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updated daily June 17-23, 2013 Vol. 28, Number 11

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Providence Business News

ROOM WITH A VIEW R.I. restaurants offer some of state’s best views.

your local source for business news in southern new england

page 8

Brown charts own educational course Twin River hospitality & tourism

By Patrick Anderson

raises bet on gaming

panderson@pbn.com

Christina H. Paxson settled smoothly into the role of Brown University’s 19th president and after getting to know the school over the past year is now looking toward its future. Like other elite colleges, Brown is growing. But unlike some of its competitors, Brown has not rushed to build far-flung satellite campuses, take over new city neighborhoods or become an online education behemoth. An economist and staunch defender of the traditional liberal arts education, Paxson said Brown will grow in Providence and online in the years ahead, but the undergraduate experience will remain deeply rooted in classrooms on College Hill.

By Patrick Anderson panderson@pbn.com

PBN: Your inaugural speech defended the liberal arts education from the push to become more career-oriented. With that core principal in mind, is Brown changing at all to include more areas of skill-specific training? PAXSON: What we are trying to do at Brown is do a much better job with career services and helping students connect what they are learning here at Brown with the world around them. The career lab has been growing at Brown. This is a great organization connecting students with all types of careers, from education to business to local global opportunities. Over the coming year I will be focusing on developing a new internship program that places our students, with a lot of help from alumni, in jobs during the summers, domestically, internationally. PBN: Do you think that the level of debt students are leaving college with is inhibiting them from taking chances? See Paxson, page 30

PBN PHOTO/TRACY JENKINS

CONNECTING IDEAS: Christina H. Paxson took over last year as president of Brown University, becoming the 19th person to hold the position. She said her goal is to better help connect what students are learning at Brown with “the world around them.”

At Twin River Casino in Lincoln, the first piece of a multiyear and multistate expansion of gambling in southern New England is almost complete. After six months of planning, hiring and construction, the Rhode Island slot parlor’s transformation into a full-service gaming hall is ahead of schedule and ready for an unveiling at the start of July. The Twin River expansion approved by voters last fall is Rhode Island’s response to a much larger bet on gambling by Massachusetts, which is creating three resort casinos and a slot parlor. Critical details of the Bay State’s gambling expansion are also being filled in this summer with the location of the slot-machine license, potentially the closest new facility to Rhode Island gaming, and the first expected to be awarded. Plainridge Racecourse in Plainville, just 19 miles from Twin River by car, is one of four groups bidding for the Massachusetts slot license. The owners of Raynham Park in Raynham are also in the running, as are a Chicago-based company with a site in Worcester and a Baltimore company still searching for a site after being turned down by officials in Boxboro, Mass. See Gambling, page 6

Bryant students laying groundwork for export growth By Keith Regan Contributing Writer

Bliss Manufacturing in Pawtucket has been handcrafting inspirational and religious medals, jewelry and other items for more than 100 years. Now, thanks in part to a partnership with the Bryant University International Business program, those items are for sale in 50 other countries

around the world. Over the past two years, Bliss has tasked groups of Bryant students completing the International Business senior practicum with helping to lay the groundwork for moves into export markets. Each time, the three-student teams researched, gathered and synthesized information that helped open doors to potentially valuable overseas

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markets, starting with Italy. “The information they retrieved was very helpful to us in going into the market in Italy,” said CEO Frank Bliss. A second group of students helped prepare a business plan for a move into Mexico and other Latin American countries. “The work they did definitely helped us advance our overseas presence.”

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Main street

Beverage company takes swing for fences.

PAGE 10

The 6-year-old practicum program was developed by International Business program director Madan Annavarjula as a capstone project required for all graduating seniors. Gerald Cohen, an international trade specialist at the John H. Chafee Center for International Business at Bryant, said from modest roots of just See BRYANT, page 30

Inside: Newsmakers BizBest Sales Moves News Briefs Focus Section

4 10 12 15 20

Calendar People in the News Editorials Mackay’s Moral

26 27 28 28


PAGE TWO

Page 2 June 17-23, 2013 www.pbn.com

Inside this issue

Providence Business News contacting us

coming next week

400 Westminster Street, Providence, RI 02903

With new contract, Gist looks forward

Main phone: 401-273-2201 Subscriptions Services: 855-813-5805 President & Publisher Roger C. Bergenheim Publisher@pbn.com

Among her key priorities is working to close the skills gap in Rhode Island.

5

The Nation’s Housing: Are kickbacks beginning to make a comeback?

7

Advertising

Dining Out: Rhody has plethora of top tables with view. 8 Metcalf Institute helps journalists get science right, offers program to immerse reporters and editors.

