"You qualify for an instantly slimming, beautifully shaping, supremely comfortable free pair of panty hose," a Mylar mailer announces.
Who could resist?
"It's a great promise," says Corpora, chairman, president and CEO of HCI Direct Inc., a direct marketing company that has served the women's market with products including Silkies panty hose for 30 years.
"The most beautiful legs in the world wear Silkies," announces an all-caps tagline situated under Silkies' curvaceous logo.
Direct marketing is an intimate, effective way to reach potential customers and deliver quality service to repeat clients, Corpora says. And with 2 million customers enrolled in Silkies home-delivery service and a 5 percent response rate -- double the national average for catalogue sales -- Silkies has a leg up on the hosiery market as the largest direct-mail brand.
"People often think of direct-response marketing as a shot-gun approach," says Corpora. "But the approach we take is very laser-like."
The 7,000 women who sent back their response cards in January to try out Silkies' luxury threads are evidence that when the right message lands at the right address, revenue returns to the sender. HCI Direct brings in $245 million each year for its efforts.
Corpora is practiced at executing the direct effect. He joined HCI Direct two years ago after leaving a position as senior vice president of marketing for America Online. His short tenure at the technology giant capped a 20-year career at Rodale Inc., a publishing company recognized for its health and fitness titles.
Corpora joined Rodale in 1980 as a project accountant, rising to president of its book division, where he grew the $30 million department with a "checkered past" into a revenue and profit leader that broke $250 million before he left in 2000.
"In direct marketing, you can adapt quickly to selling different products," Corpora says, adding that panty hose, magazines and Internet service aren't all that different -- really. "It's a different audience and message, but the process, list selection, [demographic] segmentation and the way people buy is pretty consistent."
A veteran of Rodale's circulation circuit, Corpora's learned lessons from hit-and-misses that have helped him understand the critical success factors for direct marketing. Sales pitches are different, methodology is the same.
First, a winning direct-response campaign marries statistics and style -- numbers and words. Interpreting information into a selling proposition is much different than adding up numbers and regurgitating economic data. The process requires creative and analytical mindsets.
"You have to have the right and left brains working," Corpora says. "If you are just math, you will not be successful because you need compelling copy to get people to respond. On the other hand, if you can't interpret the numbers, your ideas economically won't work for you."
Then, Corpora picked up pointers on the power of personalization.
"I learned that by testing different headlines and different formats, you could greatly increase your response rate," he says. "The beauty of direct marketing is you can have multiple messages going to multiple people."
He watched response rates climb when he experimented with snappy come-ons while working as a marketing manager at Rodale.
Corpora applies these philosophies to HCI Direct's campaigns, which explains the Mylar mailer that generated a 50 percent increase in response rate when the company introduced it five years ago.
Meanwhile, to craft messages that stick, HCI Direct mines its databases. Details matter -- even size matters. For example, women who slide into petites look for style; ladies who order extra-large sizes want comfort. These two groups will read different literature from Silkies with compelling statements that speak to their needs.
By scrutinizing demographic data, digging through customer list statistics for clues to buying preferences and identifying potential clients based on geography, age, occupation, interests and particulars such as leisure reading preferences, Corpora can narrow a mammoth circulation list to a digestible group of likely Silkies shoppers.
These women are generally middle-aged traditionalists with formal social obligations and conservative professional dress codes -- "Women from the Carolinas as opposed to women from California," Corpora says.
In fact, 300,000 such women have purchased 20 or more items from Silkies; 50,000 have received more than 100 hosiery shipments. And once women send in for their free Silkies sample, HCI Direct converts 25 percent of them into repeat customers, Corpora says.
HCI Direct pursues three types of customers in three different ways: it coddles its current shoppers, it asks former buyers if they will invite Silkies back and it prospects noncustomers who fit its specific demographic target.
"We use a sophisticated modeling system," Corpora says. "We build progression models and have access to statisticians."
Here, too, Silkies tweaks its inserts and customizes its benefits depending on where a shopper falls on the loyalty scale. It asks those who purchase four items per month if they are interested in increasing their shipment frequency. It bolsters veteran customers' buying power through rewards programs. And customer service staff fields queries and calls on cancelled accounts to see if the service was unsatisfactory.
Most retailers don't dig this deep.
"I like our position," Corpora says. "We don't position ourselves against the discounters, like Target or Wal-Mart, because we're not going to win on price. We position ourselves against department stores. That is where we compete very well on price, quality and, of course, selection."
As hosiery departments in these stores have evaporated into scant displays with fewer choices, Silkies captures shoppers who regularly purchase panty hose, seek different colors and styles, and appreciate the regular shipment so they can avoid rummaging through stock and the risk of returning home empty-handed.
Corpora's main concern is winning the mailbox competition.
"We just need to stand out among all the other mail in there," he says. "If they pick up their cable bill instead of our package, we might lose an opportunity."
Corpora likes to reach customers with words rather than dinner-time phone calls, radio announcements or department store displays. He prefers to know exactly who will find Silkies' promotions in their mailboxes.
"We have the luxury of having a lot of information on our customers," he says. "Silkies has always been recognized as a quality, valuable brand. And since we are in direct marketing, brand is more about the service and relationship people have with our company."
Six months after joining HCI Direct, Corpora knew he had encountered the most complex marketing obstacle of his career so far.
Hosiery is as hip as a petticoat in some markets, making it a challenging product to market. Today's lax dress codes and jeans-attire social functions force companies like Silkies to churn out new products that fit modern tastes -- vibrant colors, opaque and cable varieties, and even hose with rose tattoos.
"I realized after working here for a while that this job is really hard," he says.
For years, Corpora had mastered marketing strategies for products that people demanded.
"At Rodale, we were in health and fitness, and AOL was Internet service," he says. "These are two industries that have the wind to their backs -- people are interested in health and are jumping on the Internet. It was easy to sell."
