Addis was right. Providing comprehensive audits of potential clients and advising them on ways to cut their risks and insurance costs brought a deluge of business and performance levels for The Addis Group that beat competitors by a mile. With its insurers enjoying loss ratios with Addis Group clients a fraction of industry averages, revenue per employee twice that of competitors and reduced insurance costs for clients, Addis built his agency, now at 40 employees, without a sales force or marketing effort.
But the growth challenged Addis, president and CEO of the company, when it came to making sure that relationships with clients, insurance companies and his own employees remained warm. To ensure closeness with those groups as the company grew, Addis introduced a program he calls “Acres of Diamonds,” inspired by a fable that advises the reader to take care of treasures closest to home.
The effort, Addis says, has succeeded in maintaining strong ties with clients and insurers and in preserving entrepreneurialism in the company, a factor he says has been critical to The Addis Group’s success.
Says Addis: “I think we’ve been cognizant of how we go ahead and continue growing, having the systems in place but making sure the entrepreneurial spirit remains.”
Smart Business spoke with Addis about the challenges of growing his business and maintaining relationships as he does so.
What’s been the biggest challenge to growth for The Addis Group?
Our mission statement states that our clients represent the foundation upon which we build our dreams. If you think about it, without having a sales force here, the only way we grow is by having raving fans, not just satisfied customers, (but) people who say, ‘I just can’t believe the work you’re doing for me.’ We don’t even ask for referrals. When you think about it, we must have very enthusiastic I call them stakeholders, and stakeholders are obviously our customers, but it includes ourselves, the insurance carriers, law firms, the community itself. The biggest challenge has been ... how do we put in place strategies to stay close, not only to our customers, but to our other stakeholders?
How have you approached that issue?
About a year ago, we instituted what we call a formal stakeholder intimacy program. What we did was call the program “Acres of Diamonds.” What I keep reinforcing on a weekly basis is because it’s such common-sense, you know, people forget it sometimes sitting right in front of you are diamonds.
So the exercise that we’ve done with our staff is say, ‘OK, who are our diamonds?’ I think it starts with ourselves. We’ve got to make sure that everybody here feels they’re treasured, they’re polished, they’re cared for.
Then it gets into our clients, it gets into (law and accounting firms), insurance carriers. So for every one of our diamonds, we literally have a formal program and an action plan for staying close to them.
What motivated you to start a stakeholder intimacy program, and how does it benefit the company?
Our audits take a lot of time, a lot of energy. I personally got involved in a majority of audits. On the back end, there are tremendous service requirements. It could be acquisitions, claims, all sorts of internal issues that companies might have, so there’s a tremendous service component.
I know we have great people here, but I’m a Nervous Nellie, and I just needed to make sure that every client is being cared for in a very significant way. I’m very confident now that there’s a lot of creativity and freedom as far as how we handle each client.
I know there’s a definite program in place for each client, and we can measure that in all sorts of ways, measure it through referrals, through retention, through our quality assurance survey.
How do you stay close to the various groups?
I think the most critical thing we’ve done is come to the realization that we cannot grow without staying close to our customers. An example might be, for our clients, building a formal quality assurance process or a risk management education forum.
For insurance companies, we actually have an intimacy program on a quarterly basis. They receive a token of our appreciation. It could be chocolate pretzels from Zitner’s in Philadelphia, Johnson’s Popcorn from Ocean City, Virginia Peanuts, thanking them for all the work they’ve done on our behalf, as well as having a casino night
What lesson have you learned while leading a fast-growth company?
Any business starts with entrepreneurial spirit, and I think what ends up happening over time is that you have to put in systems and controls to make sure that quality assurance is there, that customer service standards are there. I think we’ve been very cognizant of how we go ahead and continue growing, having the systems in place that make sure the entrepreneurial spirit remains.
How do you keep that spirit alive?
The best way I can phrase it is we look at it almost like a football field. We say to people, ‘Play within the boundaries, do as you wish.’ We know we have to do certain things, but giving people the freedom to play within those boundaries, I think that’s been appreciated.
How to reach: The Addis Group, www.theaddisgroup.com
Born: Newark, N.J.
Education: Lafayette College, Drexel University and Stanford Executive Program
First Job: Second lieutenant, U.S. Army
Whom do you admire most in business and why?
