Seeing both sides of the situation

The business leaders in this issue have dealt with major changes in their organizations. Some of it was out of their control, while other changes were driven by them. But in either case, they didn’t freeze. They focused on the opportunities, as well as the challenges.

Vector Security President and CEO Pam Petrow is leading her company through major changes in residential and commercial security. Everything is about automation — hooking your house or business up to one infrastructure.

Petrow remembers selling $5,000 residential systems in high-end neighborhoods 35 years ago. Now, residents use their cameras for things like seeing when the dog sitter arrives so they can remotely unlock the system, let that person in and know when he or she leaves.

She and her team at Vector are embracing these changes and working hard to find their place in the new dynamic. They’ve even led a national effort in 911 facilities across the country, promoting the adoption of an Automated Secure Alarm Protocol in municipalities and public agencies, while working with their competitors on implementation. The system automatically transmits data to dispatchers to improve response time.

Vector isn’t the only organization to see the possibilities. Steve Smith, CEO of Plus Consulting, had some experience working in global markets, but he got a crash course in Australian culture after acquiring a company down under. He had to utilize a lot of communication as a result, and has since applied his lessons learned to other potential acquisitions.

Every situation has its pluses and minuses, and time and time again, I hear executives say that you’ve got to see both. No matter how challenging something is, there may be a way to turn it into an advantage, and the rosiest of situations can always be improved upon.

Editor’s Note: Please join us on March 8 for ASPIRE 2018, presented by Metz Lewis Brodman Must O’Keefe LLC, where we will bring together the region’s entrepreneurial, dealmaking and investor communities for a daylong event filled with dynamic keynote speakers, engaging panel discussions and power networking opportunities. Reserve your seat today.

A business discussion about the Franklin Park Conservatory

This month, part of my conversation about the new Scotts Miracle-Gro Foundation Children’s Garden at the Franklin Park Conservatory and Botanical Gardens, featured in the Uniquely, focused on the business behind the nonprofit.

Over the decade that Bruce Harkey has been president and CEO, the organization has transformed. Its annual revenue grew from $5 million to more than $10 million as both earned and contributed revenue increased.

While Harkey studied horticulture, he also knows business and worked for Honda for 18 years. He uses both skill sets in his job.

“One of the characteristics of this organization that is different compared to other botanical gardens is our earned revenue is 65 percent,” he says. “The typical industry average is about 35 percent.” (The conservatory can be compared against the 64 large botanical gardens across the country, which have budgets of $3 million and above.)

Ten years ago, the conservatory’s percentage of earned revenue was in the high 40s. Harkey says the change has come from a significant growth in education, event rentals and starting a catering business.

“We have worked very hard to ensure that the conservatory continues to strengthen its financial foundation so that we can be sustainable — to grow in a reasonable, responsible way to make sure that we’re debt free and that we’re growing our earned revenue,” he says.

Another focus is innovation, and part of that innovation is balancing art and horticulture, which started with the Dale Chihuly glass exhibition in 2003.

“A lot of botanical gardens do art installations, but I don’t know that they are as integrated into the DNA of the organization as they are here at the conservatory,” Harkey says.

Art is even one of the organization’s three pillars, which are botanical gardens and beauty, community outreach and education, and broad inclusion of the arts. The horticulture and exhibitions development teams, which Harkey has combined into one, work hand in hand. That way, horticulture works with the artists on staff to ensure visitors have a comprehensive, fulfilling experience, he says.

A resolution for more resolutions

It’s that time of the year. We make resolutions to improve ourselves. We self-assess to find weak spots. We want to be better, stronger. We hope to be kinder, friendlier. Or, at least a little lighter.

January may be cold and dark; it’s also a time for renewal. It’s a time to gain ground. The possibilities abound for new choices. I always hear about continuous improvement. CEOs stress this again and again. January puts that front and center — for our organizations and our lives.

We could forget our good intentions. We might slide into old habits. Our resolutions often fall away quickly. The potential, however, is always exhilarating. Turning change into routine can happen. We know that it’s not easy. But it is always worth trying.

This year, I’m setting up reminders — a calendar alert on my phone. This should make it stick longer. I hope my resolution becomes habit.

