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VOL. 36, NO. 43
OCTOBER 26 - NOVEMBER 1, 2015
35th Anniversary
CLEVELAND BUSINESS
NORTHEAST OHIO’S
MOST CONNECTED THEY’RE DEALMAKERS, POWER BROKERS AND PEOPLE TO KNOW SPECIAL SECTION — PAGES 25-3 39
ART: Check out Akron
DREES: Bulking up
JOBS: ACE Report
AUTOS: VW fallout
FOCUS: Workforce
BUSINESS OF LIFE
Museum expands horizons
Developer changes strategy
Region continues slow climb
Local dealers are doing OK
Training tomorrow’s leaders
Lost Nation adds to stable
P. 5
P. 6
P. 8
P. 16
P. 19-24
P. 42-43
BioInnovation Institute shrinks, regroups ABIA looks for sustainable way to spark medical innovation in Akron By Chuck Soder
If only the engineers at the Austen BioInnovation Institute in Akron could create a medical device that could save the life of a nonprofit. The institute is being run by a skeleton crew while its leaders work to restructure an organization tasked with turning Akron into a hub of biomedical innovation. Its survival is not guaranteed. Interim director Joe Randazzo said that ABIA would only be able to operate
“for a limited time” if it fails to win a grant it recently applied for from one of its longtime partners: The John S. and James L. Knight Foundation. Randazzo described the funding as “critical,” though he added that ABIA would also pursue other funding sources. Thus, he’s hoping that the institute’s new strategy can convince potential funders that the Austen BioInnovation Institute can find a
more sustainable way to spark innovation in Akron. One key to that strategy: Becoming a smaller organization. A few years ago, ABIA employed the equivalent of 40 full-time staff members. Now it has eight. It also employed six executives who made more than $100,000 in 2013, including CEO Frank Douglas, who made more than $630,000, according to a Form 990 ABIA filed with the Inter-
nal Revenue Service. Today, the only one who remains is Randazzo, who became interim director after Douglas left this past January. They didn’t all leave by attrition. The institute cut 12 employees last year, three of whom were offered jobs with Akron Children’s Hospital after it took over the hospital simulation center at ABIA’s headquarters. It kept a few people who could SEE ABIA, PAGE 46
20151026-NEWS--2-NAT-CCI-CL_--
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Small Business Matters i Want more information and resources on this week's topics, ideas and events? Go to www.cose.org/smallbizmatters.
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Q&A
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10/23/2015
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z OCTOBER 26 - NOVEMBER 1, 2015 z CRAIN’S CLEVELAND BUSINESS
Workplace injuries are under closer inspection
SOLD 4922 EAST 49TH STREET CUYAHOGA FALLS, OHIO
BY RACHEL ABBEY MCCAFFERTY rmccafferty@crain.com @ramccafferty
Newmark Grubb Knight Frank is pleased to announce the sale of the 296,554 SF industrial facility located at 4922 East 49th Street in Cuyahoga Falls.
Visit
TerryCoyne.com Or Call Terry at
216.453.3001
Terry Coyne represented the seller. 1350 Euclid Ave., Suite 300 Cleveland, Ohio 44115
From the start of this year through mid-September, Ohio employers called OSHA to inspect nearly 200 amputations. There’s no way to know if this is an increase or a decrease over last year, or any previous year for that matter. Before 2015, companies were rarely required to file a report if an employee lost a limb on the job. That changed on Jan. 1 when the Occupational Safety and Health Administration updated its recordkeeping rule, requiring companies to report work-related fatalities within eight hours of learning about them, and amputations, losses of eyes and inpatient hospitalizations related to work within 24 hours. Any company that falls under OSHA’s jurisdiction — which, in Ohio, is basically everyone other than government employees, miners and workers on small farms — must report, even if they are usually exempt because of size or industry. Previously, companies just had to report fatalities or hospitalizations of three or more employees in the same incident. An amputation, as defined by OSHA, is the “traumatic loss of a limb or other external body part.” That includes body parts — even fingertips — that have been severed or cut off, medical amputations and lost body parts that have since been reattached. It does not include injuries like severed ears or broken teeth, as well as avulsions or deglovings, which are, respectively, the tearing away of tissue from the body and of skin from the tissue. Howard Eberts, OSHA’s area direc-
Some of the big areas for amputation risk are around machine guarding and lock-o out procedures, said Howard Eberts, OSHA’s area director for Cleveland. Employees shouldn’t work on machinery without first locking it out, and they shouldn’t be able to get under or around machine guarding on equipment. Employers who want more information on OSHA’s recordkeeping rule, including definitions and timeframes for reportable injuries and deaths, can visit https://www.osha.gov/ recordkeeping2014/index.html.
tor for Cleveland, said in the past, the only time companies were required to report amputations was if it happened on a mechanical power press. Otherwise, the agency might only hear about it if someone was on-site and flipping through a company injury log. Now, the agency is getting a better sense of the problem. “That has widened our vision as an agency,” Eberts said. What’s clear so far is that inspections related to amputation hazards are up. From Jan. 1, 2014, to Sept. 17, 2014, OSHA performed 225 inspections in Ohio that got coded for amputation-related hazards. (This does not necessarily mean there was an amputation; just that there was a violation that could have led to one, like inappropriate lock-out plans for machinery). From Jan. 1, 2015, to Sept. 17, 2015, there were 351 such inspections for the state. Sixty-five of the 2014 inspections were in the 12county Cleveland region, while 141 of the 2015 ones were. Eberts said the hope is that the increase in reporting helps companies be more transparent and spurs them to develop more safety and health-
related measures. While this is a big change for OSHA, the companies that spoke to Crain’s didn’t sound concerned, because they already hold their employees to standards above what’s required. Jason Saragian, director of communications for Beachwood-based aluminum manufacturer Aleris Inc., said in an email that safety is one of the company’s most important global initiatives. The company has processes to record all incidents, even small ones, as well as nearmisses. That allows Aleris to correct its environment so it can eliminate safety hazards. Talan Products Inc. takes a similar approach. The Cleveland-based metal stamper hasn’t had a lost-time incident in more than three years, but if it did, managers wouldn’t hesitate to call OSHA. Maintenance manager Nate Moore said the company doesn’t have to worry about OSHA showing up at its doorstep because it already has a strong focus on worker safety. “We never prioritize production over safety,” said CEO Steve Peplin. The company’s leadership considers safety one of Talan’s core values. It has a committee to oversee its various safety-related efforts, which include comprehensive inspections, “near-miss tracking” of almost accidents and weekly employee discussions on safety topics for home and work. Having a strong safety culture helps Talan recruit employees and improve performance, Peplin said. He thinks that overall, a stronger OSHA standard could help the industry, as bad actors might be forced to improve. “OSHA is not our enemy,” Peplin said. “We both have the same goal, and that’s worker safety.”
Chicago broker is on hook for $1.86M BY JAY MILLER jmiller@crain.com @millerjh
“Success isn’t a result of spontaneous combustion. You must set yourself on fire.” – Arnold H. Glasow
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s Cleveland Bus sines ss (ISSN 0197-2375) is published weekly at 700 West St. Clair Volume 36, Number 43 Crain’s Ave., Suite 310, Cleveland, OH 44113-1230. Copyright © 2015 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $2.00. POSTMASTER: s Cleveland Bus sines ss, Circulation Department, 1155 Gratiot Avenue, Send address changes to Crain’s 210-0 0750 Detroit, Michigan 48207-2912. 1-877-824-9373. REPRINT INFORMATION: 212-2 Subscriptions: In Ohio: 1 year - $64, 2 year - $110. Outside Ohio: 1 year - $110, 2 year - $195. Single copy, $2.00. Allow 4 weeks for change of address. For subscription information and delivery concerns send correspondence to Audience Development Department, Crain’s Cleveland Business, 1155 Gratiot Avenue, Detroit, Michigan, 48207-9911, or email to customerservice@crainscleveland.com, or call 877-824-9373 (in the U.S. and Canada) or (313) 446-0450 (all other locations), or fax 313-446-6777.
A Cuyahoga County jury has awarded a Cleveland Heights man and two Swedish fraternal organizations he is associated with $1.86 million from a Chicago commodities broker. The case is one of a handful of legal actions growing from a Ponzi scheme spun by former Beachwood investment adviser Enrique Villalba Jr. Rosenthal Collins Group LLC on Oct. 13 was found guilty of aiding Villalba in the sale of fraudulent securities to Rolf Bergman, a retired electrical engineer, and VASA Order of America and VASA Order of America Archives Inc. Bergman is president of the archives organization. Joel Levin, the Cleveland attorney who represented Bergman and the fraternal organizations, said that while Rosenthal Collins argued that it was only a passive broker for Villalba, “somebody should have been paying attention, and much to their regret and outrage, they’ve got special duties under Ohio’s ‘Blue Sky’ law.” A state blue sky law is designed to protect the public from fraud in the offering and sale of securities that escape federal oversight. Rosenthal Collins has until Dec. 14
to file a motion for judgment notwithstanding the verdict if the firm believes the jury didn’t follow its instructions and its ruling is based on insufficient evidence. In an emailed statement, a Rosenthal Collins spokeswoman said that as a matter of policy, the firm doesn’t comment on litigation matters. This is one of a number of legal and administrative actions against Villalba, who is in a federal penitentiary and insolvent, and Rosenthal Collins. Villalba is a graduate of the U.S. Military Academy at West Point and of the University of Puget Sound School of Law. He held himself out as an investment manager and claimed he could produce long-term gains of between 8% and 12% for investors using a proprietary strategy he called “Money Market Plus” for investing in the futures market. However, he was an unregistered investment adviser and traded for his customers through Rosenthal Collins. The Chicago firm set up a Cleveland office that handled Villalba’s transactions. In 2010, Villalba was charged with and pleaded guilty to one count of wire fraud in a Ponzi scheme that the office of the U.S. Attorney for the Northern District of Ohio said defrauded 26 investors of $29.7 million. Villalba admitted that he had misappropriated client funds and hid his
actions from clients of his Money Market Alternative LP (MMA). The government said Villalba used some of his investors’ money to fund Rico Latte coffee shops in Hudson and Stow and to buy property in Vermillion. He was sentenced to 105 months in prison and ordered to make restitution of $30.4 million, triggering actions by Commodity Futures Trading Commission against Villalba and Rosenthal Collins. The CFTC charged that between 2006 and 2009, Rosenthal Collins failed to supervise the handling of MMA’s account. In 2012, Rosenthal Collins, without admitting to the charges against it, agreed to pay a civil penalty of $1.6 million and relinquished $921,261 in commissions. Bergman and the Swedish fraternal organizations won a $1.9 million judgment against Villalba in Cuyahoga Common Pleas Court in 2011. Villalba, who is incarcerated at the federal correctional institution in Morgantown, W.Va., represented himself in the case and offered no defense. In Erie County, Rosenthal Collins settled a similar suit in 2013 filed by three Villalba investors out of court; a case brought by a group of 14 West Coast investors that ended up in U.S. District Court in Cleveland was dismissed by District Court Judge Solomon Oliver in 2012.
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CRAIN’S CLEVELAND BUSINESS z OCTOBER 26 - NOVEMBER 1, 2015 z PAGE 5
The Akron Art Museum’s Transformer Station displays works from such artists as George Segal and El Anatsui. (Contributed photos)
Akron Art Museum broadens horizons Institution has new initiatives that go well beyond Rubber City BY SCOTT SUTTELL ssuttell@crain.com @ssuttell
Get out! In a way, that’s the philosophy these days at the Akron Art Museum, which is seeking new audiences — and new ways to engage with those audiences — by reaching beyond the walls of its downtown Akron home. Consider this: ● The museum is in the midst of a gorgeous exhibition, “Choice: Contemporary Art from the Akron Art Museum,” running through Dec. 6 at Transformer Station on Cleveland’s West Side. ● It’s teaming with the Museum of Contemporary Art Cleveland next summer to present “Mark Mothersbaugh: Myopia,” which will include works on paper, sculptures, installations, music and videos from one of the founders of the iconic (and Akron-born) band DEVO. ● The museum has expanded to new areas — in Highland Square and West Hill, at the University of Akron and University Park, and in Cuyahoga Falls — its popular “Inside | Out” program, in which framed reproductions of works in its collection can be found in parks and mounted on the exterior walls of local businesses and organizations. ● It has begun construction on the $5 million Bud and Susie Rogers Garden, which is designed to bring new life to a one-acre tract on the south side of the museum and to create a lively civic
space in the middle of downtown. The garden’s grand opening is set for next spring. Mark Masuoka, who in July 2013 became the museum’s executive director and CEO, sees the initiatives as central to building a deeper relationship with art lovers throughout the region — not just those in the Akron area who already appreciate the museum’s collection and traditional programming. “The real question is, why wouldn’t we be doing this?” Masuoka said. “If we think about the role of an art museum, or any cultural institution, in the 21st century, it has to be to reach out to people, to be open in presenting your work, your scholarship, and ultimately helping people live a more creative life.” By collaborating with other institutions in the region on exhibitions and programs, he said, the museum has a chance to “reframe the conversation” about the value of art museums.
Can-do attitude Masuoka has a big fan — and now, an exhibition partner — in Akron Art Museum trustee Fred Bidwell, who led the committee that conducted the search that led to Masuoka’s hiring. Bidwell and his wife, Laura, co-founded Transformer Station, host of the “Choice” exhibit. Bidwell said he approached the Akron museum in early 2015 about the concept for the show and received an enthusiastic response. “I was really excited when Mark said, ‘Yeah, we could do this,’ ” Bidwell said. He said Masuoka has a “very generous, very expansive notion of what the museum can do.” Bidwell is an avid collector and fan of contemporary art, and he said he was eager to present an exhibition for “a group of people (in the Cleveland area) who might not be aware there’s such a fine museum in Akron … with an extremely strong
modern collection.” Displaying works from the Akron collection, including George Segal’s “Girl Sitting against a Wall II” and El Anatsui’s “Dzesi II,” in the “rawer” space of Transformer Station gives them “a new context for a new audience,” Bidwell said. He called the Akron museum “one of the great midsize museums” in the country, and he said partnerships with other institutions help to solidify and enhance that reputation. Such partnerships also go a long way to fostering better regional cooperation — a topic much-discussed in Northeast Ohio, but one where the follow-through isn’t always strong. “I’m a big believer in regionalism,” Bidwell said. “In general as a community, we’re a little diminished when we think of ourselves as isolated institutions.” The Akron Art Museum partnership with MOCA Cleveland on “Mark Mothersbaugh: Myopia,” which is set to run May 27 through Aug. 28, 2016, was more serendipitous. Jill Snyder, executive director of MOCA Cleveland, said her institution was interested in hosting the exhibition, which was organized by the Museum of Contemporary Art Denver and recently ended a run in Minneapolis and now is in Cincinnati. Upon learning that Akron also was interested in the show, Snyder said, she spoke with Masuoka and they came up with a strategy for sharing “Myopia” that would take advantage of the strengths of both institutions. “We kind of stumbled into the collaboration, and then we became strategic,” Snyder said. Visual and sound work will be presented at both Cleveland and Akron venues, but the individual exhibitions “are organized to emphasize either sight or sound.” At MOCA Cleveland, for instance, “Myopia” will focus on “sound, sound-making objects, and artworks about correspondence and commu-
nication,” the institutions said in announcing the partnership. (Works on view include early performance photographs and film, photographs of Mothersbaugh as his DEVO alterego, Booji Boy, early mail art, 27 rugs with video animations, manipulated musical instruments, and excerpts of TV and film.) Myopia in Akron will focus on Mothersbaugh’s visual art, including an installation of 30,000 postcardsized drawings. There’s an economy to the collaboration, too, as Snyder said the institutions can share costs including marketing, shipping and insurance. If the show, if expected, is a big hit with audiences, “We should be able to get people inspired to see more (at the museums), in both directions.”
Masuoka said the collaborations with Transformer Station and MOCA Cleveland, as well as the expansion of “Inside | Out,” shouldn’t be — and won’t be — “one-time opportunities.” “If we’re going to be part of a larger regional conversation, these types of events are important,” he said. He sees the Bud and Susie Rogers Garden, where construction began in late September, as similarly important in fostering conversation. The project, which pre-dates Masuoka’s arrival at the Akron museum, is important because it will be a true public space — offering walking paths, outdoor art, concerts and films, and other events. “If it’s a place for someone to be reflective, or for someone to be creative, we’ve done our job,” Masuoka said.
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Drees is building up its presence in NEO Developer will sell lots in seven new subdivisions in 2015 BY STAN BULLARD sbullard@crain.com @CrainRltywriter
Drees Homes is changing its strategy and plans to pick up its pace in Northeast Ohio. After a dozen years in the region, the big Fort Mitchell, Ky.-based home builder is launching sales of lots in seven new subdivisions this year but also making a fundamental change in how it’s approaching the Cleveland-Akron market. That’s the word from Jen Zabkar, Drees’ new Northeast Ohio division president since Sept. 1. “We’re moving into Drees signature communities,” she said, locations where it has control of multiple lots to create a larger presence in a single neighborhood. A key sign of the shift is at North Ridge Pointe near state Route 83 and Mills Road in North Ridgeville. In a vast field where streets for a subdivision are just starting to go in, Drees will take half the lots in the 32site first phase of a land development site. It is positioned to sell there for some time: The subdivision will house more than 250 homes when it’s completed. In the other six new locations, from Brunswick in Medina County to Green in southern Summit County, Drees plans to close this year on at least 13 lots in each. “The market is back,” Zabkar said as she discussed aggressive growth plans for Drees and its plans for larger commitments to communities than it has in the past made in the region. When Drees entered Northeast Ohio, competition for sites was so intense it followed a different strategy that also allowed it to continue growing through the downturn. Originally, Drees would pick up a handful of sites in different communities with an eye to serving moveup home buyers there, such as nine lots it snagged and built on during the downturn in new home-site shy Westlake. The strategy also allowed the national builder to capitalize on existing lots as small builders failed or banks seized lots to recoup their investment during the downturn.
Range of options Drees ranks this year as the nation’s 28th largest builder, according to the Builder trade magazine’s an-
Jen Zabkar became president of Drees Homes’ Northeast Ohio division on Sept. 1. (Contributed photo) nual list of the country’s largest 100 builders. The ranking is due to a forecast the company will close sales of 1,500 homes this year with gross sales revenue of $655 million, according to the magazine. David Drees, its president and CEO, is the third member of the family to head the company since his great grandfather launched it in 1928. Now, Zabkar said, the company is diversifying more in terms of locations than in the past in Northeast Ohio. That is accompanied by a panoply of offerings that allow it to serve different buyers, from moveup buyers to first-time buyers as well as downsizing baby boomers. The North Ridgeville properties show one of its strategies: It is designing North Ridge Pointe for move-up buyers who want larger, more expensive properties in the same suburb where they might have bought smaller, less expensive newly built homes years ago. In North Ridge Pointe, Drees will offer homes ranging from a twobedroom ranch starting at $299,900
to a four-bedroom colonial costing upwards of $359,900. At the other end of the demographic scale, Drees plans to take all 22 sites being developed on the former site of the John Glenn Elementary School, 1300 E. Dartmoor Ave. in Seven Hills. Pricing is not set in the neighborhood dubbed “Glenn Park” to continue the homage to the former astronaut and U.S. senator from Ohio and reflect a substantial park that will be incorporated in the plan. The infill project is going in amidst a neighborhood of homes from the 1960s and 1970s. However, with the proximity to Interstate 77 and the substantial south suburban office market, Zabkar said it will be designed for young professionals who want a short commute. “Some of our homes are priced for someone coming out of an apartment,” Zabkar said. “But we’ve also sold a first-time buyer a home for $300,000.” Jim O’Connor, land manager, said SEE DREES, PAGE 16
Timken ‘is optimizing its IT operations,’ to lay off 70 North Canton-based Timken Co. will lay off about 70 workers from its information technology staff over about the next 18 months, the company said. The manufacturer of bearings and related components and assemblies will shift the work to its operations in India, Timken spokeswoman Gloria Irwin said in email correspondence last Wednesday, Oct. 21. “Timken is optimizing its IT oper-
ations as part of ongoing efforts to be more efficient and cost-effective,” Irwin wrote. “During the next year and a half, Timken will centralize day-to-day IT operations and strategic work in its existing business and operations center in Bangalore, India, which will become the company’s IT center of excellence, coordinating with smaller regional hubs in the U.S., Romania, Poland and France.”
The company will begin letting workers go this month and will continue to trim its IT staff into early 2017. It will retain some information technology functions in North Canton, including some management positions and functions that need to be close to the company’s existing data center and analysts, Irwin said in the email. — Dan Shingler
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The Week
CLEVELAND BUSINESS 700 W. St. Clair Ave., Suite 310, Cleveland, OH 44113-1 1230; Phone: (216) 522-1 1383; www.crainscleveland.com
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The Sherwin-Williams Co. will start the new year with a new CEO. The Cleveland-based paint and coatings giant announced that its board of directors elected John G. Morikis to serve as the company’s next CEO, effective Jan. 1, 2016. He also was elected to the company’s board effectively immediately. Morikis will succeed the current chairman and CEO, Christopher M. Conner, who has held those titles for 16 years. Connor will remain at Sherwin-Williams as executive chairman.
Parker Hannifin Corp. said it will supply Indego exoskeleton devices for a four-year, multi-center study funded by the U.S. Department of Defense and the Congressionally Directed Medical Research Programs. The Mayfield Heights-based company is commercializing the Indego device, which helps gait-impaired individuals to stand and walk again. Three rehabilitation centers will participate in the extensive study: Vanderbilt Medical Center in Nashville, the Mayo Clinic in Rochester, Minn., and the James A. Haley Veterans’ Hospital in Tampa, Fla. Three different studies will be conducted during the project.
FOR THE HEALTH OF IT A new addition is on the way to the bustling health care market of Lorain County. University Hospitals said it plans to build a $32.4 million outpatient health center and freestanding emergency department in North Ridgeville. Construction will start later this year, and the facility is expected to be completed in 2017. The proposed 50,300-square-foot center will sit on a 30-acre site on the north side of Lorain Road, just east of the entrance to the Ohio Turnpike. Designs for the facility still are being finalized. UH said initial plans include a freestanding emergency department, outpatient laboratory services, and physical therapy, primary and specialty care physician services.
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THE REIT TIME Shareholders of Forest City Enterprises Inc. adopted five resolutions to convert to a real estate investment trust from a real estate operating company effective Jan. 1, 2016. The company said the proposals received the necessary two-thirds of votes cast to pass. After the results were announced, Charles Ratner, Forest City chairman, said that he had been asked for years if the company would ever convert to a REIT and said it would if it were the right thing to do. Now is that time, he said.
A NEW REALITY Surgical Theater raised $9 million from a Chinese venture capital firm and electronics giant HTC Corp. — a deal that could help the Mayfield Village-based company become a player in the virtual reality industry. Surgical Theater’s software already allows neurosurgeons to create 3-D images of their patients’ brains and study those models on a screen. HTC, which is based in Taiwan, plans to release its HTC Vive virtual reality headset before Christmas. A quote attributed to the HTC CEO Cher Wang described the deal as “an exciting opportunity to pioneer the medical use of VR.� Surgical Theater’s technology has helped neurosurgeons to study more than 900 patients.
