“People who build aircraft want to be a giant erector set,” says Richard Ill, president and CEO of Wayne-based Triumph Group Inc. “They want to put the plane together, they don’t want to build the assemblies and components.”
Offering mere pieces and parts won’t win an invitation to the boardrooms of the Boeings, Cessnas and Airbuses of the world. The commercial airline and military customers Triumph Group serves want a three-course menu that includes building components, parts distribution and aftermarket repair and service.
“If we aren’t prepared to supply our customers with integrated solutions, we won’t be able to grow our company the way we desire to,” Ill says, noting that the company has grown from $60 million in aerospace sales when it was founded in 1993 to $700 million to $750 million this year.
“On the other hand, I’m surprised that $750 million in scale is not enough to continue to be a major factor, which we intend to continue to be in this industry,” Ill says.
He points to the two keys that matter most in aviation: scale and systems. These demands align with Triumph Group’s mission to provide a bag of tricks that can cover an aircraft’s needs from nose to tail, and Ill’s goal to break the $1 billion revenue mark in the process.
To continue growing, Triumph must continue to meet aircraft manufacturers’ increasing demand for pre-assembled machine systems and do it in a cost-effective manner.
Triumph Group started as a melting pot of businesses that Ill and a handful of key managers purchased from what is today IKON Office Solutions. A majority of the businesses were centered in aerospace and aviation, and Ill began to nurture this focus through organic growth and acquiring related businesses.
“In the beginning of time, we were well under the radar and we were selling individual company products,” Ill says.
But early on, he realized that to compete in aerospace, Triumph needed to offer customers more than individual parts; the parts from the various companies needed to be combined into completed assemblies.
“We have moved up the food chain and we offer our customer base a wider array of assemblies,” Ill says.
An aircraft diagram on Triumph Group’s Web site encourages visitors to navigate various plane body parts to learn Triumph’s capabilities. Each section of the craft lights up with a description and a list of Triumph’s businesses, which includes everything from machine parts to cabin windows.
“If you had that plane diagram in 1993, the only parts on it would be spares,” Ill says. “Instrument repair, overhauls, leading edges for wings, machine parts for landing gear and a few constant speed drives. Very few.”
Ill figures the selection has multiplied by 20 since then.
“The industry is looking for that,” he says.
But many customers didn’t realize that Triumph could provide them the integrated solutions they were looking for. Linking individual businesses to a common logo was a critical sales tool, one missing from Triumph’s arsenal three years ago. Despite a business steeped in every facet of aviation production and services, the company’s early days were punctuated by a familiar reaction from customers during sales presentations, Ill says.
“It was evident, even in the early days, that we had to do something to raise the visibility of Triumph and of our capabilities so we wouldn’t hear our customer base say, ‘I didn’t know Triumph did that,’” Ill says.
“If we heard it once, we heard it many times,” he says, explaining the impetus behind Triumph’s aggressive branding initiative and its push to publicize the “Triumph T.” “If your customers don’t know you do it, they are not going to buy it from you.”
Triumph didn’t want a piecemeal reputation, and it needed to communicate that customers could source entire aerospace and aircraft systems and services from one provider. The diverse collection of 41 companies produced complementary products and provided services that would allow customers to use Triumph as a one-stop shop so they could assemble rather than manufacture aircraft.
Still, Ill says the organization needed to better illustrate the unified whole. It needed an all-encompassing identity a bold name tag to show customers that its decentralized structure was a powerful team that could play with the big guys.
“When we branded the T, we then had the ability to bring together [all of our services] for customers,” Ill says. “We no longer hear, ‘I would have given you an order if I had known you sold that.’ Now, we have a standardization of that Triumph T, and we present that to the world.”
When Ill talks about scale, he lumps the aerospace and aviation industry into three categories large, larger and largest and he expects competition, consolidation and pricing pressure to widen the gaps between each segment. Being one of the big players is how Triumph will offer integrated solutions to its customers and continue to grow, he says.
The Boeing and Airbus types reign in the $6-billion to $29-billion group. In the lower stratosphere are companies including Triumph and those close to the $1-billion range. A notch below is a fragmented base of suppliers.
“Whether through mergers or acquisitions, the industry will consolidate,” Ill says, noting that this could present opportunities for Triumph, which evenly splits expansion efforts between acquisition and organic growth.
Although a bundled acquisition fueled Triumph’s start-up and strategic sales and purchases helped increase aerospace sales from $60 million to today’s $750 million machine, Ill cautiously regards this method as only part of the company’s plan for growth.
When Triumph invites another business to the “T,” the prospect must present a promising offer that includes three Ps people, products and profit. This translates to the total system Triumph will eventually provide customers.
“We want products that will help us expand and offer more to our customer base, and virtually all of our acquisitions have added a product or service to our bag of tricks, if you will, to make us more attractive to our customers,” Ill says.