One week in, I’m usually good. Two weeks in, I start slipping. But the alerts will keep coming. I hope the reminder isn’t annoying. I hope to beat the odds. But if I don’t, don’t worry — there’s always next year (Cleveland joke).

I will keep trying to change. But I need to remind myself: January is one month of 12. Resolutions can be made all year. Continuous improvement is like it sounds. It’s continual, constant and always present. Progressive, smart companies work on themselves. Progressive, smart people do the same.

It’s that time of the year. But that time shouldn’t be limited. Change is not just for January. Improvement is always worth our time, especially when it betters the world.


This month’s Uniquely is with recent Columbus transplant Larry Smith who created Six-Word Memoirs® a decade ago. In honor of his national movement that is almost like an edgier version of “Chicken Soup for the Soul,” I wrote most of my editor’s note in six word phrases. It wasn’t easy, but as I just wrote, easy is not always best. And like New Year’s resolutions, it was worth trying.

Entrepreneurs take center stage in Pittsburgh

Being an entrepreneur wasn’t always as exciting. Until your name was on the outside of a building, the average Joe or Jane didn’t know who you were as you toiled away in a garage or basement. That’s starting to change.

Just like how the Food Network shed light on the exciting profession of chef, media has made entrepreneurship cool. TV shows like “Shark Tank” and Silicon Valley success stories like Steve Jobs and Mark Zuckerberg, who each got their own movies, inspire people who want to create startups and invent the next big thing.

Innovation Works is doing its part. President and CEO Rich Lunak calls its Demo Days, which are held twice a year, “a rock concert for entrepreneurs.”

Just like a sporting event or popular artist, Demo Days at Stage AE draw a big crowd. It’s a time to honor the people who have more of an impact than an athlete or musician, he says. These entrepreneurs are risking everything to build companies, create jobs and make our lives better.

Another chance to shine is the AlphaLab Gear International Hardware Cup. Early-stage hardware startup teams are selected to pitch in six regional semifinals. They then join teams from other countries like Japan and South Korea to compete for $50,000 in investment funds and more than $50,000 in software, cash and other prizes.

“That program is continuing to grow. What that’s done is help build international awareness around not only AlphaLab Gear, but also what a fabulous place Pittsburgh can be to launch and build companies,” Lunak says.

Just by coincidence, Innovation Works isn’t the only organization in this month’s magazine that is turning entrepreneurs into household names in the business community. The Idea Foundry just celebrated 15 years of investing and working alongside entrepreneurs to transform business ideas into commercial activities and jobs. You can read more in this month’s Uniquely.

Now is a good time to be an entrepreneur, especially in Pittsburgh.

Stark seeks $4 billion portfolio

Who: Stark Enterprises

What: Cleveland real estate firm makes first NYC acquisition

Why it matters: Company plans to double portfolio to $4B in five years

Start spreading the news. Stark Enterprises’ foray into the New York market is the most visible in a $600 million series of deals that has the Cleveland-based real estate company poised for explosive growth.

Stark recently paid $98 million for a six-story building at the bustling intersection of Flatbush Avenue and Fulton Street in Brooklyn. It has another $1 billion in the ground and is pushing hard to double its portfolio from $2 billion to $4 billion over the next five years.

“When you do a $100 million purchase in New York, you fall under a lot more scrutiny,” says COO Ezra Stark. “But it exposed us to a lot more deals. People are taking notice of what we’re doing, and that increases the exposure of our firm to other potential investors and deal flow.”

This week, we take a deeper look at Stark Enterprises’ growth strategy and the thoughtful approach the company takes to acquiring new properties.

Knowledge equals opportunity

Stark’s journey to buying the Brooklyn property can be traced back to Ezra’s time spent as a graduate student at New York University and working at Forest City Ratner Cos. in New York.

“Typically, it can be a challenge to learn a new marketplace if you’re approaching it cold,” Ezra says. “That’s why it’s critical to have local partners and boots on the ground. You can’t buy things sight unseen or base an evaluation on paper. You need to understand the contextual relationship the asset has to the rest of the neighborhood.”