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Shinola, a Detroit-based maker of American-made watches and other items, will anchor an area that RMS Investment Corp. is describing as a “food hall� housing multiple retailers and restaurants at its proposed Van Aken District in Shaker Heights. The proposed food hall will encompass about 20,000 square feet of 100,000 square feet of retail space in the proposed remaking of the dated Van Aken Shopping Center in Shaker Heights. Luke Palmisano, president of RMS, said the developer’s plan is to fill the space with a combination of local businesses that complement unique national brands.
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The Northeast Ohio labor force continues to grow — it’s just growing slowly and is not keeping pace with the national economy. With only 611 jobs added to a labor pool of 1.2 million workers in September, according to the latest Ahola Crain’s Employment (ACE) Report, the growth is well off the pace of the national economy. That one-month addition of 611 jobs translates into a growth rate of 0.05%, less than the 1.1% rate of job growth over the last 12 months, according to data compiled for the ACE Report by economist Jack Kleinhenz. Nationally, from September 2014, employment has grown at a 2.2% pace, In his analysis, though, Kleinhenz is grateful for the positive trajectory. “I would characterize the regional economic activity as modest to moderate,� he said, echoing the terminology in the latest Federal Reserve Bank Beige Book, the bank’s periodic economic outlook. The ACE Report surveys only Cuyahoga County and the six counties that surround it, while the Fed’s Cleveland-based Fourth District comprises Ohio, western Pennsylvania, eastern Kentucky and the northern panhandle of West Virginia. However, Kleinhenz said, the “Beige Book comments are consistent with what I believe is evident in the recent (Cleveland metro) data.� The latest Beige Book, released Oct. 14, reported manufacturing activity in the Cleveland Fed’s district as “flat or mixed,� and that demand for steel remained weak due to a strong dollar overseas and competition from Chinese steel. That observation is reflected in a decline in goods-producing jobs of 209 positions in the ACE Report region, compared with a gain of 820 jobs in service industries. “It is not likely that the current headwinds facing manufacturers will likely subside in the coming months, thereby precipitating a further downshift in (manufacturing employment) growth,� Kleinhenz forecasted. The Fed survey found a strengthening market for multifamily and senior housing, though, leading to scattered labor shortages in the construction trades. “The construction industry remains challenged by a labor shortage, including laborers, skilled craftsmen and construction professions,� the Fed report said about the Fourth District. “The end result is upward pressure on construction costs, including labor.� For the 12 months, employment in the ACE Report region is up 0.89%, or 10,350 jobs, with most — 8,702 — in service positions. The Fed reported that gains in employment were seen in the construction sector, banking and freight hauling. At the same time, staffing firms reported a pickup in the number of job openings and placements, mainly in manufacturing and financial services. Looking ahead, the economists at PNC Financial Services Group see a pickup in job creation. In their thirdquarter market outlook, they forecast 2016 employment growth in Northeast Ohio at a 1.4% rate. That’s only slightly off the economists’ forecast for U.S. employment growth of 1.7%. — Jay Miller
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Opinion
From the Publisher
RNC will need everyone’s help
Editorial
A wider net Crain’s has published in the last months two special reports that have put into sharp focus the need for Northeast Ohio to step up to create diverse and inclusive workplaces and boardrooms. In this week’s issue, we rank the 100 Most Connected people in our region. Rachel Abbey McCafferty reports on page 34 that the list is far from a model of diversity. Women make up less than 20% of the list. Only six individuals are minorities. The overwhelming majority of people are white, and most are between the ages of 50 and 70. It should be noted that this is a data-driven list, not a subjective one. The numbers don’t lie, and the story they tell is one of diversity unrealized. Several weeks ago, Crain’s reporter Chuck Soder wrote about the people who control some of the most powerful organizations in Northeast Ohio: the board members of public companies. His examination of proxy statements filed annually by all 59 public companies in Northeast Ohio showed that the average board has only one female director and eight male members. In order to climb the ladder to powerful, influential positions in business, individuals have to get on the ladder to begin their ascent. It’s not surprising that older people occupy the majority of board chairs and power positions. Knowledge and expertise comes with time. But business
must do a much better job of ensuring that women and minorities are hired in the first place, and that they have the same opportunity to climb that ladder, rung by rung, that the white guys have. Diversity doesn’t occur by happenstance. Businesses must make a concerted effort. Some have adopted diversity hiring practices inspired by the NFL’s so-called Rooney Rule. Named for the chairman of the Pittsburgh Steelers, the Rooney Rule requires that teams interview at least one minority candidate when hiring head coaches and general managers. Read on page 24 how The MetroHealth System has widened its pool of job candidates by requiring that 20% of all management candidates must be racially or ethnically diverse. That’s a good start. Diversity is good for business in so many ways. It brings more and different experiences around the table. It reflects the nation and world at large, the customer and client base. Studies suggest diverse boards perform better. There is more conversation about diversity in board rooms and C-suites than there ever has been before, and that’s a good thing. But talking about diversity won’t get the job done. It’s time for Northeast Ohio to get intentional about it.
PUBLISHER: John Campanelli (jcampanelli@crain.com) EDITOR: Elizabeth McIntyre (emcintyre@crain.com)
CLEVELAND BUSINESS
MANAGING EDITOR: Scott Suttell (ssuttell@crain.com)
We are now less than nine months until the Republican National Convention in Cleveland. Like parents readying a nursery, swarms of workers in yellow vests are buzzing around downtown, operating cranes, moving earth and driving pavers. Sniff the air and you’ll get a potpourri of asphalt, dirt and diesel exhaust. Isn’t it great? To put on a national political convention, we’re going to need the infrastructure: hotels and housing, a modern convention center, a great arena, a massive tech/communications setup, buses, airports, smooth roads, restaurants and more. We’ll be able to check those boxes. Smart people are working on it. But to put on a successful political convention for Cleveland, we are going to need to do more. And when I say “we,” I mean pretty much everyone. This job is no less important — or visible — than the workers installing the glass on the majestic new Hilton. The good news is this is a job we’re already John pretty good at it. Campanelli At a Crain’s breakfast earlier this month, RNC 2016 Convention CEO Jeff Larson told the sold-out audience what put Cleveland over the top with the party’s site-selection committee. “More than anything, it was the people. It was all of you,” he said. “(That) was really what sold the chairman and the site-selection committee on Cleveland. It was the enthusiasm that people had about the convention, whether you’re Republican, Democrat or independent. People were enthused. People in the airport, when they found out we were part of the site selection team, they said, ‘Go Cleveland! We’re with you!’ “We could have gone to Dallas or we could have gone to Phoenix or some of the other cities that bid on it, but we would have been just another convention in those cities,” Larson said. “Here, we will own the week.” In other words, we made quite an impression. More important than the hundreds of millions of dollars the convention will generate and even more important than the buildings, roads and reborn Public Square, this convention gives us an opportunity to make that same knock-your-socksoff impression. Only this time we can make it on 50,000 of the wealthiest and most influential people in North America (15,000 of them members of the media who have the eyes and ears of billions of people). If we succeed, we’ll see decades of increased tourism, investment, business relocation and convention business. And we’ll hear a completely different national conversation about Cleveland. So how do we do it? First off, we need great people on the front lines, volunteers. The Host Committee needs 5,000 of them to welcome media and guests at the airport, greet people in restaurants and hotels, answer questions, give directions, provide information and otherwise help wherever and whenever they can — all with Cleveland-style pride, passion and friendliness. Volunteer or not, we all need to deputize ourselves as Cleveland ambassadors. That means eliminating the negativity and defeatism. This is about the little things: a warm welcome to visitors, directions to someone looking confused on the sidewalk, a free drink at a hotel bar, a restaurant recommendation, a quarter for the meter, half an umbrella, 10 minutes with a charging cord — these small acts that go miles in winning hearts and minds. It’s probably crazy to think we can get 50,000 people to fall in love with Cleveland at once. So let’s hook one at a time, 50,000 times.
WRITE US: Crain’s welcomes responses from readers. Letters should be as brief as possible and may be edited. Send letters to Crain’s Cleveland Business, 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113, or by emailing letters@crain.com. Please include your complete name and city from which you are writing, and a telephone number for fact-checking purposes.
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Web Talk Re: Future of Lakewood Hospital What I find pathetic (in the debate about the future of Lakewood Hospital) are the actions of people that do not understand and do not want to understand the major changes that have occurred and will continue to occur with the delivery of healthcare services. The days of large inpatient facilities that are not part of a major medical center are over. More services are delivered on an outpatient basis today, and that is what Cleveland Clinic understands. Also facilities that are more than 20 years old have major issues. What the Clinic is proposing will be a win-win-win situation for the city of Lakewood, the people and the Clinic. Politicians should stay out of issues that they do not understand. — Neil Dick Why is it pathetic to want to keep the hospital that the city of Lakewood owns, running? Lakewood is the thirdlargest suburb in Cuyahoga County, with a diversity of economic levels, unlike the exburbs. If the “days of large inpatient facilities” are a thing of the past, you may want to inform Dr. Toby Cosgrove and the Cleveland Clinic, because they are building a brand new large inpatient facility in Avon as we type. — T Schleicher I am afraid that you have bit what the Clinic has been “baiting” Lakewood residents for years, for their own personal profit, at Lakewood citizens’ expense. Lakewood needs to regain control of the situation and I am so glad to see Dennis Kucinich take it on (with a complaint to the Federal Trade Commission). He has no ulterior motive. The Clinic has been intentionally diverting patients and equipment to Fairview and even downtown hospitals. Lakewood has the numbers, and it deserves better! — Dan Morgan
Re: New Downtown Cleveland Alliance video That’s a great video showing the vibrancy and culture of downtown Cleveland! — Jonathan Oswick Marshmallow world, sure looks good. Although, the reality here in Cleveland is much different than portrayed on this video. — educatedreality
Re: Ohio looks to regulate Uber, Lyft Hopefully, Ohio legislators and Gov. Kasich will not make the same mistake as Oklahoma did this year. The bills are almost identical. … The bill is boilerplate and RIGGED. It conflicts with the Ohio Constitution and conflicts with the Ohio transportation statutes. The bill also violates the 14th amendment. If passed, it is sure to be constitutionally challenged, and the various conflicts of statutes. — Chuck Cotton
Personal View
Market will overcome greed of drug maker BY DAVID MCCLOUGH Recent indignation over the overnight price increase of a drug used to treat infections, cancer and HIV reflects the benevolence and empathy inherent in human beings, but it may ultimately undermine the best interests of the people that the public’s outrage is intended to benefit. Raising the price of the drug, Daraprim, from $13.50 to $750, adversely impacts current users of the drug. The seller of the drug recognizes that there are few alternatives in the market, so individuals who need the drug will pay the higher price. The disturbing element of the price increase is that some users will no longer be able to buy the drug and thus will incur the health consequences. Less disturbing, but still unsatisfying due to the enormity of the price increase, is that those who choose to pay the higher price are forced to give up whatever they would have purchased with the dollars now required to buy the drug. No one knows what will be foregone, but we are inclined to assume that less consumption is generally a bad thing. The price increase will, however, have another less pernicious effect, that will occur gradually over time with no corresponding media coverage. To appreciate the silent virtue inherent in market-based capitalism, one must recognize how the pursuit of self-interest serves society. It will be interesting to test my assertion by watching how the market responds to the price increase of Daraprim and other socalled “specialty drugs.” To begin, Daraprim is a 62-year-old drug, which means that the patent protecting the monopoly producer expired decades ago. In the absence of a patent, any firm can produce the drug for sale. Given the expected profitability of producing and selling Daraprim, one might expect quite a few firms to evaluate the prospect of entering this particular market. When firms sell exactly the same good, the producers compete on price. As the price declines, more buyers enter the market because the drug is affordable. Indeed, a larger market will be necessary to serve producers, especially as price declines. Albeit encouraging, this is not the happy ending of the story. I anticipate two more pleasing outcomes. First, the price of Daraprim is likely to settle at a price less than $13.50. That’s right, lower than the original price. Why? For 62 years, the seller enjoyed monopoly power, and the market price was ONLY $13.50. In the presence of competition, the former monopolist will be forced to lower the price. Given that reproducing a dosage of any drug incurs minimal cost, I suspect the price has plenty of room to decline while maintaining profitability. Second, firms will develop alternatives that are superior to Daraprim. At minimum, the new drug competes with Daraprim and forces down the price. At best, society gains access to a superior drug. Either way, the market delivers on its promise to serve society’s interest. It may take some time. But in the end, the world may be a better place because a greedy man bought a company with a drug that people need decided to raise the price. Gordon Gekko famously announced “Greed is good,” to the horror of many. Greed is neither good nor bad, but the market dynamics that channel the greed of the few along with the brilliance and creativity of many is undeniably more virtuous than generally acknowledged. So, condemn than man responsible for the price increase because he is harming people who are suffering, but look to the market to make the situation right in the long run. McClough is an associate professor of economics at Ohio Northern University.
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3-D proves to be a prolific view BY RACHEL ABBEY MCCAFFERTY rmccafferty@crain.com @ramccafferty
The Technology House got its start nearly 20 years ago by embracing a then-new process: rapid prototyping or, as it’s more commonly known now, 3-D printing. CEO Chip Gear said the company he was with previously was an early adopter of the technology and found it really cut down on the time it took to get an idea from inception to production. He decided to buy an SLA (stereolithography apparatus) machine and start a company in Solon. Fast-forward 19 years and that investment is paying off. The Technology House expanded to a second building this summer, more than doubling its footprint, and it’s looking to enter the retail market with 3-
D printed wall hangings and holiday ornaments. While The Technology House got its start making 3-D printed prototypes using SLA machines, it quickly expanded to include injection molding, rubber silicone molds and cast urethane. The company still uses the SLA machines, as well as the more modern fused deposition modeling-style printing machines. It’s just a matter of having “different tools in the tool box,� said Mark Horner, the company’s vice president of business development. Today, the company can make prototypes, small amounts of products or full-fledged production runs, said Greg Cebular, vice president of sales and project management. And the materials used range from plastic to aluminum to stainless steel. The company serves a diverse range
of industries, but has seen a lot of growth by working with the medical and aerospace industries, Cebular said. It looks for customers it can create a relationship with, discussing options and offering advice. He said they want to have a “division of their company� approach. The Technology House — and its production side, which is called Sea Air Space Machining and Molding LLC — is still moving into its building at 10036 Aurora-Hudson Road in Streetsboro. The Technology House is owned by Gear and his wife, while Sea Air Space is primarily owned by Gear’s wife and three daughters. (He holds a minority share.) Gear declined to say how much the 50,000-square-foot building in Streetsboro cost. The original plan was to completely move the company from its 35,000-square-foot plant
at 30555 Solon Industrial Parkway in Solon, but a few customers requested Gear change his approach and keep both. They wanted him to be able to ramp up production, Gear said, as a lot of the company’s competitors were bought by corporations last year. So now, the Solon location will be home to the company’s machining division, while the Streetsboro plant will offer all of its other services, including the injection molding and 3D printing. The company closed on the Streetsboro building in December and started moving in June, Gear said. The Technology House doesn’t publicly share its sales figures, but it has seen growth in employment in recent years. About two years ago, it employed 48 people.
Today, it’s up to 82, and Gear expects that to expand to 120 within two years. And the company has continued to expand its offerings. It’s starting to enter the retail market by creating elaborate ornaments for holiday trees and 3-D reliefs of famous artworks (at least, those in the public domain) for wallhangings. The company last week began selling the items online. Cebular said it plans to sell on sites like Overstock.com, Etsy and Amazon. The company also intends to invest in 3-D metal printing in the future, possibly in 2016, Horner said. It’s a growing part of the industry, but there’s a high cost of entry and a steep learning curve. Despite its diversification over the years, Gear said he thinks the company’s future growth will be in additive manufacturing.
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There is equipment not yet on the market that can make parts in minutes, instead of hours, he said. “There really is a revolution coming in the way things are made,” Gear said. Cincinnati-area consultant Todd Grimm isn’t quite so positive, but he said he thinks growth of 20% to 40% is likely. Grimm, president of T.A. Grimm and Associates Inc. in Kentucky, has worked in the industry since the early 1990s. He doesn’t think the industry will entirely disrupt the way manufacturing is done, or necessarily make it faster or cheaper, but it does offer a different way to design and make products. Craig McAtee, director of Cuyahoga Community College’s 3-D digital design and manufacturing technology program, said future growth for the additive manufacturing industry is “exponential.” While the industry has been around for decades, it has taken off in recent years. About three years ago, Tri-C received a federal grant to create a one-year certificate program for the additive manufacturing industry, and credit courses started in January of this year. In that time, the school has engaged more than 50 employers in the process, including Technology House, McAtee said.
The Technology House embraced 3-D printing almost 20 years ago. (Contributed photos)
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CRAIN’S [M]POWER MANUFACTURING ASSEMBLY PRESENTED BY MAGNET
A LOOK BACK Aleris CEO credits strategy, innovation and training with post-recovery gains W ith a solid industrial base and a steadily improving economy, Northeast Ohio is well positioned to lead the manufacturing renaissance, according to economic development leaders, industry representatives and educators gathered Sept. 30 at the John S. Knight Center for the second annual [M]Power Manufacturing Assembly, co-presented by Crain’s Cleveland Business and MAGNET. Perhaps no company epitomizes that potential better than Beachwoodbased Aleris Inc. In his keynote address, CEO Sean Stack stressed that 11 years ago “no one knew what Aleris was.” The company was created in 2004 via a merger of Commonwealth Industries Inc. of Louisville, Ky., and IMCO Recycling Inc. of Irving, Texas, and it primarily had operations in just North America. Today, Aleris is a global enterprise with a presence not only in North America, but in Europe and Asia along with “some tremendous growth opportunities,” he said. “We have 14 facilities on three continents. We have 5,000 employees …
about $3 billion in revenue, post divestitures that we just completed, and we are in the aluminum industry,” Stack told the audience of about 450. When it comes to growth stories, Aleris does have a bit of an advantage. Aluminum is infinitely recyclable, Stack said, without losing any of its characteristics or properties. It also is in high demand as automakers and aerospace companies seek lighter materials to build more fuelefficient cars, trucks and airplanes. Ford’s decision to outfit its top-selling F-150 pick-up with an all-aluminum body equates to 300,000 tons per year of aluminum demand alone. Still, strategy has played an important role in Aleris’ expansion, according to Stack. Since reorganizing in 2008 during the economic downturn, Aleris has added businesses and factories to support its core operations — processing scrap aluminum for high-growth industries such as automotive, aerospace and construction — while eliminating non-core assets, such as recycling and extrusion. “We kind of looked at Aleris like a patchwork quilt in creating, really, a new
Sean Stack, CEO of Beachwood-based Aleris Inc., kicked off the day with the keynote address.
culture out of what was an amalgamation of businesses,” he said. That culture includes an emphasis on innovation and talent development, which were recurring themes not only in the keynote, but in breakout sessions and a panel discussion during the [M]Power event. Stack said Aleris spends $20 million
annually in R&D, investing in product development and process improvement. Innovation also takes root in the company’s ability to standardize production processes when building new milling lines, such as the 300,000-square-foot expansion of its Lewisport, Ky., plant, Stack said. The addition is replicated after Aleris’
aluminum sheet processing plant in Duffel, Belgium, which has been making lightweight auto body parts to meet Europe’s stringent fuel efficiency regulations for more than a decade. Tightening fuel standards in the U.S., he added, mean aluminum processors like Aleris have to scale up quickly. “It’s impossible to meet those efficiency standards without putting aluminum on the vehicle,” Stack said. In terms of talent development, Stack said the company has put more focus — in recent years — on frontline leaders. Most of Aleris’ 5,000 employees, he noted, are managed by front-line leaders — some of whom are young managers or have moved up from the shop floor. “In plants where we have not hit our safety targets, you will find out the breakdown is always going to be with your supervisors,” Stack said. Timely assessment and development of front-line leaders, especially those who’ve come up from the shop floor, is critical to ensuring quality and safety, he said.
Breaking down the sector’s most compelling issues F
rom workforce development and globalization to operational excellence, six breakout sessions allowed [M] Power participants to take a deep-dive into manufacturing’s top talking points. In the “Quit Whining, Start Winning: 3 Must-Have Workforce Development Strategies for Your Business” breakout session, for example, attendees were encouraged by Donna Rhodes, senior business consultant of workforce and talent development for MAGNET, to align short- and long-term operational goals with workforce plans. “Workforce planning is really important because it helps you define the competencies and skills that that organization needs for those critical roles in the company and to determine whether or not you currently have that talent residing within the workplace and if not, what do you need to do,” Rhodes said. Meanwhile, Larry LeBlanc, partner, international tax services at McGladrey LLP, said during the “Globalization: Lessons From the Front Lines” breakout session that foreign currency controls illustrate the importance of planning. Before entering a new global partnership, companies must understand the practical and legal aspects of how cash will flow not only into but out of that jurisdiction. “I can tell you I have spent a lot of time with companies … that unfortunately ran into these types of traps,” LeBlanc said. “If they had thought through those in the front end, the cost associated with what we refer to as ‘the unwinding’
would be much less.” Here are some more insights from the day’s other breakout sessions: Q Ideation is more than just getting people into a room and throwing ideas onto a wall, MAGNET’s senior growth and innovation adviser Mike Kaminiski told attendees of the “Ideation: Turn Your Business Problems of Today into Tomorrow’s Innovations” breakout session. “If you truly want the silver bullet, if you truly want the next great idea, it takes up-front, hard work,” Kaminiski said. “One of the things, I think is the most important to ideation, is stimulus mining and getting prepared for the session.” Stimulus mining is a process used in advance of brainstorming. Kaminiski identified four types:
Insight mining, which includes observing or studying internal or customer processes to identify problems, conflicts or waste Q Market mining, surveying what’s already in the market in question and/ or adjacent markets Q Technology mining, reviewing patents, inventors, academics for disruptive technology Q Future mining, examining shifts and trends that may impact the market, consumers Q
Diversity, he added, is a critical component of successful stimulus mining. “You want a bunch of people doing
From left, Bruce Hendrick, president and CEO of RBB Systems Inc.; Holly Mueller, manager, external communications, Eaton; and Pete Robison, vice president of marketing and business development, Meyer Products, participate in one of six breakout sessions held during the [M]Power event. This session, which also included Craig Coffey, director of marketing, North America, Lincoln Electric, focused on "Digital Marketing Smack Down — Who is the Best Around?"
it because everybody brings different ideas to the table.” Successful stimulus mining can lead to innovation sessions that produce 50 to 70 ideas, according to Kaminiski, which are then developed further. Q On the finance side of business, there are typically more questions than answers. Keeping ahead of market-driven and regulatory changes that might have an impact on your bottom line begins with investing in your banking relationship, said Ryan Louvar, a director and senior investment solutions officer at Bank of America Merrill Lynch.
“Pick your bank, couple of banks, whatever it is. You really want to partner with them and [foster] good communication,” he said. Louvar was among a trio of panelists bringing business and banking expertise to the “Sharpen Your Pencil: Recalibrating Cash Flow Management Strategies” breakout session. Fellow panelist Kirsten Park, director of capital markets for Eaton Corp., added that collaborating closely with a bank also affords companies access to software many financial institutions are bringing online for their clients. “Some of the bank portals are coming up with some pretty good forecasting
tools,” Park said. “If you can use these, especially at the bank where you have your collections, then they can help you position that cash.” Q Companies embarking on a lean manufacturing journey tend to put a lot of emphasis on the tools they will use, according to Mike O’Donnell, senior growth adviser with MAGNET. Yes, lean tools are important, he said, but they should not eclipse practices to support operational excellence. O’Donnell facilitated the “Pursuing Operational Excellence: 3 Best Practices Your Company Needs,” breakout session. He highlighted three keys to engaging employees in a continuous improvement culture: Make respect a way of doing business so that employees can count on being respected and will respond to others with respect, especially in times of trial. Reinforce the link between waste and money, not only on the factory floor but in the front office, in R&D and in customers’ operations. Put the customer at the center of every decision. “Operational excellence is about developing an environment where people can practice this way of thinking,” he said, adding that “drilling and training” employees in these practices is as important to success in operational improvement as practicing your swing is to improvement in your golf game. “You want to drill and train so that it becomes second nature.”
