession buying key properties at attractive values and keeping his employees informed.

“I said, ‘Our existing legacy properties are going to go down in value. I know that, the market knows that, and that’s just reality. We’re going to position ourselves to buy undervalued assets, and that’s what we’re going to do to offset the decline in existing values of our existing portfolio,’” Neyer says. “That’s the mantra we have, aggressively pursuing real estate assets.”

Here’s how Neyer used to a dire business environment to create opportunities for growth.

Embrace change

When the downturn hit home for Neyer Properties no one tried to pretend as if the economy wasn’t going to have an effect on business. Neyer told his employees what they could expect to see and what the plan was for moving forward. Doing that proved to be very helpful.

“So many companies like to hide bad things or hide struggles and not inform the employees, and the employees know; they feel it and people are thinking what’s going to happen to me and what are we going to do,” Neyer says. “Just be honest and straight forward. It’s tough in our industry when everyone says, ‘Everything is bad, everything is miserable and the banks are going down.’ It’s hard to stay positive when you’re surrounded.”

Getting through a tough business environment relies heavily on being able to trust your employees and use small victories to build a positive outlook.

“We have a great nucleus of people who believe in what we’re doing, and seeing the results breeds the optimism so you can fight the negativity that may be around,” he says. “It starts with the people. I can’t do this alone, nor do I want to do this alone.”

To overcome uncertain times and difficult business obstacles, you have to have strong employees who believe in the direction you’re taking the company.

“It’s always best to surround yourself with the people who will help get you to that next level,” he says. “If that means changing people, you need to change people and don’t be afraid to do that because what’s best for the organization is always best for the organization. You have to invest in existing people, but if existing people are not functioning properly then you have to change.”

In both good times and bad, the key to remaining successful is being able to anticipate change to keep your business moving in the right direction.

“People say, ‘We embrace change,’” Neyer says. “Well, yeah, you’ve got to embrace change, but you’ve got to pursue change. Embrace means you’re accepting what is happening to you. Pursuing is much stronger. You’ve got to change before you have to change. You have to see around the corners before you come up to the corners and not react. If you’re waiting to react, you’re too late.”

Develop a plan

Instead of waiting for the economy to tell him where to steer his business, Neyer developed a strategy to take advantage of the business environment and real estate market. He focused on keeping things simple.

“I wanted to preserve, protect and position,” Neyer says. “‘Preserving’ was preserving our cash, preserving our existing tenants and the loans that we had. We had to protect our existing assets from too much decline. We’re going to invest in our assets so it doesn’t look like the properties are declining, and we’re going to protect our cash amount and hopefully have that grow with proper cash management.

“Then positioning, it’s really positioning with lenders, sellers, borrowers, banks and other organizations that take the properties back. So we’re going to position ourselves to work with those organizations to be able to acquire the properties. Was it a real long and complex plan? No, but when difficulties arise, you need to focus more and keep it simple.”

To form a plan for the business, Neyer first had to think about what he would want to accomplish if there were no hindering circumstances and then factor in any obstacles.

“You have to step back from your own situation and say to yourself and your team, ‘If there were no limitations, what would we be doing? If finances and personnel were not limited, what would you be doing?’” Neyer says.

“In our case we would be buying as many high-quality assets as we possibly could get our arms on. So step back and initially don’t burden yourself with the current restrictions or hurdles that the organization has. Come up with an approach that is in the best interest without the limitations.

“Then figure out how to pursue the desired results while you work on the restrictions. Don’t start with the restrictions because if you start with the obstacles and the hurdles and the difficulties, you’ll never get to the shining light that’s out there.”

In Neyer’s case the company had a premise that it needed to acquire $40 million to $50 million a year in real estate assets. The company had a plan, and it refused to waiver from it.

“Our MO for our equity is pretty clear: we’re going to pursue and purchase properties in the $1 million to $12 million range within a 100-mile radius at good locations, good accessibility and average about 50 percent of replacement value,” he says. “We stuck with that focus. We had opportunities to look at things outside that geographic range, but we stuck to our homegrown, homespun approach and maximized the potential within.”

In order for a plan to have the best results possible, communication is vitally important to remain aligned with goals.

“We went through our three main areas of focus: preserve, protect and position,” he says. “Then on a monthly basis we would bring everybody in and it would be like a report card — this is what we said, this is what we did, this is what we’re doing, this is what is working or not working, this is how we’re adjusting, and this is how we’re moving forward.

“You have to bring all those elements and people are generally empowered if they know they’re making a difference. It wasn’t easy at times because you always have difficulties, but if you align everybody’s interests you can move mountains.”

Stick to what you know

In difficult times, it’s very easy to stray from your intended plans and pursue different options. The key to success is to find the one path you want to go down and pursue only that path.

“There’s always more opportunities out there than one can ever accomplish,” Neyer says. “When we’re in uncertain times, sticking to your past success and narrowing your focus so you’re pinpoint laser-on is even more important. A lot of times companies that are suffering, whether it’s big or small, they say, ‘If this isn’t working, let’s try something else.’

“Whether that’s a different geographic market or a different product line or whatever the case is, they forget what got them to where they were in the first place and they try something else. I’ve seen too many companies try to do everything for all people and it just never works.”

Because Neyer Properties sticks to its strengths and is prepared to function in any business environment, it has seen its fastest growth periods during recessions.

“You have to be poised and positioned to excel when times are tough,” Neyer says. “You have to be careful when times are prolific that your tools are not sharpened and volume just comes and you don’t have to keep to your principles. You have to be consistent in the good times and the bad times. You have to hopefully excel in the tough times and when things are robust, you put the governor on and you’re careful not to grow too quick.”

Any tough times equals great opportunities and great results. When you make a decision you’ve got to go for it. You can’t be indecisive.

“We are one of the few Ohio commercial real estate companies that have been able to capitalize during the recession,” he says. “Our employment has been constant, but we have grown, and our real estate portfolio is now more than double the size that it was as of the end of 2008.

“Most real estate development companies cannot say that they’ve doubled the size of their business in the last three years. A lot of that is attributed to our conservative, strategic and long-term planning and also being strong stewards of proper financial measures and taking advantage of the opportunities that are out there.”

Over the past few years, Neyer made sure his company never waited for opportunities to arise. His team went out and found properties that best fit the company’s objectives.