For example, two years ago when Triumph acquired a heat exchange business from Parker Hannifin, now called Triumph Thermal Systems, the purchase provided Triumph with new product complementary to its existing hydraulic line. Most of all, its strong management team flourished with Triumph, Ill says.
While the business was not a major piece of the pie for Parker Hannifin, it was a profitable one. Once under Triumph’s wings, capital and managerial support allowed the thermal systems operation to flourish.
In this acquisition and all others, Ill knows that while products fuel sales, talented pilots lead a business toward success. He searches for entrepreneurial hybrids, leaders who can operate solo, managers wired to drive toward their own goals but able to retrofit their operations to meld the mechanics of a large corporation.
“The ones who do it best have a great deal of common sense, are very loyal and are knowledgeable about their products and how they fit in with everyone else’s,” Ill says.
“Some people are excellent managers of companies that were $10 million in sales. But they couldn’t grow with us. It is a challenge to find the right people who can grow with you. I employ entrepreneurial managers and we protect the integrity of each company [we acquire], but we all have to learn to be part of a group and contribute to each business as we climb the integrated solutions food chain.”
This in mind, Triumph established a corporate structure with cross-functional teams and specialized sales forces for each business.
“Human resources and the sales forces that cross over all groups are most important,” Ill says, adding that, “This doesn’t mean that individual companies have nothing to do.”
Dedicated HR, IT and sales professionals in each business focus on their particular products and services.
Geographic sales teams that understand Triumph’s mission can sell an array of total solutions to customers because they connect with every business under the corporate umbrella.
“Sales teams that present to our customer base might include four to six companies to produce one product,” Ill says. “You may have a machined part from one company, an actuation system from another, sheet metal from another, and that is formed and assembled into a part that is then delivered to a customer.”
Triumph is now positioned to make the most of its portfolio of businesses during boardroom presentations.
Further, a $25-million to $30-million annual commitment to increase operating capacity will ensure the company integrates the latest technology always a challenge in this progressive industry while providing funds for equipment repairs, machinery and product development efforts. This investment has always been a critical budget line item for Triumph.
He set an early precedent for constantly evolving to meet market demands.
“Capacity and expansion will allow us to offer more to our customers and, at some point in time, become a billion-dollar company,” he says.
Having the size and the ability to offer integrated solutions is only half the battle. You also have to have a competitive price, and that means finding opportunities across the globe to squeeze costs out of the system.
“Aerospace is very obviously an international business,” Ill says, pointing to Triumph Group’s European locations and a work-in-progress facility in Bangkok, Thailand, which he says is a direct result of the company’s international growth.
Already, 23 percent of Triumph’s business is international. This will increase with continued investments in businesses in Thailand, for example.
“We will make acquisitions in Europe and other parts of the world, if possible,” Ill says. “We are not limiting our acquisition options to only the United States.”
Ill realizes that outmaneuvering the competition requires lowering costs for customers, and with repair and overhaul business augmenting the company in Asia, he says that Triumph will investigate practical opportunities.
“In all manufacturing sectors, not just aerospace and aviation, people are looking for low-cost sourcing and for integrated solutions,” Ill says. “There is constant pressure from our customer base a constant pressure that I hope is self-imposed, because we have to [lower costs] to survive in the business world.”
The low-cost, high-output companies that can manage the volume that commercial airlines and defense programs require will survive.
Ill wants to build a big machine, but it has to be lean to cost-effectively provide customers with the total solutions they want.
“We’ve made a significant commitment in both people and capital to the lean manufacturing process,” he says, pointing to a Spokane, Wash., facility that was reconfigured into Triumph Group’s Lean University. Triumph’s reasons for acquiring the operation that was once a Boeing plant were twofold.
“It gave us a brand-new product to offer our customer base, and it was a plant that was very lean,” Ill says. “They had taken a lot of costs out of the system; the plant was built properly from Day One.”
Now, the Spokane facility serves as a school for Triumph employees, who are trained there before they assume their posts at various plants.
“That is how we transfer lean practices throughout our organization,” Ill says.
So far, Ill is satisfied with Triumph graduates and their progress at each of the company’s U.S. facilities. But, just as with revenue, product offerings and volume, in general, he knows that his team can’t turn on autopilot just because the system runs smoothly.
Lean operations help keep costs in line and a large scale allows Triumph to meet a diverse range of customer needs, but if Triumph doesn’t continue growing, adding to its capabilities and giving customers integrated solutions, its competitors will certainly step in.
“You have to get better at doing things all the time,” Ill says. “Otherwise, you won’t be able to compete with those who do get the job done.”
How to reach: Triumph Group Inc., www.triumphgroup.com
And for Devon Health Services Inc., the King of Prussia-based preferred provider organization, those bonds have meant double-digit revenue and profitable growth over the last five years.