Panty hose are a different story.
"We work in an industry where there is a declining market and we are trying to reinvent a selling model where the customer has more flexibility," he says.
While Corpora stimulates his team to inv ent strategies to catch the attention of customers, he also must convince employees that they can and should participate in driving the company forward and sending Silkies' message to customers.
"We have to make a compelling statement that our selection, flexibility and value is better than what customers can get anywhere else," Corpora says.
Realizing the task at hand, Corpora mentally pages through lessons learned that have helped him sculpt HCI Direct's corporate culture. From AOL: Approach projects with a sense of urgency. "If things aren't selling, how can we make it happen?" he says.
Question everything -- and then ask more questions.
From Rodale: Value your products, value your people.
"If you don't have a great product, you can trick people for a short time," he says. "But you will eventually lose your audience. Put the product first. Also, I think it's valuable and important to create an organization that cares about its people."
Finally, think long-term and develop a game plan with strategy that reaches beyond the next couple of quarters.
Corpora describes HCI Direct as a participatory, goal-driven workplace. Employees speak up, and are held accountable. They are encouraged to innovate and perform, then celebrate the company's progress and success.
But it wasn't always that way.
"The culture has evolved greatly over the past two years," Corpora says, calling the company "somewhat autocratic" when he joined.
"That's not good or bad," he says, "but it gives you a certain type of culture," one that can settle into complacency.
"It wasn't that employees didn't try, but the message from management was, 'We'll tell you what to do,'" Corpora says.
And when he asked workers why they did a task a particular way or why they carried out a project just so, they replied matter-of-factly, "Because that's the way it was always done."
Enough said for Corpora. The key to winning the mailbox competition, enticing new customers and delivering dependable service is developing a seamless operation behind the scenes, he says, so he developed a three-year plan he presented to the board before he took over as CEO.
He examined the company's inner workings and found that nearly every service was done in-house. That included manufacturing, which left HCI Direct as one of the few thriving textile houses in the United States. Three facilities in the Carolinas employ 400 workers, who buy yarn, knit, sew, package and ship Silkies to customers.
When HCI Direct occasionally outsources work, the defect rate is 25 percent; when it's done in-house, 5 percent of hosiery is defective. It's just not worth it to send sewing overseas, he says.
"I first thought, 'I can't believe we are competing by making our own panty hose,'" Corpora says.
Shareholders asked the same question when Corpora reviewed with them the company infrastructure.
"Does that make sense?" they wondered.
"I can prove to them that it does, and it's an advantage," Corpora says. "The people who run our plants in the South are very determined to keep that business (and 400 jobs), and labor is only 30 percent of the overall cost."
At the same time, Corpora carefully reviewed the responsibilities of the managers.
"We set up more formal review processes where managers and employees are accountable and responsible for evaluations," he says. "We set up incentive plans."
He also launched management training that includes personality tests to ensure team members understand how to communicate with one another.
Because the organization's in-house staff encompasses departments that include postage and shipping, accounting and finance, marketing and creative, and IT and statisticians, facilitating uncluttered information flow is essential. Designing goals and pinpointing expectations helps HCI Direct run as a cohesive entity rather than as a compartmentalized, function-driven company.
"There is a very nice buzz in the organization," Corpora says. "Everyone knows their job is to serve the customer, and it keeps us all very focused."
What's in store
Corpora's efforts have focused on HCI Direct's core Silkies line, but the ambitious CEO envisions an online storefront with other offerings. Eventually, the company's direct-response approach will test items besides textiles, he says.
"My goal is to transfer HCI from being a hosiery company to being a direct-marketing company that serves the women's market," Corpora says.
He says the Silkies brand is strong but not fast-growing, and to grow, HCI Direct must leverages its best-selling brand and offer different products.
"We have 10 (million) to 15 million customers who have bought from us in the last five years, and we will still have a relationship with those people in some way," he says.
Already, HCI Direct's Web site introduces customers to accessories, bath and body products, jewelry and sleepwear. This, Corpora figures, is just the beginning. Potential shoppers are tapped, databases are built and information is plentiful.
And while Corpora concentrates on maintaining a strong, competitive hosiery business he hopes fresh endeavors will provide aggressive profit and revenue growth to the $245 million organization.
And in a business where information is central, HCI Direct is in the know.
"There is one thing about Silkies," Corpora says. "We know everyone's size."
How to reach: HCI Direct, (215) 244-1777 or www.silkies.com
From a pure dollars and cents standpoint, the employer may wish to contact its CFO or accountant to determine how an adverse claim will impact the employer's future contribution rate. However, financial impact alone should never be the basis of an employer's decision on whether or not to fight an employee's claim for benefits. The employer must determine if there are any other overriding concerns, some of which are addressed below.
If there are no overriding concerns, and the impact of the claim on the employer's future contribution rate is relatively small, you may wish to simply make a business decision to permit an employee to receive benefits.
One example in which the employer should contest the claim, however, even if the impact on the employer's future contribution rate is relatively small, is when the employer has reason to believe that the employee might bring a claim of wrongful discharge, including employment discrimination, against the employer.
The employer may use the claim for benefits as leverage to settle the outstanding/future claim. Additionally, at any UC hearing, the employee is generally focused upon his or her claim for benefits and is not thinking strategically about future employment claims.
he hearing provides the employer an opportunity to discover potential evidence. Most employees do not realize that the hearing is under oath and may be admissible in future litigation.
An employer may be able to lock in the employee's testimony about why that person believes he or she was discharged, unrelated to any unlawful or discriminatory motive. However, employers must be sensitive to the fact that the evidence submitted in response to a claim for benefits and testimony presented at the hearing may also be admissible against the employer in any future proceeding.