My father-in-law, who was an executive in the chemical business. His advice was to work hard and be humble. I also admire CEOs that do not make themselves bigger than the companies they run.
What is the most important business lesson you’ve learned?
You need people who are willing to grow with the company and who will be loyal to you. And, you have to be flexible with people everyone grows differently.
What has been your toughest business challenge?
Finding the right people, managing the technology available today and managing the supply chain, in regard to us moving up the integrated solutions food chain.
Describe your leadership style.
Collaborative, candid, loyal, honest and direct.
Thanks to a variety of bank services and technology, you have some options today to protect your business.
Despite the increasing popularity of electronic payments, nearly 60 percent of all business-to-business payments today are made via a paper check. Here are some ways to ensure your checks are secure.
- Use checks that are imbedded with watermarks and microprinting. These features deter fraud by making reproductions more difficult.
- Use checks made of heat-sensitive ink and paper, which are more difficult to reproduce using basic photocopying equipment.
- Use electronic bank account statements if available. Paper bank account statements put you at greater risk by making sensitive information accessible through the mail.
- Keep track of your checks. It may seem obvious, but one of the best ways to protect your business from fraud is to keep track of where your physical checks are at all times. Don’t leave checks sitting out for others to steal.
- Add a positive pay or payee positive pay service to your business accounts two add-on services available through most banks. For a nominal charge, any checks processed through your corporate checking accounts will be carefully scrutinized.
A positive pay service starts with you sending a list to your bank of all checks issued. The bank matches the check number, dollar amount and account numbers of all inbound checks against your list.
Any checks that do not match your list are flagged for review. With most positive pay services, you can go online to review images of your checks that are flagged as exception items. You reduce disbursement risk by easily reviewing suspect items and alerting the bank whether to pay them or to return them.
With payee positive pay, when providing your bank the check number and dollar amount of checks issued, you also include the payee. Again, you may review exception items online and alert the bank to pay or to return the check.
Technology is helping businesses secure their payables and receivables when electronic payment formats are being used.
- Automated clearinghouse payments (ACH). It is cost-effective for suppliers and customers to pay via ACH. However, you must provide your bank account information before an electronic payment can be initiated. While necessary, it puts your accounts at risk. With a Universal Payment Identification Code (UPIC), you can receive electronic payments without disclosing confidential bank information.
Your UPIC number serves as a universal remittance number and masks your real account numbers. UPIC technology also limits account activity to credit payments and blocks all debits. If you should move your accounts, the UPIC number remains the same.
- Credit card payments. To protect credit card payments, both VISA and MasterCard have implemented universal precautions for businesses that accept credit card payments.
The standards require companies to follow certain procedures when handling cardholder data and include a number of criteria, such as quarterly network scans and audits by qualified independent security assessor,s to ensure merchants and service providers protect cardholder data.
- Purchasing cards. New technology is available to enhance controls on purchases made by employees with purchasing cards. This technology enables your organization to instantly manage the available credit on individual purchasing cards.
Technology advances also let you to limit purchasing activity through an array of card-spending controls, including monthly and per-transaction limits, as well as merchant spend categories that only permit use of the card with certain merchants. Some card programs provide online access to manage these parameters directly from your desktop computer.
This was prepared for general information purposes only and is not intended as specific advice or recommendations. Any reliance upon this information is solely and exclusively at your own risk.
William Friel is sales manager for corporate banking in Philadelphia at PNC Bank, National Association, member of The PNC Financial Services Group Inc. Reach him at (215) 585-5242.
While many businesses sat patiently through the past few years to ride out the sluggish economy, many are now prepared to pull the trigger on their growth plans. Capital is the key to turning these plans into reality, with many businesses looking to the syndicated loan market to finance acquisitions or to pay down more expensive debt.
Overall, syndicated loan volume grew 24 percent from $1.02 trillion in 1999 to 1.35 trillion in 2004, according to Loan Pricing Corp. Mid-sized companies defined as $20 million to $500 in annual revenue accounted for $168 billion of syndicated loans in 2004, compared to $107 billion the prior year.
Why a syndicated loan?
Lenders both banks and institutional providers tightened their belts for a couple of years, scrutinizing deals to minimize their risk or exposure. While lenders today may be cash-heavy, they are not looking to throw cash at every deal that crosses their desks. Lenders today may be reluctant to hold large amounts of debt from a single corporate customer, opting instead to take a piece of the deal and syndicating the remainder to other banks or institutional lenders. This strategy spreads the risk or exposure among multiple lenders. As the borrower, you benefit by increasing your borrowing capacity with multiple credit providers. And there are additional benefits.