PBN PHOTO/TRACY JENKINS

18

Guest Column: Should workers use Facebook at their desks? 24 FOCUS: Human Resources ‘Ban-the-box’ bill opposed by most business groups.

20

Tech talent war heating up locally as workers look to stay closer to home.

Signs of things to come

LIST: Executive Compensation 22

Surviving its first winter was a struggle for Providence Painted Signs, admits co-owner Shawn Gilheeney. But survive it did and Gilheeney, a Coventry native pictured above, and his company have been busy this year on their biggest project to date, the interior and exterior signs for the renovated Arcade in Providence’s Financial District. The company, founded by three local artists, is becoming known for its use of traditional fonts and has a growing client list of about 50.

Do you think smoking breaks are the same as regular breaks?

680-4824 680-4830

In your opinion, are smokers permitted longer breaks (overall) than nonsmokers?

Yes 28.6%

Yes 25.9%

No 71.4%

680-4822

vices)

Researcher 680-4838 Barbara Lipsche Contributing Writers Richard Asinof rasinof@fullchannel.net (Health Care)

production

Production Director Darryl P. Greenlee Production Artist Christopher Medeiros

No 74.1%

680-4860 680-4868

CIRCULATION

Yes 60.7% No 32.1%

How often do you see colleagues/ employees step out for smoking breaks each day?

Circulation@pbn.com 1-855-813-5805

Rarely 57.1%

Fax: 401-274-6580 Business Manager Michelle Fiori

Occasionally 35.7%

Not sure 7.1%

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Providence Business News is published weekly by Providence Business News, 400 Westminster Street, Provdence, RI 02903 (USPS 002-254) (ISSN 0887-8226)

Frequently 7.1%

Periodical postage paid at Providence, R.I. The Providence Business News Executive Poll is a weekly survey of 70 business leaders throughout the state, representing small and large companies in a variety of industries.

Index to This week’s Featured companies ChemArt Coast Guard House Cooley Group CVS Caremark Corp.

Dave’s Marketplace 26 Dunkin’ Donuts Center 20 E4 Health Inc. 14 3 FM Global 1

Copy Editor Justin Sayles Staff Writers Patrick Anderson

(Energy/Environment, Entrepreneurship, Financial Ser-

Minding the gap?

COLUMNS & FEATURES Sales Moves 12 Calendar 26 People in the News 27 Q&A 27 Editorials 28 Mackay’s Morals 28 Op-eds 29

BankNewport BatchBlue Software Big Brothers Big Sisters of the Ocean State Big East Bliss Manufacturing Blue Cross & Blue Shield of Rhode Island Bridge Technical Talent Brown University Bryant University

(Technology)

Rhonda Miller

Executive poll Does your company have policies that limit cigarette breaks?

23 30 3 23 14

Fax: 401-274-0670 Editor@pbn.com Editor Mark S. Murphy 680-4820 Managing Editor Michael Mello 680-4826 Web Editor Emily Greenhalgh 680-4836

(Government, Manufacturing, Real Estate/Development)

NEWSMAKER Mark K.W. Gim, The Washington Trust Co. executive vice president for wealth management and treasurer, talks about wealth management in an uncertain economy. 4

HEALTH CARE NEWS BRIEFS 13 PBN.COM NEWS BRIEFS 14 R.I. & MASS. NEWS BRIEFS 15

Fax: 401-274-0270 Advertising@pbn.com Vice President, Sales and Marketing Christopher Santilli 680-4800 Marketing and Events Director Nancy Adeszko 680-4818 Events Coordinator Donna Rofino 680-4832 Senior Account Managers David C. Dunbar 680-4801 Jim Hanrahan 680-4816 Lisa Pagano 680-4806 Lauren Soares 680-4812 Advertising Coordinator 680-4810 Joyce Rylander

EDITORIAL

20

Companies showing tough love when it comes to staff health. 20

Advanced Pharmacy Concepts Alex and Ani Group American Athletic Conference Amica Mutual Insurance Co. Atrion Networking Corp

680-4848

30 Hospital Association of Rhode Island 8 23 Jacky’s Waterplace 14, 20 Johnson & Wales University

13 8 14

8 Mass. State Gaming Commissio 6 3 Metcalf Institute for Marine and Environmental Reporting 18 20 Moran Shipping Agencies Inc. 23 14