If a lawsuit against the employer is not at issue, the employer may wish to consider whether there are any other overriding issues to address. If an employee is discharged for violating rules -- for example, he or she was caught stealing -- the employer may wish to send a message to other employees that such acts will not be tolerated or rewarded.
Is the individual an independent contractor?
Individuals who truly are independent contractors are not entitled to UC benefits. However, if the independent contractor meets the legal definition of "common law employee," he or she will be eligible for benefits, regardless of any agreement between the employer and contractor to the contrary. An adverse finding in such an instance may impact the employer's legal relationship with other independent contractors as well.
Some employers contest UC claims as a matter of principle. Before taking such a didactic approach, employers should understand that just because an employee was discharged for legitimate reasons does not mean he or she will be denied benefits because of willful misconduct. For example, absences under a no-fault attendance policy, prior performance and negligent acts generally will not rise to the level of willful misconduct.
Additionally, when an employer contests a legitimate claim for UC benefits, it may force the employee to seek legal counsel, who might suggest the employee pursue other legal claims against the employer.
The decision to fight unemployment must be made on a case-by-case basis after considering all of the relevant facts.
Allan M. Dabrow, a shareholder, and Jennifer L. Petruccelli, an associate, are labor and employment attorneys in the Philadelphia office of Buchanan Ingersoll PC. Reach them at firstname.lastname@example.org or email@example.com.
Are you ready? To be successful, you need to make informed decisions and a commitment in terms of time, staff and funds. But it's within your reach.
The numbers add up
First, ask yourself, is your product something that foreign consumers or manufacturers might need or desire? If your answer is yes, you should consider the value of exporting.
Are you worried that your company isn't big enough to export? Think again. Size isn't an issue.
Companies looking to increase profits through exporting have at least two options - hold the price of your goods constant in foreign dollars and get more back in U.S. dollars than you would have previously, or keep your price consistent in U.S. dollars and make more in volume. That means that if your product costs $1 in euros, it now takes more dollars to equal a euro. If you hold your price the same in dollars, the lower cost in euros might convince foreign customers to buy more.
Are you ready?
When evaluating the export potential of your business, start with these basic questions.
* Has your product been successfully marketed in the United States? If so, there's a good chance that it will be successful in similar markets abroad.
* Have sales declined locally due to increased competition or the introduction of a more technologically advanced model? Other countries may not need state-of-the-art technology and may welcome another supplier.
* Is your product unique? Does it have important features that are difficult to duplicate abroad?
If your product successfully measures up to these general standards, the next step is to assess your company's commitment to developing a proactive, long-term export business. According to the Pennsylvania Economic Planning and Development Council, additional self-assessment questions include:
* Does exporting fit into your overall marketing and sales objectives?
* Can you give foreign customers the same attention and service you give to U.S. customers?
* Are you willing to modify product packaging and ingredients to meet foreign regulations and cultural preferences?
* Are you aware of the constant change in foreign exchange rates that can impact sales and profits?
Formulating an export strategy based on solid information and proper assessment will help bring success.
Local resources and expert advice
Perceived barriers to exporting, such as foreign languages, foreign currencies and other issues, can be better navigated with input from resources in your own business community, including small business development centers and regional planning and development commissions.
Select financial organizations also can help. From setting up letters of credit and hedging foreign exchange risk to securing financing for your buyer and establishing local banking services, banks work with companies and sponsor trade workshops to spur growth beyond the U.S. borders.
Don't let the "E" word dissuade you. Exporting can be quite profitable, especially in this time of a weaker dollar. With improvements in communications and technology, exporting is a real option for many companies. How about yours?
William Friel is executive vice president and region sales manager for corporate banking in Philadelphia at PNC Bank, National Association, member of The PNC Financial Services Group Inc. PNC Bank is a 2004 Presidential "E" Award winner, honored by the U.S. Department of Commerce for export services. Reach Friel at (215) 585-5242.
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.
But now there is a medical health insurance plan -- at an affordable price -- for your employees who cannot afford standard packages. Furthermore, thanks to little-known tax advantages, these "mini-med" plans are a way to offer much-needed insurance to the uninsured within your work force at no cost to your employees or you.
Companies already using mini-med plans for their part-time, seasonal employees and low-income workers include PepsiCo, Burger King, Eckerd RX, Clark and Applebee's. What should you know about mini-meds and whether they are appropriate for you?
The benefits of mini-meds
Although less comprehensive than traditional PPO or HMO insurance products, mini-meds provide a wealth of coveted benefits. Most plans feature first-dollar coverage, with no pre-existing conditions or limitations. Covered services may include reimbursement for inpatient and outpatient hospital care, visits to doctors and specialists, surgical benefits, lab and X-ray services, even much needed prescription drug coverage.
Some mini-med plans provide coverage including life and disability insurance, as well as dental benefits.
As important, mini-meds serve as a viable preventive care insurance choice for employees and their families, and help reduce lost productivity due to preventable illness.
Tax advantages render mini-meds free
Mini-meds are significantly less expensive than other insurance options -- average monthly costs range from $20 to $150, depending on a plan's design. Additionally, employees may benefit from the little-known IRS Earned Income Tax Credit (EITC) program, which can make mini-med plans a benefit available at no cost.
An outgrowth of the 1990 Omnibus Budget Reconciliation Act, the EITC is a tax benefit for low- and moderate-income workers.
Families earning less than $34,458 and that have two or more children are eligible to receive a tax credit up to $4,300 per year. Families earning less than $31,338 with only one child are eligible for $2,604 per year.
Even families without children can earn a credit of $390, which means the EITC program could easily subsidize the entire cost for those who qualify.
Mini-med plans can be funded on a noncontributory, contributory or voluntary basis, although most often are paid for using the latter two. Premiums may be payroll-deducted through Section 125, providing both the employee and employer tax savings typically associated with Section 125 of the IRS Code.