- Less-expensive financing than bonds lower interest rates and upfront costs
- Prepayment may be available without penalty or premium
- Expanded access to noncredit products such as capital markets solutions and expertise
- Short-term loans, traditionally up to five years
- Reliance on any one lender is reduced with multiple providers
- Competitive pressure often results in more market-driven structures and price
James Florczak, treasurer of Arch Coal Inc., once compared the loan syndication process to buying a new car. You know you really need do to it; you are really excited about getting the deal done; but the process ... well! Coming into the process prepared and educated can really be an advantage. First, you need to get yourself an agent bank. Sometimes referred to as the lead arranger, your agent will structure the deal, arrange and manage your loan. The agent is responsible for shopping around your deal to other banks or institutions, and tracking payments and other administrative responsibilities. Like Hollywood agents, your agent bank is paid a fee for this service based on multiple factors.
- Size of the financing
- Complexity of the financing
- Your company’s credit risk rating
- Underwritten vs. arranged structured
If the credit facility is underwritten, your agent commits (subject to certain conditions) to fund the entire amount of the financing if it does not find other lenders to provide a portion of the financing. If arranged, sometimes called the best-efforts option, your agent commits an amount less than the full amount of the financing and then markets the remainder to other lenders.
If this is your first loan syndication, meet with several different lenders and request a work up of the numbers in the form of a term sheet. Your agent bank should evaluate your financial needs over the next three to five years, not just the financing for your current project. And, be sure to inquire about the banks’ track records before awarding your business. From start to finish, you can expect the loan syndication process to take, on average, eight to 10 weeks. Discuss all of your options with your financial advisor as you embark on the new adventure of the loan syndication process.
This was prepared for general information purposes only and is not intended as specific advice or recommendations. Any reliance upon this information is solely and exclusively at your own risk.
Bob Kane is a senior vice president for Corporate Banking in Philadelphia at PNC Bank, National Association, a member of The PNC Financial Services Group Inc. Reach Kane at (610) 725-5724.
“The single biggest mistake business owners make is focusing on the product and not the people,” says Thurman, chairman and CEO of Viasys, a $600-million medical technology company that has sealed six deals in the last few years, three of them in January 2005.
This acquisitions spree is hardly spontaneous. Thurman’s eyes are fixed on Viasys’ three-year strategic goals to identify new business opportunities, invest in product research and development, and achieve greater growth.
Already, the chosen few are producing numbers that fall in line with Thurman’s expectations. Viasys holds top positions in each market of the medical technology industry that it serves respiratory care, neuro care, medical systems and orthopedics. In the last three years, Viasys has invested more than $90 million in product development to achieve “best in class” status in the major products for each business. Through the first half of 2005, revenue has increased 19 percent over last year, operating income jumped 56 percent and its stock price has jumped 60 percent in the last year.
Thurman’s expansion strategy is paying off, and he attributes some of the company’s success to its entrepreneurial management structure.
“Viasys is really a company of companies,” Thurman says.
In position to purchase
A strong balance sheet and ample cash flow position Thurman to consider expansion through acquisition, but Viasys wasn’t always this financially comfortable. Like most start-ups, Viasys was cash poor and deep in debt when it was spun off of financial holding company Thermo Electron in 2001. Thurman was recruited to lead the launch.
“The first two years, our primary goals were to eliminate the debt and improve the cash flow from the business operations,” Thurman says.
Viasys introduced new technology to the marketplace, building off of its first major product, the VMAX system for respiratory diagnostics and, immediately following, the AVEA ventilator. But products weren’t enough to generate the cash flow necessary to expand. So to further strengthen the company’s profile, Thurman consolidated facilities and simplified management structures, keeping a discriminating eye on cash flow and eliminating excessive operations costs.
“Every aspect of running a more profitable company, whether it was better products, reducing our costs or paying attention to the balance sheet, we did it all,” he says.
By 2004, Viasys was primed for expansion through acquisition. The company had chipped away all of its debt, accumulated more than $100 million in savings and generated annual operating cash flow of $50 million.
“This [financial picture] provided us with a competitive advantage in that we can move quickly to acquire companies that meet our strategic objectives,” Thurman says.