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FROM THE ATTENDEES: “I think the message is starting to be heard not only around Ohio — but about Ohio — that manufacturing is alive and well.” — ROB FELBER, Felber Public Relations & Marketing, Twinsburg
“Attendance was fantastic as was the networking, sharing of ideas and getting MAGNET more out there in front of small and medium-sized companies, which hold so much potential for growth. It was a huge success.” — AARON PATRICK, MAGNET, Cleveland
“One major idea that came through was the absolute importance of people to manufacturing, which is a big shift from the past. Today that is obviously on the minds of CEOs and managers and it appears to be more than lip service. They are putting forward programs and projects to identify, cultivate and develop future leaders.” – MARK INGRAM, Workday, Strongsville
“I took away a lot of the insight from the panel about what they see as far as industries’ technological advances and how that factors into a need to maintain and grow their workforce.” – JAY YOUNG, Nesco Resource, Akron
Finding skilled workers now, in future a top concern for industry leaders
T
alent. Finding it. Developing it. Attracting the next generation of manufacturing professionals. That is one big concern that keeps Northeast Ohio manufacturers awake at night, according to the leaders panel discussion at the 2015 [M]Power Manufacturing Assembly. “To be competitive we have to drive productivity, and we need talent to do that,” said Ramzi Hermiz, president and CEO of Shiloh Industries, a Valley City manufacturer of lightweight metals for the automotive industry. Hermiz and fellow panelists Michael Heil, president and CEO of the nonprofit Ohio Aerospace Institute in Cleveland, and Steve Peplin, CEO of Talan Products Inc., a Cleveland-based metal stamping company, said manufacturers need skilled workers today to fill vacancies left by retiring baby boomers and new positions created by growth. They also need to attract more young people to the field. Other concerns cited by the panel included managing growth, keeping the technological edge and coping with economic shifts. “We are nearing the end of an economic cycle, probably. They don’t go forever,” Peplin said. “Can we have a nice little gentle landing or will it be a crash?”
Adding ‘sizzle to our steaks’ With talent top of mind, much of the conversation between the leaders focused on efforts to close the manufacturing skills gap. Peplin said Talan has relaunched apprentice programs, but still struggles to fill openings.
From left, Mike Heil, president of the Ohio Aerospace Institute; Ramzi Hermiz, president and CEO, Shiloh Industries; and Steve Peplin, CEO, Talan Products Inc. participated in a leaders panel discussion, "What Keeps NE Ohio Manufacturers Up at Night?"
“We have a hard time finding press operators, and I don’t understand that,” he said. “Cleveland was full of metal stamping companies 10, 15 years ago, and all of these big iconic companies are gone now. Where did all those guys go? They didn’t all retire.” Hermiz said his company is becoming more involved with STEM education initiatives, starting as early as the third grade. Heil pointed to FIRST Robotics programs as a successful conduit for bringing students into robotics and engineering. The three panelists agreed that part of the answer will come from changing the perception of manufacturing in the hearts and minds of students, parents and teachers — or adding “sizzle to our steaks,” as Peplin put it. Today’s manufacturing facilities, Hermiz said, are not the dark, dingy factories many may picture and the jobs
are not low-paying, low-skilled positions. Shiloh has 200 robots and 85 employees at its Valley City facility. “You are programming computers. You are programming robots. It is very different than what (manufacturing workers) did before,” he said. “Even (to operate) our presses, you have to understand PLC (Programmable Logic Controllers) and technology.” Heil added that aerospace companies need to communicate their “cool factor” as well and combat the perception that the space age is over. “Here’s what’s changing: new space,” he said. “Elon Musk, I’ve heard him referred to as the Henry Ford of today. … He is out there doing great things in aerospace.” Dollars and cents On the economic front, globalization brings new challenges for manufacturers.
In today’s connected economies, financial pressures in countries such as China have an impact on factories in Ohio, Hermiz explained. Then, there are decisions and regulations at the federal and state levels that can negatively impact operations or make it harder to grow businesses here, the panelists said. Inconsistent federal fuel efficiency standards, for example, could hamper growth at companies like Shiloh that provide lightweight automotive parts. As a solar panel components supplier, Talan is bracing for the sunset of alternative energy tax credits. Meanwhile, Hermiz said something as simple as the amount of freight companies can move on roads affects how and where local manufacturers can expand. Michigan allows 80,000 pounds of freight. Ohio only permits 45,000. “We put something in Michigan because of that,” he said. Training incentives are another differentiator. States like Tennessee and Georgia, Peplin said, provide grants to train manufacturing workers. Among aerospace companies, Heil added, Ohio is not considered a business-friendly state. Despite these challenges, the panelists said Northeast Ohio manufacturers have a lot going for them from technological advances, growing markets and toprated universities to a central location, low cost of living and cultural and recreational amenities. “I really feel we are in the right place, right industry, right time,” Peplin said. “I think we are looking at a booming next decade or two.”
Innovation will keep NEO manufacturers on growth track
A
s a biochemist turned business consultant and now head of the nonprofit MAGNET: The Manufacturing Advocacy and Growth Network, Ethan Karp knows a thing or two about reinvention. Northeast Ohio manufacturers sit at a crossroads, according to Karp. Earning a place in the manufacturing renaissance, however, will not happen by chance. There are challenges to face. Opportunities to seize. Crain’s Content Studio sat down with the MAGNET CEO at the second annual [M]Power Manufacturing Assembly to address issues that impact small and mid-sized manufacturers in Northeast Ohio.
What are the biggest challenges for today’s small and mid-sized manufacturers? Karp: We always look at it as a combination of innovation and workforce. They are linked. No doubt, you need a strong, innovative workforce to do innovation, and often you need innovation to attract a good workforce. But, they can take on different flavors. From the innovation standpoint, it’s doing all the things they do, only better
Ethan Karp
tomorrow than they did them today – so innovation in operations, innovation in creating new products, innovation in how you market, innovation in how you think about your leadership. All of these things are different ways innovation can be used, and you start doing new things to make yourself better, more competitive and you will start to grow. Once you’ve added those jobs – or frankly even if you are staying the same (in terms of positions), you are going to lose people because of massive numbers of retirees — you now have to figure out
how to make your company the most attractive place for folks to work. Yes, there is a component of going out to find those people, but we already know the pool is limited. You have to be as competitive on the workforce side as you are on the products side or as you are in dealing with customers. Times are good for manufacturers in general. Things are on an upswing. That’s wonderful. That also means it is time to do their best in both of these things. People today focus a lot on the workforce challenge, and they should, but it’s the innovation side that is going to keep the company healthy in the next downturn. How can manufacturing leaders better address those challenges? Karp: Not enough manufacturers take the time to work on their business, instead of in their business. That prevents them from doing the innovative things in their workforce or in their products or operations. … If leaders are always working in the business, doing the things that keep the wheels on — which is very important — they won’t get to [innovation]. On the innovation front, what are
TO READ AND VIEW MORE COVERAGE OF THE EVENT, GO TO www.crainscleveland.com/mpower
proven strategies to fostering, cultivating breakthroughs? Karp: First, diversity is absolutely critical, whether it is cross-team or cross-industry or just getting a bunch of creative people in a room. That sort of diversity of thought helps create the idea. The second thing is what we call “fail fast, fail cheap.” Focus a lot of your energy, especially upfront, figuring out what is the quickest way to determine whether your idea has promise or not. Do all the checks of market size and all these sorts of things, so you can kill it early rather than investing the massive amounts of money it will probably take to get a new idea to actually come to fruition. The third thing is that companies do not have to do it alone. Whether it is some sort of resource MAGNET might bring like the university connection or some sort of external expertise or a supplier or another complementary company or distributor – all of these people have a desire to increase their revenue. If you can figure out a way you can do something together, to do something innovative together, especially where there is not competition, that is going to benefit everybody.
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DREES
Local VW dealers say biz is humming along BY DAN SHINGLER dshingler@crain.com @DanShingler
Even though many customers, regulators and even whole governments are damning Volkswagen for programming its diesel vehicles to cheat on emissions tests, local dealers say they’re so far not faring too badly. “People ask me this question all the time — ‘I’m so sorry for what’s happening. I feel so bad.’ But I say, ‘Don’t feel bad for me. … We’re having our best month in a long time right now,’ ” said Michael Friedman, general manager for Ganley Volkswagen in Bedford, which claims the title of Ohio’s largest VW dealership. Worldwide, sales of the company’s vehicles were down 4% in September, as it halted sales of diesel cars in the United States and other markets, while announcing it eventually will recall 8.5 million cars with the deceptive diesel engines. But other dealers here also say that, so far at least, the impact of the scandal on their sales has been minor, and they believe and hope it will be short term. Not that they’re happy about it, of course. “We’re very concerned about it. But at the same time, the brand’s been around a very long time, so I’m not too worried about it,” said Bernie Moreno, who owns several auto dealers in Northeast Ohio, including Volkswagen of Streetsboro. Moreno and Friedman say there are a couple of reasons that their sales might not be as heavily impacted as some might expect. For one thing, only Volkswagen’s diesel vehicles are affected. While
CONTINUED FROM PAGE 6
Volkswagen reported that diesel models made up almost one-quarter of its U.S. sales before the scandal hit, sales were much higher in more environmentally conscious states like California than they ever were in Ohio, local dealers say. (Ironic, huh?) Moreno estimates that only about 10% of his unit sales were of diesel vehicles, and Friedman said diesels only made up about 5% of his sales before the crisis. Another reason the dealers say sales have not been impacted too greatly is because of incentives Volkswagen is extending to current customers. If you bought a new VW in recent years, you probably have been receiving offers of a $2,000 rebate or low-interest financing in recent weeks. Volkswagen actually reported a 6% increase in its U.S. sales for the month of September, Bloomberg recently reported. But, taken in context, that’s not such great news. Sales at Ford were up 23%, Nissan’s sales jumped 18%, Chrysler’s were up almost 14% and General Motor reported a 12% increase in sales for the month. VW was left in the dust. But going forward, area dealers say they remain confident in the brand. It’s doing the right thing by customers so far, they contend, and will continue to do so. It also builds great cars, emissions cheating aside, they say. “They (VW) are embarrassed and they’re saying to dealerships, ‘Don’t worry, we’re going to take care of you and your customers,’ ” Friedman said. “You’re always going to have a few people who are pissed off and say, ‘I’m not going to buy one of their cars now.’ I’ve heard a little of that, but not much.”
the diverse offerings throughout the area plays to the Drees focus on selling a number of homes but being willing to customize them to suit customer desires. To that end, the firm’s Brecksville office boasts a smartly outfitted design center showing everything from plumbing fixtures and doors to stairs the company offers. The company also has a degreed interior designer on site who works with purchasers on their plans. A big-screen TV in the design center shows plans as buyers make their decisions about home specifications on a computer-aided design program. “All our builders carry iPads with the buyers’ selections,” Zabkar said. “There’s no need to carry bulky blueprints anymore.”
New leader at helm The other distinguishing factor for Drees in Northeast Ohio is its leadership. Zabkar, who became division president earlier this year, is the first woman to lead a division of a national builder in this market. Zabkar previously headed the Drees sales unit here and was selected over several candidates for the position. “There were competitors. It was based on my success in the past and ability to get the job done,” she said. She is not the first female to hold such a position in the company. Zabkar joined Drees in 2008 as the sales manager here and has been working in new-home sales since 2001. “I’ve been around home construction for 15 years. I know the process,” she said, adding, “We have a great team of people here.” In 2014, Drees closed about 130 home sales in Northeast Ohio. With-
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in the next five years, Drees plans to triple that level of production. To accommodate its growth, Drees increased its staff by six in the last year to 32. It’s also in the market to hire three more staffers, Zabkar said. Bob Dyer, a veteran of Pulte and Ryan Homes who now operates the Hudson-based Asset Advantage land consultancy, said he cannot recall another female heading a na-
tional builder’s operations here. “It’s fantastic,” Dyer said, for a woman to reach such a leadership level with a national builder’s local operations. He also knew Zabkar slightly when both worked at Ryan Homes and describes her as “smart and knowledgeable.” She is also confident. Given the task ahead of her team, she said, “I expect to get the sales.”
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Focus WORKFORCE DEVELOPMENT
JOB FAIRS - P. 20
z
ADVISER - P. 21
z
DIVERSITY - P. 24
Training tomorrow’s tech titans Students like Tramond Culver are being immersed in high-tech trades through hands-on learning BY RACHEL ABBEY MCCAFFERTY rmccafferty@crain.com @RAMcCafferty
At the new Max S. Hayes High School that opened this fall on Cleveland’s near West Side, exposed ductwork and clear doors revealing the underlying pipes are even part of the learning process, as they show students exactly what goes into a new building. The school, at 2211 West 65th Street, has a heavy industrial focus and was designed to show students how traditional subjects like social studies or math — and even the environment around them — can fit into their chosen career paths. “Kids are, at their very core, motivated by relevancy,” said Kelly Wittman, who joined Max Hayes in July as its principal. Max Hayes is one of the Cleveland Metropolitan School District’s five career-tech schools — now known as the Academies of Cleveland — that offer an array of programming from public safety to culinary arts to animal science. At the revamped Max Hayes, the school is teaming up with industry partners to develop fresh ways for students to immerse SEE MAX HAYES, PAGE 22
MCKINLEY WILEY
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WORKFORCE DEVELOPMENT
Job fairs still have a place in the Internet age BY DOUGLAS J. GUTH clbfreelancer@crain.com
Daisy Greene was working as a Cleveland mail carrier when she decided to change her career path. She kept her day job while studying online for an associate of applied science degree in nursing at Cuyahoga Community College. Then this past September, Greene attended a “Nurses Right Now” career fair hosted by the Cleveland Clinic. The one-stop hiring day for nursing job applicants allowed for interviews, background checks and health screenings all in a single sitting. As the afternoon commenced, an admittedly nervous Greene was taken through the paces by a friendly and organized human resources rep. “When I got in the door there was somebody greeting me and pointing me the right way,” said Greene, 50. “I was given gold-star attention.” The Clinic liked the Colombia native, too, offering her a nursing position in palliative care on the main hospital campus. As of mid-October, Greene was going through a week of orientation before beginning her new job. “This is one of the best places you can have nursing career,” she said. “What else can you ask for?” The seed of Greene’s exciting new occupation germinated at a traditional job fair, which supporters
maintain still has a place in a world of info-packed online job boards and aggregators. With the proper planning and approach, career events can play a critical role in the recruiting process.
Nice to meet you Since August, the Clinic has sponsored nursing job fairs at the health system’s East Side, West Side, main campus and Florida locations. Each employment event drew an average of 200 interested caregivers, noted Meg Duffy, director of nurse recruitment and staff resources. Though the health system only hires registered candidates through its career day, students and unlicensed graduate nurses are also free to attend. Face-to-face interactions with prospective employees provide an intimacy just not possible when submitting a résumé online, Duffy said. “We are high-tech, but the challenge is to stay high-touch,” she said. “We’re taking our brand and getting it out to nurses in the community.” The best job fairs also target a specific market, Duffy said. “For experienced nurses we’ll drill down to critical care, the oncology floor, or the operating room,” Duffy said. “A nurse is going to be part of a team, so we have to make sure that fit is there.” Hiring days offer the Clinic an opportunity to showcase its culture, meaning a precisely assembled
Ingrid Muir, the Clinic’s institute nursing director, interviews a candidate at a recent fair. (Contributed photo)
organizations and students using
whose employer put forward more than 600 job offers — including internal transfers — at its four recent nursing career days. Westlake-based Hyland Software — which makes OnBase, an enterprise content management software product — attends between 18 and 22 job fairs each year on the campuses of eight in-state colleges and universities. Company representatives present at these events are generally outgoing, flexible and able to answer any question a fair participant may offer, said Jen Murphy, campus relations program manger for Hyland Software. “As students want to make a good impression on us, we want to make a good impression on them,” Murphy said. In recent years, Hyland’s collegiate partners have organized smaller fairs targeting specific majors. This is a good thing for a company that is often seeking particular hires in areas like global services and tech consultancy. Last year, a fair hosted by Ohio State University’s College of Engineering netted 13 interns alone. “We struggle with general fairs because we’re looking for a specific skill set,” Murphy said. “Specialized fairs allow us to target segments of students or even the alumni population.”
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Well-run career fairs give businesses the tools to prepare for a long day of informal interviewing, Murphy said. Books with resumes from students active in a university’s career center database can be particularly useful. “Preparation is key,” Murphy said. “A (résumé book) gives us the
best list of candidates.” While targeted fairs have merit, general career events can be a boon for large companies looking to add 50 customer service reps or other entry-level workers, said Lori Long, a human resources consultant and a Baldwin Wallace University associate professor. “Fairs are a huge time commitment, so smaller companies may not find value in that,” Long said. Businesses may meet fewer aspirants at more focused job affairs, but those interactions are often fleeting. So as to not waste anyone’s time, company reps should be prepared with specific questions that tease out participants who have done their research. “Ask them why they’re interested in your company and what they know about you,” Long said. “Job applicants should know who you and what you do. If they don’t, they’re probably not good candidates.” Locally run career fairs usually are worth attending, as the regional university, newspaper or chamber of commerce putting on the event will have knowledge of the area talent base, Long said. Professional job fair companies that travel from city to city, though, are another story. “With those you have to be cautious, because they may not know the market,” she said. Even with the rising popularity of virtual job fairs in technical fields and other sectors, the traditional fair is far from obsolete, Long said. Most companies won’t overlook the chance to build early relationships with people who might become future employees. “As long as there’s value in them, career fairs are going to stick around,” Long said.
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ADVISER: William H. Gary
NEO must create unified plan for workforce development The region’s economic future hinges on two words: workforce development. Not since the Great Depression has the advancement of our workforce been more critical to the wellbeing of Northeast Ohio. The continued resurgence of Greater Cleveland depends upon creating and maintaining a pool of trained workers with the knowledge required for jobs in the new economy. That’s why it is critical that Northeast Ohio develop a unified regional plan for workforce development, one that cuts across industry sectors and serves every segment of the business community from health care to manufacturing to hospitality. The region needs an integrated business-driven strategy that establishes a blueprint or “system” for aligning workforce development policy, programs and priorities with regional economic development and retention goals. It needs a coordinated strategy for addressing challenges and issues faced by the unemployed and underemployed, as well as employers seeking to fill jobs. Now there currently are numerous private and public sector organizations in Northeast Ohio engaged in workforce development-related initiatives. Most of these, however, only address singularly-focused constituencies and outcomes. We need to think broader by reframing the workforce development agenda. The key is creating a “system” versus “networks” model that consists of participants from across the business spectrum. By joining together through a memorandum of understanding, the region’s stakeholders could prepare and sustain a qualified workforce with transferable skills that defy boundaries. This memorandum of understanding would need to include clearly defined roles, responsibilities, outcomes and levels of accountabilities for participating partners that benefit all industries in Northeast Ohio. Such an approach would increase Northeast Ohio’s organizational capacity, reduce the skills gap and provide the framework for all partners to operate under the same regional workforce development agenda. To respond to this window of opportunity and help lead the effort, Cuyahoga Community College is changing the paradigm of workforce development programming and delivery in Northeast Ohio. Tri-C has embraced this “systems” approach by restructuring its workforce development division. This restructuring includes the development of a strategic plan that aligns Tri-C’s programs with the needs of businesses representing six key industry sectors. These sectors — health care, manufacturing, hospitality, information technology, professional services and construction/building trades — are generating the majority of in-demand jobs in Northeast Ohio. The goal is to bring all sectors to the table to find training commonalities between and within industries. By coordinating efforts, industries can build a workforce
foundation that Northeast Ohio can build upon. This new strategy will require partnerships between communitybased organizations, state and local agencies, businesses and industries, workforce investment boards, colleges and school districts and anyone else with a vested interest in Northeast Ohio. This effort would also address the “holistic” needs of job seekers, to include affordable
William H. Gary is executive vice president of workforce, community and economic development at Cuyahoga Community College. housing needs, family and rehabilitative services, transportation, training and education, sustainable living wages, unemployment and underemployment services. Untold thousands of citizens
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themselves in prospective occupations. For example, in the building trades program, qualified students soon will have the chance to take part in a pre-apprenticeship program that John Nesta, the school’s construction curriculum specialist, said will give students exposure to a variety of construction-related trades like bricklaying and electrical. “This will hopefully give them a better exposure so they can narrow down their choices,” Nesta said. Nesta, who joined the district this year after more than three decades with the sheet metal workers union, said the goal is to have students graduate with a certificate that would carry some weight if they went on to apply for a full apprenticeship with a union. It can be expensive to train an apprentice, he said, and the last thing a union wants is to invest in someone who doesn’t know what they want to do. John Colm, president and execu-
tive director at Wire-Net in Cleveland, said he’d like to see a similar program for manufacturing. Currently, the group is preparing to launch a program called the Technical Corps as part of the Cleveland Foundation’s Encore movement, which encourages people 50 and older to use their professional experiences to get involved in the community. Wire-Net’s program, expected to begin in January, would bring former manufacturers into the classroom to help lead special projects, such as making a guitar. Typically, high school manufacturing students find themselves making less exciting items like hammers or vices, Colm said. He thinks the program could generate more interest in manufacturing at the school. The ultimate goal is to help students earn industry certifications and improve their grades. “It’s real world stuff,” Colm said. “It’s not abstract.”
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Students at Max Hayes are exposed to a number of career possibilities, including automotive technology, welding, computer-aided design, software development and engineering. Pictured here are students Trevionne Walker (top left), Robert Gallagher (top right) and Nylah Brown (bottom right). MCKINLEY WILEY PHOTOS
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WORKFORCE DEVELOPMENT
MetroHealth pushes for more diversity in its upper ranks BY CHRISSY KADLECK clbfreelancer@crain.com
Patrick Curry didn’t fill a quota when he was hired by The MetroHealth System this summer as the new director of marketing. But as part of an intentionally collected pool of qualified candidates, Curry — an African-American — did bring his experience in hospital marketing from New York City back to his native Cleveland and put an impressive face on MetroHealth’s diversity and inclusion initiative. “I saw the position as a tremendous opportunity,” said Curry, who was most recently assistant vice president of marketing for North ShoreLIJ Health System, the largest health system in New York with 21 hospitals and $9 billion in operating revenues. “One of things that was most impressive to me about MetroHealth is as you walk the halls of this organization — from administration, senior leadership down to food service workers — the diversity is palpable,” he said. “It’s not just race or gender,
it’s diversity in opinion, it’s diversity in politics, it’s diversity in religion.” MetroHealth’s diversity initiative, which started several years ago, was ratcheted up by CEO Dr. Akram Boutros after he was hired in 2013 and learned that only 13% of the managers throughout the health system were racially diverse. “Clearly over 50% of our staff and over 50% of our patients are racially diverse. There was a major disconnect for me,” said Boutros, who was born in Cairo, Egypt. “When I looked at the folks who were hired, I found that they really did a good job of finding the best candidates from the pool. It became very clear to me that the problem is with the pool of candidates, not the selection process.” To get to the root of the problem, Boutros instituted a new systemwide requirement in 2014 that 20% of all management (including manager, director, vice president, senior vice president and executive president) interviews must be racially or ethnically diverse. That measure resulted in a winning success: 38% of interviews for management
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positions were racially/ethnically diverse and 39% of hires for management positions were diverse. “It did exactly what I thought it would — the more qualified candidates you had in front of you that were diverse, the more likely you would hire a diverse person,” he said. “There were no quotas. It didn’t matter. If you interviewed 20% of the candidates who are diverse, it didn’t matter who you hired. We never interfered with who you hired.” Human resources vet the candidates at the start of the hiring process and then send the qualified candidates along to appropriate department so there was no way to “stack the deck” so to speak, he said. “One of the things that I believe in health care delivery, to achieve the best outcomes one must gain the patients’ and families’ trust,” he said. “If you were to walk into a room in which no one, no one looks like you, whatever that is, whether you’re wearing a hijab, or whether you’re white and you walk into an entirely African-American room, or you’re African-American and walk
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into a completely white room; there’s an element of uneasiness that comes through.”