Mini-meds close the insurance gap
Estimates tell us that 27 million full-time employees and 37 million part-time workers are uninsured; the former represents one out of every four full-time workers. Additionally, a study conducted by Blue Cross/Blue Shield of Ohio reported that 94 percent of insured employees use less than $1,000 of medical benefits per year.
The large majority of these services would be covered under most mini-med plans. Furthermore, with the EITC tax credit reaching up to $4,300, mini-meds can easily become a free health benefit for employers to offer.
By incorporating mini-meds into their suite of health benefits choices, employers stand to gain from tapping into and retaining this potential applicant pool of uninsured but valued workers.
Mini meds, max returns
I have met with hundreds of employers looking to provide sensible solutions, strategies and answers concerning their benefit plans. Mini-meds have provided many in the brokerage and consulting community the opportunity to narrow the gap between the uninsured and the insured.
Savvy employers structure their benefit programs in a way that allows them to recruit and retain the best employees. Adding a mini-med plan can increase the value of their overall benefits program at potentially no additional costs to employees. Not only does it provide a well-received benefit, it builds goodwill and helps reduce turnover.
The uninsured are more susceptible to major illness because preventive measures are not available. By providing some level of health insurance, employers create a healthier work force, resulting in less time lost due to preventable illnesses. Ultimately, that means increased productivity.
MICHAEL GAZZARA is vice president for Corporate Synergies Group Inc., a full-service employee benefits brokerage and consulting firm in the Philadelphia region. He has been a benefits consultant for more than 14 years, specializing in short- and long-term strategic planning for clients. For more information on what benefits service brokers offer, go to www.corpsyn.com or call Corporate Synergies at (877) 426-7779.
"The business is evolving and changing -- the dust really has not settled, in my opinion, even though three years have passed since Enron went down," says Smart, founding partner. "The CPA industry is in the midst of tumultuous change. We are simply the beneficiary of these changes."
While people wash out the sour aftertaste from ethical upsets such as Enron, progressive firms such as Smart's prosper. His company focuses on nurturing client relationships, serving up consulting services and recruiting talent to drive new business.
Arthur Andersen's expiration sweetened the talent pool. Smart "drafted the best players when the draft was open," recruiting Andersen professionals, executives and partners to bolster his technology consulting practice. Fall-outs, mergers and legislation continue to open up market share that feeds the firm's growth.
And Smart is picking up plenty of business from compliance consulting. Tagging the Sarbanes-Oxley Act of 2002 "the most important piece of legislature since the FCC Act of 1934," he attributes the firm's growth in business advisory services to its provisions. Under the act, clients that hire "The Big Four" for auditing services no longer can enlist the consulting services of these firms.
"All of a sudden, these executives have to look for other service providers," Smart says.
With its headquarters in Devon, and offices in Atlanta, Chicago, Baltimore/Washington, D.C., and New York City, the firm reaches global clients. Meanwhile, Smart and his partners knit relationships with executives and earn business -- part of an aggressive yet calculated and careful growth strategy.
"Change is good," Smart says.
Smart Business spoke with Smart to discuss the challenges of these strategies and how he plans to keep the growth going.
How did you tap into growth opportunities?
We follow industry changes very closely and we chase opportunities that are presented to us. The biggest part of our growth in 2004 was primarily providing assistance to companies that were implementing the Sarbanes-Oxley Act.
There were provisions that all auditors had to comply with, and the deadline was the end of 2004.
How does your strategy work?
Our strategy from earlier days was to fill what we've always believed has been a huge gap between international and local firms. When we first started the firm, it was The Big Eight, and that gap, by way of market share, seemed huge. The Big Eight consolidated into The Big Four, or Final Four as it is today.
The merger activity in itself has created opportunity.
Layer in the changes that occurred as a result of the Sarbanes-Oxley Act, and you have a recipe and invitation for other firms to step up and compete. That is why I view the Sarbanes-Oxley Act as our invitation to compete with international firms, and compete in a credible way.
Clients are forced to look for other service providers. In the old days, the notion was always that you select an auditor, and once you do that, that firm is your adviser for taxes and consulting. The way of the world was that everyone went back to the auditor for consulting services.
After the Sarbanes-Oxley Act, auditors are truly watchdogs, and that is the only service they can offer clients.
How much of your growth came from the passing of this act?
We were growing rapidly before the act - the act just forced companies to change. We were making inroads to developing relationships with large corporate clients anyway, and we were having some success without the rule change.
The rule change certainly fed our growth -- we've done $8 (million) to $9 million revenue in Sarbanes-Oxley compliance work. It's hard to put a finger on the percentage or what growth would have been if Sarbanes-Oxley did not occur.
I'd like to think we would have continued to grow at the pace we are on, but I have to admit that the marketplace might not have permitted it.
Which areas of your business show promise -- which services are most lucrative?
Our business advisory services department is the area that includes the Sarbanes-Oxley consulting work, which has been the No.1 driver of growth in our firm. But a close second is the technology practice. We started this in July 2002 with 13 people -- a fledgling group.
In July 2004, we had 64 people in that group, and they went from doing $1.5 million to more than $15 million in 2004. The budget for 2005 is $18 (million) or $19 million. More than 70 percent of our revenue comes from consulting services, and I estimate that the business consulting part of the practices did about $22 million in 2004.
Was your revenue always so strong in advisory services?
I've always enjoyed advising our clients beyond handling year-end filings that were required for Uncle Sam and bank audits. Inconsistent with other firms, helping clients with mergers and acquisitions has always been a big part of our practice.
Even in the early days -- 1990 and 1991 -- almost half of our revenues were from consulting. That has grown, and that is where the growth will continue to be.
As you continue to thrive in the consulting sphere, how do you manage this rapid growth?
Pepto Bismol. (laughs)
Does the pink stuff always work?