That’s the tricky part finding businesses that fit Viasys' profile and Thurman’s standards.
“The challenge is finding high-quality companies and not just acquiring anything that comes along,” Thurman says.
Thurman estimates he evaluates 10 times the number of companies he actually pursues. This year, three made the cut Micro Medical Ltd., Oxford Instruments and Pulmonetic Systems Inc. Each transaction rounded out Viasys’ product and distribution portfolio in its respiratory diagnostics, critical care and neuro diagnostics businesses.
Thurman believes each acquisition will drive earnings in 2006 and beyond.
“Strategically, these businesses moved us into higher growth segments and moved us into new channels of distribution, such as home care and the physician’s office,” he says. “Our acquisitions have allowed us to accelerate our overall growth and position us for outstanding long-term success.”
The significant six
When Thurman whittles down prospective acquisition potentials to candidates that suit Viasys’ mission and market objectives, he refers to six principles. First, the company must align strategically with Viasys’ core business segments.
Next, prospective companies must introduce new market opportunities or growth opportunities in existing segments. And financial criteria are critical. Thurman want to realize a 20 percent rate of return on acquisitions, and he prefers that companies’ earnings are accretive to Viasys’ overall earnings within the first full year following acquisition.
Then, he looks for companies with products that can be quickly introduced in Viasys’ vast international distribution structure.
Finally, Thurman looks for strong leadership managers who will thrive in Viasys’ entrepreneurial structure and play an important role in the company’s future. This human element, Thurman says, is the deciding factor. He recalls one of Viasys’ first acquisitions, when the personnel part of the equation was neglected.
“We focused solely on the value of the products they were bringing and we overlooked some important human resources issues,” Thurman says. “We ended up not retaining many of their key people because of that.”
Since then, Thurman tunes into the human assets a company can bring to the table, not just how the tangibles will benefit Viasys. This experience confirmed a lesson he learned in 1990 when he led the integration of U.S.-based Rorer and the French company Rhone-Poulenc. Marrying two corporations with sharp contrasts in management structure and communication style was difficult.
“It was like combining capitalism with socialism,” he says. “The Rorer company was more entrepreneurial we were less bureaucratic than the French business culture. In the U.S. business culture, we give more responsibility to individuals to make decisions, where in the French business culture, decisions tend to go through multiple layers of management and committees.”
The French called Thurman “Rambo.”
“They saw me as quick to make decisions, quick to take action they just weren’t used to that,” he says. “The decisions we used to make in an American company based on two businessmen talking in the hall would take a month to move through the levels of bureaucracy on the French side. It was culturally a very difficult integration to accomplish.”
Thurman refers to this experience today when considering which companies will adjust and thrive in Viasys’ environment. Earlier this year, Viasys was considering the purchase of Pulmonetics Systems or a French company. But he didn’t envision a cultural match between Viasys and the French company.
“One of the factors that really became important was that we felt that the cultural dynamics of Pulmonetics was more in line with the culture of Viasys,” Thurman says. “That was the key aspect that led us to acquire Pulmonetics and not [the other company.]”
Thurman facilitates a meaningful initiation process regardless of whether an acquired company operates independently or integrates. First, he shares with its employees his six acquisition criteria and identifies why each person is important to Viasys’ success.
“We certainly articulate how important they are to our future,” Thurman says.
Thurman spends time walking the halls of newly acquired businesses so he can introduce himself to employees. He wants them to be able to put a face to the Viasys name.
“For an acquisition to be successful immediately, the people who are running that company have to feel like they are part of Viasys and an important part of our future, and they have to be integrated into the culture of our company,” Thurman says. “We spend the time and energy to do that.”
New personnel are enrolled right away in Viasys’ incentive programs all employees can participate in a stock ownership plan. And if Thurman thinks Viasys needs to “put our money where our mouth is,” he initiates retention programs to show employees he is serious about keeping them on board.
Still, each acquired business maintains a certain level of autonomy, something Thurman says executives appreciate.
“Generally speaking, I think employees find the cultural transition to a company like Viasys to be much less of a change than they expect,” he says.
Within Viasys’ core business units, each segment has its own division president, and each president has substantial autonomy and significant investment backing for product development, marketing and distribution.
“In many instances, the companies we acquire are still run by the original founder or scientist that invented their technology,” Thurman says. “Even though we have become a large company, we pride ourselves on the fact that we maintain aspects of a young, entrepreneurial company.