“If you buy key properties at attractive values and are able to obtain financing with providing the right mix of equity, there is no better time to purchase real estate,” he says.

“I’ve looked at investing in other asset allocations other than real estate since I’m so heavily invested in real estate. I just have not found any other asset allocation that has the upside that real estate does.”

Since 2008 Neyer Properties real estate has doubled in portfolio size and its ROI has more than doubled in the last three years giving the company 2011 revenue of $55 million. This success is due to both increasing the occupancy level on existing legacy properties and purchasing assets in an aggressive mode.

“Fortunately, we’ve been able to acquire where most people are falling back because they have no choice,” he says. “They are too highly leveraged, they don’t have cash and they’re stuck. Our usual approach is buying things for 50 percent of replacement value and buying properties highly accessible and highly visible. If you have key properties at key locations and your base is much lower than your competition, even though the vacancy might be higher than you want, you win.”

How to Reach: Neyer Properties, (513) 563-7555 or


-          Be honest with your employees.

-          Develop a strategic plan to achieve your goals.

-          Once you know your direction, stick to it.

The Neyer File

Dan Neyer

President and CEO

Neyer Properties Inc.

Born: Cincinnati

Education: Attended Miami University and received a degree in finance and accounting

What was your first job and what did you learn from that experience?

I worked as a bus boy at Perkins Restaurant in the early mornings, which made me realize I had to get up early and as soon as I arrived, I had to work hard. At times I had to work at breakneck speed because back in the ’70s. Perkins was the place to go.

What is the best business advice you have received?

Follow your passion and realize that if you work hard, good things will happen. People always say, ‘You’ve been really lucky.’ Well, I’ve been really fortunate, and I’ve had some good luck, but good planning almost always gives good results. You can call that whatever you want, but planning equals results, equals opportunities, equals luck. Stick with what you believe. Don’t deny your gut feeling.

Whom do you admire in business?

One is my father, who taught me the importance of detail. I also appreciate the creativity of somebody like a Steve Jobs. He created history by following what he believed was necessary even though he may have been the only one on earth that believed it. He made people believe the impossible.

What was the toughest thing about the recession for your company?

It was the uncertainty from the lending community. They were in a state of total chaos, and what were they going to do? They could have just pulled the plug (and some did) and found reasons to basically cause the total demise of commercial real estate because if you eliminate credit, you eliminate all value. Fortunately, for the most part, they kept their head on. They could have effectively wiped out the economy of the U.S.

What are you looking forward to in the future of real estate?

What I see on the horizon is great, valuable, long-term enduring real estate assets growing over the future. With the boom of natural gas in this country, I think you’re going to see a tremendous influx of investment in the U.S. because this place is still the biggest buying power. The cost to manufacture now is the same as it is in China because of their increasing inflation and cost to ship goods. So I see a tremendous upswing in the future of the U.S. in the next number of decades.

Published in Cincinnati

Productivity losses related to personal and family health problems cost U.S. employers $1,685 per employee per year and $225.8 billion annually, according to the U.S. Centers for Disease Control and Prevention. So what is creating these problems with health care claims and insurance, which ultimately lead to poor health and lower productivity?

“It is the delivery system, administration and billing,” says Danone Simpson, founder and CEO at Montage Insurance Solutions. “I have no doubt about this, as our firm battles away at claims that take hours, weeks, months and sometimes years to sort through.”

Smart Business spoke with Simpson about what she sees as the problems with health care, how carriers are coping and what employers can do about it.

What is the problem with health care today?

From wait times for approvals to multiple bills being sent to carriers, carriers are denying needed PET scans, MRIs and other tests so doctors can determine care — partially because of what they deem as ‘abuse’ from doctors who overtreat or analyze treatment. Approvals can sometimes take two months when patients need major surgery to remove cancer.

The real issue with health care is not only who is paying what premiums, fines or co-payments, it’s more about the overall cost of health care and billing complications.  Doctors desperate to earn more may overbill, even though they know the contracted amount they agreed to. However, that may be a different amount with each carrier, which makes the administrator’s job a nightmare.

How will private exchanges and mandated health care impact the system?

It’s likely that health care insurance exchanges won’t necessarily lead to better health care pricing. In addition, private health insurance carriers will be forced to offer coverage on the exchanges and compete with themselves.

Surveys prove that employers are angry about being forced to pay for coverage, even if they already cover 100 percent. They expect employees to ask for more coverage of dependents, and some employers who stretch to pay a portion of dependent coverage are feeling backed into a corner. It’s not required to cover dependents, but most plans today do.

What are carriers doing to help with costs?

With expensive fines that can account for more than the actual premium amounts, carriers are helping form Accountable Care Organizations (ACOs) to hold doctors and hospitals responsible. These organizations use incentives to cause providers to work together when treating a patient across care settings such as doctors’ offices, hospitals and long-term care facilities, according to For example, the Medicare Shared Savings Program rewards ACOs that slow health care cost increases while meeting performance standards on quality of care and putting patients first. Patient and provider participation in an ACO is purely voluntary.

What can employers do to lower health insurance costs?

Offering a wellness program is one way to truly impact the heart of the problem of the country’s health care costs. An unhealthy work force is a major issue for businesses large and small. For example, 20 million Americans — 7 percent of the population — have diabetes and 30 percent of this population remains undiagnosed, according to Katz. Moreover, a recent Newsweek article states that two-thirds of adults and one-third of children and adolescents are overweight or obese.

The law might require an employer to buy an insurance policy for employees, but it causes anger and rebellion on the part of many employers. The more proactive approach is to dive down into the parts of the reform that assist in either lowering premium costs or aiding in the retention and well being of your employees.

There are a number of tax credits available to help you with this proactive approach, if they are available to companies of your size.

  • The Patient Protection and Affordable Care Act includes a variety of provisions aimed at encouraging wellness and disease prevention. As reports, effective Jan. 1, the ‘law will permit rewards or penalties such as premium discounts of up to 30 percent of the cost or coverage. Existing wellness regulations permit incentives of up to 20 percent of the total premium, provided that the program meets certain conditions. The law increases the amount of the potential reward/penalty to 30 percent of the premium.’ There is also the possibility of an even higher amount after national studies are performed.
  • Another option is the Small Employer Health Insurance Tax Credit. The U.S. GAO states, ‘Fewer small employers claimed the Small Employer Health Insurance tax credit in tax year 2010 than were estimated to be eligible.’  Calculators are available on the National Federation of Independent Business, and many other websites.