Natco Products Corp. 9 Newport Grand 6 Providence College

Gateway Center 13, 20 Gilbane Building Co. 21 Greater Providence Chamber of Commerce 9, 20, 23 Raynham Park 13 Rhode Island Community 1 Hinckley, Allen & Snyder LLP 23 Food Bank 20 Rhode Island Convention Café Nuovo 8 Hire Image LLC 30 Center Authority Chartercare Health Partners 13 Hope Global

Next PBN EVENT

Rhode Island Department of Education 9 Rhode Island Hospital 13 Rhode Island Manufacturers Association 9 R.I. Airport Corporation 15 R.I. Convention Center Authority 3 R.I. Department of Environmental Management 15 R.I. Economic Development Corporation 15

30 Simpatico Jamestown 6 Spain Swing Juice 3 T.F. Green Airport 1 The Miriam Hospital The Port 26 Twin River Casino 9 University of Rhode Island

POSTMASTER: Please send address changes to 400 Westminster Street, Providence, RI 02903.

8 8 10 15 13, 26 8 1 18

Tennis Hall of Fame, Newport Thursday, July 25, 2013 Visit the events page on PBN.com for more info.

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Providence Business News

June 17-23, 2013

www.pbn.com n 3

higher education

Big East changing name; downsizing possible By Patrick Anderson

ation in 1979. One of the seven original Big East Mike Aresco, commissioner of the schools, Providence College was also athletic conference known for 34 years one of seven Catholic schools that broke as the Big East, speaks fondly of Provi- away from the conference to form their dence, but he can’t promise how long own league last year. With more original Big East memthe league he’s reinventing will remain bers breaking away than those remainin its historic home. On July 1, the Big East will officially ing, the new Catholic conference dechange its name to the American Ath- cided to purchase the Big East name, letic Conference and welcome a new which it will assume July 1 when the American Athletic Conference is born. group of schools centered All of these machinato the south and west of its tions should have at least Northeastern roots and some impact on Rhode IsRhode Island headquarland’s capital city, which ters. has benefited from hosting Aresco, who took over league headquarters and the Big East while the Providence College games league was in crisis last against national-title-winyear, is rebranding and ning basketball teams for reorganizing the league, 34 years. a process that could lead When Providence Colanywhere. lege returns to the court “We have no immediMike Aresco next fall, its schedule will ate plans to move, but are Big East commissioner still feature well-known, investigating our options high-caliber teams, many and will ultimately do what makes the most sense,” Aresco of them old rivals from the former Big said. “Obviously we have less of a pres- East, including Georgetown, St. Johns ence in the Northeast, but then again and Villanova. But the biggest draws to the Dunkin’ this is an age of electronic communication. We have a good staff and history Donuts Center for Providence College games in recent years – the University here and Providence is a great city.” The Big East was born in Providence of Connecticut and Syracuse Univerbecause of Providence College and its sity – won’t be on the schedule. In the last two years, Providence then-athletic director Dave Gavitt, a chief architect behind the league’s cre- College sold tickets to home games panderson@pbn.com

‘We will reorganize and I am looking at how we can be more efficient.’

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COURTESY BIG EAST CONFERENCE

TIP OFF: Big East Commissioner Mike Aresco, left, will oversee the conference’s transition to the American Athletic Conference. Providence College, a founding member of the Big East, will not be a part of the new conference.

against UConn and Syracuse in packages in order to boost attendance for other games. UConn will be the only founding member of the Big East to stay in the re-formed American Athletic Conference, but no plans have been made yet to renew the rivalry with Providence College. Still, both PC and Dunkin’ Donuts Center officials are downplaying the effect the conference will have on future ticket sales. “We have built a very strong conference which features schools like us with a national name,” said Providence College Athletic Director Bob Driscoll in an email. “Only time will tell the effect on ticket sales, but we are aggres-

sively trying to sell Providence College basketball as we always do. We will have a strong conference schedule with new, attractive league members and existing league rivals coming to the Dunk.” On the subject of UConn, Driscoll said PC would like to renew the rivalry. “We just have to find a place where it fits in our schedule and their schedule,” Driscoll said. Providence College has a multiyear, per-game lease for the Dunkin’ Donuts Center with the R.I. Convention Center Authority. PC receives the proceeds from all ticket sales under the deal while the arena takes all parking and concession revenue. See Big East, page 9

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NEWSMAKERS

Page 4 June 17-23, 2013 www.pbn.com

Providence Business News

Uncertain economy raises stakes for wealth management By Rhonda J.Miller miller@pbn.com