“Running a company within Viasys is much more akin to running your own business than it is being a part of a bigger company. That culture is very important to our future.”
Best in class
Research and development is also critical to sustaining growth and market share in the medical technology industry.
“In order to compete globally, you must be committed to innovation,” Thurman says. Viasys has confirmed its dedication to delivering new products to all of its markets with a $90 million investment to ensure its systems and services are best in class. The slogan refers to an initiative to fine-tune every part of the Viasys machine, from the way products are developed to how they reach customers and the support that follows every sale.
Heightening standards and constantly reaching for the next level defines Thurman’s acquisition practices and his commitment to sustaining Viasys’ healthy balance sheet. Just as in the early days, when Thurman notices a weak link, he considers what resources are necessary to rebuild. The Neuro Care business was one of those weak links. Some products were out-of-date, and new competition threatened Viasys’ position. But in the last couple of years, the division has undergone a complete overhaul.
“We started with new leadership to run Viasys Neuro Care and we redeveloped our core products, which the team did in two years,” Thurman says. “We had to rebuild customer relationships that had been allowed to deteriorate.”
In the second quarter of 2005, the Neuro Care division achieved 75 percent growth over 2004. It now boasts talented management, a new product portfolio and strong sales.
Neuro Care accounts for 25 percent of Viasys’ overall business; Respiratory Care accounts for half of total revenue, and the remaining 25 percent is divided between Medical Systems and Orthopedics.
In each business, Thurman challenges leaders to identify growth opportunities and the ways their respective markets can maintain best in class status. Many times, these assessments result in acquisitions to broaden market reach or extend the family of products.
“Traditionally, we’ve been the strongest competitor worldwide in the respiratory diagnostics side of the business,” Thurman says. “So, we challenge them to [determine] what products or business segments we could move into to increase our growth. As a result, we started a business in clinical services.”
When Viasys acquired Micro Medical this year, it gained access to promising distribution opportunities in physicians’ offices and home care markets. While certain subsegments of Viasys’ critical care business were strong, such pediatric ventilation, other segments were untouched.
“In that case, we developed products in our R&D labs to address some of those markets and we acquired a couple of companies to address other higher growth markets,” Thurman says. “Our balance sheet will allow us to continue to be opportunistic. In the next three years, customers can expect to see new products and services developed internally and a reasonable number of acquisitions that will help us meet our strategic goals. The combined result of that will continue to generate higher overall growth than the industry average.”
Although Thurman’s children are the only ones who still occasionally refer to him by his action-figure moniker, he uses that no-nonsense approach to leadership and view on expansion and success.
“Lead, follow or move aside,” he says.
And integrity is an absolute.
“A lot of times when you acquire companies, they come from a box mentality,” Thurman says.
“And many people think product companies just build boxes.
”We don’t build boxes. The systems that we develop and manufacture change people’s lives literally save people’s lives. We are in the business of improving the quality of human life. When companies [we acquire] learn our mission, right away they find it inspiring.”
How to reach: (610) 862-0800 or http://www.viasyshc.com
“You have to be an enterprise that sometimes is willing to say, ‘I messed up,’” says Nevels, chairman of West Chester’s The Swarthmore Group.
There’s been plenty of pleasure to go with the pain, it would seem. Although Nevels and his team have grown The Swarthmore Group, launched in 1992, into an enterprise with nearly $2 billion in assets under management, that growth came during an era when erratic changes shook the confidence of investors in the markets and their money managers.
In some respects, Nevels’ business accomplishments pale when compared to the challenge he has faced as chairman of the Philadelphia School Reform Commission, a team put together in 2001 to fix Philadelphia’s public education system.
Nevels took on what seemed to be the impossible job of reviving a public school system of 200,000 students and 15,000 teachers that was in trouble on nearly every front. Nevels coaxed the state into allowing creative refinancing of the district’s debt and helped float new debt issues to fix crumbling infrastructure. He also engineered agreements with teachers and administrators to put the best teachers in the most troubled schools and to make educators accountable for results.
His term on the commission has helped him understand the challenges his firm faces as it grows and its structure becomes more complex.
Nevels talked with Smart Business about what it takes to be a successful investment manager, his schooling in business and the business of schools.
How has your training as a lawyer influenced your business management style?