Employers also can ask their carriers about the Medical Loss Ratio reimbursement, which was just issued for the first time.

Take care to avoid fines and earn tax credits on wellness incentives. Many employers are starting to offer a carrot approach to motivate employees, and then a stick with some sort of penalty for not participating to truly see employees take advantage of a wellness-based plan.

Danone Simpson is the founder and CEO at Montage Insurance Solutions. Reach her at (818) 676-0044 or

Insights Business Insurance brought to you by Montage Insurance Solutions

Published in Los Angeles


Employers have a sacred, fiduciary duty to treat benefit plans as if they were their own nest eggs. Therefore, such plans are heavily governed by the Department of Labor (DOL) with numerous expectations, communication needs and filing rules.

“The dilemma today is that so many plans are underfunded,” says Bertha Minnihan, national leader, Employee Benefit Plan Services, at Moss Adams. “People have worked hard for their retirement, and if a sponsor should screw that up, they have nothing to fall back on.”

An aging population that needs its money to go further compounds the problem. When benefits aren’t administered properly, society struggles to care for the older generation, she says, and the younger generation suffers when older workers stay on the job longer.

Smart Business spoke with Minnihan about how to properly administer your benefit plan to help employees and how to avoid common regulation pitfalls.

What is the typical reporting structure for employee benefit plans?

There are several disclosures and reporting that are required to go to the participants, as they are the first consideration, and all entities are working to ensure that plans are administered properly for them. Additionally, plans must file a tax return annually to the DOL and the IRS, and those meeting additional requirements must be externally audited, as well. The Pension Benefit Guarantee Corp. also monitors benefit plans that have gone defunct or become underfunded by a certain percentage. The system is quite complex.

Who are the service providers in this space?

Internally, there may be the company sponsoring the plan and a committee delegated to oversee the day-to-day operations, as well as HR and payroll. Externally, benefit plans have investment custodians holding the funds and investing them at the participants’ direction and record keepers tracking plan activity. Record keepers can be a separate entity, or they can be an arm of the investment custodian. Other players include auditors, plan attorneys, actuaries for defined benefit plans, investment advisers and trustees.

What DOL hot button areas do sponsors need to consider when administering benefit plans?


One of the more common pitfalls is the timeliness of deposits into the trust. The DOL wants employee deferrals put into participant accounts quickly because employees deserve to start earning. It’s problematic when companies are careless or feel payroll taxes and other items are more important so they withhold withholdings and play cash flow games.

Compensation is another challenging area, especially when different types of bonuses are paid. The DOL’s hot button is whether the deferrals are being calculated on the correct costs and whether the right components are eligible. If you are missing income components and deferrals are understated, your company could be offering an understated match.

Then, if the employee is shorted, the employer has to make up the entire shortfall, which often surprises people. Some Fortune 500 and 1,000 companies in Silicon Valley have miscalculated compensation and now owe their plans millions of dollars from deferrals, earnings and unfunded matches.

The DOL is also very concerned with educating employees, whatever their demographic. As a business owner, you need to make an effort to get your employees to participate and to maximize their retirement savings.

What are some best practices for plan administrators?

Here are some best practices that could help mitigate risks, concerns and challenges.

  • Appoint an oversight governing committee. If your board does not delegate, it is automatically the fiduciary, and the board is often not up to speed on the plan, HR, payroll and/or the Employee Retirement Income Securities Act (ERISA), the law governing benefit plans. Additionally, in private companies, a third-party trustee who is an internal officer is also at fiduciary risk, and a class-action suit could be brought against both the board and the trustee at a risk of personal liability.
  • Have your oversight committee be timely with sending funds to the trust.
  • Review your census data regularly and ensure databases are accurate. Changes, such as a termination date, reporting someone’s death or a wrong age need to be communicated to different departments.
  • Ensure your personnel understand how the plan works. For example, if you hire a new payroll person, make sure that he or she has read and understood the summary plan description.
  • Benchmark your fees and look at them regularly. With new federal disclosures, there is transparency by law, so pay attention and ask questions.

How should merger and acquisition groups approach benefit plans?

Whenever companies — small or large — fold or change ownership, a number of items can be missed, so keep this in the back of your mind as you go through the process. Have an ERISA expert advise you early on, as this is not just a matter of merging benefits. The acquired company could have a 401(k) plan that needs to be terminated, a defined benefit plan that is unfunded and frozen, or a deficient benefit plan that must be cleaned up before it can taint your plan on contact. M&A committees should have checklists to ensure employees do not lose their benefits and that the company is still protected and reporting in a timely manner.

How are governing entities dealing with work force globalization in this area?

Globalization is affecting benefits plans without businesses realizing they are possibly being sloppy. If you have U.S. employees working abroad or foreigners coming to your company to work, you need to consider how this will affect benefits. How is your plan written? Are employees still accruing benefits in a timely manner? What does your plan include or exclude, and is that what you intended to do? There is a lot of interest on the subject, and the IRS is working with other governments to ensure that documents are in order, that they understand what the U.S. is doing and that they know what to tell their citizens who come here.

Bertha Minnihan is the national leader, Employee Benefit Plan Services, at Moss Adams. Reach her at  (408) 916-0585 or

Insights Accounting is brought to you by Moss Adams.

Published in Northern California

Employee productivity is important to any business’ success, and if an employee is too overwhelmed by personal or behavior problems to perform at his or her highest level, the company’s productivity will suffer as a result.

To address those issues, many employers are turning to Employee Assistance Programs (EAPs). An EAP can help identify issues facing troubled employees and direct employees to resources such as short-term counseling, referrals to specialized professionals or organizations, and follow-up service to help them address those issues, says Ron Carmassi, a sales executive with JRG Advisors, the management arm of ChamberChoice.

“EAPs offer a safe environment where an employee can discuss problems with a counselor who can make a confidential and professional assessment and provide referral to a mental health professional if necessary,” says Carmassi.

Smart Business spoke with Carmassi about EAPs and how they can assist your employees, improving both the lives of your workers and the productivity of your business

What are EAPs designed to accomplish?