Here's how you know you are a partner: I really don't have a client load any more. From time to time, I work with a few clients, but I delegated my client relationships to my partners several years ago.
Somewhere along the line, someone offered me the best advice I ever received: Are you working in the business or on the business?
If you are going to grow in a service business like ours, you have to manage it and step back from the day-to-day fray. So I delegated the vast majority of my client relationships to other people five years ago to build a management structure that is more corporate than the traditional partnership model. I have a COO and CFO now, and we spend the time to manage the business.
It's the only way to do it. I can't possibly grow this business if I am also working day-to-day.
It's a big leap, and a leap that a lot of firms don't make. It's against your nature to pass on your clients because you spend time building relationships with them, and then to transition and hand off these relationship to your partners because you don't have time to manage them can make you pause and think.
Accountants hold on to relationships -- that is our security blanket. If all else fails, you always have your clients.
What is rewarding about working on the business rather than in it?
The growth, the challenge of growth and enjoying the success. We are building an environment that allows people to grow and progress through the firm to partner.
It is exciting to see people who have been with us for seven or eight years grow into partners. And it is satisfying to mentor other people -- and that is a big part of my job.
How do you target the right people for hiring?
The key is to hire the best players in the draft when the draft is open. I hire good people, and work follows good people. We don't hire because we have a backlog -- we hire talent.
Our business is a service business -- the only asset that matters is our people. We provide vibrant career paths with opportunities for growth and development.
Where do you expect your company to be next year at this time?
We always have this discussion, and I said to our executive board at our retreat: We can't expect to grow at the pace we have in the past. All of a sudden, the green eyes come out and we all get conservative and say we'll grow by 20 percent.
Then, I say: We haven't grown only by 20 percent in eight years. I challenge the conservative nature of my partners and push them to suggest that we will grow more than that.
Realistically, I will be disappointed if we don't bill at least $80 million in revenues in 2005. We didn't do many mergers in 2004, and I have some optimism that that could change in 2005, and we could bring on some new players that will feed the growth engine beyond what you can budget.
How do you maintain perspective when considering the avenues your business could tap into in the coming year?
The key for us is that we have focus. For reasons beyond our control, we find ourselves in an industry with extraordinary opportunity. When opportunity knocks, you have to take advantage and open the door. We are doing that with gusto.
But, it takes time to grow, and you need to take the time to manage your growth. You cannot work in the business and grow at a pace that resembles ours. It is physically impossible.
If you hire great people, you will not be afraid to delegate responsibilities. That is the key.
How to reach: Smart and Associates, (610) 254-0700. www.smartassociates.com
"I have been impressed by how Comcast has managed their rapid distribution growth through skilled operational execution, innovation and ability and willingness to compete," said Shell. "I am excited to join their team and hope to continue the growth and success that the company has experienced."
Shell was most recently CEO of Gemstar TV Guide International, where he successfully navigated Gemstar through a number of legal and operational challenges. Before that, he held a number of positions within News Corp., including president of the FOX Cable Networks Group. There, he oversaw the operations of FOX's entertainment and sports cable programming businesses, including FOX Sports Net, FX and the National Geographic Channel. Shell also worked in the Strategic Planning Group at the Walt Disney Co. and at Salomon Brothers Inc.
Shell received his bachelor of science degrees in economics and applied mathematics from the University of California, Berkeley and his MBA from Harvard University
THE AMERICAN RED CROSS BLOOD SERVICES
Brigid O'Neill-LaGier assumed the role of CEO with The American Red Cross Blood Services, Penn-Jersey Region. Formerly the COO, O'Neill-LaGier fills the vacancy left by Stanley C. Roberts, who assumed the position of vice president for business strategies for American Red Cross Biomedical Headquarters.
A graduate of The State University of New York at Binghamton, O'Neill-LaGier has a bachelor's degree in business/leadership and organizational studies, and an associate's degree in medical laboratory technology. She is an MBA degree candidate at Drexel University, with an expected completion date of June 2005. Her credentials include certification as MT(HEW), MLT(ASCP) and HT(ASCP).
She began her career as a medical laboratory technologist in clinical hospital laboratories in upstate New York, specializing in general laboratory science, microbiology and histology. After joining the American Red Cross in 1993, O'Neill-LaGier held leadership positions at Biomedical Headquarters in Washington, D.C., the New York-Penn Region in West Henrietta, N.Y., and the Penn-Jersey Region in Philadelphia. During her five-year tenure as COO for the Penn-Jersey Region, she served as acting CEO for 18 months.
O'Neill-LaGier is a member of the American Association of Blood Banks, the New Jersey Society of Blood Bank Professionals and the Blood Bank Task Force of New Jersey.
One of 35 American Red Cross blood regions, the Penn-Jersey Region provides lifesaving blood and blood products to more than 125 hospitals in southeastern Pennsylvania and New Jersey.
THE CHEST FOUNDATION
The CHEST Foundation, in association with the American College of Chest Physicians, awarded Mehboob K. Chaudhry, MBBS, one of 22 Governors Community Service Awards. These awards are given to medical professionals who demonstrate outstanding dedication to improving the health of communities and people in need through their volunteer work with health care projects worldwide.
Chaudhry's project provides free tobacco prevention programming and services to assist teens and adults in quitting smoking. The project also trains health care providers in tobacco cessation interventions at no cost and boasts an 80 percent short-term quit rate for adults, 66 percent after there months and 55 percent thereafter. As medical director, Chaudhry advises and provides instruction for the program team and other participating health care professionals.
The Governors Community Service Awards Program encourages volunteer service by ACCP members to improve the health of individuals and communities through advocacy, direct patient care and/or patient education activities. In addition to honoring the recipient, The CHEST Foundation also grants a monetary award to the organization each recipient supports.
FIRST FINANCIAL BANK
Martha Hilty joined First Financial Bank, a subsidiary of Chester Valley Bancorp Inc., as assistant vice president and branch manager of its Brandywine Square office.