It has affected it greatly. No. 1, I am a big picture person from the standpoint of business, but the law has really affected me in terms of my view of how things work together, how things fit together.
There is really something to the (notion) that when you go to law school and graduate, you’ll never think the same way. I can be incredibly analytical when need be. I found that I could be a well-informed consumer of legal services, but I don’t pretend to practice law anymore. I know just the right questions to ask, and the law prepares you in just the right way to ask the hard questions. And I found that is a gift, that’s a capability that’s incredibly valuable.
The thing that I am a little manic about is that I need information, I need information to know those details are taken care of. I can get very frustrated by not knowing those details are being taken care of.
Why did you make the transition from lawyer to entrepreneur?
I realized that I had an interest and an aptitude in commerce and in business. And in terms of practicing law, in terms of documenting those transactions, doing the legal work for a financial transaction, I realized that perhaps I was thinking at some point more like a businessperson than a lawyer.
And besides that, it became clear to me that the businesspeople had all the fun. I didn’t want to stay up all night working and drafting things for them when they were having the fun and doing the deals.
I saw it as exciting, but I also saw that there was a creative aspect. There was an analytical aspect, which the practice of law satisfied, but then there was an additional factor of creativity that I may not have been getting as much of in practicing law.
How do you lead an investment management firm successfully through the ups and downs of the market?
I think that the thing in any business, particularly in the investment advisory business, is maintaining strong relationships and the primacy of the most important thing in a business, the client. I know that sounds so elemental, but it becomes critically important to talk to and realize that the client is the coin of the realm and the most important factor in any business.
Because if your clients are happy and well treated and well attended to, everything else works out. When we started at The Swarthmore Group, we started as an equity only, stock only investor. We had the good fortune and sometimes it’s better to be lucky than smart we started in the equities market during the most robust equity market in the history of the republic.
You’re looking at 20 percent returns, incredible performance. What happened was my CEO, Paula Mandle, and I realized that this could not be the party that was never going to end, that the equity surge would have to end for any number of reasons. But then the critical thing that happened was our clients started talking to us about the following: How do you feel about this market?
Clients were saying, ‘I’m feeling uncomfortable about valuations in the equity markets.’ Our response was, ‘Would you feel comfortable about taking some of those gains off the table and placing them in the fixed income arena?’
And by listening to them, we were able to move into the fixed income arena, which has grown mightily in the last five years. The firm has $1 billion-plus in fixed income. That’s an illustration of what you do in difficult markets; you listen to your clients and you use your best judgment to assist them.
What do you look for in employees of The Swarthmore Group?
What we look for are individuals who understand the client is king or queen, and what that refers to is being responsive to client requests, being responsive to client servicing and making absolutely sure that the client is in the forefront for them.
The second is that we hire people with the utmost integrity, because I think that’s the sine qua non in the investment business. Integrity, in some ways, is the easiest, in that you talk with people that know them, you talk with prior employers. We follow up on references.
And the other way to screen is you sit down with the candidate and see if they’re comfortable with the environment of The Swarthmore Group, and you can read that pretty easily. Are they comfortable with the other people, are they individuals who seem like they are likely to get along with other people?
What are the most important qualities for success in the financial management field?
Valuing relationships and your integrity, and I know I keep coming back to that, but your word is your bond. You keep your word even when it’s uncomfortable to. I will tell you that you would be amazed how difficult it is for people to do that.
You don’t B.S. the client because the client will always find you out. I would also include intellectual honesty in that. If you’re not self-analytical, it’s hard to be financially successful in the investment advisory business. There are going to be times when you’re going to look in the mirror and say, ‘You know what? I made a mistake on that call, got to get out.’ Or, ‘Nothing has changed, I’ve got the courage of my convictions.’
How did you approach the job of chairman of the Philadelphia Commission on School Reform?
The way I approached it was, one, to identify the client. Again, simple and elemental; the clients are the children. You’ve got to focus on the children and their families. I learned the art of triage very quickly; what are the worst problems, how do you deal with them and how do you resolve them on behalf of the kids.
The other thing that was critical and remains is the focus on the children. I don’t make a statement without referencing the children, because ultimately, it’s not about the teachers, the teachers’ union, the principals, it’s not about the adults. It is the children’s business. I also knew it would be critical to find a crack jack CEO. The commission members and I worked studiously on a search to get the best CEO in place and then to act as a corporate board would, and that is to establish policy.