Falcone, now its president, oversaw much of that success as the company’s COO during its growth spurt. The growth has come, says Falcone, by leveraging the relationships the 130-employee company has with its medical providers and with its payer clients, the insurance companies, labor unions and employers that use its provider networks.
“For me, the big focuses are making sure that our relationships with our clients are always in good shape, especially the big guys, and keeping in tune with what’s going on in the market,” he says.
For Falcone, that often means coming up with new approaches to cutting costs and improving delivery of health care services, ideas whose inspiration usually comes out of the problems that his clients face.
“That’s the focus of my job, making sure that we don’t miss those opportunities, that we’re not asleep at the switch,” he says.
By staying in front of clients and listening to them before trying to sell them, Falcone has been able to engineer some innovative approaches to reducing costs for payers and providers and increasing cash flow to doctors by providing novel income streams. And while doing so, the company has been expanding its geographic reach it enjoys a national presence, yet remains in close touch with its customers.
Falcone talked to Smart Business about how his company stays in front of clients, feels their pain and relieves it with smart solutions.
How has Devon Health Services sustained double-digit growth and profitability over the past five years?
Relationships. We deliver what we promise we’re going to deliver. When we go in and say we’re going to do something, we do it, and we deliver it right. We provide the right customer service and the right follow-up.
It’s not a case where we promise something and we can’t get it done. If we commit to doing the project, we’re going to do it, even if it means it’s not going to be the best benefit for us. Because of that, we’ve developed relationships with some of the biggest payers in the country.
So what made us, over that last five years, achieve this double-digit growth? It was really understanding the relationships we had and tapping into those relationships to put the right products and services in front of the people we know.
What that meant was getting our team together, the key people, the people that were in front of our key clients as well as internally, the people that understood the processes and the things we were doing, and making sure that we could deliver the right products and services to the people that needed them, a group effort to put the right things on the street.
Do you get involved directly with clients or is your role essentially one of interfacing with them through your staff?
Really a combination. Since the beginning, and even today, I do maintain relationships with our clients, especially the bigger ones, and I plan to continue that.
That’s the key to our growth, to make sure our clients are satisfied, and again, understanding what their needs are because, in the health care environment today, the needs are changing rapidly, and we want to be aware of what’s going on.
How do you maintain those close relationships with clients as the company grows?
For us, we always have that group of key clients. Today, we have over 500 clients on our list. They’re called payers to us, and that list has grown substantially.
Obviously, it would be next to impossible to maintain a relationship with every single one of those, but communicating to our salespeople and our client relationship people and understanding what’s going on with them is key. So even though you don’t have a direct link to each one, through the people in our organization, we can understand the needs of each one and the relationship we have with them.
One thing we did this is going to be probably five or six years ago we created a new process whose exclusive purpose was to interact with our clients. So before that, where it was just the salesperson who sold the case and maintained the case, the new group was designed to be in front of the client every day or whenever the client needed us to be.
And that group maintains relationships with clients at all levels, from the people at the top down to the day-to-day people so we understand what’s going on. Those groups, the client service groups as well as the sales group, have regular meetings and discussions about our clients so we understand at all times what’s going on.
Twice a month we have our sales meetings, which incorporate those departments. We talk about existing clients as well as new prospects and where we’re going with future products. We do some other things to stay in front of clients. On the anniversary of every client’s contract, depending on how big a client they are, we send lunch to their staff for the day, send something to their office, bring them bagels, whatever it may be.
It’s not something we send to one person but to the whole group that we work with at that client’s office. We get great feedback from that. We also maintain a list of our top clients and we want to make sure we go to lunch with them or dinner with them so we make sure we’re staying in front of them, communicating with them at all times.
Those kinds of programs are keeping me and our key sales group and our client service people in front of our clients and understanding their needs so that we, as a company, can react when we need to make changes.
How have some of the less traditional approaches you’ve taken helped to build the business?
One of the reasons for rapid growth was partnering with other entities in other regions to expand to a national presence. Historically, our footprint was the Mid-Atlantic region, but our clients wanted us to help them in other geographic areas.
So we went out and created relationships to provide services in those other areas. That’s one of the pieces that’s helped us grow, as well as stay on the cutting edge of new products.
We can provide a client with access to networks and products anywhere in the country. But outside of that, we’ve developed new programs directed at payers as well as health care providers to keep us thriving as an organization.
What are some of the programs you initiated that have fostered growth, and how did you develop them?
It all goes back to having the relationships ... so that they’re going to communicate to us their needs and what’s going on with them. That’s what allows us to go into them with products and services that are going to help them save money.
What do the products and services look like? Well, one example is we had a client that was using our network and our geography here in Pennsylvania. However, they had members in other states where they weren’t satisfied with the networks that they were using.
We put a program in place where we wanted to get discounts on 100 percent of their utilization, which meant getting their in-network utilization up, building a network for them wherever we could, making sure they were getting the discounts with the doctors they were going to.