Hilty earned a B.S. degree in finance from Penn State University in 1985. She also holds Series 6 and 63 licenses and Pennsylvania State Life & Health Insurance. Prior to joining First Financial Bank, she worked with Wachovia Bank as a financial specialist. Hilty also worked with Bank of America and Wilmington Trust of PA.
First Financial also hired Patricia Hartnett as business development officer and vice president, community banking. Hartnett will work with small businesses throughout Chester County.
She holds an MBA from Rutgers University and earned her B.A. degree in international relations and French from Johns Hopkins University. Previously, she spent four years as a small business banker with Wachovia Bank, and in positions with The Bank of New York and The Bank of Baltimore.
THE CHILDREN'S HOSPITAL OF PHILADELPHIA
The Children's Hospital of Philadelphia appointed Gavin R. Kerr as executive vice president and COO.
Previously, Kerr was president and CEO of Mercy Health System based in Philadelphia and southeastern Pennsylvania, and senior vice president of Catholic Health East. He also served as chairman of the board of directors for Keystone Mercy Health Plan, one of the nation's largest Medicaid managed-care plans. Prior to his role at Mercy, Kerr served for five years as vice president for Planning and Organizational Effectiveness at the University of Pennsylvania Health System.
Kerr holds an undergraduate degree in economics from Colgate University and a master of divinity in counseling degree from Princeton University. He served for a year in the United States Peace Corps as a marketing adviser in Kenya and serves as chairman of the Urban Health Care Coalition in Philadelphia.
After all, the CEO is often expected to be, among other things, the visionary, strategist, cheerleader and spokesperson of the enterprise -- almost its living embodiment as represented by executives such as Steven Jobs, Sanford Weill, August Busch and Ed Whitacre.
At the same time, consultants and business writers identify, appropriately in my view, the need for and the virtues of a strong senior team supporting the CEO. This senior team, however, is often characterized as a collection of functional specialists -- the COO, the CFO, the CIO, the CMO -- and little else. They are often the "no names" of corporate success.
But what skills beyond functional expertise do these senior players and potential CEO successors, need to bring to the enterprise to deliver on corporate objectives and ensure their own success? The following are essential requirements.
* A strong bottom line orientation. Profits and cash flow do really count
* Directly applicable experience to the task at hand (been there, done that)
* A genuine bias toward flexibility. In the information age, external variables can change the fundamentals of your business overnight, and a C-Level executive has to be able to cope, survive and thrive.
* The ability to think both strategically and executionally, as the need dictates
* The attributes of a magnet. Magnets are executives who can attract and retain other strong players. Business is too complex and interrelationships are too numerous for the sole practitioner executive to make a lasting mark in a business; other supporting cast members are a critical need.
* An impact player whose presence makes a meaningful difference in the core drivers of a business
* High-quality communication skills, orally and in writing, with a keen ability to listen, assimilate and synthesize
* An executive who really gets involved in the mission of the business, not just a mercenary or hired gun
* A broad world view and a student of trends and developments that can profoundly affect the business
* High integrity, honesty and consistency (yes, ethics are a must)
There are two other factors that are not often directly associated with C-Level success, usually because they aren't easily quanitifiable and measurable -- soft stuff and cultural fit.
The soft stuff is aligning compensation systems with company performance, motivating large groups of employees, dedication to team-building and team alignment, insisting on and modeling cooperation and collaboration, focusing on human capital development and slotting people in the right positions, and the willingness to sublimate personal interests to organizational imperatives.
Cultural fit in a business setting requires an understanding of and compatibility with the beliefs, values, behaviors, and reward and penalty systems of the enterprise. It implies an acknowledgement and respect for the heroes and myths that are embedded in the fabric of an organization and the willingness to build on such culture with today's stories that can add new chapters, contemporizing both the visible and virtual guideposts that shape behavior.
It's perfectly understandable that the spotlight frequently is on the CEO. It allows us to simplify and understand complex dynamics and creates a center of accountability.
However, the trend of only looking at the CEO rather than at the significant others who really drive business success -- that essential collection of high-performing senior executives who genuinely support and enable the singular leader -- must be reversed in organizations that want to achieve consistent business success over the long run.
Mitch Wienick is a WCU College of Business and Public Affairs Advisory Board member and a partner with Kelleher Associates, Inc., a premier career management and executive coaching firm in Wayne.
Premiums continue to climb, and companies dedicate significant time, money and human resources to provide employees and their families with health insurance. Employers continue to pay more than they realize for a number of reasons, chief among them that many business owners don't work with a benefits services broker.
A good benefits services broker acts as a direct insurance advocate, an aggressive benefits partner that can leverage experience and clout for more than just great rates. Insurance carriers and benefit plans are loaded with loopholes and complicated clauses and faults that cost employers dollars.
According to an industry billing study, 3 percent to 4 percent of total premium costs are wasted due to incorrect billing. Carriers overcharge companies, or worse, charge for employees who are no longer employed.
Employers don't realize that they are writing checks that are too large. Benefits services brokers can streamline paperwork and help HR personnel manage benefits plans effectively by assisting in services such as billing consolidation and reconciliation.
Minor paperwork mistakes can morph into major liability issues that cost companies thousands of dollars in court -- another indirect expense. Employers shoulder far too many responsibilities to keep track of legal logistics.
In fact, many employers overlook legal issues simply because they do not understand laws such as HIPAA (Health Insurance Portability and Accountability Act). Designed to reduce industry inefficiencies and fraud, the legislation also places parameters on business owners' hiring (and firing) decisions.
For example, if an owner opts to release an employee and knows about the worker's extensive medical costs, the employer could be held liable. An employer is not permitted to fire an employee knowing that person might be responsible for high insurance claims.