First created many years ago in response to businesses’ concerns about the impact of employee alcohol and drug abuse on bottom-line productivity, employee assistance programs are now designed to deal with a much wider and more complex range of issues that are confronting today’s work force. Modern EAPs are designed to help workers with issues including family and/or marriage counseling, stress, depression, financial difficulties, crisis planning, illness, pre-retirement planning and other emotional, personal and wellness needs.

The expansion in the scope of EAP counseling is often attributed to the change in our social fabric. Double wage-earning households, an increase in the number of single parent households, economic crises, changing and more demanding career patterns, and technological advances have created new and different types of stresses, which affect the health and productivity of many employees.

Individuals experiencing a personal or family crisis and who are under chronic stress often have nowhere to turn for advice and assistance other than the EAP that is offered by their employer.

What is the benefit to employers that offer EAPs?

Many employers realize a direct link between employee well being and employee productivity.  The difference in value and productivity between happy and unhappy employees can be profound, as personal and work-related problems can manifest themselves in poor job performance, adversely impacting the company’s overall productivity.

Employers often perceive that the biggest advantage of an EAP is the positive impact it can have on employee productivity, but there are other benefits as well. For example, businesses offering EAPs often see a reduction in absenteeism, an increase in morale, fewer work-related accidents, a reduction in incidents resulting from substance abuse and an overall reduction in medical costs, resulting in a significant savings for the company.

In addition, employers that include an EAP as part of their benefits package are often viewed as more ‘employee-supportive’ than competitors that do not offer this type of program. That, in turn, makes the EAP a tool for both employee attraction and retention, potentially resulting in lower turnover.

Another advantage of the EAP is that it frees up the company and its personnel to focus on operations, rather than devoting work time to issues that are not directly related to productivity, deadlines and other business activities that result in growth and added revenue.

What should an employer consider when choosing an EAP?

The characteristics of EAP programs vary, so it is important to compare programs to understand exactly what you are getting before you sign on. In addition to cost structure, other factors to consider before purchasing an EAP include the qualifications of the staff that will provide counseling.

Staff should be professionally licensed with established relationships with local and/or national health groups and they should also be engaged in continuing education initiatives so that they remain current. Be sure to inquire about the extent of training services because EAP training programs vary in scope and subject matter.

Convenience of services and responsiveness of staff are also important factors to consider, and business owners should seek out EAP providers with facilities in the same geographic region as the company so that employees can visit before, during or after work. The EAP should also include a toll-free telephone line that is operational around the clock

What would you say to employers who say they can’t afford to sponsor yet another benefit?

While employers understand the value of an EAP, many are concerned about the cost of implementing and maintaining this type of program, particularly with increasing costs for other insurance and employee benefit programs. And while it is true that the employer generally bears the cost of the EAP, many employers are surprised to learn they can institute an EAP at a relatively small expense to the company, often with monthly fees ranging from just $2 to $6 per employee.

More often than not, once employers become involved in an EAP, they come to believe that the return on that investment is well worth the cost.

Insights Employee Benefits is brought to you by JRG Advisors, the management arm of ChamberChoice.

Published in Pittsburgh

It is a buyers’ market right now for real estate, and the same holds true for middle market companies.

“At most banks, the middle market portfolio is the heart of what drives the commercial banking earnings,” says Steve Cobain, senior vice president and middle market manager at First Commonwealth Bank.

As part of such a crucial economic sector, middle market businesses have the power to choose a bank that suits their needs.

“Some banks differentiate by being very easy to deal with, making their credit terms very loose and their pricing extremely inexpensive,” Cobain says. “Other banks accentuate the fact that they are a full-service provider, are very consultative, work with clients, understand the business from the owner’s perspective and are going to be a very dependable financial partner for the client, rather than just compete on price alone.”

Smart Business spoke with Cobain about the general market conditions in middle market lending and how businesses can take full advantage of them.

What is the definition of a middle market company?

There are multiple definitions, but the most prevalent is that a middle market company has sales that range in annual revenue from $20 million to $500 million. They are usually privately owned — a large number of them are family owned — and have rapid growth. There are a high number of companies that fit that category; in Pennsylvania, there are probably 6,000 companies fitting that definition.

What are the typical financial needs of middle market companies?

The middle market is one of the more complicated sectors, where companies need a full array of banking products. There’s a need for credit, treasury management services and other products, such as manufacturing companies that need trade letters of credit for both the sale of their goods and the import of raw materials.

There is no segment of the economy that the middle market doesn’t touch, but there are different underwriting standards, credit structures and treasury management products depending upon the business. For example, a service business might not have many assets for collateral, so banks take a harder look at the cash flow that a company can generate, while a manufacturing company uses inventory, receivables, equipment and real estate to secure credit.

In addition, there are a number of factors that come into play for middle market companies trying to secure a loan agreement, such as whether the owner needs to personally guarantee the company’s debt, the number of times a company has to cover its debt service, how much leverage the bank will allow a company and the types of advance rates available for lines of credit based upon inventories and receivables

What is the current situation for middle market lending, and what does this mean for businesses?

From a small community bank all the way through to the largest banks in the country, there are dedicated business practices for the middle market. From a bank’s perspective, it is one of the most profitable of the corporate sectors. Because businesses are reliant on their primary bank for the bulk of their services, there are a lot of cross-sell opportunities, and middle market companies are typically loyal.

On the whole, there’s still a perception that banks are not actively lending money, but that’s not the case for the middle market. If you’re a strong middle market company that is profitable and financially stable, you are going to find that virtually every bank in your geographic area will be trying to attract you as a client. Other middle market companies might be going through working capital challenges because growth is rapid and you haven’t fully demonstrated your profitability yet, so you should find a bank that can be a true financial partner.

What should middle market companies look for in a banking partner?

Look for a bank that will invest the time and effort to understand your business and support you through your working capital cycle. Your banker needs to be able to see your business from your perspective, as an owner. Many middle market companies are privately held with little regulation, so look for a bank that can help you find a balance between distributing excess capital back to yourself and keeping the company’s balance sheet strong and stable for the foreseeable future.

Middle market employers should expect a high level of service from their banking partner. Typically, the bank designs a portfolio of products, assigns a relationship officer who meets with the company at least four or five times a year and makes sure the company is aware of all the products available. In addition, the employers themselves are put into a private banking group for personal banking needs.

How can businesses determine the right time to switch to a different middle market lender?