We then negotiated when there were out-of-network claims, so they never paid retail. We’ve implemented it with other groups and we’re still implementing it today, and we’ve having very good success with it.
What kinds of programs have come out of your relationships with providers?
On the provider side, we have a terrific program where we have point-of-care marketing for pharmaceutical companies or any entity that has an interest in marketing their products to patients and physicians. It happens to be a great fit for pharmaceuticals because it encourages patient-physician dialogue about new drugs, new treatments, etc.
The program’s called supply marketing. The original concept was exam table paper. You go into a physician’s office, you see a plain white piece of paper on the exam table.
Well, we saw that as a billboard. We went out and talked to some of our pharmaceutical clients who agreed that they wanted to put their brand on that billboard. So the pharmaceutical company would buy the paper and we would give it to the doctors.
How to reach: Devon Health Services Inc., www.devonhealth.com
Kelly joined Agere in 2000 as vice president of operations for the company’s Integrated Circuits division and was named head of Agere’s global operations in 2001. He has been instrumental in reinventing the company’s supply chain and manufacturing strategies. Previously, Kelly worked at Fujitsu-ICL Systems Inc., where he served as chief operating officer for a year and chief financial officer for three years.
Over his career, Kelly has been responsible for overseeing a wide range of financial activities in previous positions within Texas Instruments’ semiconductor division in the United Kingdom, France and Portugal. He also was head of finance for Sonae, a publicly traded conglomerate based in Portugal.
Kelly earned a bachelor’s degree in management from the University of Manchester Institute of Science and Technology and he is a fellow of the Chartered Institute of Management Accountants. He is also on the board of directors of Plexus Corp., where he is a member of the Audit Committee.
DEVON HEALTH SERVICES INC.
Devon Health Services Inc. named Charles J. Falcone president.
As one of the first full-time employees 11 years ago, Falcone was instrumental in the development of DHS. As executive vice president and chief operating officer for the last five years, he oversaw the development of several programs that helped the company’s clients save hundreds of millions of dollars on their annual health care expenditures. Under his leadership, DHS has experienced double-digit revenue and profitability growth over the past five years.
Falcone has a keen interest in finding and hiring local talent. Through its intern program, DHS has worked with many of the area’s top colleges and universities to make this possible. The “Devon Cares” program, the philanthropic arm of DHS, has contributed both people power and money to local and national charities. Falcone also has helped lead the committee for Best Nest Inc.’s annual “Wine and Jazz” fund-raiser, which generated nearly $100,000 last year. Best Nest assists Philadelphia-based families that are affected by AIDS.
“I am very proud of Charlie and his accomplishments,” says Dr. John Bennett, founder and CEO of Devon Health Services Inc. “His leadership and vision have helped Devon Health become a leader in our industry. His determination for success is contagious. He has been vital to our growth and progress.”
Nora Pomerantz joined the office of Duane Morris LLP. She works in the firm’s Estates and Asset Planning Group in its Philadelphia office.
Pomerantz advises clients in the areas of estate planning, trust and estate administration, charitable giving and closely held business matters. She has extensive experience in sophisticated estate, gift and generation-skipping transfer tax planning, as well as retirement benefits planning, and has worked with noncitizens to create effective estate plans under applicable international and United States tax laws.
She represents individuals, corporate fiduciaries and nonprofit organizations in a wide range of personal, tax and administrative matters, including advising charitable organizations in connection with their deferred-giving programs.
She is a member of BNA Tax Management’s Advisory Board on Estates, Gifts and Trusts and has been a regular contributor to BNA Tax Management’s Estates, Gifts and Trusts Journal. She is a member of the Executive Committee of the Probate & Trust Law Section of the Philadelphia Bar Association.
Before attending law school, Pomerantz worked in publishing in New York and Philadelphia, at Psychology Today, The American Lawyer and other publications.
GSI COMMERCE INC.
GSI Commerce Inc. named Robert Wuesthoff executive vice president of global operations. Wuesthoff heads the company’s fulfillment, customer care and business operations.
Wuesthoff has 23 years of experience managing call centers, mail service fulfillment operations, distribution centers and manufacturing operations for companies in the health care and consumer products industries. Prior to joining GSI Commerce, he had been senior vice president of customer operations for Medco Health Solutions since 1999. In this capacity, he was charged with overseeing the customer service, fulfillment and claims processing for the $35 billion prescription drug benefit management company.
Wuesthoff was responsible for approximately 3,500 Medco employees and the operations of six Medco-owned call centers, two outsourced call centers and two outsourced fulfillment and claims processing operations.
Prior to Medco, Wuesthoff worked for Johnson & Johnson Corp. from 1982 to 1991, where he managed business-to-business distribution centers in New Jersey, Illinois and California, 10 public warehouses and a business-to-business customer service unit. He earned an MBA from The Wharton School of the University of Pennsylvania and holds a bachelor’s degree in operations management from The Pennsylvania State University.