How do you get the disparate groups to work together for reform?
By establishing credibility, which affords the commission and the CEO the ability to have ... an accumulation of what I’ll call capital, it’s intellectual capital, it’s political capital. Because with improvements, you have credibility.
And then you do everything you can to be fair to all of the members of the partnership ... but there has to be that added conversation, to look across the table and say the children come first. Yes, it’s important to have a living wage and living benefits and so forth, but every nickel that gets saved goes back into the classroom to benefit the ultimate client.
What have you learned from your experience on the commission that influences how you think about your business?
While we’re getting larger in terms of number of people, we’re also getting larger in terms of assets under management, and what has become important is that (our CEO) choose members of her team ... the chief investment officer, the senior marketing officer, assembling that cadre of leaders is very important.
You can draw a big circle around that portion of the organization and see how important it is to the longevity and viability and service to our clients, and I have certainly seen that in a far larger organization called the Philadelphia School District.
How to reach: The Swarthmore Group, http://www.swarthmoregroup.com
The Senate Judiciary Committee is considering the Trademark Dilution Revision Act of 2005, which would restore trademark dilution as a powerful cause of action for trademark owners after a 2002 Supreme Court decision imposed strict requirements on trademark owners seeking to prove dilution. The bill passed the House with overwhelming bipartisan support in April and is expected to pass the Senate and be signed into law within the next few months.
The concept of trademark dilution differs significantly from the more commonly recognized violation of trademark infringement. Trademark infringement is based on protecting consumers from confusion. Under an infringement analysis, a trademark owner must show that the alleged infringer’s use of a similar mark is likely to cause consumer confusion with the owner’s trademark.
Courts weigh a number of factors in determining the likelihood of confusion, including the degree of similarity of the parties’ trademarks, goods and services, and the extent to which these goods and services are sold through the same or similar channels of trade. Therefore, it may be difficult to prove trademark infringement where the parties sell different products through different channels, even if the marks are identical.
However, dilution protection shields the trademark holder rather than the consumer. Dilution protection is thus more akin to copyright or patent protection, since the trademark owner is not required to show a likelihood of consumer confusion to establish dilution.
Instead, the trademark owner must show that the mark is famous and that the junior user’s mark is likely to dilute the fame of the senior user’s mark by preventing consumers from identifying the famous mark exclusively with the senior user’s goods and/or services. This can occur even where the parties’ goods and services are not in competition.
For example, Congress has noted that DuPont shoes, Kodak pianos and Buick aspirin are examples of potential dilution, since pianos sold under the Kodak mark would weaken its distinctiveness, even if consumers did not believe that the pianos were actually produced by Eastman Kodak Co.
Congress first passed a trademark dilution law, the Federal Trademark Anti-Dilution Act, in 1995. However, in 2002, the effectiveness of this law was drastically reduced by the Supreme Court’s decision in the case of Mosely v. Victoria’s Secret Catalog Inc. In the Victoria’s Secret case, the Supreme Court ruled that a trademark owner must show actual dilution rather than merely a likelihood of dilution. Because it is difficult to quantify the distinctiveness of a mark and to prove that distinctiveness has been damaged, trademark owners have found it difficult to successfully bring dilution claims under the new standard.
The legislation currently considered by Congress would codify the likelihood of dilution standard as the appropriate test for dilution claims, thus effectively overruling the Supreme Court’s holding in Victoria’s Secret, which required actual dilution.
If passed, the law would require the owner of a famous mark to prove a likelihood of association between its mark and the junior mark, arising from the similarity of the marks, which would impair the distinctiveness of the famous mark. This test would depend in large part upon the degree of similarity between the marks and the degree of fame in the senior mark.
Additionally, the law would also require that the trademark at issue be widely recognized by the general consuming public of the United States, not merely in a certain geographic area or in a certain market niche.
If the bill is passed, it will give the owners of nationally famous trademarks a new weapon to prevent weakening of their trademark rights. It will also force small and mid-sized businesses to take a second look at their trade names and trademarks to ensure that they are not using conflicting marks.
Bassam N. Ibrahim, a shareholder, and Bryce J. Maynard, an associate, are members of the Intellectual Property Group at Buchanan Ingersoll PC. For more information about trademark and intellectual property matters, reach Bassam at email@example.com or Bryce at firstname.lastname@example.org.