Upping the ante Encouraged by the first year’s success of effectively doubling the original goals and objectives through a targeted outreach effort to attract diverse candidates, MetroHealth upped the ante this year, said Kyle Hodges, manager of diversity recruitment. Now 40% of all management and physician interviews must be racially/ethnically and gender diverse. As of second quarter, 72% of interviews were diverse (race/ethnicity and gender) and 78% of hires were diverse. And of the 356 management team members, 17% are racially or ethnically diverse, a slight improvement since the end of 2013. “We’re excited about opening these doors,” said Hodges, who regularly reaches out to local professional groups such as the National Society of Hispanic MBAs, the Society of Urban Professionals and the
National Black MBA Association as well as universities and colleges in the region. “We’ve had conversations about our recruitment practices that we hadn’t really engaged in previously, and it generated a lot of good traction.” Diversity is a critical first step but inclusion must be the second, Boutros said. “Diversity is simply the representation of many different types of people and of the mix of people that you have,” he said. “Inclusion, however, is the deliberate act of welcoming that diversity and creating an environment where all the different kinds of people can thrive and succeed.” He points to the system’s new Language Access and Communication Services Center at its main campus, which provides interpretation services in more than 200 languages for patients with limited English proficiency, hearing or sight impairments. “Diversity in ethnic, religious, national origin, gender and sexual orientation — it’s good for our community and it is absolutely, positively good for MetroHealth,” Boutros said.
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CRAIN’S CLEVELAND BUSINESS
NORTHEAST OHIO’S
MOST CONNECTED They’re dealmakers, power brokers and people to know
C
leveland’s often described as a “small big city.” It boasts a sizable population — about 390,000 or so, according to the most recent estimates. However, despite being the state’s second most-populous city, power is concentrated in a select few. It’s not difficult, for instance, to connect the dots between Cleveland’s power brokers — the bulk of which are older white men. Still, connectivity is about more than being able to get a deal done in one’s place of residence. As Crain’s and New York-based Relationship Science set out to determine who in Northeast Ohio are the strongest bridge builders, we did so through a national lens. By comparison, Euclid Avenue might be downtown Cleveland’s central thruway, but it’s really the interstates that connect Northeast Ohio with the rest of the country. This list, metaphorically speaking, highlights Northeast Ohio’s human interstates. Cleveland, for example, might be known as one of the nation’s health care strongholds. After all, its two largest employers are Cleveland Clinic and University Hospitals. However the Clinic’s CEO, Dr. Toby Cosgrove — often viewed as one of the city’s most powerful corporate leaders — barely cracked the top 100 at 96. Moreover, UH’s CEO, Tom Zenty, didn’t inch into the top 100. While both systems are regarded nationally for their high quality care, their influence — though growing — is largely regional in scope. The top of Crain’s list is anchored, for the most part, by those in the financial realm. Coming in at
No. 1 on the list is James M. Malz, managing director for Ohio/Western Pennsylvania for JPMorgan Chase. For many, Malz’s name might not carry the same cache locally as, say, KeyCorp CEO Beth E. Mooney (No. 6 on the list), but according to our calculations, his connectivity is undeniable. Malz, who maintains offices in Cleveland and Columbus, was not the top person on any given metric in the calculations, such as reach, reliability, influence, access or centrality. However, he performed well across all five dimensions, according to RelSci’s senior director of data and content, Emma Griffin. His network’s strength, Griffin said, “comes from connections to influential individuals and institutions — he can really leverage his relationships to get things done.” He has strong ties with prominent individuals affiliated with key institutions. Malz’s employment with Chase — the country’s largest bank — carries significant heft. “This affiliation and his extensive board participation also add to his ability to reach influencers through his extended network. He can directly access individuals who in turn can access other powerful people,” Griffin said. A top Chase official — John Carter — also came in at No. 1 on Crain’s Detroit Business’ Most Connected list, which published last month. The remaining top 10 include some of the region’s most well-known civic figures. Starwood Retail Partners CEO Scott Wolstein, whose family’s civic ties run deep, has been connected with some of the region’s most powerful institutions. A pre-eminent dealmaker, Wolstein un-
til 2011 led what is now DDR, a Beachwood-based real estate investment trust focused on shopping centers. Then there’s Samuel H. Miller at No. 4. And with Miller, the longtime Forest City executive who spearheaded the venerable firm’s push into land development, it’d be easier to say which boards or organizations with which he hasn’t been involved. The diversity of his involvement is also intriguing. Miller, for one, has been involved with a number of organizations rooted in the Jewish faith, but also with several Christian-based organizations, such as John Carroll University, Baldwin Wallace University and Notre Dame College. Connectivity is also a family affair. Take James C. Boland (No. 34) — the former Ernst & Young executive who also served as the Cleveland Cavaliers’ CEO — and his daughter, Julie Boland (No. 56), the current managing director for Ernst & Young’s Cleveland office. And, of course, then there’s the Ratners. In 2005, Crain’s described the Ratner name as being “as Cleveland” as Terminal Tower. Making appearances on the list are Charles Horowitz Ratner (No. 25), Forest City’s chairman; James A. Ratner (No. 30), chairman and CEO of Forest City’s commercial group; Albert B. Ratner, Forest City’s co-chairman emeritus (No. 44); and Ronald A. Ratner, president and CEO of Forest City’s residential group (No. 59). Miller, too, has Ratner ties, as the former husband of the late Ruth Ratner Miller. — Timothy Magaw
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MOST CONNECTED From the Editor
Celebrating 35 years of connecting Connections bring people together. They’re the sparks that ignite every deal, that bring small business to life, drive customers to your door, and that close the deal. Business is about relationships. We’ve all heard it countless times. It’s not what you know; it’s who you know … and who knows you. It’s who’s in your phone (and for some, your Rolodex), who picks up your call, answers your text and returns your emails. And, just as importantly, who reaches out to you. Business, at its heart, is personal. And it’s these personal connections that create the pathways where good business travels. Elizabeth That’s why, as Crain’s Cleveland Business marks its 35th anMcIntyre niversary this year, we decided it was a perfect opportunity to celebrate the connections that make business happen in Northeast Ohio. To mark our three-and-a-half decades, we wanted to do something bold, a nod to the people in — and behind — the headlines you’ve read in Crain’s over the years. What you see in this special report is the result of a sixmonth effort to identify the 100 Most Connected people in Northeast Ohio. This ambitious endeavor isn’t the same as our “Power 150” and “Who’s Who” lists we’ve produced in recent years. And that’s intentional. Those projects were about identifying people who were leading our region’s most influential organizations and who were in a position to move Northeast Ohio forward. The editorial staff collectively gathered names, taking into consideration each person’s role in Northeast Ohio and that of their organization, and reached a subjective consensus. It was distinctly unscientific. This Most Connected list for our 35th anniversary is unique. It’s based on data. To make that happen, we teamed with Relationship Science, or RelSci, a technology company based in New York City. To build its data-
base, RelSci used 12 of Crain’s Cleveland Business’s lists: the largest accounting and law firms, higher education institutions, nonprofits and grantmaking foundations, public and private companies, employers, and the highest paid CEOs and non-CEOs. Those lists generated more than 8,000 leaders in Northeast Ohio tied to hundreds of organizations. RelSci then compared that list of decision makers with their huge database of more than four million movers and shakers tied to more than one million organizations around the world. From there, RelSci identified the Northeast Ohioans with the most access to influential people based on their education, employment history and civic and corporate board involvement locally and nationally. A note of caution: We urge you not to confuse power with connectivity when viewing this list. As Emma Griffin, RelSci’s director of data and content, explained, this is about the ability to leverage relationships to get things done. Something else to keep in mind: This list is based on algorithms. People were assessed according to their links to highly connected people and organizations locally and nationally and to the number and strength of their connections. This isn’t about public relations, popularity, celebrity or who snags the most headlines. You won’t find LeBron James or Michael Symon on this list. (As a side note, when our sister publication Crain’s New York did a similar Most Connected list last year, GOP frontrunner Donald Trump and Vogue Editor-In-Chief Anna Wintour did not rank in their top 200.) We hope you enjoy reading about the Most Connected in Northeast Ohio. Spend some time exploring the list on CrainsCleveland.com and using our Clout Calculator, which allows you to figure out how connected you are to the 100 Most Connected people in the list. We’re proud to have made — and to continue to make — connections for businesspeople in Northeast Ohio. And look for our highlight reel of the news and newsmakers we’ve covered since we first hit the streets and mailboxes of Northeast Ohio in 1980, coming in your Dec. 21 issue of Crain’s Cleveland Business.
MOST CONNECTED OVER THE YEARS For our 35th anniversary, we have identified the Most Connected people of 2015. That got us thinking: What if we’d had the technology to do this in 1980, when Crain’s Cleveland Business first published? Or for our 10th or 25th anniversaries? Who might have made the Most Connected list over the years? Here are 10 people we’ve covered who may well have landed on a Most Connected list during their era: JAMES CARNEY Upon his death in 1996, former Cleveland mayor and U.S. Rep. Dennis Kucinich described the real estate developer as “a brilliant businessman, a connected politician and a generous public servant.” Carney developed the Hollenden House, the Bond Court Hotel and the Ohio Savings Plaza in downtown Cleveland. His board service included the Greater Cleveland Growth Association, the Port Authority and Cuyahoga Metropolitan Housing Authority. HENRY EATON The co-founder of public-relations powerhouse Dix & Eaton, he was the go-to adviser for decades for countless CEOs in Northeast Ohio. He served on the boards of Playhouse Square, the Cleveland Orchestra and the Growth Association, among others. GEORGE FORBES The former Cleveland City Council president was at the height of his power during Crain’s first decade. He left political life in 1989 after losing to Michael White in his bid to become mayor. Forbes went on to become head of the local NAACP chapter and served on the boards of numerous civic organizations, including the Cleveland chapter of the National Urban League. JOE GORMAN He retired as chairman and CEO of TRW in 2001, a year before the automotive, defense and aerospace conglomerate was sold to Northrop Grumman. Gorman was active in corporate and civic boards, including Cleveland Tomorrow, Cleveland Clinic, the Musical Arts Association and Alcoa. BERNADINE HEALEY Her connections were national in scope. A cardiologist, Healey came to town to direct the Cleveland Clinic’s Research Institute. She went on to become the first female director of the National Institutes of Health and past president of the American Heart Association and the American Red Cross. ALLEN HOLMES A year after Crain’s launched in 1980, Holmes was named “the most powerful man in Cleveland” by Town & Country magazine. He was the former managing partner of Jones, Day, Reavis & Pogue and a passionate arts advocate. His board affiliations ranged from Sherwin-Williams and Case Western Reserve University to Diamond Shamrock and the Cleveland Institute of Music. KAREN HORN The sixth president of the Federal Reserve Bank of Cleveland, she was the first woman to be named president of a Fed bank. Horn led the Cleveland Fed through Ohio’s savings and loan crisis in the 1980s before leaving to serve as chair and CEO of Banc One Corp. in Cleveland. She served on boards such as British Petroleum, Rubbermaid, Case Western Reserve University and the Cleveland Clinic. LARRY ROBINSON The retail jeweler and civic leader also was a force in local radio and TV. He took his parents’ business and created the national chain J.B. Robinson Jewelers. His board service included the Jewish Community Federation of Cleveland, the Growth Association, the Urban League and the Musical Arts Association. Look for his wife, Barbara, on Crain’s Most Connected list. RICHARD SHATTEN He died at the age of 46 in 2002, but in his too-short life, Shatten was one of the catalyzing forces behind efforts to rebuild Cleveland. He served as executive director of Cleveland Tomorrow from the mid-1980s to the mid-1990s. He was executive director of the Center for Regional Economic Issues at Case Western Reserve University’s Weatherhead School of Management and served on the boards of the Cleveland-Cuyahoga County Port Authority and EcoCity Cleveland. TOM VAIL The former president and publisher of The Plain Dealer, which his great-grandfather bought in 1885, rode a high tide of influence from 1963 until his retirement in 1991. He co-founded Cleveland Tomorrow. Vail’s board service includes the Cleveland Clinic, the Cleveland Council on World Affairs and the Committee for Economic Development.
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THE NAMES THAT MADE THE LIST ... AND THE SHOCKING ONES THAT DIDN’T
1
JAMES MALZ Having grown up as one of eight kids on a dairy farm in Andover — a small town about 70 miles east of Cleveland — James Malz said he learned early on to use resources in the right way. One of the most valuable resources he’s found, of course, is human capital. In his role as managing director for JPMorgan Chase in Ohio/Western Pennsylvania, Malz’s success banks, quite literally, on his ability to make connections. “You won’t succeed in this business without a great network,” said Malz, who maintains offices in Cleveland and Columbus and lives in Brecksville. “It’s a great practice to get out, be heard and be seen. You have to be hungry for knowledge.” He added, “There’s no magic to it, but you have to work at it, maintain it and keep it fresh.” Malz came to Chase through its merger with Bank One. Always fascinated by numbers, he graduated from Hiram College with a degree in economics and landed in the banking realm. Since then, he has worked himself slowly into the state’s corporate and nonprofit fabric. One of the most important pieces of advice Malz said he ever received came from his mentor, Dick Pogue — the venerable Jones Day attorney who landed at No. 19 on Crain’s Most Connected list. Pogue taught him “what it means to be a great ambassador in the community,” Malz said. “He taught me a lot about not spreading yourself too thin, and be impactful where you can be.” The bulk of Malz’s involvement beyond Chase was concentrated in Northeast Ohio until he was promoted to take on a mostly statewide role. In Northeast Ohio, he has been involved with the Cleveland Institute of Music, the Children’s Hunger Alliance, the Cleveland Zoological Society and other organizations. As he has deepened his involvement in Central Ohio by getting involved with organizations such as the Ohio Foundation of Independent Colleges and Nationwide Children’s Hospital. And according to Crain’s partner, RelSci, Malz likely serves as a bridge connecting each of these communities to each other, as well as connecting his fellow bankers to people active in each of these causes. His influence and access scores are particularly high, suggesting that a lot of his network’s strength comes from connections to influential individuals and institutions. — Timothy Magaw
ROUNDING OUT THE TOP TEN: 2
SCOTT WOLSTEIN STARWOOD RETAIL PARTNERS, CEO
One of the most well-known developers in the region, Wolstein now is working to bring to life the vision of his late father, Bart, to transform the Flats East Bank into a vibrant downtown destination. Until 2011, Wolstein had served as the head of what is now DDR, a Beachwood-based real estate investment trust that focused on shopping centers.
3
ALEXANDER M. CUTLER EATON CORP., CEO
After 15 years leading what’s arguably the region’s most powerful manufacturer, Cutler announced recently that next May, he will step down after reaching the company’s mandatory retirement age of 65. Though Eaton still maintains its corporate headquarters in the Cleveland area, Cutler in 2012 shifted the company’s domicile to Ireland through an acquisition of Cooper Industries Plc.
4
SAMUEL H. MILLER FOREST CITY ENTERPRISES, CO-CHAIRMAN EMERITUS
For over half a century, Miller has been one of Cleveland’s most-prominent businessmen and philanthropists. In particular, Miller’s been credited with leading Forest City’s push into land development. He served as the treasurer since 1992 and was named chairman of the board in 1993. He was joined by Albert B. Ratner as co-chairman in 1995.
5
PAUL G. GREIG FIRSTMERIT, CHAIRMAN, PRESIDENT AND CEO
In 2013, Greig led FirstMerit to its largest acquisition ever, which included bringing 37 Michigan branches of Citizens Republic Bancorp Inc. — and $24.5 billion in assets — into the FirstMerit system.
6
BETH E. MOONEY KEYCORP, CHAIRMAN AND CEO
“The most powerful woman in banking” according to one industry publication, Mooney has positioned herself as one of the most powerful civic figures in the Cleveland area. At present, she chairs the board of the Greater Cleveland Partnership, the regional chamber of commerce.
7
ALFRED M. RANKIN JR. HYSTER-YALE MATERIALS HANDLING, CHAIRMAN AND CEO
Rankin, who also holds the top post at Nacco Industries, followed in his father’s footsteps and become one of the most civically engaged leaders in the region. Until earlier this spring, he led University Hospitals’ board of directors during a period of rampant growth for the health system.
8
HENRY L. MEYER III KEYCORP, FORMER CHAIRMAN AND CEO
During his roughly four-decade tenure with Key, the Cleveland-based bank grew from a small, $1.5 billion operation to one of the largest banks in the country with $95 billion in assets. A trusted civic figure, Meyer retired from Key’s top post in 2011 after having served in the role for about 10 years.
9
WILLIAM B. SUMMERS MCDONALD INVESTMENTS INC., RETIRED CHAIRMAN AND CEO
Summers was the longtime head of one of Cleveland’s prominent brokerage firms, which was purchased by Key and ultimately sold to banking giant UBS. Summer has been active in a number of high-profile boards — both public and private — around town.
10
STEVEN W. PERCY BP AMERICA, FORMER CHAIRMAN AND CEO
A legendary business figure, Percy has also been involved in a number of boards in the Cleveland area. He’s also served as a member of former president Bill Clinton’s Council on Sustainable Development as the cochair of its climate change task force. He also temporarily served as dean of Cleveland State University’s Monte Ahuja College of Business.
VISIT CRAINSCLEVELAND.COM/MOSTCONNECTED FOR THE FULL LIST AND INTERACTIVES
It would be an understatement to say that there are some surprises — and oddities — lurking about in our list of the 100 Most Connected individuals in Northeast Ohio. First, let’s just get this out in the open before the phone calls and emails start: There are many powerful, important, connected people who do not appear on this list by virtue of the process through which this information was culled. If a person did not have a connection to any of the organizations or companies appearing on the 12 Crain’s Cleveland Business lists we used to pull information, then there was no way for them to appear as part of this project. (We made the deliberate decision to not add any names so as to not subjectively skew the information.) For example, basketball phenom and worldwide sports celebrity LeBron James is not on the list, despite the fact that there’s few places on the planet where he wouldn’t be recognized. Celebrity chef Michael Symon also didn’t make the list. Neither did Joe Pulizzi, the rock star of the content marketing world, nor did Sen. Sherrod Brown, for that matter. That’s because these people didn’t have connections to the region’s largest accounting firms, colleges and universities, law firms, banks and grantmaking foundations. They don’t have links to the area’s biggest employers and largest public companies, private companies and nonprofits. And, they did not appear on our list of highest paid CEOs, non-CEOs and nonprofit executives. That said, there are a lot of people who did show up within this universe — 8,085 individuals to be exact. So, keep in mind, even if someone wasn’t in the top 100, he or she might have appeared later in the list. Such was the case with University Hospitals’ Thomas F. Zenty III, Cleveland Mayor Frank Jackson, attorney April Miller Boise, MetroHealth’s Dr. Akram Boutros and Third Federal’s Marc Stefanski (who all fell in the top 25% or top 2,000), as well as many others with highranking positions in Northeast Ohio. Of course, the final top 100 offered up some surprises, too. Yes, there are many names you would expect to see — Miller, Ratner, Lerner and Wolstein, to name a few — but there are others who were not as expected. Take Paul G. Matsen, the Cleveland Clinic’s chief marketing and communications officer. His overall ranking is No. 92, which is four spots higher than his boss, Dr. Toby Cosgrove, who ranks No. 96. Seems like a mistake at first, given Cosgrove’s preeminence in the world of health care. But once you look at Matsen’s background, you realize that he has a world of connections as well, including current and previous links to Delta Air Lines, Destination Cleveland, Hathaway Brown School, Rutgers University and the United Way of Greater Cleveland. The bottom line is that this list reflects more than name recognition and posts of power — which is exactly what makes it interesting and different from anything we’ve previously done. — Amy Ann Stoessel
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11-100 OF THE MOST CONNECTED 11. Christopher M. Connor Chairman/Chief Executive Officer, The Sherwin-Williams Co. 12. Robert W. Gillespie Former CEO, KeyCorp 13. Barbara R. Snyder President, Case Western Reserve University
41. Loretta J. Mester President & Chief Executive Officer, Federal Reserve Bank of Cleveland 42. Frank C. Sullivan, Chairman & Chief Executive Officer, RPM International, Inc.