These rebel unions have formed the core of a new group called the Change To Win Coalition, which also includes the Carpenters union that left the AFL-CIO a few years earlier. The Coalition’s stated goal is to spend significant amounts of their members’ dues on organizing at the grassroots level, rather than using it to fill the coffers of Democratic politicians who have time and again failed to deliver the goods to their loyal union constituency.
The house of labor has never been more divided, with union membership in the private sector totaling only about 8 percent of the total work force, down from 35 percent in 1955. At the same time, the AFL-CIO’s political influence on the national level is waning after having wasted significant dollars and time on Democratic campaigns, only to watch their candidates lose at virtually every turn.
Recent evidence of the eroding union movement can be found at Northwest Airlines, where 4,400 mechanics were replaced last week without much more than a whimper from their union brothers.
This dissention among union brethren most likely presents a mixed bag for Pennsylvania employers. On one hand, local AFL-CIO federations, such as the Allegheny County Labor Council, will have less money available to move their political labor agendas forward, and it will take time regroup in terms of organizing efforts.
On the other hand, organizers for the Teamsters, SEIU and UFCW, which utilize the most aggressive organizing tactics in Pennsylvania, will have significant new monies to take their message out to the street to nonunion employers, as well as to raid AFL-CIO represented companies of union members who have been dissatisfied with the way that their AFL-CIO affiliated unions have been doing business.
The SEIU, in particular, has proven itself to be formidable in Pennsylvania, having managed to organize a significant portion of the state’s health care workers, as well as janitorial workers across the state. Now that the shackles are off, the SEIU and other coalition unions are free to wade into organizing other industries, including businesses with white-collar workers, that were previously off limits, given the constraints placed upon them by the AFL-CIO.
Nevertheless, don’t count out the AFL-CIO member unions. The AFL-CIO still controls two-thirds of the union membership across the United States, and still has the ear of powerful national and local politicians. Should the AFL-CIO decide to take on the fight for union members, employers could very well see a resurgence in union activity, turning a once-complacent union movement into a roaring tiger.
All things considered, employers in Pennsylvania should be aware that the changes in the labor movement increases the probability that they will encounter unionization efforts.
Employers would be well served to perform a comprehensive review of their labor and employment policies and practices to make sure that they are up-to-date and conform to sound employee relations standards, analyze their wages and benefits to ensure they are competitive in the marketplace, have senior level managers take the time to go out and meet directly with employees to gain a better understanding of what their problems and concerns are in the workplace, and become knowledgeable about the law that regulates labor relations.
George Basara is a shareholder with Buchanan Ingersoll and serves as chair of the firm’s Labor and Employment Group. Reach him at 412 562-1636 or firstname.lastname@example.org.
Phil Lanctot Jr., CEO of Morrisville-based NRI Data, has adapted his company to suit the times. Over the last five years, revenue at NRI, which provides equipment and services to the data centers of Fortune 1000 companies, grew from $18.7 million to $35 million through the acquisition of small companies that added new technologies and capabilities.
“It allowed us to sell products that, in the past, we were reluctant to bring to market,” Lanctot says.
Smart Business spoke with Lanctot about how NRI Data’s sales techniques have evolved and how he expands his company through innovation.
How do you grow NRI Data?
It’s hiring and acquiring the right people, more technical people. We picked up most of them via acquisition.
We also took our sales team from your traditional relationship-type guys, and they’ve become a lot more technically savvy over the last five years. They’re required to attain various certifications and product training, something that really wasn’t that common 10 years ago.
We wanted to have a situation where our sales rep could just walk into a room, and in five minutes, do what it would take an IT guy a couple weeks and a lot of trial and error to do.
I have an ad in CareerBuilder right now which says, ‘If you’re an IT guy with very good people skills or you’re a salesperson with technical scope, give us a call.’ Our technical people have to be comfortable giving a presentation in front of customers.
You’ve got to know your product, and you’ve got to have sales skills. Our technical people are pretty good salespeople, and our salespeople are pretty good technical people.
How do you expand your company through innovation?
We’ve positioned ourselves kind of like an incubator for new technology. An example would be a Bluesocket; that’s the center of our wireless security solutions. We just finished a five-day site survey over at Rider University. (Bluesocket) can’t go to a CompUSA, a CDW or a Dell and say, ‘Pick up our line.’ They’ll say, ‘How many millions are you doing right now?’ And (Bluesocket will say), ‘No we’re just getting started.’ They’ll say, ‘Come back when you’re moving some product.’
Even the big distributors, if you buy a computer product, whether it’s from CompUSA or Best Buy, a lot of those are coming from the same people that I would get; there’s a handful of major wholesalers that feed these different outlets. But if you’re new, you’re not going to get any shelf space. They’re not going to move your product.