A broker can ensure that employers know the rules and are following regulations in order to avoid potential lawsuits. Penalties are serious for employers who neglect personnel policies or paperwork concerning insurance. In the worst case scenarios, CEO and HR managers can wind up behind bars.
Industry lingo and complicated plan provisions create confusion and stress for employees, as well, which ultimately contributes to the cost. A benefits services broker can run interference for employees.
Employee productivity, retention and satisfaction ride on a business owner's ability to provide workers with an effective benefits program. Companies lose worker productivity every day because of ineffective benefits programs.
Having to hold on 800 numbers and waiting for return phone calls from claims representatives waste an employee's valuable work time. When employees are forced to resolve benefits issues in an inefficient administrative process, employers pay the price.
When a benefits services broker acts as an employee advocate, it alleviates employees' stress and delivers value to a company's bottom line by saving workers time. For example, when employees turn to HR personnel to help solve insurance snafus, complicated claims paperwork can bog down the department.
HR departments often work with multiple carriers, thereby further complicating the administrative process with redundant activities that consume time and, ultimately, money.
The bottom line is that efficiency, protection and employee satisfaction can have a positive impact on the bottom line. Effective insurance services brokers design and implement creative solutions that pay off for employers.
Eric Raymond, CLU, is founder and CEO of Corporate Synergies Group Inc., a full-service employee benefits brokerage and consulting firm in the Philadelphia region. He is a frequent guest speaker at insurance and HR conferences and serves on the board of directors of Philadelphia Trust Corp. and Albert Einstein Medical Center. For more information on what benefits service brokers offer, go to www.corpsyn.com or call Corporate Synergies at (877) 426-7779.
First, to Bill Gates. Then, George Fisher, former CEO of Kodak. He contacted John Chambers at Cisco, Andy Grove at Intel and stock investor giant Warren Buffet.
And he didn't leave his mentor -- Peter Drucker, renowned business economics writer -- off the list.
"I called them up and told them, 'You never met me. I'm going to be starting as CEO of a Fortune 500 company, and I'd sure love the opportunity to get your thoughts,'" Boscia says, reciting his casual prompt without a hiccup or stammer.
His smooth talk sounds like he simply dialed up his old college cronies. No big deal.
"I had several years of stints in sales, and I was used to calling people and having them hang up," says Boscia, who has spent the last seven years as Lincoln Financial's CEO and the last four as chairman of its board. "What was remarkable was not a single one of them said, 'No.'"
Boscia is not afraid to ask questions, analyze feedback and even stare at the ceiling from 2 a.m. until daybreak, allowing his mind to exercise the possibilities. After six months dedicated to travel, more than three dozen face-to-face conversations with business executives and countless tours through company departments from human relations to marketing and sales, Boscia had plenty to think about and a marathon ahead of him.
That's to be expected when the company you run -- a leading provider of wealth accumulation and protection products -- has $110 billion in consolidated assets, annual consolidated revenue of $5.3 billion and more than 5,600 employees. But Boscia leads the way undaunted by the task.
Avid for advice
Boscia's presidential training breached traditional succession practices. Rather than shadowing his predecessor, Ian Rolland, Boscia clocked miles on the road and studied other companies' systems.
"Ian said to me, 'Jon, the typical transition would be for me to move into the chairman and CEO role only, and you would become president and COO,'" Boscia recalls of his conversation with Rolland, whose tenure exceeded 20 years.
This was 1998, when Lincoln Financial was based in Fort Wayne, Ind.
"He told me if we did it that way, I would spend seven days a week tied up with the most detailed decisions,'" he says.
Rolland warned Boscia that employees would ask him, "What are your plans?" Putting out fires consumes time that is necessary for concentrated business decisions, Rolland told him.
So Boscia selected executives to work on his team and spent the six-month transition period traveling and learning the following business lessons that steer the Lincoln Financial's success today.
* Tap technological talent.
Lincoln Financial Group is not a technology company, but smart systems are crucial to delivering products, serving customers and efficiently doing business in a competitive market. Boscia wondered, should we hire tech wizards or outsource?
He asked Bill Gates.
"Imagine you are at MIT," Gates told Boscia. "You've got Microsoft recruiting tech people, you have Intel recruiting tech people and you are recruiting tech people. Where do you think the best will line up to go to work?"
Boscia won't outsource everything -- "You have to be selective in how you utilize outsourcing in technology," he says. But he reconsidered his stance on hiring outside firms to handle technology projects, and today he depends on outside resources for a significant portion of technology development.
* Think big picture.
Business issues cross industries, Boscia learned. This insight prompted him to drop his perception that the best corporate advice for finance companies comes from peers in the industry.
"Best practices exist in almost any company, and they are transferable to your company and industry," he says. "You need to have a broad view of business."
* People power success.
Quality counts when hiring workers to drive a company toward growth goals. Boscia always placed priority on people, but during his conversations with other executives, he confirmed the importance of recruiting the best in class and keeping them professionally challenged and personally fulfilled.
"Employees really are the only major sustainable source of competitive advantage a business has," he says.
This reality resulted in many all-night cram sessions for Boscia. He thought about some of Michael Porter's economic studies. The author of "Competitive Strategy: Techniques for Analyzing Industries and Competitors" presents a competitive analysis of nations and sparked a serious question: Should Boscia move Lincoln Financial headquarters from Fort Wayne to a region with a financial services hub and a greater chance of finding the best and brightest?
"Innovation occurs when people can leave one company and go to another without hardship," Boscia says, referencing Porter's work. "A constant stream of going from one company to the next gives employees fresh perspective."
* Tackle tough decisions first.
At the time, Boscia didn't realize the value of Dick Fisher's commentary on dealing with demanding issues. The former CEO of Kodak asked him, "Are there any emotional issues that you are grappling with or any hard decisions you have to make?"