Now at this point, you might be thinking, ‘I’m not interested in buying real estate. This story has nothing to do with me.’ Before you swipe left, consider this:

Nico Bolzan“We don’t look at ourselves as a company that just buys or develops property,” says Nico Bolzan, executive managing director at Stark Capital Group. “We are a true real estate operating company. When we look at a potential acquisition, we consider EBITDA, revenue, expenses, profitability, cash flow and upside — the same statistics you would look at if you were looking to buy a business.”

The company was fortunate to have Ezra’s knowledge of Brooklyn before it made that acquisition. But if he had not been there, the company would have done what was necessary to do its homework and gather the information and perspective it needed before pulling the trigger on the purchase.

“We approach every acquisition from all those different perspectives,” Ezra says. “That’s really been one of our secret sauces. We’re very proactive. We position ourselves to be responsive to opportunities. At the same time, we are seeking opportunities and we once we identify them, we’re in a position to hit the ground running.”

Expertise from every angle

There are two key components to Stark’s growth strategy: vertical integration and a willingness to embrace key strategic partnerships. We’ll start with vertical integration.

Stark owns Arbor Construction, a full-service construction firm; Comet Management, a multifamily leasing and management company; and Emuna Energy, which is focused on environmental sustainability. These are in addition to Stark Capital Group, the capital markets arm, and Exterior Services, which does landscape design.

This allows the company to provide all these services directly to its assets. And from an acquisition perspective, it is a critical tool that can be used in the decision-making process.

“When we’re evaluating an asset for acquisition or development, we sit around the table and with all of our teams,” Ezra says. “You have somebody from development, somebody from finance, somebody from legal, architecture, landscaping. Each of these departments brings its unique perspective to the discussion.”

When you’re committing large sums of money to make an acquisition — whether it’s a building or a business — that ability to understand all the details from a variety of viewpoints can make a huge difference. A prime example of the value of this process is that it forces you to consider the downside scenarios.

“When we enter into any acquisition, we say, ‘What’s our Armageddon? How do we protect the principal investment so that in a worst-case scenario, we don’t lose money,’” Ezra says. “I’ve seen a lot of people who think, ‘Well, it’s been growing at this rate for the past couple years, it’s going to continue to do so.’ As we know, everything is cyclical.”

A team of experts that cover all the bases minimizes the risk of missing something that could lead to headaches down the road.

A shift in approach

Partnerships are another piece of the puzzle at Stark. Historically, the company did not typically raise outside capital or rely on equity partners to complete acquisitions, Bolzan says. That changed when Stark decided to expand geographically and buy more income-producing assets.

“We already had the knowledge and the infrastructure,” he explains. “We had the base to do everything and we really wanted to grow the business. The only thing that was stopping us was the capital. So to bring in outside equity partners with us to buy acquire, develop and redevelop these properties, it allows us the ability to grow.”

At one time, Stark was 100 percent a development company. It has shifted to 65 percent development and 35 percent acquisition and if all goes according to plan, Bolzan hopes it will soon be a 50-50 split.

“We’ve acquired $600 million worth of deals in the last 24 months,” he says. “Our goal is to double our portfolio in the next five years. We have a lot of different partners and assets from Los Angeles to Cleveland to New York.”

For the Brooklyn purchase, Stark partnered with Sun Equity, located in the heart of New York City.

“We have the ability to bring in outside partners, which helps us with the capital necessary to close the deals,” Bolzan says. “We also bring in local partners who are in that market to partner with us so we can have a competitive advantage. Stark Enterprises is never going to be successful entering these markets if we don’t have the local knowledge in that specific market.”

The building in Brooklyn is a mixed-use, fully leased property. The primary tenant, Consolidated Edison Inc. of New York, occupies 238,000 out of 258,000 total square feet. Other tenants are CVS Pharmacy, JP Morgan Chase and United HealthCare Services.

“This move is our first of several planned acquisitions in New York,” Ezra says. “It’s consistent with our strategy of acquiring assets that allow us to unlock hidden value in urban locations that have long-term opportunistic upsides.”

He says Ohio has been a valuable proving ground for Stark’s foray into the Big Apple.