They don’t want to carry a product that has no existing revenue stream. They’re going to put a product in their bag, and they’re going to want $5 million or $10 million right off the bat. So a lot of times, companies like that will go to an NRI.
This is something that’s kind of developed because new products usually aren’t developed by the big names. New products are developed by the start-up companies, and the big names buy them. We look for these companies, and these companies look for us, and we’ll take their product to market because we’ve been around for 30 years. We do have access to a lot of Fortune 1000 companies, so we can take an unknown product and introduce it and create some revenue streams in their target market.
They’d have a hard time getting into a UBS, GMAC, Comcast, Bank One. They kind of work their way into that. That’s usually a good revenue stream for us, too, because we’re walking into large companies and hitting them with cutting-edge products they haven’t seen.
How does consulting play a role in NRI Data’s growth?
I call it a solution with consulting packed into that.
Having everyone involved in the solution aware of what the big picture is, who the customer is, why they decided to go with the solution and what they’re hoping to accomplish is really important. If you’re in the middle of a big install, and you’re using a subcontractor who (says), ‘Hey, I don’t know anything about what this is. I just have my job here,’ that usually creates problems.
If someone has a bad experience or two with (larger technology companies), their relationship sometimes is so big, or they’ve got some kind of contract and are so committed to them, where (the technology company) can afford to screw up every now and then. We really don’t get that luxury. People do hire consultants to do what we do but usually the results aren’t as good. Someone might actually pay a consultant hundreds of thousands of dollars to come up with the same thing that basically we offer right out of the box.
HOW TO REACH: NRI Data, (800) 828-3333 or http://www.nridata.com
The key to success in liquidity management is to strike a balance that offers you easy access to your ready cash, while taking advantage of the rising interest rates. Where do you start? Sweep accounts are the easiest and most efficient way to manage the investment of your operating cash. A sweep account is a bank account from which, at the close of each business day, the bank automatically transfers amounts that exceed a certain level into an income-earning account or investment.
Your working-capital needs are taken care of, excess funds earn income overnight and, best of all, you don’t lift a finger. However, you may not be aware of the many ways to make a sweep account work for you.
Money market investments
Until recently, funds transferred to sweep accounts were usually invested in traditional money market investments, such as repurchase agreements or commercial paper. These short-term investments feature flexible maturities that react daily to changes in interest rates.
Other investment options may not react to interest rate increases for up to 30 days, making money market investments an ideal place to park funds on a temporary basis. The funds are swept from your account after the close of business and returned the next day, along with any accrued interest.
Money market mutual funds
While repurchase agreements and commercial paper remain a viable option, money market mutual funds have become attractive to businesses due to strong ratings and diversification. These accounts allow you to determine how much operating cash you need on a daily basis, and keep the rest in a flexible money market mutual fund account to continue growing.
Unlike traditional sweep accounts, the money remains in the investment account until needed in your checking account. Any cash above the account’s target balance is invested in the sweep account at the end of the day. The sweep investment balance is still available to the business, if needed.
If your business requires as little as $100,000 in daily operating cash, a sweep account may be quite useful. A low monthly fee is usually associated with sweep accounts generally less than $200.
You may choose to stay with the more traditional sweep accounts involving repurchase agreements or commercial paper, based on your investment policies and guidelines. Money market mutual fund accounts, however, allow for greater flexibility in investment type, including tax-exempt options and diversification.
If you’re looking for a short-term, but not day-to-day, way to manage excess operating cash, a direct investment may be a good option. Direct investments enable you to invest some operating cash in an interest-bearing bank deposit, a U.S. Treasury bill, commercial paper or short-term, tax-exempt municipal bonds.
These are generally 30-day to 90-day investments, with higher yields than traditional sweep accounts. Direct investments are more complicated and require more monitoring. They are appealing for businesses willing to take on a little more risk and that have at least $5 million to $10 million in assets to invest.
They are a good fit if you can identify this amount of expendable operating cash each month. However, if you redeem a direct investment early, there may be a risk that the investor could lose money.
While it may take some time to learn the complexities of each sweep option, it may be well worth it especially in an environment of rising interest rates. Call on your trusted financial adviser often, if necessary for more information about all of your options.
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.
Denise Monahan is senior vice president and sales manager for corporate at PNC Bank, National Association, member of The PNC Financial Services Group Inc. Reach her at (856) 489-2972.
He succeeds Terry Kendall, who has led CIGNA International since 1999. Kendall recently passed away.
Hartley joined CIGNA in 1985. He has held several positions in the company, including responsibility for treasury and capital management for CIGNA International, serving as CEO of CIGNA’s Hong Kong operations and vice president of life operations in Southeast Asia prior to assuming his role as CEO of CIGNA’s Asia-Pacific region.