While daunting, the task is not impossible, as long as the training and educational targets are established and the appropriate measurement tools are in place.
Successful sales professionals use targets to guide their selling strategy and work to gain new sales in target accounts. Sales training must utilize that same approach in order to be successful.
Training targets are called educational objectives, and establishing objectives is an essential first step to any training strategy. Once established, objectives should be used to design and develop training and as a comparison point to measure the effectiveness of the training delivered.
Using a comprehensive framework like Benjamin Bloom’s taxonomy of learning objectives, sales training executives can map out a training program that guides the sales professional through higher levels of learning as they progress through the training program. Bloom’s taxonomy:
- Provides six cognitive-learning levels that build upon one another, with each progressive level representing more advanced performance
- Enables specific training objectives to be developed based upon the level of desired performance
- Ensures development of comprehensive training objectives and clear performance goals
Bloom’s taxonomy helps the salesperson to:
- Remember. Retrieve relevant knowledge from memory.
- Understand. Determine the meaning of instructional messages.
- Apply. Carry out or use a procedure.
- Analyze. Break material into its constituent parts and determine how they interrelate.
- Evaluate. Make judgments based on criteria and standards.
- Create. Put elements together to create an original product.
Targets for training design
Equally important to developing clear educational objectives is developing a training program that accomplishes the stated objective. Using Bloom’s taxonomy to guide the design of a training program ensures that the objectives are met by utilizing strategies that challenge the learner to perform to the desired level within the taxonomy.
An example of Bloom’s-based training design would be when sales professionals are asked to role-play a sales call, with a sales trainer acting as a prospective customer. In this situation, the sales professional demonstrates the ability to apply factual knowledge previously learned.
Targets to measure performance
Finally sales training executives should determine whether the training targets have been met. Donald L. Kirkpatrick has established a sequenced approach to measuring performance that accomplishes this goal. Training executives use Kirkpatrick’s four levels of evaluation model to measure:
- The learner’s reaction to the training delivered
- The actual learning that occurred in the training setting
- The performance that occurs back on the job
- The training program’s impact on the organization
An example of Kirkpatrick’s model to assess performance would be when sales professionals are required to take a pre- and post-training assessment that evaluates the progression of learning from the beginning to the end of the training program. This hard data measures actual learning in the training setting and can be used to demonstrate the success of the training program.
Kirkpatrick’s straightforward model provides the feedback and data needed to examine the success of the training program and to make any adjustments as necessary.
A targeted approach to training ensures that not only is the training successful, but the sales professionals who attend the training return to the field ready to perform.
Dan Scott is the senior director of sales training & development at Cephalon Inc. Scott has 15 years of experience training sales professionals, with his previous sales experience providing him considerable insight into the learning and development needs of this unique audience. Cephalon is a biopharmaceutical company focused on developing and marketing products to treat neurological diseases, sleep disorders, cancer and pain. For more information visit Cephalon.com.
Education: Ph.D., pharmacology, Temple University; postdoctoral studies, University of Pennsylvania and Rutgers University
First job: Research assistant, department of physiology, A.I. Du Pont Institute, Wilmington, Del.
Involvement: Co-chair of BIO 2005; chairman of the BioAdvance Biotechnology Greenhouse Corp.; executive council of the Harvard Division of Sleep Medicine; board of trustees at Temple University and The Franklin Institute; board of directors for the Greater Philadelphia Chamber of Commerce, Eastern Technology Council, NicOx, ViroPharma Inc., Biotechnology Industry Association, Pharmacopeia Drug Discovery Inc., Quaker BioVentures, Pennsylvania Biotechnology Association and Acusphere
Whom do you admire most in business and why?
Early mentors were scientists in post-doctoral programs and in graduate education. In business, you look toward people who have done tremendous things. Bob Swanson, founder of Genentech, led the premiere company in our space, surrounded himself with state-of-the-art scientists and changed the world from a genetic perspective.
What is the most important business lesson you’ve learned?
When you are 33, every day is a lesson. But the best thing to do for your business is to surround yourself with the best people. It’s more about people and less about technology.
What has been your toughest business challenge?
Drugs can fail our first drug didn’t receive approval from the FDA. We had been developing it for eight years, moving along with just enough resources and scrambling to build a successful business. Now, it’s nice to look back and see how we survived that.