In the early stages of a middle market company, with sales of $20 million to $30 million, the business can be with a smaller community bank. However, as revenue grows, you might need a bank with a higher hold limit.

It’s important for a middle market employer to know how much credit any one bank can provide and work with banks to ensure there is enough financial backing to accommodate anticipated growth. Therefore, in a period of rapid growth, it might be necessary to change or add banks to your portfolio.

Also consider switching if you’re not getting some combination of a high level of service, a good understanding of the business, solid consultative advice, and fair and competitive pricing.

Insights Banking & Finance is brought to you by First Commonwealth Bank.

Published in Pittsburgh

The TV show, “Are You Smarter Than a Fifth Grader?” is fun because it highlights how much young students know that their parents have long forgotten or never knew.

But, measuring up to fifth-graders is equally difficult in other areas. For instance, how would most adults answer this question: “Are you as fit as a fifth-grader?”

“It’s likely that most adults don’t know how fit they are and they are probably less likely than fifth-graders to be able to find out,” says Dr. Michael Parkinson, senior medical director of Health and Productivity, for UPMC Health Plan. “Many employers do health risk assessments for their employees, but they do not realize that the absence of risk does not equal fitness.”

Smart Business spoke with Parkinson about how employers can better gauge and encourage fitness among their employees.

Why compare an employee’s fitness to that of a fifth-grader?

That is certainly an arbitrary standard, but what got me thinking about it was when my fifth-grade son came home with what was called a ‘Fitness Gram’ that showed how he scored in a number of physical tests designed to measure his fitness. What struck me most was how detailed the test was, most especially when you compare it to anything that could pass as its equivalent in the corporate world.

Employers have been measuring and promoting workplace wellness primarily through use of a health risk assessment that measures personal health behaviors and self-reported height and weight, or body mass index (BMI). Many employers add biometric screenings, which include blood pressure and lipid or blood fat levels, as well. And, of course, all employers are now required to pay for preventive care at no cost to their employees.

Are health risk assessments ineffective in measuring fitness?

They have a purpose, certainly, but they can be misleading. In health risk assessments, those whose scores indicate low risk are considered to be the most healthy. But what employers do not realize is that an absence of risk does not equal health. Absence of risk does not equal fitness. To be blunt, in the corporate world, the bar has been set too low on wellness.

How can the bar on fitness be raised?

One of the tests my fifth-grader had to take measured his aerobic capacity and is known as ‘VO2 Max.’ Aerobic testing is rarely, if ever, a part of any corporate wellness test for an adult, even though the information is vital.

Aerobic capacity shows the maximum capacity of an individual’s body to transport and use oxygen during incremental exercise. It is widely recognized as the test that best reflects the physical fitness of an individual.

It is also been shown to be the best single predictor of ‘all cause mortality,’ or how long we’ll live. Greater aerobic capacity has been associated with the ability to better perform both physical and mental work, clearly required in today’s demanding and competitive workplace.

Why should the fitness of employees matter to an employer?

Fitness tests generally assess muscle strength, endurance and flexibility, all of which are of great importance in the workplace. However, unlike elementary students, adults are rarely tested in these areas. Musculoskeletal injuries such as strains and sprains are due often to obesity, lack of core body strength and fitness.

Musculoskeletal injuries are a leading cause of lost workdays, as well as medical and disability costs. Back injuries, slips and stretching mishaps are common work-related incidents that employees face and that could be avoided with improved core body strength.

Is BMI an important measure of fitness?

Body mass index, or BMI, is a measurement test that is a common feature of most health risk assessments and it is used to determine whether an individual’s body weight differs from what is normal or desirable for a person of that height.

BMI is a measurement based on a formula that takes into account your height and weight in determining whether you have a healthy percentage of body fat. In general, BMI is an inexpensive and easy-to-perform method of screening for weight categories that have the potential to develop into health problems. But, again, it doesn’t indicate anything in terms of fitness levels and it doesn’t really say how healthy you are, just that you might be at risk for obesity.

How can employees raise their fitness levels?

Fifth-graders are often more fit than adults because, generally speaking, they are more active. In order to improve fitness, people need to participate in some kind of moderate aerobic activity for 30 minutes a day, five days a week. It does not matter if the 30 minutes is broken into three 10-minute segments.

What’s important is to try to get moving. Some exercise at any level of intensity is better than none as you start to build endurance.

It’s funny to think about comparing employee fitness levels to that of fifth-graders, but the message is serious. Any company that wants to take wellness to the next level should think about measuring fitness the way fifth-graders do, and, in the process, see how their employees measure up.

Insights Health Care is brought to you by UPMC Health Plan.

Published in Pittsburgh

The impact of intellectual property litigation can devastate a small business, as it is an extremely expensive and there are many steps involved in preparing a defense.

“The most important thing is to not ignore the complaint,” says Jude A. Fry, a partner with Fay Sharpe LLP. “When a complaint is delivered, you typically have 21 days to answer or to file a motion to dismiss. Don’t just sit on it for two weeks and then decide you have to act because there is a lot you need to do immediately,” she says.

Smart Business spoke with Fry about how to defend yourself against intellectual property infringement lawsuits both before and after a complaint has been filed.

When a suit is filed, how much time can pass before a company needs to take action and should you assert potential defenses?

Act immediately. Contact and retain legal counsel as soon as possible. Preferably, hire an attorney who specializes in patent, trademark or copyright law who can help you figure out the strength of the complaint and your potential defenses.

However, chances are that the attorney you hire will want a retainer. Ask him or her for an estimate of the attorney’s fees you may expend over the course of the litigation so that you’re aware of the potential costs of the suit. Talk with your general counsel to get a recommendation for someone who could handle the case.

It’s possible to assert a counterclaim against the other side to try to leverage a settlement. For example, the products of the entity filing the suit could be examined to determine if any infringe on your patents. You can also assert counterclaims that the other side's intellectual property is invalid or unenforceable, assuming you have a basis for making these claims. Once the other party is under the gun, it may not want to pursue the lawsuit.

The counterclaims that you assert are going to be related to the facts that are alleged against you in the complaint. There are times when the other side may try to file a motion to strike your counterclaims or remove them to a new litigation, but typically they are going to be part of your answer to the complaint.

Can claims contained in the complaint be covered by insurance?