14. Marvin Krislov President, Oberlin College
43. Christopher L. Mapes Chairman, President & Chief Executive Officer, The Lincoln Electric Co.
15. Thomas W. Adler, Former President, Society of Industrial and Office Realtors
44. Albert B. Ratner Co-Chairman Emeritus, Forest City Enterprises, Inc.
16. Jeffrey I. Friedman, Former Chairman, President & Chief Executive Officer, Associated Estates Realty Corp
45. Jerry Sue Thornton President Emeritus, Cuyahoga Community College
17. Robert H. Rawson, Jr. Of Counsel, Jones Day
46. Jim E. Bennett Chief of Staff, Cleveland State University
18. Richard K. Smucker, Chief Executive Officer/Director, The J. M. Smucker Co.
47. Stephen D. Newlin Executive Chairman, PolyOne Corp.
19. Richard W. Pogue Senior Adviser, Jones Day
48. Stephen R. Hardis, Former Chairman & Chief Executive Officer, Eaton Corp. Plc
20. Sandra Pianalto, Former President/CEO, Federal Reserve Bank of Cleveland 21. Daniel P. Walsh, Jr. Chief Executive Officer, Citymark Capital 22. Thomas F. McKee Chairman, Calfee, Halter & Griswold LLP 23. Donald T. Misheff Former Managing Partner, Ernst & Young LLP 24. A. Malachi Mixon Former Chief Executive Officer, Invacare Corp. 25. Charles Horowitz Ratner Chairman of the Board, Forest City Enterprises, Inc. 26. Frederick R. Nance Regional Managing Partner, Squire Patton Boggs LLP
49. Christopher M. Gorman President of Key Corporate Bank, KeyCorp 50. Craig Arnold Vice President & Chief Operating Officer, Industrial Sector, Eaton Corp. Plc 51. John M. Stropki Former Chief Executive Officer, The Lincoln Electric Co. 52. Richard J. Kramer Chief Executive Officer & President, The Goodyear Tire & Rubber Company 53. Arthur F. Anton, President, Chief Executive Officer & Director, The Swagelok Co. 54. Daniel B. Gilbert, Founder /Chairman, Rock Ventures, Quicken Loans
27. Maryrose T. Sylvester President & Chief Executive Officer, Lighting, General Electric Co.
55. Peter S. Hellman Former Executive Vice President, Chief Financial Officer & Chief Administrative Officer, Nordson Corp
28. William Robert Timken, Jr., Former CEO, The Timken Co.
56. Julie Boland, Managing Partner, Ernst & Young LLP
29. Michael B. Petras, Jr. President, Cardinal Health at Home
57. Peter Raskind, Former CEO, National City Corp.
30. James A. Ratner Executive Vice President, Forest City Enterprises, and Chairman and CEO, Forest City Commercial Group, Forest City Enterprises, Inc. 31. Karen R. Haefling Vice President of Marketing, Vita-Mix Corp 32. James R. Geuther, President of Commercial Banking, Cleveland & Akron Region, JPMorgan Chase & Co. 33. Bonnie W. Gwin Vice Chairman & Managing Partner, Board Practice in North America, Heidrick & Struggles International, Inc. 34. James C. Boland Strategic Partner, Gates Group Capital Partners LLC 35. Carol A. Cartwright President Emeritus, Kent State University (Ohio) 36. Mario M. Morino Co-Founder, LEGENT Corp. 37. R. Steven Kestner, Chairman, Baker & Hostetler LLP 38. William R. Robertson Former Managing Partner, Kirtland Capital Partners LLC 39. Jerry L. Kelsheimer President & CEO, Fifth Third Bank of Northeastern Ohio, Fifth Third Bank (Cincinnati, Ohio) 40. Lyle G. Ganske Partner, Jones Day
58. Michael D. Siegal Chairman & Chief Executive Officer, Olympic Steel Inc 59. Ronald A. Ratner President & Chief Executive Officer, Forest City Residential Group, Forest City Enterprises, Inc. 60. Barbara S. Robinson Piano Soloist, Boston Pops 61. Jay A. Gershen President, Northeast Ohio Medical University 62. Michael J. Horvitz Former Partner, Jones Day 63. James A. Goldsmith Partner, Chair, Trusts & Estates, Ulmer & Berne LLP 64. Ronald M. Berkman President, Cleveland State University 65. Robert S. Reitman Former Chairman & Chief Executive Officer, The Tranzonic Companies 66. Katrina M. Evans, Executive Vice President, Director of Corporate Center, KeyCorp 67. Ralph M. Della Ratta, Jr. Managing Partner & Chief Executive Officer, Western Reserve Partners (Private Equity)
70. Patrick M. Pastore Executive Vice President /Head of Corporate Banking, Northern Ohio, The PNC Financial Services Group, Inc. 71. Lauren Rich Fine, Partner, Howard & O’Brien Associates 72. Stanley C. Gault, Former CEO, The Goodyear Tire & Rubber Company 73. Donna M. Sciarappa Regional Managing Partner, Great Lakes, McGladrey LLP 74. Paul G. Clark Regional President, Cleveland, PNC Bank, NA 75. Donzell S. Taylor President and CEO, Welty Building Co. 76. Michael J. Haas Partner, Jones Day 77. Eric V. Roegner President, Alcoa Defense; president, Alcoa Titanium and Engineered Products; COO, Alcoa Investment Castings Titanium and Engineered Products, Alcoa, Inc.
James A. Goldsmith
78. John M. Saada, Jr. Partner, Jones Day 79. Morry Weiss, Chairman, American Greetings Corp. 80. Bruce D. Murphy, Executive Vice President of Corporate Responsibility, KeyCorp 81. J. David Heller, CoFounder, The NRP Group LLC 82. Paul E. DiCorleto Vice President for Research and Sponsored Programs, Kent State University
MAKING THE RIGHT CONNECTIONS
83. Jacqueline F. Woods Former President, AT&T Ohio 84. Larry Pollock Former President and CEO, J.B. Robinson Jewelers 85. Norma Lerner Co-Founder, Cleveland Clinic Lerner Research Institute 86. Les C. Vinney, Managing Director, NDI Medical LLC 87. Stephen H. Gariepy Partner, Hahn Loeser & Parks LLP 88. Stewart A. Kohl, Co-CEO, The Riverside Company 89. Alex B. Johnson President, Cuyahoga Community College 90. David E. Weiss Executive Vice President/ General Counsel, DDR Corp. 91. Christopher J. Hyland CFO and Treasurer, Hyland Software, Inc. 92. Paul G. Matsen, Chief Marketing/Communications Officer, Cleveland Clinic
Plenty of things are bound to change over the course of a 35 year career practicing trusts and estates law. But for Ulmer & Berne partner James A. Goldsmith, one constant ÛiÀ Ì i Þi>ÀÃ >Ã Lii > Õ y V } `i` V>Ì Ì Ã clients and a commitment to building strong bonds that stand the test of time. Ulmer & Berne congratulates Jim on being named one of Northeast Ohio’s 100 Most Connected in Cleveland for 2015 by Crain’s Cleveland Business.
Named one of Northeast Ohio’s 100 Most Connected – Crain’s Cleveland Business
93. Deborah Z. Read Managing Partner, Thompson Hine LLP 94. Richard H. Fearon Vice Chairman/CFO, Eaton Corp. Plc
Learn more at ulmer.com
95. Michael D. Stovsky Partner, Benesch, Friedlander, Coplan & Arnoff LLP 96. Delos M. Cosgrove President & Chief Executive Officer, Cleveland Clinic 97. Linda A. Striefsky Partner, Thompson Hine LLP 98. Eddie Taylor President, Taylor Oswald Co.
68. William C. Mulligan Managing Partner, Primus Capital Partners, Inc.
99. Marcia J. Wexberg Partner and Chair, Estate & Succession Planning Group, Calfee, Halter & Griswold LLP
69. Jeffrey J. Wild Partner, Benesch, Friedlander, Coplan & Arnoff LLP
100. Paul R. Bishop Chairman & Chief Executive Officer, H-P Products, Inc.
Cleveland | Columbus | Cincinnati | Chicago
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MOST CONNECTED
Sizing up their networks Say you want to have a quick phone conversation with a fairly high-ranking person in the business world. Someone you don’t know.
It’s not like you’re selling a product or anything. You just want some advice. But you don’t feel comfortable calling them up on the phone or sending them an email. And they don’t have a Twitter account. If only you knew someone who knew that person. Someone who could introduce you.
Someone with “reach.” A person’s reach score is designed to measure how many connections he or she has in the business world — and how many connections those connections have. So if you know a lot of business people, and they also know a lot of people, too, then you’ll have a high reach score. You don’t need to be best friends, either. The category — which was invented by Relationship Science, the New York-based company that helped us produce the lists that form the foundation of the Most Connected project — measures the sheer number of connections you have, not the strength of those connections. Thus, people who have worked for several large companies often have high reach scores. For instance, Eric Roegner, who is head of multiple business units at Alcoa, only ranked 77th on our overall Most Connected list. But he had the secondhighest reach score of anyone in the Cleveland area. That’s partly because he’s con-
nected to a lot of people at Alcoa, a big company that makes lightweight metal products. He also used to work for two other publicly traded companies: Nordson Corp. in Westlake and McKinsey & Co., a global consulting firm. So it makes sense that Jim Bennett ranked just behind Roegner. Bennett sat on McKinsey’s executive committee during his 30 years at the company. Also not shocking: The next guy on the list — James M. Malz, who ranked No. 1 on the overall list — is an executive at the nation’s biggest bank, JPMorgan Chase (as is James R. Geuther, who ranked 11th on the reach list). Who didn’t do as well? Well, a few longtime college presidents who ranked highly overall had lower reach scores — Barbara Snyder of Case Western Reserve University; Carol Cartwright, formerly of Kent State University; and Jerry Sue Thornton, formerly of Cuyahoga Community College. They spent a lot of time working with academics
and thus have fewer connections in the business world. But hold on. They’ve all served on corporate boards. Doesn’t that help? To an extent. Being a board member helps people build close relationships and make connections between people who wouldn’t otherwise be connected to each other, according to Relationship Science. So it helps their overall Most Connected ranking by boosting their scores in other categories, like centrality and reliability. But the average corporate board in Northeast Ohio only has about 10 members. So those connections will only do so much for someone’s reach score — even if you’re Jerry Sue Thornton, who has served on a long list of boards over the years. Of course, anyone who serves on a board with a guy like Scott Wolstein (the real estate developer is No. 1 on the reach list) would see their reach score get a boost. OK, so what about Jeff Friedman? He spent more than 40 years at one
company, Associated Estates Realty Corp. Not a small company — it generated $194 million in revenue last year — but not huge either. How did his reach score break the Top 10? His score got a boost because he has served on the boards of a few membership organizations, according to Emma Griffin, senior director of the content team at Relationship Science. Those kinds of ties are often weak, but remember, the reach score is about sheer number of connections. Even weak ties can be meaningful, though. Even if you’re a board member for a national association that only meets in person once a year, you could still ask a favor from another board member — without it being weird. Who else does well in the reach category? Griffin says that lawyers and bankers at big companies usually do well, though you won’t see many of them very high on our reach list, unless they’re in the C-suite. Once you get to No. 39 on the reach list (Jeffrey J. Wild, a partner at Benesch) they start showing up in larger numbers. — Chuck Soder
TOP 10 REACH They know plenty of people
Shaker Heights congratulates its Most Connected professionals.
They connect,
1
SCOTT A. WOLSTEIN STARWOOD RETAIL PARTNERS LLC, CEO Wolstein is connected to a lot of people. And those people are pretty well-connected, too. Wolstein — who is leading the effort to redevelop the Flats — spent nearly 20 years as CEO of Beachwood-based DDR Corp., which owns hundreds of retail buildings. His current job gave him new connections. For instance, he’s now a phone call away from the chairman of Starwood Retail Partners, Barry Sternlicht — the founder of Starwood Hotels & Resorts Worldwide. Oh yeah, and he’s been a board member for roughly 20 different nonprofits over the years.
2
ERIC V. ROEGNER Alcoa, head of multiple business units
3
JIM BENNETT Cleveland State University, chief of staff
4
JAMES M. MALZ JPMorgan Chase & Co., managing director of Ohio/Western Pennsylvania
5
inspire, and make a difference – at home and beyond.
6
JEFFREY I. FRIEDMAN Associated Estates Realty Corp., former chairman, president and CEO DAVID E. WEISS DDR Corp., executive vice president, general counsel and secretary
7
RICHARD J. KRAMER Goodyear Tire & Rubber Co., chairman, CEO, president
8
BETH E. MOONEY KeyCorp, chairman and CEO
9
ALEXANDER M. CUTLER Eaton Corp. plc, chairman and CEO
10
BONNIE W. GWIN North America Board Practice, Heidrick & Struggles International Inc., vice chairman and managing partner
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These people can pull some strings for you Money is the fabric that binds together the business cosmos, and these are the Clevelanders weaving the threads. If nothing else, they can pull some strings.
In Northeast Ohio, the executive with the most pull — or the one with the most threads at her disposal — is KeyCorp chairman and CEO Beth Mooney. Now regarded as the most powerful woman in the U.S. banking sector, Mooney is the superstar Cleveland A-listers want to know, if they don’t already. She leads a pool of other businesspeople with strong ties to banking and investment groups and massive companies that comprise the bulk of the 10 most connected Clevelanders with the strongest web of influence. These people are identified by job titles and degrees of connectivity with other high-ranking and prominent executives. They’re ranked through a special algorithm from Relationship Science, or RelSci, that considers the power in each individual’s network, the importance of the people within that and what those people can do with their connections. The influence value is also closely tied to the access metric: the access these individuals have to other organizations and people in their professional and civic lives. Intuitively, Clevelanders with the most influence also ranked high in overall connectivity. While Mooney, the top of the influence chain, is ranked the sixthmost connected, her runner-up in this category is Cleveland’s most connected, James Malz, managing director for Ohio/Western Pennsylvania for JPMorgan Chase & Co. He is followed by the No. 2 most connected, Scott Wolstein, CEO for Chicago-based commercial real estate agency Starwood Retail Partners LLC. Wolstein established his
network here through his family’s Beachwood real estate investment trust DDR Corp. Those who control the cash command the most influence. The theme of connectivity to money flow persists through the list, as the ability and capacity to control capital proves that not only does money talk, but those with money talk to each other. The trend manifests through other banks (which claim the most spots on the list with three) like JPMorgan, which is again represented in the No. 8 spot via James Geuther, a longtime local banker and president of commercial banking for the mega-company’s Cleveland and Akron region, or other investment groups like Cleveland’s Forest City Enterprises Inc. and New Yorkbased private equity firm CapGen Capital Advisors. Strong pull also comes with the territory for multibillion-dollar enterprises like J.M Smucker Co. and Eaton Corp., which are among half of the top 10 populated by company founders or C-suite executives. JPMorgan is the only company to place in the top 10 more than once. However, secondary links to Key itself are consistent. CapGen Capital Advisors’ Robert Gillespie is a former KeyCorp CEO from the 1990s, for example, illustrating another tie back to the bank. Meanwhile, Case Western Reserve University president Barbara Snyder currently sits on the Key board of directors as does Eaton Corp.’s Alexander Cutler. It’s apparent that ties to Mooney and Key carry additional clout. But for Mooney herself, the head of a $93 billion asset bank controlling more than 22% of depositor market share in the Cleveland MSA (their nearest competitor, PNC Bank, claims slightly more than 12%), the numbers, and the story behind them, speak for themselves in terms of influence. In her four years behind the helm for KeyCorp, Mooney has truly steered the ship in a new and prosperous direction; it’s only natural to make some connections along the way. Key expertly navigated the last recession and is growing in the years following its wake at an impressive clip. Mooney, notably, also claims the top spot as a woman, where she is joined in the top 10 only by Case Western Reserve’s Snyder. Women as a group claim just 17% of the most influential category. — Jeremy Nobile
TOP 10 INFLUENCE Meet Northeast Ohio’s executives with the most pull
1
BETH MOONEY KEYCORP, CHAIRMAN AND CEO
Beth Mooney became chairman and CEO of KeyCorp in May 2011 after joining the Cleveland-based bank in 2006. Her time at Key was prefaced by jobs of increasing scope and responsibility at banks including Alabama-based AmSouth Bancorporation (now Regions Financial Corporation), Bank One Corporation and Citicorp Real Estate Inc. Mooney has made her strongest impact as CEO of one of the country’s largest regional banks, managing growth and setting a standard for diversity in a massive corporation. Her control of Cleveland’s largest bank and her impressive and extensive access to the corporate elite in this region and across the country secures her spot among the most influential business leaders in Northeast Ohio.
2
JAMES MALZ JPMorgan Chase & Co., managing director of Ohio/Western Pennsylvania
3
SCOTT WOLSTEIN Starwood Retail Partners , CEO
4
ALEXANDER CUTLER Eaton Corp Plc., chairman and CEO
5
RICHARD SMUCKER The J.M. Smucker Co., CEO and director
6
ROBERT GILLESPIE KeyCorp, former CEO
7
MARIO MORINO LEGENT Corp., co-founder
8
JAMES GEUTHER JPMorgan Chase & Co., president of commercial banking, Akron and Cleveland
9
SAMUEL MILLER Forest City Enterprises Inc., co-chairman emeritus
10
BARBARA SNYDER Case Western Reserve University, president
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You can count on them What good is a connection if you can’t count on it? Just as important as the number of connections a person has — perhaps even more important — are the strength of those connections. For the purposes of ranking our most connected Northeast Ohio leaders, we’re terming this quality: “reliability.”
Reliability measures the quality of a person’s relationships and emphasizes the likelihood that the person could actually connect with others in their most connected network. You might call it “clout” and, as you might imagine, the chair of a board tends to have more of it than the other members. Sometimes, people with the most reliable networks do not have the largest networks. That can sometimes be because they immerse themselves fully into the organizations in which they become involved — and choose
not to become involved unless they perceive taking on a large role and list of responsibilities. Our research partner Relationship Science (RelSci) has identified several factors that strengthen a person’s connections. They include shared board responsibilities and relationships, seniority, and participation in major events and transactions. In other words, a person who has been a member of a board of directors for 10 years, and has participated in the executive compensation committee, or acquisitions, will have a higher reliability score than a first-year board member still defining their role. In Northeast Ohio, more than a few of the most connected civic and business leaders have deep and dependable networks. But Sherwin-Williams Co. CEO Christopher M. Connor is Mr. Reliable. It’s not hard to see why either. Connor’s not only connected to important people at important places, but his connections run deep. Connor is almost as likely to be the chairman of a board as he is to be a member. University Hospitals, the Federal Reserve Bank of Cleveland, United Way of Greater Cleveland, the Rock and Roll Hall of Fame and Museum, the 2016 (Republican National Convention) Cleveland Host Committee — these are organizations for which Conner either chairs or cochairs the board or a major advisory committee. They are also some of the
most important organizations, with some of the most coveted board positions, in all of Northeast Ohio. It’s a similar story with some of the other most-connected people that have deeply reliable networks. Take a look at the contacts of Alfred M. Rankin Jr., who has our second most-reliable network. Rankin is or has been the chairman of several boards, including the boards of University Hospitals Health System and the Federal Reserve Bank of Cleveland. In other words, the people with the most reliable networks are not put on boards for show. They’re doers, not wallflowers, and they seem to join boards because they want to be — and usually become — deeply involved. This puts them into more decisionmaking processes, causes them to be thoroughly informed on more issues and, of course, to be connected with other, similarly important, connected and energetic people. If you want a business buzzword to describe people with the most reliable networks of contacts, the word is engaged. And you’ll find the people on our list with the most reliable networks are always engaged. They are, in many instances, the people behind the growth of our region’s businesses and economy and the driving forces behind the revitalization of Cleveland and other parts of Northeast Ohio. — Dan Shingler
TOP 10 RELIABILITY They make deals happen
CHRISTOPHER M. CONNOR SHERWIN-WILLIAMS, CHAIRMAN AND CEO Connor is not only the longtime leader of one of the nation’s Fortune 500 companies, but also one of the most involved business leaders in and around Northeast Ohio. The list of boards with which he has been involved is both long and impressive, including the Greater Cleveland Partnership, Rock and Roll Hall of Fame, the United Way of Greater Cleveland, the Playhouse Square Foundation, Eaton Corp. and others.
1
2
ALFRED M. RANKIN JR. Hyster-Yale Materials Handling, chairman and CEO
7
SAMUEL H. MILLER Forest City Enterprises, co-chairman emeritus
3
RICHARD K. SMUCKER The J.M. Smucker Co., CEO and director
8
CHARLES HOROWITZ RATNER Forest City Enterprises, chairman of the board
4
BETH E. MOONEY KeyCorp, chairman and CEO
9
5
JAMES M. MALZ JPMorgan Chase & Co, managing director of Ohio/Western Pennsylvania
BARBARA R. SNYDER Case Western Reserve University, president
6
MARIO M. MORINO LEGENT Corp., co-founder
10 JAMES R. GEUTHER JPMorgan Chase & Co., president of commercial banking, Akron and Cleveland
Creating bonds, building a stronger community Congratulations to all of the “Northeast Ohio’s Most Connected” honorees who make Cleveland work!
bakerlaw.com
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They’re at the core of every deal Sam Miller from Forest City Enterprises Inc. is only one of the bestknown business leaders in Northeast Ohio.
Until recently, the now 94-yearold Miller drew regular mentions in newspapers for everything from dropping off bagels to strong opinions. For decades, he was a regular speaker at real estate events, particular the Home Builders Association of Greater Cleveland’s economic forecasts, long after the developer’s interests shifted from the region to the nation. That and innumerable acts of personal kindness to people, combined with his continued and longtime membership on a prodigious
number of boards, account for his top ranking in the centrality feature of the most connected figures in the region in a ranking produced for Crain’s by New York City-based Relationship Science, or RelSci. Miller has been well-known for regional political donations and friendships with elected officials of both parties. That was at its apex in the 1990s, when Miller was close to the generally unapproachable former Cleveland Mayor Michael R. White. Miller is a nationally recognized leader in international, national and Jewish organizations, but he also works with the Catholic Diocese of Cleveland. Membership on a national civic or nonprofit board also distinguishes and broadens the contact reach of the 10 highest-ranking people in centrality. For example, Marvin Krislov, president of Oberlin College, sits on the boards of both the National Endowment for the Humanities and the National Association of Independent Colleges and Universities. Christopher Connor, CEO of Sherwin-Williams Co., has served as chairman of Keep America Beautiful Inc., also known as the litter fighters
of the nation, and he sits on the boards of the National Association of Manufacturers, the American Coatings Association, the National Paint and Coatings Association and the Rock and Roll Hall of Fame and Museum. RelSci refers to people’s rankings in centrality as their role as “super hubs.” These are people who have the ability to make introductions to vastly different types of people for donations, board appointments, contracts or jobs. Serving on boards of corporations not only puts people in top ranks of earnings as directors, but it broadens their reach astronomically on a geographic and industrial basis. It’s another way all those meetings generate benefits. For example, Alfred Rankin Jr. is not only chairman, president and CEO of both Nacco Industries, and Hyster-Yale Materials Handling, of Cleveland, but he served as a director of Vanguard, the 900-pound gorilla of mutual fund firms based in Valley Forge, Pa. Likewise, Larry Pollock, former CEO of several of the region’s public companies and now board chairman of Shaker Heights-based nonprofit administrative service
provider and strategist Wingspan Care Corp., served on the board the former Borders of Ann Arbor, Mich., and today is on the board of Mentor-based CardinalCommerce, a digital platform provider for secure transactions. The second-most central figure on the list, former EY Cleveland managing partner Daniel Misheff, not only sits on a panoply of local nonprofit and civic boards but also a range of boards of publicly traded companies. Among them: Trinseo, a Berwyn, Pa.-based materials provider, as well as prominent local firms Aleris Corp., FirstEnergy Corp. and TimkenSteel Corp. The only female to crack the top 10 list in centrality is Sandra Pianalto. The retired president and CEO of the Federal Reserve Bank of Cleveland serves on four public company boards, ranging from Eaton Corp., which has its American campus in Beachwood, to Prudential Financial, based in Newark, N.J. Moreover, her nonprofit board list includes that of the Rock Hall. That means contacts ranging from Wall Street to the music business. — Stan Bullard
VISIT CRAINSCLEVELAND.COM/MOSTCONNECTED FOR THE INTERACTIVE LIST
TOP 10 CENTRALITY Connecting the dots
1 SAMUEL H. MILLER FOREST CITY ENTERPRISES INC., CO-CHAIRMAN EMERITUS Sam Miller shows the proof of the old Klingon greeting “live long and prosper.” At 94, he has seen a lot of history made in Northeast Ohio — and he knew people making it on a first-name basis. He served as a speaker regularly for lots of groups when others would pass. Despite Miller’s stature as a nationally recognized Jewish leader, he also hangs with Catholic bishops, Cleveland cops, the Urban League of Greater Cleveland and many past mayors. Long tenure with the firm that’s the best-known real estate developer in town gave him contact for years with a lot of people from different walks of life. He worked for Forest City before it was public when the lumber company cut its teeth as a land developer of home sites in post-World War II Parma and other now inner-ring suburbs.