“The cap rate’s valuation of properties is pretty flat in Ohio compared to New York,” Ezra says. “I would argue that to create a multi-billion-dollar portfolio in the Midwest is a much more challenging endeavor than in New York. Yes, New York has many sophisticated players, but the fact is if you can succeed in the Midwest, it actually sharpens the skill set and enables you to have that sophistication to be able to compete in the New York marketplace.”

How to reach: Stark Enterprises,

BDO’s Bob Littman

As one of the founders of SS&G and now managing partner of BDO’s Akron office, Bob Littman has seen a lot of changes in the dealmaking landscape across Northeast Ohio. “With the advent of the access of capital with private equity, there is just so many more ways now to exit businesses,” he notes.

We sat down with Littman to talk about being ready to act, finding the right partner and how options have changed for dealmakers over the years. What follows is a transcript of the above video, edited for readability.


Be ready to act

One of the things that’s interesting through my years of experience is that timing is everything they say in life, but timing doesn’t always correlate with best value or highest price for some of these privately held business owners. They’re so attached to the businesses that it’s a difficult decision to make. And I always say one day, they wake up and they say it’s time to sell the business and it may or may not be the time when they’re going to generate the greatest value or the most dollars from a transaction. But it’s important, very important, for them to understand the process so when they are ready, they know what steps it’s going to take — and they know what steps and how it’s going to go.

Find the right partner

I think it’s very, very important to research and understand the different options you have. I mean, finding the right partner is imperative. It’s very, very important. It’s important for the success of the business going forward. It’s important for the stability of the workforce. You want the right partner. Making sure that you have the right advisers and the right resources to help you find the right partner is very important to business owners.

An abundance of options

I look back at my career — I’ve been doing this for 30 years plus. Thirty years ago, in these privately held businesses, the succession planning was all about the next generation. So from my perspective the succession planning was, well we need to find a young accountant that can deal with the succession plan of the business owner passing it down to a child. It was just known that the business — normally succession planning was to go down the generation. Fast-forward to today and I almost call it like the death of the family business. With the advent of the access of capital with private equity, there is just so many more ways now to exit businesses. The whole concept of passing the business down to the next generation is no longer the first option anymore because there’s so much access to capital and so many more buyers out there. Twenty-five years ago, 30 years ago, you just didn’t have the different options to sell your business.

A long-term look at life and business

E. Maxine Bruhns, 93, has had her job for more than 50 years. Not only is she just the second director of the University of Pittsburgh’s Nationality Rooms, she’s likely the oldest employee at Pitt.

She also shows few signs of slowing down. When I spoke to her, she’d just gotten off her treadmill and happily spoke of creating many of the rooms as if they were favored pupils.

Before her time in Pittsburgh, she had a multi-cultural life, visiting more than 80 countries and meeting famous people like Albert Schweitzer. Her husband, who she met at The Ohio State University, warned her if she married him, they’d have to travel. He worked for the United Nations.

She shared more about her leadership of the Nationality Rooms in the Uniquely feature.

In an issue that partly focuses on business longevity — where I queried senior executives of companies at least 50 years old about how they’ve adapted to internal and external conditions for long-term success — it’s interesting that Bruhns has a similar tenure.

Bruhns has the ability to accept change, too. She said she’s discovered over her life that anything can happen, so she tries not to think too far ahead.

The executives, on the other hand, were all about looking to the future. Some common themes were continuous improvement, never getting complacent and keeping a check on your ego. Most spoke of accepting market or industry conditions in order to evolve the company to fit those.

When I asked how they decided to take the risk when it came time to pivot, they felt the risk of not doing something was higher. They looked to the horizon for the next challenge or opportunity, weighed the current realities and made a judgement that it was time to change.

It may have been a bit of a leap of faith, but I guess sometimes that’s what it takes. The courage to choose and stick with it.

You can’t have one without the other

Three features in this month’s magazine are either directly part of The Ohio State University or have some connection to it. It truly is a town within a town.

Ohio State relates to nearly everything in Columbus in one way or another. It doesn’t matter if you’re an alumnus or not. It doesn’t matter if you plan your Saturdays around Buckeye games or not. It doesn’t matter if you grew up in the area or not. Ohio State most likely touches your life in some way.