Yes. Particularly if the claims include an advertising component, they could be covered under an ‘advertising injury’ provision of a comprehensive general liability insurance policy. While this type of provision is often part of a policy, it usually has exclusions.

Immediately contact your insurance agent and send him or her a copy of the complaint. The insurance company could agree to defend you in the suit and cover your attorney’s fees. However, it may retain counsel of its own choosing to defend you, and you might want to dispute their choice.

The insurance company may also pay the other side to settle the matter or pay any judgment against you, although this is often only the case when you’ve included previously such a clause in your policy. Either way, it’s worth the time to determine whether your insurance will cover any part of this.

Should documents and emails related to the complaint be destroyed?

Definitely not, because the court is likely going to discover you did so and will sanction you. As a result, you will either have to pay damages or the court could presume that you have done something wrong. Destroying evidence could be devastating to your case.

Contact your IT department and place a preservation hold on documents, including emails that may pertain to the litigation. Take affirmative steps to make sure all evidence is maintained and put steps in place to ensure that you identify and protect documents that, without intervention, could be destroyed.

Have an attorney speak with key people who may have knowledge or documents that pertain to the litigation and advise them of the necessity to preserve evidence.

How can a company assess its potential exposure in a lawsuit?

Work with your lawyer to see what types of damages could be available to the other side, such as monetary damages that could include an award of your profits, a reasonable royalty on sales of infringing products and actual damages to the other side. Also, estimate your sales of the product that has been accused and the profit that you made from those sales.

Statutory damages could also be available in copyright infringement cases. Statutory damages can be applied if fault is established without proof that the claimant has been damaged or that it lost sales to you. Damages claimed can range from $750 to a maximum of $150,000 if willful infringement can be proved.

Also, consider the business implications of an injunction enjoining the sale of the accused product. This could result in an injunction that prevents you from selling the product associated with the violation, which could mean the end of your business.

What steps can a company taketo avoid this type of litigation?

Do your research and determine whether competitive products are protected. Examine packaging, advertising and websites for trademark and copyright symbols and references to patent numbers. If a party is holding a similar product out as covered by intellectual property, talk to an Intellectual Property lawyer prior to selling or manufacturing your product. While there is always the chance that regardless of the precautions you take, you could still get sued, consulting with counsel in the early stages can better position you to disprove a claim that you intentionally infringed a copyright, trademark or patent.

Also, apply for your own intellectual property protection. In addition, if you are working with independent contractors, make sure you have agreements in place to ensure you own all the rights in the work and that your employees execute agreements assigning all rights in IP to you.

Jude A. Fry is a partner with Fay Sharpe LLP. Reach her at (216) 363-9000 or

Insights Legal Affairs is brought to you by Fay Sharpe LLP.

Published in Cleveland

The big buzz in the insurance industry today is around Core Systems Modernization.

“Core Systems Modernization is the process of insurance companies adapting to the needs of customers by bringing their processes and technologies using the numerous possibilities available today,” says Vani Prasad, vice president of Insurance Technology for HTC Global Services.

There’s a big push toward modernization as companies continue expanding their web presence and establishing mobile solutions to make their products accessible to more customers. By using new technologies such as mobile, virtualization and cloud, companies are building bridges with their current core systems, creating new value from existing assets. Modernization is helping companies not just improve their bottom line but transform the way their core systems such as policy administration, underwriting, distribution, billing and receipts, and claims are functioning to enable businesses to grow. Some companies are going beyond operational or technology improvements and are reshaping their business models.

Many large and mid-sized insurance companies are in the process of executing modernization projects to keep up with technology and increase customer engagement through powerful analytics. The last two years have seen a big growth in modernization projects, and this wave is gaining intensity.

Smart Business spoke with Prasad about what insurance companies need to know when it comes to modernization and its effect on business.

What is driving modernization?

Modernization has come from many forces in the marketplace, such as innovation in new types of insurance products. Introduction of products poses new challenges to execute through the current operational and technology setup in an organization. This is one of the biggest drivers for core systems modernization.

From a technology standpoint, one of the prominent driving forces is popularizing the use of mobile technology for business purposes to improve customers’ ability to view and change products and their coverage. This also makes it easier to communicate with customers, for example, after an accident, getting them back on track faster. Customers today expect to get what they want, when and where they need it, making it critical for companies to connect smart devices to core insurance systems. CEOs want to address business growth and operational efficiency at the same time and are looking for smart ideas that fuse these two aspects.

Also driving modernization is analytics, the intelligent use of data stored by a company to target consumer-oriented marketing specific to customers’ needs and to develop new products. Previously, the agent was the key source of analytics. That person had contact with customers and could offer products as the need arose. But now, as customers are rarely present when deals are made, companies are using technology to do this.

What are the benefits of modernization?

Companies should modernize either to increase their top line through new sales that capture market share, or improve their bottom line through internal efficiencies. Those wanting to increase market share have to simplify processes and be able to adapt to changes and make improvements quickly. These days, customers relate to businesses differently, and the old ways of doing business aren’t as effective anymore. Businesses have to evolve and change to keep pace with the market to retain their market share. In today’s marketplace, it’s easy to take their foot off the gas pedal for just a brief moment and find themselves with lost sales or retention issues.

For example, customer inquiries need to be processed quickly. If a web page takes too long to load, the customer drifts off. If a phone call takes too long, the call is lost. If the number of pages, clicks or paths on the customer contact is too many, the customer moves away. By modernizing the technology systems, these seemingly simple adjustments are resolved. No one drops the ball on the customer and one can better capture those customers who are trying to engage and reach out to them a second time if the process was not finished quickly enough.

How does modernization differ from fixes or repairs?

Modernization goes beyond maintenance. Everybody feels they are contributing to improvements in their own way; every department has their own ‘quality circle.’ But going beyond semantics, look at modernizing from a leadership perspective and ask what will actually make a difference to the top and bottom lines. How does it help in reputation, reduce operating costs, enhance customer satisfaction, increase market share, increase earnings per share or maintain a healthy underwriting ratio? If the impacts are at that level, then that’s a modernization project.

Companies that perform maintenance work, such as keeping software up to date or fixing bugs, are still modernizing in that they use newer and better technology to better meet consumer needs. However, performing maintenance work on its own doesn’t allow companies to easily add new features or embrace new technologies. The main difference between maintenance work and the modernization described above is one of scale and adding business value: Rather than fixing and repairing smaller systems, everything is being fixed and repaired. This allows for future growth because the large-scale changes can be structured to make it easier to add features such as a mobile presence or a shift to cloud-based technology.