2
DONALD T. MISHEFF Ernest & Young, former managing partner
7
PAUL CLARK PNC Bank, Cleveland regional president
3
MARVIN KRISLOV Oberlin College, president
8
CHRISTOPHER M. CONNOR Sherwin-Williams Co., chairman and CEO
4
RICHARD W. POGUE Jones Day, senior adviser
9
SANDRA PIANALTO Federal Reserve Bank of Cleveland, former president and CEO
5
6
ALFRED M. RANKIN JR. Hyster-Yale Materials Handling, chairman and CEO LARRY POLLOCK J.B. Robinson Jewelers, former president and CEO
10 FREDERICK R. NANCE Squire Patton Boggs LLP, regional managing partner
WE KEEP YOU UP AND RUNNING.
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What’s with all the old white guys? The people who hold the real power in Northeast Ohio make up a pretty homogeneous group. The vast majority of the individuals are between the ages of 50 and 70, and nearly all are white. Just under 20% of the people on the list are women.
Somewhat surprisingly, the statistics in the Most Connected list don’t change that much if you look at the younger end of the scale. Of the eight individuals in their 40s, only one is a woman, and none are non-white. At least, this is the way it appears. It’s important to note that identity, especially in terms of race, gender and sexual orientation, can be a difficult thing to ascertain.
But even considering that, it’s pretty clear that power hasn’t shifted much in Cleveland. Lists like this are shaped by the organizations included. The institutions in Crain’s Most Connected section were drawn from a variety of our regular lists, mostly focusing on the largest in categories including accounting and law firms, higher education institutions, nonprofits, and public and private companies. We also used the lists of the highest paid CEOs and non-CEOs. There are a lot of factors that go into who becomes a business leader, but familiarity with the work and money to invest are a few of them, said David Hammack, Hiram C. Haydn professor of history at Case Western Reserve University. It’s understandable, he said, but can perpetuate the inequalities that already exist. In Hammack’s lifetime, though, he has seen the world become a more inclusive place. In certain fields in Cleveland in the 1960s, there was a ceiling on the success a Jewish person could achieve, he said. That’s not necessarily the case today. The “socialization of young women and the careers open to them” have changed from when he and his wife were in school. And opportunities for African-American individuals have grown, as well. Hammack said when he was teaching in Houston in the early ’80s, he had African-American master’s students who had never been in an integrated
classroom before. “So African-Americans weren’t getting onto the ladder at that point,” Hammack said. But despite these changes — and despite a lot of public conversations about the value of diversity — our list of movers and shakers remains pretty stereotypical. Society talks an awful about diversity, but action to advance diversity is not often welldefined or well-executed, said Michael Williams, director of black studies at Cleveland State University. People talk about diversity, but not about the approaches like affirmative action, assuming all candidates are qualified, that would actually enact it. “And I think that’s where the struggle is,” said Williams, noting that the will to carry out a diversity initiative is critical. Suzanne Holt, director of women’s studies and a professor in the Center for Comparative and Integrative Programs at Kent State University, said the key to diversity initiatives is getting people to truly buy in to something they might not have created. A lot of people will say the right words, but because inclusion initiatives can seem to mean that someone will lose in order for someone else to win, it can bring out territorial feelings. Additionally, there’s a “tension” between inclusion programs and the freedom of speech and of beliefs, which can feel at risk with these measures, Holt said. Business in particular faces challenges to
become more inclusive because there are monetary consequences to taking a risk and there’s a sense of “something to lose,” Holt said. Williams said he thinks that Cleveland has been catching up, especially considering its reputation as one of the most segregated cities in the United States. But the old orders are entrenched. He has been in rooms where people are talking about how much they value diversity, while he’s the only African-American person in the room. The practice of inclusion brings more points of view to the table, he said. On our list, the banking and finance industry looks to be the most diverse — it has the most women at four, as well as three of the youngest individuals on the list. It’s also one of the only industries with any racial diversity represented. The business and consumer services industry is also well represented by women with four individuals on the list, followed by three women each in the legal and education fields. Education has the most racial diversity, but just barely, as there are two individuals in the field on the list. Outside of finance, the youngest individuals on the list are in a variety of fields from legal to technology to industrial products. The oldest individuals also run the gamut in terms of industries, but the majority work in private equity and venture capital. — Rachel Abbey McCafferty
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DEMOGRAPHICS
RACIAL DIVERSITY FREDERICK R. NANCE JERRY SUE THORNTON CRAIG ARNOLD
Breaking down the age, gender and racial diversity of our list
BRUCE D. MURPHY ALEX B. JOHNSON EDDIE TAYLOR
YOUNGEST JEFFREY J. WILD, 42 ERIC V. ROEGNER, 45 CHRISTOPHER J. HYLAND, 46 DANIEL P. WALSH, JR., 46 PATRICK M. PASTORE, 48 MICHAEL B. PETRAS JR., 48 JULIE BOLAND, 49 JERRY L. KELSHEIMER, 49
OLDEST SAMUEL H. MILLER, 94 STANLEY C. GAULT, 89 ALBERT B. RATNER, 87 RICHARD W. POGUE, 87 ROBERT S. REITMAN, 81 STEPHEN R. HARDIS, 80 NORMA LERNER, 79 WILLIAM ROBERT TIMKEN, JR., 76 MORRY WEISS, 75 JAMES C. BOLAND, 75
WOMEN BETH E. MOONEY BARBARA R. SNYDER SANDRA PIANALTO MARYROSE T. SYLVESTER KAREN R. HAEFLING BONNIE W. GWIN CAROL A. CARTWRIGHT LORETTA J. MESTER JERRY SUE THORNTON JULIE BOLAND BARBARA S. ROBINSON KATRINA M. EVANS LAUREN RICH FINE DONNA M. SCIARAPPA JACQUELINE F. WOODS NORMA LERNER DEBORAH Z. READ LINDA A. STRIEFSKY MARCIA J. WEXBERG
Congratulations to Crain’s on 35 years and to the
100 Most Connected People in Northeast Ohio!
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Finding the common threads As the president and CEO of BVU: The Center for Nonprofit Excellence, Brian Broadbent is all about connections. He says business leaders are frequently pressed for a few spare minutes, so when it comes to donating hours, they look for efficient groups with which to work.
“The reason you see some execs on some boards are they’re very well-run organizations,� Broadbent said. “Since they’re so busy, they want to have maximum impact and leverage their time very
effectively.� According to data that Crain’s analyzed from New York-based Relationship Science, the United Way of Greater Cleveland is a very popular landing spot for some of Northeast Ohio’s most prominent executives. Going by Relationship Science’s metrics, 30 of the 100 Most Connected people in the region have worked with the local United Way — either in current or past board memberships, or on various committees in the organization. Five of the top nine Most Connected people — Scott Wolstein (ranked second overall), Alexander Cutler (No. 3), Beth E. Mooney (6), Henry L. Meyer III (8) and William B. Summers (9) — have donated time to the United Way. Cutler and Meyer are still on the organization’s board, which, over the years, has had 11 of the top 20 on Crain’s Most Connected list. “It’s incredibly important to a nonprofit organization to have connected leaders involved in your group,� said Bill Kitson, the president and CEO of the United Way of Greater Cleveland. “Volunteers do make it happen. “Connected members leverage the ability of the organization to do so much more. We could never pay for this type of support from a staff perspective.�
Congratulations to Fifth Third Bank’s Region President, Jerry Kelsheimer, on making the 100 most connected list!
Kitson credited his predecessor at the United Way, former president and CEO K. Michael Benz, for recruiting many of the big names that have helped the United Way. He called the involvement of Thompson Hine LLP managing partner Deborah Read, a member of the top 100, “the perfect scenario� for the nonprofit. Kitson said Read worked with the organization “long before� she rose to prominence at the Cleveland law firm. “We got lucky,� Kitson said. “We picked the right person to help us out.� Then there is Sandra Pianalto, the former president and chief executive of the Federal Reserve Bank of Cleveland. “She’s the chair of our women’s leadership council — now that she has a few extra minutes,� Kitson said. “We value the fact that they come to work with United Way regardless of where they are career-wise.� University Hospitals’ various boards have 22 of the top 100 as current or past members, and its primary competitor, the Cleveland Clinic, is next with 17 current or former board members on the Most Connected list. Six of the top 20 — Wolstein, Meyer, Christopher M. Connor (who ranks 11th), Thomas W. Adler (No. 15), Richard W. Pogue and Pianalto — have both United Way and UH
ties. That supports Broadbent’s belief that highlevel execs often serve on the boards of prominent hospitals, art museums and key foundations. “It’s like a rite of passage,� the BVU president and CEO said. “Companies want to make sure they’re represented on those organizations.� When it comes to where the Most Connected people went to school, two obvious choices were in the top three. Case Western Reserve University led the way with 17 of the top 100, including eight who earned master’s degrees at the institution, and Ohio State University came in third with 11. In between is Harvard University, which counts 12 members of the Most Connected as alumni, including three of the top 12 (Samuel H. Miller, Meyer and Robert W. Gillespie). The region’s top financial institution, KeyBank, has at one time or another employed 11 members of the top 100, including Mooney, its current chairman and CEO. The nation’s largest bank, JPMorgan Chase, accounts for six of the top 100, as do the armed forces. Of the six top-100 members with military ties, three — James C. Boland, Pogue and Paul R. Bishop — served in the U.S. Army. — Kevin Kleps
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TOP BOARDS REPRESENTED UNITED WAY OF GREATER CLEVELAND UNIVERSITY HOSPITALS CLEVELAND CLINIC CASE WESTERN RESERVE UNIVERSITY ROCK AND ROLL HALL OF FAME AND MUSEUM
30 22 17 16 14
TOP ALMA MATERS CASE WESTERN RESERVE UNIVERSITY HARVARD UNIVERSITY OHIO STATE UNIVERSITY
17 12 11
TOP EMPLOYERS KEYBANK 11 JPMORGAN CHASE 6 UNITED STATES MILITARY 6 (the Army leads the way with three; the Air Force, Marines and Navy each have one)
JOHN CARROLL UNIVERSITY
CONGRATULATES
Crain’s Northeast Ohio’s Most Connected Richard J. Kramer ’86 • Samuel H. Miller ’99H Michael B. Petras Jr. ’89 • James C. Boland ’62 John M. Saada Jr. ’88
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They can open doors Since they run businesses that cut across industry and regional boundaries, it’s not surprising that two bankers — Beth Mooney and James Malz — sit atop the list of Northeast Ohioans best able to open important doors to business and civic movers and shakers.
As the first woman to lead a top-20 national bank, Beth Mooney is a sought-after board member. The chairman of the board and CEO of KeyCorp tops the Crain’s list of Northeast Ohioans with the greatest access to the levers of power, according to the analysis by Relationship Science. RelSci, as it’s called, is a New York Citybased company that has an ever-growing database of influential decision makers and their business and civic relationships. Its files
have the names and corporate and civic affiliations of millions of individuals that it analyzes to help its clients — businesses and nonprofit organizations — better focus their efforts for winning clients, raising money or just building relationships. One of its measures is access, a gauge of a business or civic leader’s membership on influential boards, and it has ranked the access of Northeast Ohioans in its database based on their roles at the most highly connected organizations, locally and nationally. In Northeast Ohio that means the boards of organizations such as the Greater Cleveland Partnership, the powerful regional chamber of commerce, the Cleveland Clinic and University Hospitals, the region’s dominant health care organizations and prestigious cultural institutions such as the Cleveland Foundation and the Musical Arts Association, parent of the Cleveland Orchestra. Mooney is chairman of GCP and member of the Clinic’s board of directors. And, of course, she chairs the region’s largest banking company. But she is also a member of the boards of the Musical Arts Association; Catalyst, an international nonprofit that works to expand opportunities for women in business and has a board composed largely of corporate chairs; and the Financial Services Roundtable, a 100year-old advocacy organization for the financial services industry whose board is composed of the heads of 34 American financial services corporations. So when RelSci massaged its data, it found
that her association with these organizations gave her what in pre-digital time would be called the area’s best Rolodex. In addition, she has topped American Banker’s list of most powerful women in banking for the last three years, is on Fortune’s list of the 50 most powerful women in business and has been recognized by Forbes as one of “The World’s 100 Most Powerful Women. Similarly, Malz, managing director for Ohio/Western Pennsylvania for JPMorgan Chase & Co., sits on the boards of Nationwide Children’s Hospital in Columbus; the Cleveland Institute of Music; Hiram College, his alma mater; Ohio Foundation of Independent Colleges; and the Children’s Hunger Alliance, a Columbus-based nonprofit that helps ensure that children get nutritious meals and develop lifelong healthy eating habits. No. 3 on the list is Scott Wolstein, CEO of Starwood Retail Partners. He’s also a member of the board of trustees of Case Western Reserve University and University Hospitals. Of late, though, he’s most well-known — and comes in contact with the community’s civic and business leaders — because of his development, along with his mother, Iris Wolstein, of the Flats East Bank development, the $500 million-plus office, retail and residential redevelopment of the East Bank of the Cuyahoga River. — Jay Miller
TOP 10 ACCESS
1
The levers of power
BETH MOONEY KEYCORP, CHAIRMAN AND CEO A Michigan native, Mooney got her start in banking in 1977 as a secretary with First City National Bank of Houston after graduating from the University of Texas. In 2011, she became the first female leader of a major American bank when she was appointed chairman and CEO of KeyCorp. “I certainly was proud of the accomplishment,” Mooney told Crain’s in 2012. “I was proud to be the first.” Sitting atop a major financial institution brings with it considerable access; topping an influential local board, the Greater Cleveland Partnership, and getting a seat on the board of the Financial Services Roundtable, where many of the leaders of major American financial institutions gather, greatly expands that access.
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HOW IT WAS DONE
2
3
The Crain’s Cleveland Business Most Connected list is a collaboration between Crain’s and New York-based Relationship Science. Relationship Science, or RelSci, focuses on ways to illuminate the connectivity between individuals and the institutions with which they are associated. RelSci’s data platform — dossiers of some 4 million decision makers affiliated with more than 1 million organizations in the U.S., Europe and Asia — uses algorithms to predict the likelihood of a relationship between individuals based on shared life/work experiences. Its clients include more than 700 institutions in the finance, corporate and nonprofit sectors. To learn more about the firm, go to RelSci.com.
JAMES MALZ JPMorgan Chase & Co., managing director of Ohio/ Western Pennsylvania SCOTT WOLSTEIN Starwood Retail Partners, CEO
4
RICHARD SMUCKER The J.M. Smucker Co., CEO and director
5
ALEXANDER CUTLER Eaton Corp Plc., chairman and CEO
6
THE FINE PRINT
JAMES GEUTHER JPMorgan Chase & Co., president of commercial banking, Akron and Cleveland
7
MARIO MORINO LEGENT Corp., co-founder
8
SAMUEL MILLER Forest City Enterprises Inc., co-chairman emeritus
— Although this list features strong quantitative factors, these types of rankings always have an element of subjectivity. Different methodology would produce somewhat different results. — Connectedness is about measuring influence, not power. That’s why CEOs or company owners do not always rank higher on this list than other executives. — The information in print and online includes selected details about occupations, corporate and civic boards, education credentials and employment histories. These were pulled from public databases, company websites and Crain’s research. They are intended to be relevant, but they are not complete. We have verified as many of the details as possible, but were not able to do so in every case.
9 PAUL G. GREIG FirstMerit Corp., chairman, CEO and president 10 CHRISTOPHER CONNOR Sherwin-Williams Co., chairman and CEO
— Additionally, for the purposes of this project, voting and property records were used as verification of Northeast Ohio residency.
First in class:
How Northeast Ohio can lead the nation in degrees and jobs
METHODOLOGY RelSci used 12 major Crain’s lists to track a universe of more than 8,000 leaders tied to hundreds of for-profit and nonprofit institutions based in Northeast Ohio. RelSci’s research team then reviewed and updated profiles of the individuals tied to the Crain’s lists in the firm’s data platform. In general, RelSci uses more than 30 algorithms to map connections between people and organizations through past and present professional, personal and civic experiences. Both qualitative and quantitative factors contribute to the strength of a connection, including job titles, length of employment, organization size and type of relationship. RelSci further honed its criteria by considering five characteristics to determine a final rank: • Reach, or number of connections. This is the size of a person’s network. • Reliability, or the strength of connections. This measures the quality of a person’s relationships. • Influence, or links to highly connected people. RelSci weighted and combined its influence metric with its access metric before determining a person’s final ranking. • Access, or links to highly connected organizations and their leaders. RelSci weighted and combined this metric with its influence metric. • Centrality, or ability to connect two unconnected people. This identifies the individuals who serve as the best bridges between separate groups of people.
CRAINSCLEVELAND.COM/ MOSTCONNECTED Online, the Most Connected chart is sortable, and has several views. See the 100 people by rank, with titles and organizations, or click RANKINGS to see how they ranked in the five RelSci categories. Click or tap on a person to see what organizations and educational institutions he or she is connected with. That organization or school will show the others also connected to that entity. Click or tap on an entity to see all the people on the list who are connected through that entity. Want to zoom in or out? Use your mouse (the center wheel) or your laptop trackpad for desktop, or your fingers on tablet or mobile. Or, use the provided zoom tool — the + or — buttons in the top right. Clout calculator: This allows you to enter basic information to see how connected you are to the 100 Most Connected People in our list. You can even save your “cloud” and share it with friends on Facebook or Twitter. You can create as many “clouds” as you want. It’s not scientific —but it’s fun! Want to return to the list? Click the “X” in the right corner What do the shapes indicate? See the legend at the bottom of the interactive for a guide to the shapes. Circles, for example, indicate organizations. Sharing on social media or sending the link: Each person’s profile includes a “shareable link” near the top. Click here to go to a page that can be shared on social channels. Just copy and save the URL and share via email, Facebook or Twitter.
The final ranking is based on a weighted combination of rankings in each of the five metrics.
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Business of Life Lost Nation is spreading its wings By Kevin Kleps money on the former soccer academy. “Mike came on and said, ‘You gotta bite the bullet,’ ” Haas said. “We ended up putting another half-million bucks into this. He said, ‘You gotta build it and they’ll come, but you’re trying to make it and spend it along the way. That’s just not going to work.’ ” Instead, the building that formerly housed a fullsize indoor soccer field was transformed following the conclusion of the Gladiators’ season in early August. Two full-size basketball courts, which double as four regulation volleyball surfaces, were added, and the soccer area now includes two large turf fields and a miniature field for youngsters. Eight batting cages will be ready for use in November. Lost Nation Sports Park West held its grand opening Oct. 17, and its partners believe they’ve developed a complex that is unique to the West Side of Cleveland. The adjacent building has a kitchen that Srsen said is twice as large as the one that supports the 200-seat Players Club at his Willoughby sports park, in addition to locker rooms, 20 dorm rooms that will be used for residential camps, a trainer’s
room that could double as a rehab facility, and a weight room that the group hopes to rent out to a CrossFit or athletic training business. The second phase of the renovations, which are expected to begin next spring or summer, should include a sports bar and restaurant, and connecting the two buildings so patrons can shuttle between the restaurant and sports facilities. “That’s the thing that makes this whole Lost Nation concept unique,” said Srsen, who in 1998 founded the Willoughby complex with late Parker Hannifin Corp. chairman and CEO Patrick Parker. “There are places that are indoors, a couple that are outdoors, but nobody has both on the same campus.” Haas and Srsen have tabbed Avon High School boys soccer coach Chris Dore, a former member of the Cleveland Force, as general manager, and Joe Magill as assistant GM. Dore said the majority of the winter schedule is booked by youth and prep teams, and the basketball courts will double as Futsal surfaces. “I’m a hurry-up-and-run type, but Mike slows me down,” Haas said. “He’s like, ‘hold on.’ He handpicked these guys. That to me is a key. You have to support yourself with some great guys.”
“When I first saw this I couldn’t believe it. ... The potential here is so significant.” — Mike Srsen, co-founder Lost Nation Sports Park
MCKINLEY WILEY PHOTOS
Mike Srsen wasn’t searching for another business opportunity. The former Cleveland Browns chief financial officer has a successful sports and recreation facility, Lost Nation Sports Park in Willoughby. But when Srsen toured the 30-acre site of the former Brad Friedel Premier Soccer Academy in Lorain, he couldn’t help himself. “When I first saw this, I couldn’t believe it,” Srsen said. “I’m 64 years old. I wasn’t looking to conquer any new horizons, but the potential here is so significant. The scope of what we can do here is more vast than what we can do in Willoughby.” In June, Srsen and Chris Haas, who owns All Pro Freight Systems Inc. in Avon, joined forces to turn the former soccer academy — an extravagant, twobuilding complex that went bankrupt in 2009 — into a year-round, multisport facility that expands the Lost Nation Sports Park brand. Haas purchased the complex — which has two buildings that are a combined 115,000 square feet, plus full-size grass and turf soccer fields outside the facility — in 2013. There already was a book of business — the Cleveland Gladiators train there, as do some lacrosse, softball and soccer teams — and Haas figured he could continue to make some
We don’t just see people for who they are; we see
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In the past nine months,
94% of individuals served in United Way-funded healthy food access programs have increased their fruit and vegetable intake.
Avon High School boys soccer coach Chris Dore is the general manager of Lost Nation Sports Park West in Lorain.
them for who they can become.
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BUSINESS OF LIFE
Source Lunch When she was a young girl, Norma Rist thought she might want to be a teacher. And now she is one. But instead of a classroom full of children, Rist teaches business owners and professionals how to succeed. For more than 25 years, Rist has been president of Norma J. Rist CEO Consulting Inc. in Akron. Rist works with both startups and established companies. Before starting her consulting firm, Rist spent nearly 20 years as a controller for General Cinema Corp. and its Pepsi Cola Bottlers division in Akron. She later served as vice president and general manager of the Pepsi division. Rist is also a big part of Akron’s women’s community. She’s a founding member of the Women’s Endowment Fund and past chair of Athena International.
Norma Rist CONSULTING
— Sue Walton
What is the biggest thing an entrepreneur might miss when creating startup plans? Entrepreneurs may easily miss the cash-flow projections to be certain that bills can be paid on time. Over the period of a month or a quarter, the current cash receipts may be adequate to pay the current bills in total, but the timing might be off. Entrepreneurs also need to make time to talk with other entrepreneurs and a few important advisers. Working 18-hour days is sometimes needed, but planning for lunches and meetings with advisers is essential to gain perspective and discover easier ways to get things done. The world of business is changing more quickly now. Keeping up with new Internet solutions is an important part of any business. How do established companies know when to seek the outside help of a consultant? When something is not going well, and it does not get better, a second set of eyes might be the answer. Having a consultant review a certain process or discuss solutions to an ongoing challenge can save a lot of money in the long run. I once had an owner ask me to spend the day with him, no agenda. We just talked about all the functions of the business — finance, marketing, sales and operations. During our all-day conversation, he made the notes for improvements.
You have created the Women Owner’s Accelerator, which has space for eight to 10 women owners. What are some of the advantages of a genderspecific accelerator?
Statistics show that women are still woefully under-represented in professional leadership roles. What needs to be done to change that?
We call our accelerator The Circle. The women owners are all independent professionals who have specific growth targets. There are many synergies and sharing of ideas and skills. Just like any accelerator around the country, the problem-solving and support from others enables the owners to have a team of people to look to for answers. They can walk around The Circle and get ideas, resources and answers. And then, of course, it is fun to celebrate successes together.