It was nice to learn more about the latest president, Dr. Michael V. Drake, who is a very different leader than his predecessor, in this month’s cover story. I also heard from a former Buckeye football player, Roy Hall, who is doing his part to give back to the community.

While Jack Hanna is only an honorary Buckeye, he will be celebrating 40 years at the Columbus Zoo and Aquarium in 2018.

I grew up watching Hanna on television, but I don’t think I realized how great his impact has been until I put together this month’s Uniquely. Hanna and the Columbus Zoo have become synonymous. It’s hard to think of one without the other.

It’s incredible how one man — and his keen understanding of public relations, education and entertainment — can help spark such change and progress. Hanna is someone who made himself into his own brand. When you think about him, an image of khaki and wild animals immediately springs to your mind. It’s no coincidence that all of his television shows use his name as part of the title.

Sometimes, I forget just how influential Ohio State has been and will always be to not just the Central Ohio community, but all four corners of the state. As Drake said in a video after he became the 15th president, you have to appreciate the pride and emotional connection that people have to Ohio State, as well as how central the university is to the community.

You really can’t have one without the other, just like Hanna and the zoo.

Finding inspiration from among the Smart 50

Once again, it’s time to honor the Smart 50. These are people who love what they do. It shows in their excitement and vision.

I know the profiles in the magazine only scratch the surface of what these amazing leaders and organizations are doing, so please take some time to visit their websites and meet them in person at the Nov. 9 event. You won’t be disappointed. You’ll be motivated, just like I am every year.

Another inspiration is Rice Energy. Founded a decade ago by a young, inexperienced management team, it is being sold to EQT Corp. for $6.7 billion. CEO Daniel Rice IV, the keynote speaker for the Smart 50 event, shared a story with me that demonstrates some of the skepticism he and his brothers met along the way.

Daniel, his brothers Toby and Derek, and their CFO — all four in their late 20s and early 30s — were riding up an elevator in New York City to their first meeting with a potential investor on their IPO roadshow. A woman gets in, who is probably in her 60s.

“She looks at us and in her New York accent, she says, ‘Are you boys here for job interviews?’” Daniel says.

Luckily, the Rices had faith and were confident in what they were doing, in spite of the doubt. That ability to press on in the face of challenges and setbacks is prevalent among many of the Smart 50 who overcome disadvantages to find success.

Even though I may never start a company, close a merger or be in charge of hundreds of employees, hearing about the great things going on the community always recharges me. We all need that sometimes. Bad news might travel faster, but good news is still worth listening to.

If you’re still in the weeds of a challenge at your company, I hope you can take heart from their example. If you’re looking to be inspired today, start with the Smart 50.

Follow the Columbus Way to the benefit of all

The energy, spirit and engagement in Columbus seems to be on the rise. That’s certainly true when talking about the Columbus Way, the collaboration between the private and public sectors.

Smart Columbus is a great example of this. Not only did our recent Smart 50 event highlight what’s going on with Smart Columbus, John Ammendola, president and CEO of Grange Insurance, who is this month’s cover, is a big fan.

Ammendola says Grange got involved because of his involvement with The Columbus Partnership, and now Grange has someone representing the company on the Smart Columbus team.

“What we’re trying to do now is say, ‘How can we help Smart City continue to move the ball along?’ We’ve offered up our resources. We’ve offered up people. We’ve offered up intelligence and insights,” he says.

Grange isn’t the only one from the private sector offering to help. In an area with a strong insurance industry, the changing face of transportation not only will impact drivers, but also these major employers.

If cars are talking to buildings and city infrastructure, then Grange, a key and large insurer in Ohio, wants to be on the front end of how and what risk begins to look like, Ammendola says. Like many, the company needs to ensure that both its policies and offerings are relevant.

The opportunity to be a big part of Smart Columbus is not only seeing how Grange can help, it’s also being ready for how Smart Columbus can help Grange.

I think these connections in our society cannot be overestimated. There’s so much overlap. What’s going on in the public sector will impact the private sector. What’s going on in the corporate sector affects the nonprofit sector. What’s happening in this industry all the way over here will eventually change industries that seem to be unrelated.

It reminds me of karma. If you help others with good deeds and intent, then it will eventually come back around. That’s why the Columbus Way is always a smart move.