“Under Paul’s leadership, our Asia-Pacific operations have grown rapidly and CIGNA has become an acknowledged market leader in the region in providing innovative life, accident and health insurance products and services through affinity partners,” says H. Edward Hanway, CIGNA CEO.
Hartley is a graduate of the University of Sheffield & Hallam in England and is an FCA. He is also a fellow of the Institute of Chartered Accountants in England and Wales.
“I am confident that given Paul’s extensive experience, deep knowledge and leadership skills, he and his team will continue CIGNA International’s successful record of focused growth and profitability,” Hanway says.
FIRST FINANCIAL BANK
First Financial Bank promoted William DeFalco to first vice president and commercial lending team leader.
DeFalco will manage the group that develops and manages commercial and industrial business in Chester County. He joined First Financial Bank two years ago as a relationship manager in the Commercial and Industrial Lending Group. Prior to joining First Financial Bank in 2003, he worked with Republic First Bank and Mellon Bank.
He is a 1984 graduate of the University of Scranton, where he earned a bachelor of science degree in business management.
Monica Justice was promoted to vice president of studio operations at QVC. She is responsible for management of product central, the studio operations desk, backstage operations, image, broadcast design, post-production and graphics.
Justice joined QVC as an on-call fashion stylist in 1994. Prior to her promotion, Justice was director of studio operations, where she was responsible for the studio operations She received her bachelor of science degree in fashion merchandising from Philadelphia College of Textile and Science.
QVC also appointed Randy Ronning chief merchandising officer. He is responsible for merchandising, brand development and Internet. Ronning joined QVC in 2001 as executive vice president.
LITHIUM TECHNOLOGY CORP.
Lithium Technology Corp.’s board of directors promoted Andrew Manning to president and chief operating officer.
Manning had been the Plymouth Meeting company’s executive vice president since 2002 and its chief technical officer since 2003. He’s been a directors since 2004 and is a managing director of LTC’s Gaia Akkumulatorenwerke GmbH subsidiary, based in Nordhausen, Germany.
LTC’s board also appointed William Hackett chief financial officer, executive vice president and treasurer, as well as a board member.
The board also made Klaus Brandt an executive vice president.
Comcast Corp. appointed Diane L. Robina president - Comcast-Sony Networks, a joint venture between Comcast and Sony that will create new cable networks using content from the Sony library.
Robina is responsible for working with the board to determine the genres for the new networks and overseeing their start-up and operations. She is an elected member of the board of directors for New York Women in Film and Television.
Robina received her bachelor of arts degree from the University of Delaware.
Comcast also promoted Diane Dietz to senior director of public affairs and vice president of The Comcast Foundation. Dietz directs the company’s public affairs activities, including its national community investment and outreach initiatives. She also oversees The Comcast Foundation, which provides financial support for organizations and programs that work to strengthen the communities Comcast serves.
Dietz joined Comcast in 1996. She holds a juris doctor degree from Thomas M. Cooley Law School in Lansing, Mich., and a bachelor’s degree from the University of Michigan.
Stonebridge Bank appointed Russell W. Carlow chief credit officer.
He previously held positions including assistant vice president of Advanta Bank Corp., president and CEO of Bank of Chester County and senior vice president of Hamilton Bank.
No matter what industry you’re in distribution, manufacturing, professional services the livelihood of your business and the welfare of your family and your employees’ families depends on your ability to successfully market your company in the right way.
Whether your goal is to introduce your business to a broad audience, get that first meeting with a prospect, announce a new service offering or something else, a strategically crafted letter can be a very effective and inexpensive tool.
Many think a business letter is an add-on to the guts of a business package, be it a business plan, financial prospectus or a marketing campaign. Not true. A form letter is obvious at a glance, while a carefully constructed and targeted business letter hooks readers immediately and has them searching for more.
Here are six tips for producing a high-quality, effective business letter.
- Have a compelling opening. Get to the point right away. Too many letters beat around the bush before getting to the key issue. A good letter lets the reader know what to expect in the first sentence, and why it’s worth the time to continue reading. The most compelling letters open with a promise of a benefit or a solution to a problem.
- Use a postscript. Studies have proven that the part of the letter most often read (after the salutation) is the P.S. Unless the tone of your letter is completely inappropriate for a postscript, use one. These are best used as a reiteration of a key benefit or a call to action, such as “P.S.: Remember, with my service, your business can be more profitable tomorrow. Find out how by giving me a call at XXX-XXXX.”
- Set your letter aside for 24 hours after it is complete, and then reread and edit it. When looking at it cold, you will often find the message is not as clear as you may have originally thought. You also will be able to edit out repetitive or useless phrases, making it more direct and to the point.
- Read it out loud. Many business letters try too hard to sound intellectual but end up sounding aloof and incomprehensible. To avoid overuse of jargon, read your letter aloud. You may find that you can make changes to make it sound more conversational, which means you will communicate more effectively.