Some businesses put off modernization because it requires time, effort and new technology skills to execute. However, over time, the problems these companies face worsen. If a company is more than two or three generations behind in the use of technology, it is very difficult to fix even minor problems. While it is possible to sustain in the short-term, these companies are in danger of becoming obsolete in the long-term.

What are some tools used to modernize?

Insurance companies are struggling to deal with the massive amounts of information they collect. It is not enough to just add more hardware or network bandwidth if the processes are inefficient and are not yielding the desired outcomes. Sometimes, companies fear that it costs too much to modernize. However, there are numerous tools and approaches available in the market, depending on the scale of improvements intended, and the extent of modernization requirements can be taken up.

While everyone knows the power of mobile and cloud computing, companies are also looking into techniques such as crowd-sourcing to maximize their benefits. Cloud computing is not yet leveraged in many insurance companies, but it provides the ability for insurers to leverage large-scale technology with little or no investment up front. To insurers, this means easier storage of the huge amount of information coming to them, such as photographs, depositions and other documents. A lot of managers are being designated and groomed to help focus on using cloud technology and how it can reduce the bottom line. It also enables customers to access information anywhere, any time, with minimum fuss. Insurance companies can leverage the cloud to ease the transition to mobile devices, using them as vehicles for meeting the increasing amounts of data gathered and processed. It is not just technology tools alone that matter, it is the newer processes and approaches that make a big difference in modernizing.

It is also common for companies to wait for a silver bullet to remove inefficiencies. Is this the right time to modernize? Of course it is. Technology is never static, it is ever changing and driven by innovation. There are numerous options available, and these will only increase over time.

How can modernization be executed?

Strong leadership that focuses on building a solid approach to modernization is vital. Building a roadmap to modernizing with options and scenarios is a big step. Modernizing should bring a positive impact to everyone in the company for it to have lasting value.

Once an approach is chosen and an investment decided upon, it is important to dedicate specific people for the planning and implementation. Projects are initiated with the right scope based on the investment and professionally managed. Process engineers that have a broad understanding of company operational processes are vital ingredients to the modernizing journey. Sometimes, the changes to technology or a business process need to be tested on small groups to refine the approach, measure the benefits and then apply to the rest of the company.

Some companies have the aptitude and skill to modernize in house. There is a vast amount of information available online on how to approach and prioritize modernization projects. Consulting companies and third-party product and service providers can also help an organization reach its goals.

Vani Prasad is the vice president of Insurance Technology with HTC Global Services. Reach him at (309) 287-0229 or

Published in Chicago
Wednesday, 01 August 2012 20:00

Michele Fabrizi keeps MARC USA client focused

Michele Fabrizi has always had a philosophical difference with the way most advertising firms approach business and client relationships. Having worked on both the client and business side of the industry, she has become tired of continually seeing firms focus strictly on creating a strong ad with no regard for what the customer really wants and ignoring ideas because they came from a non-senior person, male or a female.

Fabrizi, who is president and CEO of MARC USA, a 280-employee, $300 million full-service advertising firm, was attracted to Marketing Advertising Research Consultants because the company did business the way she thought all firms should operate — with the client at the center of the business model.

In her first two years at the helm of MARC she oversaw 200 percent growth, much of it the result of her ability to get the firm to focus on the client’s needs.

“I am very much about building a business model that is centered on the clients and getting results for our clients,” Fabrizi says. “That DNA and some of the other philosophies such as it doesn’t matter who has a big idea whether they’re junior or senior, male or female, that idea is wrapped up, and we work to get it up and going. Those were very different from the experiences I had at larger shops and on the client side.”

With this philosophy driving the business and Fabrizi reinforcing it, MARC USA has been able to break barriers and foster innovation within the company, creating growth and client relationships that help transform brands.

“It’s been really exciting to build a company that is based on what’s right for the clients,” Fabrizi says. “It’s about breaking things and being innovative. We can do so much more for our clients and be more innovative and invest in the business which you couldn’t do in a public company.”

Here’s how Fabrizi keeps MARC USA client-focused while building relationships that foster growth and innovation.

Build a client relationship

Good business runs on developing and cultivating strong relationships. Simply having a good product or service no long assures repeat business or a place at the top of your industry. Look to make a lasting impression by playing to client needs.

“It sounds simple, but first of all you have to really have to want to hear and listen and get to know people,” Fabrizi says. “If you ultimately think either that’s not important, you’re not interested and it’s a waste of time, or you know more, then you can’t do it. If you think you know more about their business and you want to spend all the time talking, you can’t do it. It’s really about truly wanting to get to know someone on all levels, business and personal.”

Part of developing a deeper relationship lies in how you conduct your meetings, getting off site, and not just across the conference room table.

“Through those kinds of conversations, you can really get more insight, not just into the person but what’s really critical in their business that they feel is important that might not come up in the conference room,” she says.

“There’s a whole basic relationship management that really is critical in your client’s business at all levels. It’s really doing a relationship plan at all levels for all the key people you have to come in contact with. Making sure everybody has their ownership and accountability on that is the only way you’re going to be able to get the information and insight beyond what you can garner on your own to figure out how to help the client be ready for this big idea or the challenge that they’re facing.”

The best relationship people are the ones who really are very thoughtful and plan and study the business. Particularly in this day and age, everything is so fast. Everything is so 24/7 that it becomes very important for the high-touch part.

“Frankly, in our business, that’s very important to touch the consumer across all channels, online, in-store, word-of-mouth,” she says. “Having that kind of ability is important to us in our business in order to be effective communicators and it has to be integrated.”

To integrate better communication and high-touch capability, MARC focused on a team environment and training.

“Team is about behavioral modification, trust, and how to get people to talk,” Fabrizi says. “As part of our culture and our people and talent, we continue with team dynamic high-performance training at all levels, with my senior leaders all the way down. There’s nobody in the company that doesn’t get that training.

“If you’re training people how to work effectively among themselves, that transfers to their clients and relationships.”

To aid the culture of teamwork and a client relationship focus, MARC decided to move to one P&L statement. Instead of having each client listed under separate P&L statements, they combined them to make the overall environment more collaborative and team- oriented. The company wanted the best solutions for its clients and didn’t want people fighting over P&L.