Boscia thought about the potential move.
"I said, 'Yes,'" he says. "Fisher said his advice was to make them as soon as you take on the leading role. Get it behind you and move on."
The financial services cluster is bracketed by Boston and Washington D.C., with Philadelphia resting right in the middle, Boscia says, explaining how he narrowed his search for headquarters locations.
"There was a lot of emotion with moving the company out of its birth place, and I was right on the fence as to whether or not to make that move," he says. "But after I talked with Dick, it became clear to me that if I didn't move the company right away, it would be almost impossible to do it later."
Boscia became CEO in July 1998 and announced the move the following November. Thirty people moved with Lincoln Financial -- there were 60 at the Fort Wayne headquarters at the time. Today, Lincoln's four companies employ 1,300 workers in Philadelphia.
Rearranging the house
While moving the business challenged Boscia emotionally, reorganizing Lincoln Financial's corporate structure was by far the most trying task, he says. He paints a snapshot of most companies' back-stage operations, a model Lincoln mirrors, as well.
Sales, marketing, product development and research are silos in this vertical structure.
"They are totally independent business lines with complete vertical integration," he says.
Boscia drew some lines. He separated sales from manufacturing so each could concentrate on delivering 100-percent performance.
"We centralized sales, so rather than being a product vendor, we could bring a wider solution set to the organizations and people we deal with," he says.
Business lines dedicate efforts to ensuring products are competitive and customers are cared for after the sale. Sales focuses on customer needs and on differentiating Lincoln Financial's products in the marketplace.
Manufacturing doesn't sell or cold call. The department concentrates on producing quality investment products.
"Last year, Barron's named us the No. 4 family of mutual funds," Boscia says proudly. "Five years ago, Delaware Investments was literally named one of the 10 most dysfunctional fund families in the marketplace. In five years, we went from 10 most dysfunctional to one of the four best."
Boscia attributes this to a focused company structure, although he didn't reassemble the corporate clockwork without careful consideration.
"If I had been wrong ... " he muses, weighing the potential consequ ences.
No one had advice for Boscia when he shook up operations.
"There was no other visible business model at that time to support the decision," he says. "So, it was a combination of business judgment and intuition."
And plenty more late nights, he adds. Boscia knows his ceiling quite well.
Boscia is particularly light on his feet after flipping through a copy of National Underwriter magazine on the train ride to his office. An article posted year-to-date results for variable annuity sales.
"Lincoln Financial is a pretty big variable annuity company," he says, noting that the industry average was 6.5 percent. Lincoln was up 83.7 percent. "I note that not to highlight variable annuities, per se, but we have gained market share in all of our primary product categories, whether mutual funds, insurance products or 401(k) products."
Strong business results are due to a three-tiered success model Boscia relies on to drive growth. The lucky charms are quality products, broad and deep distribution, and a strong brand.
"If you don't do any of these three well, you will not be successful," he says. "If you do one of the three well, you will continue to exist, and if you do two well, you will be very successful. If you are fortunate enough to excel in all three, you will be tremendously successful."
The model works. Lincoln Financial posted $511 million in net income in 2003 and reported $317.6 million for the first three quarters of 2004, compared to $317.2 million the first three quarters of 2003.
"The sales success in variable annuities is coming on the heels of some exciting product innovation we introduced in mid-2003 through 2004," Boscia says, pointing to the first tier in his success model. "We have competitive products that are well-positioned."
Boscia expects 401(k) products and mutual funds to take off in the next five years as baby boomers retire. He says many will seek out investment options that allow them to draw regular paychecks, and creative insurance products will allow clients to do just that,.
The trick is to deliver these products to the market. So the company launched Lincoln Financial Distribution four years ago to identify attractive relationships in the stock, bank and independent financial planner channels. A team of 400 wholesalers targets these customer groups.
"Their job is to get in touch with the stockbroker sitting inside an AG Edwards & Sons office or the personal trust banker at Wachovia or the independent financial planner," he says.
But if customers don't recognize the brand, they are not likely to buy its products, Boscia points out. He considers advice from his mentor, Peter Drucker.
"He said to me that there are two things you should never reduce your budgets for, and they are the first two things that virtually everyone on your staff will tell you to reduce spending on," he says. "One of them is training dollars for your employees, and the other one is advertising. It's like heroin, where you get addicted to saying, 'I don't have to spend because my results didn't go down.' That's a very slippery slope to step on."
Boscia remembers watching Lincoln commercials on television in the 1950s, but since then, the company had invested little in advertising. Today, the picture is quite different -- Technicolor, actually. Lincoln Financial is the naming rights sponsor for the state-of-the-art stadium that houses the Philadelphia Eagles football team, a $139.6 million investment over 20 years that pays off generously in name recognition.
"It's important for financial intermediaries to know who we are," Boscia says.
Lincoln representatives don't have to do a lot of explaining these days. An annual familiarity and awareness survey showed that 95 percent of financial intermediaries know Lincoln, compared to less than 50 percent a few years ago, Boscia says. The company spends $30 million each year on advertising; $7 million of this goes toward the stadium sponsorship and a majority of the rest goes toward TV advertising.
Tending to these three tiers will continue to drive the company forward as it deals with industry challenges -- an economy that is out of any CEO's control, rising interest rates and unpredictable consumer confidence.
Even CEOs aren't immune to worrying over uncontrollable variables.
"You have images that executives are 100-percent confident and certain in what they do," he says, reflecting on his numerous conversations seven years ago. "The reality is, they are human beings struggling with the same decisions and issues as anyone else. When you realize that, you have increased confidence.
"You don't have this insecurity blanket wrapped around you -- you can show your humane side and make mistakes and errors, as long as you learn from them."
And if Boscia gets stumped, he'll just pick up the phone.
How to reach: Lincoln Financial Group, (877) 533-0003 or www.lfg.com