This is a complex topic, and there are many ideas about the solutions. I have watched over my career as very small inroads have been made by women in their efforts to achieve the general manager, EVP, COO or CEO positions. The culture of diversity comes from the top down. Only when male CEOs are aware of the significant benefits of a diverse management team do they make the changes. Groupthink is not an academic term; it is alive and well in Northeast Ohio. More perspectives generate better results. Statistics show the bottom line increases when more than three females are on the board of directors of public companies. When more CEOs create initiatives — not just a program — around diversity, then we will see more results, higher profitability, improved performance and increased innovation.
You are a pioneer in that you built your career during a time when women were rarely, if ever, in upper management. What is the biggest change you’ve seen since you began your career that has helped in the advancement of women in the business world? More women set aggressive goals for success than they did decades ago. Encouraging young women to have higher career goals is generating results, and it needs to continue.
FIVE THINGS: FAVORITE BOOKS
“Riches in Niches: How to Make it Big in a Small Market” by Susan A. Friedman and “Eat People: And Other Unapologetic Rules for Game-Changing Entrepreneurs” by Andy Kessler.
WHAT DO YOU LISTEN TO
National Public Radio, for the stories and the news.
LOOKING FORWARD ... to participating in her business for the rest of her life. “There are parts of my business that I dearly love and want to keep doing it for as long as possible. That is my fun,” Rist said.
WHAT ARE YOUR HOBBIES?
Attending speeches or workshops to hear people whose work is completely different than her own.
FALL MUSTS
Traveling to Pittsburgh to visit her grandchildren.
LUNCH SPOT Bricco 1 W. Exchange St., Akron 330-4751600 www.briccoakron.com
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TAX LIENS The Internal Revenue Service filed tax liens against the following businesses in the Cuyahoga County Recorder’s Office. The IRS files a tax lien to protect the interests of the federal government. The lien is a public notice to creditors that the government has a claim against a company’s property. Liens reported here are $5,000 and higher. Dates listed are the dates the documents were filed in the Recorder’s Office.
LIENS FILED ADI TRANSFER CORP. 231 E. 206 St., Euclid Date filed: Sept. 3, 2015 Type: Employer’s withholding, corporate income Amount: $13,732 RED FITNESS 24 7 WESTLAKE LLC 18605 Detroit Ave., Lakewood Date filed: Sept. 3, 2015 Type: Employer’s withholding, unemployment Amount: $13,452
Contact: Phone: Fax: E-mail:
MEDICAL CARE CENTER LLC 1250 Superior Ave. E, Cleveland Date filed: Sept. 3, 2015 Type: Employer’s withholding Amount: $13,439
DJDJ INC. AUGIES PIZZA WARRENSVILLE 14084 State Road, North Royalton Date filed: Sept. 3, 2015 Type: Employer’s withholding Amount: $11,582
WESTLAKE BISTRO GROUP INC. 23800 Detroit Road, Westlake Date filed: Sept. 3, 2015 Type: Employer’s withholding, unemployment Amount: $13,431 AVON PIZZA LLC COLEONES PIZZA & SUBS 1260 Smith Court, Rocky River Date filed: Sept. 3, 2015 Type: Employer’s withholding Amount: $13,302 KS FAITH PROPERTIES LLC 3736 Rocky River Drive, Cleveland Date filed: Sept. 3, 2015 Type: Employer’s withholding, unemployment Amount: $12,379
PRIMARY ROOFING INC. 8189 Chestnut Blvd., Broadview Heights Date filed: Sept. 3, 2015 Type: Employer’s withholding, unemployment Amount: $11,058
BANGLA GAS INC. 14196 Granger Road, Maple Heights Date filed: Sept. 3, 2015 Type: Employer’s withholding, unemployment, failure to file complete return Amount: $10,062
DREAM ON FOUNDATION INC. 968 Bryan Drive, South Euclid Date filed: Sept. 3, 2015 Type: Employer’s withholding Amount: $11,037
COMPLETELAW-W WEB LLC 19901 Van Aken Blvd., Shaker Heights Date filed: Sept. 3, 2015 Type: Employer’s withholding Amount: $9,235
MRSO ELITE LLC ELITE ANSWERING SERVICES 20800 Center Ridge Road, Suite 205, Rocky River Date filed: Sept. 8, 2015 Type: Unemployment Amount: $7,376
BAJAN ENTERPRISES LLC 15700 Benhoff Drive, Maple Heights Date filed: Sept. 3, 2015 Type: Employer’s withholding Amount: $10,957
MCM EUCLID SQUARE MALL LLC 13829 Euclid Ave., E. Cleveland Date filed: Sept. 3, 2015 Type: Employer’s withholding Amount: $8,454
SUMMIT PLUMBING & MECHANICAL LLC 14572 Hartford Trail, Strongsville Date filed: Sept. 3, 2015 Type: Employer’s withholding Amount: $6,599
REAL ESTATE
Denise Donaldson (216) 522-1383 (216) 694-4264 DDonaldson@crain.com
ANTHONY GROUP INC. DAPPER DANS 10703 W. Pleasant Valley Road, Parma Date filed: Sept. 3, 2015 Type: Employer’s withholding Amount: $8,398
17209 TAVERN LLC WEST PARK PANINIS P.O. Box 360893, Strongsville Date filed: Sept. 3, 2015 Type: Employer’s withholding Amount: $10,857
SUNSHINE FLOWERS INC. 6230 Stumph Road, Parma Heights Date filed: Sept. 3, 2015 Type: Employer’s withholding Amount: $8,225
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Akron aiming to raise bigger biomedical fund BY CHUCK SODER csoder@crain.com @ChuckSoder
How is the city of Akron’s effort to build up its biomedical industry doing? Good enough that the city should be able to raise a larger pot of money for its second biomedical investment fund. The first fund has invested $1.5 million into 13 companies since 2012. Four were recruited from other countries, and one moved from Kentucky. Local companies and institutions that backed the first fund have all said they want to get in on the second fund, according to Bob Anthony, a consultant who helps the nonprofit Akron Development Corp. recruit biomedical companies and help them grow. Now the city is looking to turn what Anthony described as a campfire into a bonfire: The Akron Development Corp. is seeking additional capital from other companies, institutions and wealthy individuals in the Akron area. Granted, it’s taking longer to raise the money than Anthony expected, perhaps because most of the major hospitals and universities in town have relatively new CEOs. Still, the city is “starting to get interest from all of those groups,” he said. The development corporation also has applied for state and federal grants that could more than double the size of the fund, which is run through a for-profit company called Akron BioInvestments Funds LLC. So was the first fund successful? It’s too early to tell. Anthony noted that none of the 13 companies are generating a profit yet, which isn’t unusual for medical tech startups. The com-
pany that’s furthest along is 7signal, which sells hardware and software that hospitals and other organizations use to monitor their WiFi Internet networks. The company — which was recruited to Akron from Finland a year before it received money from the fund — has about 20 employees, and it has raised about $10 million in financing, said CEO Jeff Reedy. Another company called Quest Medical Imaging was recruited in 2013. It plans to employ five people at its new U.S. headquarters in downtown Akron by Jan. 1, said chief operating officer Rob Ngungu. The Netherlands-based company is just starting to ramp up sales of its technology, which allows surgeons to see full color images while hunting for body parts marked with a fluid that emits light that’s invisible to the naked eye. Ngungu said the city has done a “very good” job of growing its biomedical industry. However, he noted that it could do an “excellent” job if it recruited more volunteers — and perhaps even some part-time employees — who’ve had experience commercializing medical technologies. “Most of the people who I know who are executives here will give up their time,” he said, adding that his opinions “are not those of Quest, but my own as an individual.” Anthony — who spent about 25 years working for medical technology companies — agreed that the city needs those people. That’s why it is putting together an advisory board with industry executives. But he noted that it’s hard to find executives who have the time and inclination to help out. “Let’s say there’re a hundred of them in Akron. They’re all doing a hundred things,” he said.
The Austen BioInnovation Institute is attempting to serve more organizations. (Chuck Soder)
ABIA CONTINUED FROM PAGE 1
continue helping doctors and entrepreneurs commercialize medical technologies. Otherwise, much of its work has been put on hold until it finalizes its new plans, said Randazzo, who also serves as chief financial officer. Those new plans also could include having one or more other organizations run ABIA’s product commercialization services, according to institute chairman Bill Considine, who is CEO of Akron Children’s. The institute also aims to generate more revenue by providing services to more organizations, including groups outside of Akron, and by renting out space within its headquarters at 47 N. Main St. When ABIA was founded in 2008, much of its funding came from the Akron-area hospitals and universities that created the nonprofit. To-
day, however, Akron Children’s is the only one still considered a formal “member.” None of the other organizations — Summa Health System, Akron General Medical Center, the University of Akron and Northeast Ohio Medical University — renewed their membership. Why not? For one, all of those organizations have faced financial challenges. And they’re all led by individuals who weren’t around when ABIA was founded. Dr. David Peter, chief medical officer at Akron General, said his organization didn’t see enough progress — in terms of research being conducted and technologies being developed — to justify making what was “a very large investment.” “We weren’t seeing the value for the investment at the time,” he said. The institute’s former members still do have relationships with the
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institute. For instance, Akron General recently moved a laboratory and some research-related offices into ABIA’s headquarters. The hospital also is one of the 13 organizations that wrote letters of support for ABIA as part of the institute’s Knight Foundation application. The foundation declined to provide comments for this story. The institute wants other health care-related organizations and companies to become tenants. For example, Stark State College last month announced plans to rent space for some of its health care education programs. The community college already uses the simulation center.
Asset or liability? The institute could use more renters, because its real estate costs could increase substantially on July 1, 2016. That’s when Summit County is scheduled to vacate the fourth, fifth and sixth floors of the building. That move could be a blessing, however, if ABIA finds enough renters to make a profit on the building itself. Other organizations, including Akron Public Schools, have expressed interest in the space, Randazzo noted. “We’ve joked about getting gold blazers and becoming Century 21,” he said. OK, real estate aside, does ABIA provide a valuable service? As far as the simulation center goes, its utilization rate has been on the way up since Akron Children’s took over. The center suffered in the early days because several partner organizations were still “trying to do simulation on top of what the center was doing,” Considine said. On the commercialization front, ABIA says its programs in one way or another helped spur the creation of seven companies that employ a total of 17 people. One of ABIA’s former executives, Rob Ngungu, told Crain’s that the institute’s challenges stem partly from what he described as a staff that had too few employees with product commercialization experience. Randazzo countered that ABIA has “had many experienced medical innovators and seasoned professionals on staff or working in our network,” including Douglas, a former pharmaceutical executive who was involved in the development of more than 20 drugs, including Allegra. Randazzo added that technology development “can be rewarding, but it takes much time and resources to bring medical products to market.”
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The List
LARGEST ACCOUNTING FIRMS Ranked by Number of Local CPAs NUMBER OF LOCAL CPAS
NAME THIS ADDRESS YEAR PHONE/WEBSITE
PRACTICE PERSONNEL ENGAGED IN
8/31/15
8/31/14
LOCAL DEGREED PROFESSIONALS % CHANGE 8/31/2015
FULL-TIME LOCAL EMPLOYEES 8/31/2015
AUDITACCOUNTING TAX
CONSULTING OTHER
TOP LOCAL EXECUTIVE TITLE
1
Ernst & Young LLP 950 Main Ave., Cleveland 44113 (216) 861-5000/www.ey.com
299
267
12.0%
1,191
1,292
357
156
178
558
Edward T. Eliopoulos, managing partner, Akron; Julie Boland, managing partner, Cleveland
2
PwC LLP 200 Public Square, 18th floor, Cleveland 44114 (216) 875-3000/www.pwc.com
170
174
-2.3%
NA
NA
153
82
83
52
Mark Ross Lake Erie Market managing partner
3
Cohen & Co. 1350 Euclid Ave., Suite 800, Cleveland 44115 (216) 579-1040/www.cohencpa.com
129
121
6.6%
231
242
89
75
6
78
Randall S. Myeroff president, CEO
4
BDO 32125 Solon Road, Cleveland 44139 (440) 248-8787/www.bdo.com
101
130
-22.3%
201
203
NA
NA
NA
NA
Robert M. Littman Ohio managing partner
5
KPMG LLP 1375 E. Ninth St., Suite 2600, Cleveland 44114 (216) 696-9100/www.us.kpmg.com
100
100
0.0%
170
180
50
16
97
17
John S. MacIntosh managing partner
6
Deloitte LLP and its subsidiaries 127 Public Square, Suite 3300, Cleveland 44114 (216) 589-1300/www.deloitte.com
91
90
1.1%
413
413
142
56
161
54
Craig Donnan Northeast Ohio managing partner, Deloitte LLP
7
Meaden & Moore LLP 1100 Superior Ave., Suite 1100, Cleveland 44114 (216) 241-3272/www.meadenmoore.com
80
78
2.6%
134
150
55
46
27
22
James P. Carulas CEO
8
McGladrey 1001 Lakeside Ave., Suite 200, Cleveland 44114 (216) 523-1900/www.mcgladrey.com
78
66
18.2%
118
127
63
23
27
14
John Zalick Ohio managing partner
8
Skoda Minotti 6685 Beta Drive, Mayfield Village 44143 (440) 449-6800/www.skodaminotti.com
78
77
1.3%
174
196
56
40
79
21
Gregory J. Skoda chairman
10
Maloney + Novotny LLC 1111 Superior Ave., Suite 700, Cleveland 44114 (216) 363-0100/www.maloneynovotny.com
72
69
4.3%
107
125
68
29
9
19
Matthew J. Maloney managing shareholder
11
Bruner Cox LLP 388 S. Main St., Suite 403, Akron 44311 (330) 376-0100/www.brunercox.com
54
52
3.8%
80
90
28
31
16
5
Steven O. Pittman managing partner
YOUR BUSINESS IS OUR BUSINESS Ä´  ¢ Ƹ ¢ȓ ¢ ¢ǯ Ƹ Ĺ˜Ĺ—ĹœÇŻĹ™ĹœĹ™ÇŻĹ–Ĺ—Ĺ–Ĺ–
12
Bober, Markey, Fedorovich & Co. 3421 Ridgewood Road, Suite 300, Akron 44333 (330) 762-9785/www.bmfcpa.com
52
40
30.0%
83
95
44
33
5
13
Richard C. Fedorovich CEO, managing partner
13
Grant Thornton LLP 1375 E. Ninth St., Suite 1500, Cleveland 44114 (216) 771-1400/www.grantthornton.com
51
58
-12.1%
95
101
47
28
15
15
Thomas P. Freeman managing partner
14
CBIZ Inc. 6050 Oak Tree Blvd. S., Suite 500, Cleveland 44131 (216) 447-9000/www.cbiz.com
41
45
-8.9%
168
229
18
20
29
162
Steven L. Gerard, chairman, CEO Jerome P. Grisko, president, COO
15
HW&Co. 23240 Chagrin Blvd., Cleveland 44122 (216) 831-1200/www.hwco.com
39
42
-7.1%
74
82
25
15
24
10
John P. Fleischer president, CEO
15
Walthall LLP 6300 Rockside Road, Suite 100, Cleveland 44131 (216) 573-2330/www.walthall.com
39
39
0.0%
48
58
31
13
1
2
Richard T. Lash chairman
17
Barnes Wendling CPAs Inc. 1350 Euclid Ave., Suite 1400, Cleveland 44115 (216) 566-9000/www.barneswendling.com
38
41
-7.3%
55
67
26
21
17
4
Jeffrey D. Neuman president, director
18
BCG & Co. 1735 Merriman Road, Akron 44313 (330) 864-6661/www.bcgcompany.com
29
35
-17.1%
63
89
14
32
35
20
David A. Brockman president, managing partner
18
Ciuni & Panichi Inc. 25201 Chagrin Blvd., Suite 200, Cleveland 44122 (216) 831-7171/www.cp-advisors.com
29
32
-9.4%
54
59
32
13
8
6
Brian D. Marita managing partner
20
Apple Growth Partners 1540 W. Market St., Akron 44313 (330) 867-7350/www.applegrowth.com
27
28
-3.6%
56
70
15
25
6
NA
Harold Gaar CEO
21
Pease & Associates Inc. 1422 Euclid Ave., Suite 400, Cleveland 44115 (216) 348-9600/www.peasecpa.com
26
25
4.0%
47
56
22
22
3
9
Joseph V. Pease Jr. chairman
25
27
-7.4%
29
29
25
0
25
25
22
The Siegfried Group LLP 950 Main Ave., Suite 600, Cleveland 44113 (216) 487-6153/www.siegfriedgroup.com
Brian D. Seidner, managing director, Lake Erie MarketsCleveland, Columbus, Pittsburgh, Toledo
23
Hobe & Lucas CPAs Inc. 4807 Rockside Road, Suite 510, Independence 44131 (216) 524-8900/www.hobe.com
24
22
9.1%
30
33
24
3
2
1
Jerome J. Lucas president, COO
23
Plante Moran PLLC 1111 Superior Ave., Suite 1250, Cleveland 44114-1902 (216) 523-1010/www.plantemoran.com
24
19
26.3%
49
54
23
14
12
5
Daniel P. Hursh office managing partner
RESEARCHED BY DEBORAH W. HILLYER Source: Information is supplied by the companies unless footnoted. Crain's Cleveland Business does not independently verify the information and there is no guarantee these listings are complete or accurate. We welcome all responses to our lists and will include omitted information or clarifications in coming issues. Individual lists and The Book of Lists are available to purchase at www.crainscleveland.com.
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20151026-NEWS--9-RG1-CCI-CL_--
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VOL. 36, NO. 43
OCTOBER 26 - NOVEMBER 1, 2015
THE AKRON EDITION
CLEVELAND BUSINESS
NORTHEAST OHIO’S
MOST CONNECTED THEY’RE DEALMAKERS, POWER BROKERS AND PEOPLE TO KNOW SPECIAL SECTION — PAGES 25-3 39
ALSO IN THE AKRON EDITION:
MARKETING: Big pitches
JOBS: Recharged
AKRON ZOO
OTHER VOICES
LEADERSHIP ON MAIN
Regional universities see
Sue Lacy a boost to Summit
Looking for ways to expand
Food deserts are market gaps
Public Schools superintendent
the value — P. A1
Workforce Solutions — P. A2
its audience — P. A4
for entrepreneurs — P. A5
David James — P. A7
BioInnovation Institute shrinks, regroups ABIA looks for sustainable way to spark medical innovation in Akron By Chuck Soder
If only the engineers at the Austen BioInnovation Institute in Akron could create a medical device that could save the life of a nonprofit. The institute is being run by a skeleton crew while its leaders work to restructure an organization tasked with turning Akron into a hub of biomedical innovation. Its survival is not guaranteed. Interim director Joe Randazzo said that ABIA would only be able to operate
“for a limited time” if it fails to win a grant it recently applied for from one of its longtime partners: The John S. and James L. Knight Foundation. Randazzo described the funding as “critical,” though he added that ABIA would also pursue other funding sources. Thus, he’s hoping that the institute’s new strategy can convince potential funders that the Austen BioInnovation Institute can find a
more sustainable way to spark innovation in Akron. One key to that strategy: Becoming a smaller organization. A few years ago, ABIA employed the equivalent of 40 full-time staff members. Now it has eight. It also employed six executives who made more than $100,000 in 2013, including CEO Frank Douglas, who made more than $630,000, according to a Form 990 ABIA filed with the Inter-
nal Revenue Service. Today, the only one who remains is Randazzo, who became interim director after Douglas left this past January. They didn’t all leave by attrition. The institute cut 12 employees last year, three of whom were offered jobs with Akron Children’s Hospital after it took over the hospital simulation center at ABIA’s headquarters. It kept a few people who could SEE ABIA, PAGE 46
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SHANE WYNN
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Getting schooled in promotion As the competition to attract students becomes fierce, the region’s universities learn to make marketing a priority BY MARTHA MUELLER NEFF Imagine you’re an 18-year-old high school senior: Your email inbox is jammed with messages every day. Everywhere you turn, there are YouTube videos, commercials during football games, Tweets, “likes” on Facebook, Snapchat stories, and Instagram and Tumblr pleas. Dear [prospective student], 10 reasons why you should come to the University of … You’re a perfect fit for the University of … Consider yourself a part of the University of … In other words, they want you. They really, really want you. At least three regional public universities — the University of Akron, Kent State University and Cleveland
State University — are pulling out all the stops to increase enrollment, enhance retention or burnish tarnished images by launching or expanding major marketing and advertising campaigns. Their target: eligible students here and in other regions such as Pittsburgh, Columbus, Toledo and Detroit. Take, for instance, the University of Akron, suffering from a well-documented dip in enrollment, questionable expenditures on construction and, in July, $40 million in cuts — including the elimination of 215 positions and the baseball program — to offset what university officials described as a $60 million “financial problem.” The University of Akron last spring rebranded itself as “Ohio’s polytechnic university” and last month enlisted LeBron James’ help in the “Are you out there?” SEE UNIVERSITIES, PAGE A6
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z OCTOBER 26 - NOVEMBER 1, 2015 z CRAIN’S CLEVELAND BUSINESS
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New leader is refueling county workforce engine BY JUDY STRINGER Being an invited guest at the White House is pretty exciting. Being invited to the White House on President Barack Obama’s birthday is even more exciting. Better yet? It’s your birthday, too. Sue Lacy found herself in that enviable position on Aug. 4, when — as the new president of Summit Workforce Solutions — she represented Akron at a Washington, D.C., event that unveiled the next round of TechHire communities. “We sang ‘Happy Birthday’ to [Obama], and I leaned over and said to the gentleman next to me, ‘It’s also my birthday.’ I had to say it to somebody.” Lacy is doing a lot of talking these days. Since quietly assuming leadership at the nonprofit Summit Workforce Solutions in spring, she has conferred with business executives, educators and community leaders, and shared her message with just about anyone and everyone who will listen. That message goes something like this: There are lots of great jobs right here in Summit County for people with the right skills. To be more specific, Lacy’s early pitches have centered on employment opportunities in manufacturing. Before joining Summit Workforce Solutions, she was a partner and co-founder of Round River Consulting and was under contract with the Fund for Our Economic Future to facilitate Summit County executive Russ Pry’s Talent Steering Committee in its refining of the county’s workforce development ecosystem. “What we saw was a need that was not being filled,” said Chris Thompson, director of regional engagement for the Fund for Our Economic Future. “The need was the ability to help the community — which includes everyone from job seekers and employers to those who serve
both groups, such as community colleges, high schools and public workforce programs — to better understand the market for talent … and to figure out how we can better match up supply and demand.” According to Thompson, two immediate recommendations emerged from the steering committee. One was that Summit Workforce Solutions should be the vehicle for the county’s talent planning activities. The second was that Lacy should be the driver. “The first area we focused on was manufacturing,” he said. Aligning local education and training programs with the skills needed by Northeast Ohio employers has long been a target of Summit Workforce Solutions, according to chairman Chuck Wiedie, but the organization struggled to hit that mark. Funding was a big part of the problem, said Wiedie, economic development director for Hudson. Summit Workforce Solutions owns the Ohio Means Jobs building on East Tallmadge Road in Akron. The bulk of Summit Workforce’s funding comes from leases to other occupants, including Summit County Department of Job and Family Services. “Being a landlord and being responsible for upkeep of the building, a lot of times we were just basically trying to cover the operating costs of the building and staff with those revenues,” Wiedie said. With Lacy came the know-how and funding connections to organize and bankroll more ambitious community-based workforce programs. Pry credited Lacy with spearheading the TechHire designation, for example, which makes Akron eligible for a grant to provide IT training to area job-seekers. Lacy said she expects to request between $2 million and $6 million once the final application is complete. Only two communities in Ohio earned a spot
Sue Lacy in the federal program. Grants from the Fund for Our Economic Future, Joyce Foundation and Akron Community Foundation, just to name a few, are helping with the local rollout of TalentNEO, a skillsbased hiring pilot launched in Cuyahoga and Summit counties. Through TalentNEO, job seekers can take specialized assessments that quantify their workplace skills at designated test sites across the county. They can then see how well their skills scores match up to scores based on the skill sets defined in job postings and, in some cases, access training and remediation programs to “upskill.” “All of this is available to job seekers free of charge for the next two years,” Lacy said. Summit Workforce Solution also hosted two manufacturing site visits for Akron Public Schools teachers and counselors. “We have seen a lot more activity in just the last four months,” Pry said. “It’s been a very exciting time.” Jenny Stupica shares Pry’s excitement. Human resource generalist at SSP, a Twinsburg-based manufacturer of instrumentation fittings, valves and tubing, Stupica said SSP didn’t have a relationship with Summit Workforce Solutions before Lacy’s appointment. The company has since signed on to Summit Workforce’s new manufacturing network — composed of six local employers — and is one of the first companies to adopt the skills-based hiring initiative. As a TalentNEO employer partner, SSP agrees to consider applicants who meet the skill scores assigned to its job postings, even if the applicant has no experience in manufacturing or lacks the certification or degree associated with the job. “There is not a lot of experienced skill out there in the manufacturing industry, but there are a lot of people who could learn the jobs,” said Stupica, who is on the Summit Workforce board. “[Skills-based hiring] opens the door for a whole bunch of applicants we might not have been able to reach.” Moving forward, Lacy plans to expand the manufacturing network and is already forming a TechHire network to drill down on the employment needs in IT. Health care will likely be the next frontier as Summit Workforce Solutions solidifies its position as the talent entity in Summit County.