“With the one P&L what we did was created a mindset shift in our employees, because you just can’t say, ‘Work together,’” Fabrizi says. “It won’t work. With that being freed up and the other training and tools that we give them, literally an integrated team gets together and will talk about the issues of a client and come up with ideas. It’s about breaking convention and being innovative.”

Get results through innovation

MARC USA has a heritage of doing things differently and bringing innovation to the industry. The company even created an off-the-wall word to describe its unique capabilities.

“We’re using breakthrough research techniques and new technologies to drive innovation every day,” Fabrizi says. “That’s what I’m about, what’s next? At MARC we say what we do is a word we made up because there is no word for what we do. It’s called ‘wezog’ and it’s how we think. It’s what we expect from our people. It’s a critical component of our long-term client relationships. It means doing things the way they haven’t been done before — thinking outside the box.”

The firm builds successful brands and drives sales through its creativity, insights and technology and the results are changing the game for clients.

“It’s a key reason why we have such strong, long-lasting client relationships,” she says. “It’s really about not doing things the way they’ve been done before, being highly collaborative with clients and finding ideas to break assumptions and challenge conventions. This is the kind of thinking that really helps brands strive in good times and in bad times.”

There are three words that clients use to describe MARC: passion, vision and collaboration. If you’re going to deliver on those three, you have to have the people power that’s going to do that.

“That’s how I’ve taken the company into the future, and it’s such a right thing for the business now,” she says. “It’s not about what’s nice and what the competitors are doing. People come in with ideas that are not founded.

“We do a lot of innovative techniques and strategic alliances on deep-seated emotions. Good enough is not good enough, particularly when you look at the business challenges that everyone’s facing.”

These days, consumers are more in charge than ever. They have more choices, they have more information and they have more ways to shop. It is up to firms to deliver something that is not a one-size-fits-all solution for clients.

“Sometimes our ideas are rethinking how they do business,” Fabrizi says. “Our initial ideas may not even be advertising ideas, but ideas that would protect their ROI and more along the lines of business solutions, but eventually could become advertising and marketing solutions.

“We have a very deep practice in behavioral science and behavioral economics so that we can really understand at a very deep, deep level. What we do is almost like brand therapy where we get the consumer to qualitatively express their conscious and subconscious thoughts so that we can really empower them to explore their thinking beyond the literal.”

To get those results you need to evolve and create tools and systems that help to provide new ways to connect with the consumer. In order to do this, you have to be up close and personal in your clients’ business.

“In any business today, whoever your clients are, if you’re not intimately involved, I don’t know how you’re going to survive,” she says. “You have to have trust so they’ll share data and the pain points, or you just can’t get the kind of revolutionary ideas that are going to get the kind of sea change results that are needed.”

Look for opportunities

In a business that constantly strives for new and innovative ideas, you have to reinforce what it is you’re trying to do within your company — and it’s the CEOs job to lead the charge.

“The secret is you have to get the senior leaders to buy in to it to make radical change,” Fabrizi says. “If you can’t do that, you will not be successful. If you want that type of environment then you need to keep saying it in every which way and reinforcing it and so do the leaders or it won’t happen.

“To me this is about transformation and how do you adjust your company in this day and age when you’ve got so many pressures. It’s really looking at your business and saying, ‘Why are we doing it this way? How do we do it differently?’”

In the world of advertising it’s all about being unique and having the ability to take advantage of opportunities when they arise. You have to plan for this in order to bring opportunity to fruition.

“Again, it’s thinking out of the box,” she says. “It’s not doing things normally. It takes time to do that, and it’s not a quick fix. What are the fundamental core things about the business that if nullified or changed or innovated, within a period of a year or two, could dramatically catapult the company forward so it’s not just parity?

“That’s what you’re seeing out there is a lot of parity, and you see a lot of tactics. You see very little really strong core business strategies. It’s very tactical and that’s short-term, so that means you’ll always be running, running to catch up because those things are very easy for competitors to emulate.”

Those strategies and plans are the responsibilities of the senior leadership. Those tactics have to be driven forward as the day-to-day business continues to function.

“That falls squarely with the CEO and the senior leadership and even the management level,” she says. “If they don’t think it’s important, they’re not adding those insights, they’re not worried about it, they’re not planning it and they’re not getting together to collaborate on it, you’re going to lose your way.”

The other key part is collaboration among your leadership in these processes.

“You have to have people who can help you make that idea happen,” she says. “If somebody within the organization has an amazing idea and I get hold of it, it’s like, ‘Oh my gosh — we’ve got to do it.’ I don’t care where it comes from. In this day and age we all have egos, but at the top you have to have less ego and more ability to know when you have to follow and listen, as opposed to constantly being the brilliant, fearless leader.”

How to reach: MARC USA, (412) 562-2000 or  


- Get to know your clients on a business and personal level.

- Use client relationships to deliver results.

- Find opportunities to grow.

The Fabrizi File

Michele Fabrizi

President and CEO


Born: Pittsburgh, Pa.

Education:  Received a bachelor of arts degree from Carlow University

What was your very first job and what did you take away from that experience?

My first job was helping out in my father’s music store. I saw how he took the time to listen to people and treat each student or customer as an individual. It was a very powerful lesson in many ways — how to develop people, how to deliver excellence in service, and how much you can learn about a customer’s needs if you pay attention to what they say and also what’s not said. He understood that emotions drive choices long before neuroscientists proved this.

Who is someone you admire in business?

Tena Clark — writer, musician, entrepreneur and head of DMI Music. She was one of the first people to understand that brands have a sound DNA and built a very successful company to deliver this vision. We’re very like-minded and that’s why MARC USA partners with DMI to use music to help brands forge strong emotional connections with their customers.

What are you most excited about for the future of your industry? Why?

Developments in brain science and technology are taking us in amazing new directions. While some people claim technology separates people, we’re using it to make stronger connections than ever and to deliver highly customized, personalized one-to-one experiences with brands.

If you could have a conversation with any one person from the past or present, to whom would you speak with and why?

Leonardo DaVinci — truly a visionary who also got things done. He combined left-brain and right-brain thinking to envision and then create things not even imagined by anyone else around at his time or for many years after.

Published in Pittsburgh