- Use emphasis. Help your readers find the key points by using typographical techniques. Use bullet points, underlined text, bold text, italicized text and combinations thereof to make certain points. But a little goes a long way. If too many words are emphasized, nothing is really emphasized.
- Be skippable and scannable. Make it easy for your readers to find the information they need. By putting your key message up front and by using typographical highlighting, short paragraphs and postscripts, readers should be able to easily navigate (skip and scan) their way through your letter for the information that is most relevant to them.
Mark McGuriman is in the marketing department of CBIZ Accounting, Tax & Advisory LLC and Mayer Hoffman McCann PC, an independent CPA firm in Plymouth Meeting, Pa. CBIZ, a publicly traded company and the 10th largest accounting firm nationally (Accounting Today), provides a wide range of assurance, tax and business consulting services to small and mid-sized companies. Reach McGuriman at email@example.com or (610) 862-2284.
D’Alessandro will lead United Way’s 60-member board of business and community leaders for a two-year term and play a major civic leadership role in the region. The board establishes the policies and direction for United Way, including setting the goals of the annual fund-raising campaign, and the strategy and priorities for funds invested in the community.
“I’m honored to be part of this important team of volunteers who are shaping the future of the communities where we work and live,” says D’Alessandro, who previously served as the board’s vice chair. “United Way is committed to building a better future by focusing on long-term goals of education, employment and self-sufficiency. I cannot imagine more important work than that.”
Before joining Sovereign, D’Alessandro spent 20 years with Main Line Bank. Prior to her present position, she was president of the retail banking division of Sovereign Bank for Pennsylvania.
D’Alessandro is also a board member of the Main Line Chamber and is involved in several chambers of commerce and community groups across the region.
DEVON HEALTH SERVICES INC.
Richard A. Longo joined Devon Health Services Inc. as vice president of network and client development. He is responsible for spearheading all network and client development efforts in Western Pennsylvania and West Virginia. Initially, he will oversee the development of a Medicare Advantage provider network in these regions.
Longo has more than 25 years of experience in health care management and strategic development. He has in-depth knowledge of physician recruitment and group medical practice administration, provider reimbursement, quality improvement processes, managed care, and integrated delivery systems.
Additionally, Mike Frick was hired as sales manager for product development. Frick joins Devon Health with more than 15 years of sales experience, including large territory oversight. He will oversee the sales efforts surrounding the Devon Health Clinical Trials and electronic prescription programs. He will also play a major role in the development and test marketing of future products.
Joe Tauber was promoted to vice president - human resources and support services of Keystone Helicopter. Tauber oversees recruitment and human resource operations at Keystone, as well as oversee Composite Technology Inc.’s human resources functions.
Keystone Ranger Holdings, Keystone Helicopter’s parent company, acquired CTI last year, and the company is in the process of standardizing policies and integrating benefits. Tauber is responsible for facility safety, environmental compliance, insurance, benefits and other support functions.
IKON OFFICE SOLUTIONS
IKON Office Solutions named Bruce Fiscus to head its sales and service operations in the Bay Area as area vice president. Fiscus brings 18 years of IKON sales and sales management experience to the position, most recently serving as director of sales in the Greater Los Angeles area. He succeeds Mark Bottini, who was promoted to vice president and general manager of IKON’s western region.
Fiscus began his sales career with Xtec in Philadelphia, which was later acquired by IKON. After six years of selling, Fiscus was promoted to sales manager. In 1998, he was promoted to director of sales for IKON’s Los Angeles area.
ACE USA INTERNATIONAL ADVANTAGE
Alfred E. Bergbauer was named senior vice president, ACE USA International Advantage. The ACE USA International Advantage unit provides international insurance products and services for U.S.-based businesses.
Bergbauer leads a team of international property and casualty underwriting specialists who are responsible for delivering international programs, specialty coverage and client services for U.S.-based companies with global operational needs.
Previously, Bergbauer was south region international practice leader at Marsh USA Inc. He also previously served as CEO of two insurance companies in Asia.
ACE also named John S. Scales vice president, underwriting, for ACE USA International Advantage. Scales is responsible for overseeing the underwriting function within the International Advantage unit and leads the growth of the custom casualty underwriting segment.
Scales joins ACE from Marsh USA Inc., where he was senior vice president, southeastern zone international practice leader. Previously he was regional manager at AIG WorldRisk, southeast regional casualty manager at AIU of North America Inc. and senior business development manager at American International Companies Inc.
GENERAL FIBER COMMUNICATIONS INC.
General Fiber Communications Inc. (GFC), a cable fulfillment provider, named Richard Martin chief financial officer. Martin, a CPA and a certified treasury professional, has more than 17 years of domestic and international financial management experience. His areas of expertise include strategic planning, turnaround management, mergers and acquisitions, internal controls and capital structure management.
Previously, Martin served as CFO for Strategic Distribution Inc. He has also held financial management positions within UPS.