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Conflict growing over Medina County business sewer fee BY AMANDA GARRETT Medina County has one of the lowest sewer rates in the area — less than half of what most pay in Cuyahoga County or the flat rate charged in Summit County. Yet as the recession melts, giving way to more business growth and expansion in Medina County, there’s a battle brewing over how the sewer system is funded. It started last year when the owner of Medina Plating Corp. — which provides rust-preventative coating for the auto and truck industries — decided to expand and bought a 60,000-square-foot building. Shawn Ritchie was shocked when he received his first sewer bill. It was for more than $300,000. “I thought it was a typo,” Ritchie said. The whopping bill included a one-time service fee Medina County charges businesses when they move into existing buildings and plan to use more sewer and water capacity than the previous occupant. The sliding fee is based on the business owner’s estimate of how much water and sewer capacity the business will use. In Ritchie’s case, that was 30,000 gallons per day once his expansion was operating at full capacity. Medina County officials established the fee in 1984 as the county was on the cusp of enormous growth and needed to increase its sewer capacity. The capacity and tap-in fees — charges levied against the owners of new construction for tapping into the county sewer and water service for the first time — have been used to help offset the cost of expansion, including the debt incurred. No one griped loudly, or at least not publicly, about the benefit charge until Ritchie, who threatened to move his business expansion and between 20 and 36 jobs it would create to Kentucky. Ritchie’s story rallied the business community, who said the capacity charges could inhibit economic growth. The mayor of Medina fretted that Ritchie might eventually move his whole operation — and upward of 300 jobs that go with it — south. And the county commissioners, who control the fees, faced a dilemma: Should the fees be eliminated and, if so, how could they make up the difference in the sewer budget? “Historically, from a philosophical perspective, the county tried to keep user monthly rates as low as possible by charging tap-in and capacity fees,” commissioner Adam Friedrick said. This year, Medina County residents paid an average of $30.25 monthly for sewer service. By comparison, most Cuyahoga County residents, who are part of the Northeast Ohio Regional Sewer District, paid about $76.55, and Summit County residents paid a flat rate of $64.89, according to figures provided by the Medina County sanitary engineer.
If the capacity fee is eliminated, its opponents contend, it will likely spur more development in Medina County, enough to make up for whatever shortfall the elimination would cause. “It’s not a zero-sum game,” said Medina County’s newest commissioner, Tim Smith, a former business owner and economic development director for the city of Brunswick. “If we don’t charge that fee, we’ll have other successes and there will be a ripple effect across the whole area.” Neither Smith nor other opponents of the fees interviewed for this story could point to specific instances
where Medina County lost potential investment because of the capacity fee, but each said the county would likely never know if it had. “People looking to build or expand might call and find out the rates and just never call back,” Smith said. “It’s gone before it even started.” Smith refers to the capacity fee as a “gotcha charge.” “But the average resident is not going to see it (a rate hike) that way,” Friedrick said. “They’re just going to look at their bill and see an increase.” Supporters of the capacity fee say businesses are only being charged for what they use — increased sewer
capacity — and residents shouldn’t be forced to pick up that cost. Since Ritchie first sounded an alarm last year, his initial sewer capacity bill plummeted to just over $50,000 after sewer officials recalculated the capacity his business is using now as opposed to maximum capacity Ritchie hopes to use in the future. Medina County also hired CT Consultants to analyze its rate and fee structure. In December 2014, the consultants released a report concluding that, among other things, the capacity fee is reasonable and justifiable considering that new
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Two sides to argument How much the capacity and tapin fees have worked over 31 years to keep Medina County sewer fees low is unclear. But opponents of the capacity fee point out that, in recent years, the fees have generated about $50,000 for the sewers annually, an amount they said could easily be made up by raising county residents’ bills by less than a dime each month.
businesses are using some capacity others have already paid for. Even though CT Consultants recommended that the county maintain its capacity fees, the battle continues. County sanitary engineer Amy Lyon-Galvin is using new billing software to collect more data and provide the county with a deeper analysis of the fee structure. Meanwhile, in September county commissioners voted, 2-1, to maintain the capacity fee but adopted Lyon-Galvin’s recommendations to offer payment options.
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AKRON
Akron Zoo seeks to attract wider audience BY BETH THOMAS HERTZ
Doug Piekarz has been president and CEO of the Akron Zoo since January. (Shane Wynn)
Thanks to a steady stream of new attractions, partially funded by money from a tax levy, the Akron Zoo has grown significantly in the past 15 years. While its core audience is families with small children, a big part of its strategy for continued growth involves reaching young professionals and empty nesters, folks who may not think of the zoo as a place to spend their time or money. That’s a big part of why the zoo is seeking to upgrade its liquor license from one that allows it to only serve beer to one that permits wine and cocktails. It’s a move to attract new demographics to special evening events, often while earning rental fees at the same time. “Brew at the Zoo (during which beer is served) is one of our largest attractors of young professionals without children,” said Doug Piekarz, the zoo’s president and chief executive officer. “We need to engage them, and adult-only outings are a great way to do that. Right now, we are limited on how many special events and park rentals for corporate events or weddings we can schedule because of our limited (liquor) license.” Event organizers can bring in their own alcohol and serve it, but that is not the level of customer service many of them want, he said. The zoo held 27 after-hours events in 2014 but turned away many more. “We believe that having a liquor license could help us double that number,” Piekarz said. The question will be decided by residents of the zoo’s precinct –
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AKRON ZOO ANNUAL ATTENDANCE YEAR
ATTENDANCE
2000
121,690
2001
114,139
2002
107,969
2003
149,430
2004
158,681
2005
223,918
2006
255,804
2007
262,217
2008
328,953
2009
316,478
2010
315,276
2011
315,728
2012
332,960
2013
389,508
2014
367,305
Source: Akron Zoo
Akron 3E – on Nov. 3. Meetings with residents of 3E, and the entire Ward 3, generally have shown that people are receptive to the idea of afterhours liquor consumption on the premises, he said. A full liquor license also would help the zoo increase the earnings of its biggest annual fundraising event, Summer Safari. Typically held in early August, the event includes local restaurants serving samples of their cuisine along with beer, but no wine or spirits. It earned $140,000 for the zoo in 2015. Rob Vernon, senior vice president of external affairs for the Association of Zoos & Aquariums in Silver Spring, Md., said that Akron’s plans are in line with the national trend of zoos working to offer new and different experiences to attract visitors. Many are adding features such as ropes courses, carousels, splash pads and behind-the-scenes events. “Adding those kinds of attractions helps diversify the experience visitors have,” Vernon said. “People make decisions about how they will spend their free time, and you have to give them a reason to spend it with you.” Vernon also sees many zoos reaching out to a wider age range through evening events. “People may not be able to visit during the day, so an evening option is appealing to them. It opens you up to a new audience.” Piekarz is new as the zoo’s leader, becoming CEO and president in January. But he has been at the zoo for 17 years in many capacities, most recently as vice president of planning and conservation. The zoo has grown exponentially in that time. In 2000, the first year the zoo began receiving public dollars through a tax levy, annual attendance was about 121,690, and the zoo, a fraction of its current size, was only open April through October. In 2013, after years of adding exhibits and year-round availability, attendance reached an all-time high of 389,508. (In 2014, it was 367,305.) There have been 22 new exhibits since 2000, including Legends of the Wild, Komodo Kingdom, Penguin Point, the Lehner Family Zoo Gardens, Journey to the Reef, and, most recently, Mike & Mary Stark Grizzly Ridge. The zoo also has added a new
welcome center, an indoor café, a solar-powered train and the Conservation Carousel. In 1997, the zoo had about 30 employees, a number that is just over 270 in 2015. Its workforce has grown by 29% since 2010 alone, according to David Barnhardt, director of marketing and guest services at the zoo. The zoo’s current annual operating budget is between $11 million and $12 million. About $8 million per year comes from the zoo’s most recent tax levy, a 0.8 mill tax Summit County voters approved in 2013. Generated revenue grew 39% from 2008 to 2014, and per-capita spending per visitor rose from $7 to $8.66 over the past seven years. Piekarz explained that per-capita numbers are important because zoo officials feel they are the most effective way to measure the zoo’s impact. Part of increasing the per-capita spending has been incorporating some type of financial generator into each new exhibit, be it food service, treats to feed the animals in the petting zoo or rides on the carousel or train. The zoo has a room to grow – only about half of the 77 acres it owns are in public use – and many expansion plans are lined up, Piekarz said. An expansion of the parking lot to add 168 more spaces is underway. It should be completed in November 2016 and is expected to alleviate the need for overflow parking off the zoo grounds during high-traffic events, such as the Boo at the Zoo, which drew the zoo’s largest one-day crowd on record – 6,658 – on Oct. 25, 2014. The zoo also is working on linking to the popular Ohio & Erie Canal Towpath Trail. Visitors will be able to ride their bikes to the zoo from the Bartges Street connection starting in October 2016. In May 2017, the zoo will open a reimagining of the Journey to the Reef space that launched in 2012. It was the popular Jellies in Blue exhibit from 2008 to 2011, and the zoo wants to keep it fresh, Piekarz said. Zoo planners are currently soliciting ideas from the staff on how to do that while keeping some aspects of what is popular with visitors. For example, touch tanks were kept between the previous two iterations of the space, just with different animals. Possible plans will be shared with the community before a final decision is made, Piekarz said. The zoo also is planning a major upgrade of Tiger Valley to improve the lion and tiger areas and possibly add primates (most likely monkeys), he said. The project has a target completion date of 2019 or 2020. The design phase is expected to start next year. “The lions and tigers have the oldest carnivore exhibit here, and we need to improve it,” Piekarz said. The design will aim to allow as little human interaction with the animals as possible. He said the updated exhibit might even include a little extra “wow” in the form of a ferris wheel that would offer unique views of downtown Akron as well as into the lion and tiger exhibits. The zoo also is actively working to find new ways to attract more visitors in the “shoulder” season – winter and early spring. It is exploring what special events it can hold to accomplish that, Piekarz said, with next March and April targeted for kickoff.
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ENTREPRENEURSHIP: Tobin Buckner
Targeting Summit County’s food deserts For those who enjoy good food, Northeast Ohio is an amazing place to live. Ask anyone in the know, and they’ll tell you our best restaurants will stand toe-to-toe with anything you’ll find in New York or Chicago. Meanwhile, our access to fresh, local ingredients makes many of our metropolitan neighbors green with envy. However, not everyone is sharing the bounty. Food deserts — neighborhoods where affordable, nutritious food is difficult to obtain — have become major problems in our nation’s urban areas, and our region is no exception. According to the Summit County Food Policy Coalition (SFPC), we actually fare better than other areas when it comes to basic food access; residents of Summit County are never more than 10 minutes by car from a grocery store, and more than 80% are within a 1-mile radius of a food store. The problem, of course, is that many “food stores” specialize in fast food or junk food rather than fresh nutritious options. This is especially true in low-income, urban areas. The negative results of these conditions are obvious. According to the 2010 Akron Community Health Assessment, not only do lower-income residents in Summit County have less access to fresh foods than more affluent residents, they also experience higher rates of obesity and diabetes. Furthermore, many of the low-income residents who participated in the assessment expressed a deep concern about increasing levels of diet-based disease within their community and a desire to help the next generation make better food decisions. In the aftermath of this assessment, the SFPC in 2011 held its first Growing Hope Food Summit with the goal of increasing access to healthy food and exploring ways to strengthen the local food economy. From a nonprofit perspective, this work makes natural sense. But it also makes sense from an entrepreneurial perspective, which might help explain why food entrepreneurship has caught fire in the subsequent four years. For traditional nonprofits, food deserts are a societal problem, but for entrepreneurs they are also a market gap. And we all know entrepreneurs love to fill market gaps. Today, Summit County boasts an increasing number of gourmet eateries, urban farms, roving food trucks, farmers markets and communitysupported agriculture (CSA) initiatives. Even traditional grocers are getting in on the act, adding more fresh/local options, launching “gro-
ceraunt”-style prepared food departments and offering expanded fooddelivery services to respond to the growing customer demand. All of this activity is great for local business and job creation. It is also crucial to the elimination of fresh-food deserts in Summit County. Those of us who are connected to the entrepreneurial support community also have an important role
to play in this work. Although they might not follow a traditional “Silicon Valley”-style model based on venture capital and IPOs, today’s local food pioneers face some of the same hurdles as many other entrepreneurs and are just as critical to the long-term health of our community. Some food entrepreneurs need mentors and business advice. Others need help procuring land to farm or
negotiating lease terms for their business. Some may even need capital investment or small business loans to help cover the cost of purchasing equipment and getting started. Whatever these entrepreneurs need, we need to ask ourselves how we can help them connect to the larger ecosystem and make their big, local food ideas a delicious reality in Northeast Ohio.
Buckner is JumpStart’s Akron entrepreneurial community manager and contributes a monthly blog about entrepreneurship in the region.
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CORRECTION A Sept. 28 story about downtown Akron development incorrectly stated that Tony Troppe was instrumental in the development of the Northside district. Troppe was involved in the development of the North of Howard area (or NoHo).
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campaign. The university is spending close to $1 million on media — including slick videos and soon radio spots, too — featuring students and faculty on campus. On Oct. 20, it unveiled a new commercial feature James. Akron also will feature prominent faculty members, including alum and former Microsoft partner Mario Garzia, and other schools on campus. This is in addition to the traditional means of reaching students through alumni, recruiters, and high school teachers, counselors and principals. “The environment is so competitive,” said Lawrence Burns, Akron’s vice president for advancement who was recruited from the University of Toledo by President Scott Scarborough, also a former top administrator at UT. I need to be sure that I have the opportunity to tell our story. We’re not in a position to live off the gains that we have made. So I’m always looking for ways to tell our story.” While Kent State does not have the financial difficulties that dog UA, a Philadelphia branding and creative agency recently told Kent State,
a school of 28,981, that it doesn’t toot its own horn loudly enough. One university trustee was quoted as saying Kent State has been “meek too long.” So Kent State is embarking on its own campaign, yet unnamed and rolling out in January, to show the world the value the university offers the Kent community, the state and the world. It will pay $2.3 million over the next three years to the 160over90 agency to help tell that story. “We provide a good education, and we do that by being fiscally responsible,” said Iris Harvey, Kent State’s vice president for university relations. “It’s not just about bragging. When you are marketing, you are helping students and families understand how [your] programs compete in the marketplace. That is valuable information.” Cleveland State University is making the most of its location in the heart of Cleveland with its “We put a lot of Cleveland into Cleveland State” campaign, which highlights the school’s 7-year-old Engaged Learning branding, the many places students frequent and the cultural
institutions that are on campus or a short bus ride away. CSU increasingly is distancing itself from its image as a commuter school. CSU is working with Wyse Advertising of Cleveland to create videos, a city guide and an app to give students updated information on events, food and other cultural touchpoints. This year’s campaign, launched last month, costs about $1 million, said Rob Spademan, chief marketing officer at CSU. Spademan said in the eight years he’s been at CSU, he hasn’t seen the excitement and energy from students that he’s seeing now — a testament to the success of CSU’s longand short-term marketing, the commitment of CSU president Ronald Berkman and the excitement that city living is generating. About 1,850 first-year students attended the first day of classes in August, almost 15% more than last year. “You have to stand out from the crowd because it really is a sea of sameness,” he said. “A big part of it is your message. And the timing right now is absolutely phenomenal.” Not everyone thinks these marketing and advertising campaigns are
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cost-effective or a benefit to students. “Here’s a good idea: Why not try to get the basic job of being a great university right, and let the reputation follow? Or UA can just continue to lay off people and invest in gimmicks,” one commenter, Olive Jar, posted on Crain’s website on a story about the LeBron James collaboration. Richard Vedder, director of the Center for College Affordability & Productivity and an economist with Ohio University, said these marketing efforts are growing among some public universities because the schools rely on tuition revenue, but U.S. college enrollment has shrunk for three years in a row. So universities are pushing hard to get a larger share of a smaller pool of traditional students, 18- to 22year-olds. “I think it’s somewhat of a dubious practice,” Vedder said. “Serving students has become secondary to the institution staying alive. … They should be engaging in cost-cutting strategies.” Some universities, like the University of Akron, are doing that. But they also are staying firm in their commitment to marketing, making it a part of the administrative fabric and their budgets. Marketing and advertising are tools universities can use to recruit students, but they also tell the stories of faculty accomplishments, school milestones and overall school attractiveness. “Over the last five to 10 years, universities have used marketing to clarify the message and recruit prospective students,” said Ann Oleson, CEO and founder of the Iowabased higher-education marketing firm Converge Consulting. “But they’re also using it for alumni engagement and fundraising, which also has a benefit university-wide, for parents, students and faculty.”
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But are all of these messages starting to sound the same, and are they targeting the same students in regional pockets of the country? Universities (like everyone else) want to grow their business, and it’s a buyer’s market for halfway decent students. The schools are trying to find ways to stay abreast of an increasingly competitive recruiting market. The University of Akron’s Burns said the school is optimistic about the effectiveness of its “Are you out there?” campaign, especially on its digital spend: There were 300,000 views of a campaign video in three days when James posted it on Facebook, and the university has enlisted 30 students to document their life at the school for a series of videos. Akron had a total new-freshman enrollment of 4,278 this fall, an increase of 3.6%. But the real proof will be measured in next August’s enrollment numbers. “Our mission is to be the place for the first-generation college student. … But we also need to be the place for the student who has other choices but chooses the University of Akron because of its offerings, its suitability and its affordability,” Burns said. “Even though we’ve had a tough budget situation, we’re over that and we’re on the road to better things and being better than we ever have been.” Most local public universities are looking for that bigger and better. “It depends on the objective, but marketing and communications has become an important role on campuses,” said Oleson. “You have to have a strategy to communicate your message most effectively. [Marketing] is a strategy for survival for some schools, and for others, it’s a way to get their message of success out there.”
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Leadership on Main
Akron schools chief values situational leadership BY BRIAN HOLLINGSWORTH When it comes to his job as superintendent of Akron Public Schools, in addition to his passion for the students, David James loves the problem-solving aspects of leading a district with 22,000 pupils, 300 employees and 50 buildings. James spoke about his job and what leadership means to him during the Oct. 7 Leadership on Main Series at Canal Park. Teresa LeGrair from the Akron Community Foundation moderated the discussion. In addition to his daily duties, James is overseeing one of the biggest construction projects in the 166 year history of the school system — converting all the schools into Community Learning Centers. James joined the district in 1992 as environmental program manager. He later served as executive of business affairs and became superintendent in 2008. Prior to joining Akron Public Schools, he worked for an engineering consulting firm. He holds a bachelor’s degree in economics and a master’s degree in public administration. Throughout the discussion, James emphasized hard work and consistency as being keys to success. Apply yourself and pay attention, and you’ll advance, he said. James also talked about his own leadership style, which he characterized as situational leadership — employing different styles in various situations to be more effective. You have to know “when to push, when to pull and when to get out of the
SEWER CONTINUED FROM PAGE A3
Under the new plan, businesses that face a capacity fee of more than $1,000 can make monthly installments over 60 to 240 months with no interest. Businesses who opt to pay a capacity fee of more than $1,000 up front would earn a discount of 10% to 20%. “I thought that was a good compromise,” Lyon-Galvin said. Commissioners Friedrick and Pat Geissman apparently agreed and supported the plan. But Smith voted no. “I want to see the fee go away, and I won’t stop until it’s gone,” Smith said in an interview with Crain’s. “I haven’t even begun to fight yet, and I’m pretty relentless.” Ritchie, however, isn’t taking any chances. Although he’s making payments on his lowered capacity fee — which is locked in place, he said, for five years — it could skyrocket again to the $300,000 bill he first received if he reaches full capacity. “I’m sick of going to meetings. I’m sick of complaining and promises to get something done,” he said. So Ritchie is challenging the system in a new way. He’s building his own waste-water treatment system. It will cost about $150,000, he said, but it will save his business about $12,000 per month in water and sewer fees, cutting his consumption and output in half. “I’m tired of feeling like the black sheep,” Ritchie said. “I just want to get something done.”
way,” he said, adding that building a good team is essential. If a leader has good people, the team will help the leader see his or her blind spots and will offer different perspectives, experiences and skills, he said. For the school district, community involvement and collaborative partnerships — such as the one with the LeBron James Family Foundation — are key, he said. Leaders must be open to change and flexibility, es-
pecially within a school district, where the board members can change with each election. For a financially limited area, like the Akron district, workforce training for students is also important, the superintendent said. Creating partnerships within the community that help kids find what they are interested in is vital in helping to drive down poverty, as is having a variety of pathways by which students can develop the skills and knowledge they will need to
Editor’s note: In this feature, the Leadership Akron Alumni group provides a recap of the most recent event from its Leadership on Main series, which offers a monthly program featuring conversations with Akron’s civic and business leaders. succeed in the workforce. Currently, the Akron district has 34 career programs that lead to work.
More than anything, James said, students need talented people to serve as mentors. Kids need exposure to mentors, community leaders and organizations that can provide them with opportunities and choices that otherwise might be beyond their awareness. When citizens — not just parents — mentor students, it sends a message to the kids that the whole community cares about its children and their future, he said.
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Wherever I go, I always talk about being from Akron. Without those five letters, I wouldn’t be who I am today. That’s why the LeBron James Family Foundation has partnered with The University of Akron to give everyone who graduates from our program the chance to get a full scholarship to attend UA. That’s our dream. Whatever your dream is, whatever your passion is, you can accomplish it. But it’s earned. Not given. Every day can’t be a bed of roses. You’re going to have ups and downs. Keep getting back up. At The University of Akron, you can be sure you’re not by yourself on this journey. Are you out there? Join us.