Mark Gim was appointed The Washington Trust Co.’s executive vice president for wealth management in May. The post is in addition to his existing position as treasurer for both The Washington Trust Co. and its publicly owned holding company, Washington Trust Bancorp Inc. Gim takes on this critical responsibility amid the nation’s shifting economic landscape and Rhode Island’s sluggish economic recovery. He is charged with establishing and executing strategy for the wealth-management division, strategic planning, and oversight of the bank’s investment and wholesale funding portfolio. PBN: What is your overall perspective about taking on this critical responsibility, with the nation, and especially Rhode Island, slowly recovering from the recession? GIM: At first glance, it’s a challenging environment. We have a slow national recovery from the recent recession and an even slower economic recovery in Rhode Island, certainly as compared to the rest of New England. At the same time, it is a time of opportunity, we think, both for investors and for wealth advisers. Clearly, the economic circumstances are quite different from what they were a decade ago. We think the need for advice and solutions is even greater than it was than before the recession. PBN: What are your objectives in this new leadership position? Will it change the direction of Washington Trust’s wealth-management strategy? GIM: The overall goals of

COURTESY WASHINGTON TRUST

WITH GREAT INTEREST: Mark K.W. Gim, executive VP for wealth management at Washington Trust, says that tax policy and an aging population are among the factors impacting the current state of investing.

Washington Trust Wealth Management really haven’t changed very much in the last decade or so, but the way we go about achieving them has. We continue to provide what we think is very comprehensive, accessible, prompt and customized advice to our clients that helps them achieve their goals, and not just to help them watch the value of their investments grow. The direction of our strategy, whether it’s investment management or life planning or trust services, hasn’t changed philosophically, but we think the opportunity to serve that market has increased. We think that we have improved our ability to provide sophisticated and responsive advice. My real objective is just to try to make the breadth of our solutions better known, more accessible and relevant. PBN: The economy continues to struggle to make significant

gains. Why do you think this is so, and how does that impact your wealth-management strategy? GIM: The financial markets, the stock markets, seem to be reacting out of proportion to what feels like, to the everyday Rhode Islander, a really slow improvement. And while it feels that way in the U.S., in a much more global world, the U.S. is a good story, compared to other parts of the developed world. I can understand why people would say it seems to be out of proportion, but today with money flows coming not just from the U.S., but from overseas, I think that helps account for it. It doesn’t affect our core wealth-management strategy, but I think it has made us more aware over the last 10 years that this is a much more global world, and we cannot be focused on the U.S. alone, just as investors cannot be focused on the U.S. alone. PBN: Do you see baby boomers still investing? How do you, generally, tend to advise them to invest? GIM: The boomers are getting older and we are having to adjust to the fact that over the last decade, the wealth we set aside for the future has taken a step back. But at the same time, our needs haven’t changed – retirement, health care, education, transferring our wealth to the next generation. And we have to catch up to future needs. … Patterns of investing have changed, but a completely conservative approach to investing and being cautious when the economy is recovering can lead to a loss of opportunity.

PBN: What changes have you seen in the state since you graduated from Brown that give you cause for concern? For optimism? GIM: Rhode Island hasn’t grown very much in that time, but it has changed a lot. Some things that may be cause for concern are the departure of some very big and familiar names, corporate in particular and some industries, that have changed the face of the economy. Financial services, while there are vibrant and thriving organizations that remain here, the presence has been lessened, whether it’s insurance or banking. Manufacturing has obviously taken a step back. And we haven’t caught up fully to the demands of a globally competitive 21st-century economy. … There have been positive changes in public policy that have confronted the issues of doing business in Rhode Island. There are key sectors where we are really good, like health care and education – we have some gems here, in colleges and universities. n

We have some gems here, in colleges and universities.

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dress the changing economic landscape with the bank’s customers? GIM: It’s not just the economic landscape. Many changes go beyond that – the aging of the population, changes in tax policy as concern over the deficit has grown, the rising costs of health care and changes in public policy around how health care and health insurance will be provided. Not just financial markets, but many aspects of age and public policy make it more complicated for people to try to navigate through the financial world.

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INTERVIEW Mark K.W. Gim POSITION: The Washington Trust Co., executive vice president for wealth management and treasurer BACKGROUND: Gim has been in banking for 23 years. He joined Washington Trust in 1993 and has been treasurer since 2008. Gim serves in many community organizations, including being president of the Community College of Rhode Island Charitable Foundation and a member of the boards of The Rhode Island Free Clinic, the YWCA of Greater Providence, Trinity Repertory Company and the Rhode Island Philharmonic School of Music. EDUCATION: Bachelor’s degree in history from Brown University, 1987; master’s degree in history in 1987 from London School of Economics FIRST JOB: Worked at a bookstore and magic store in Rockville, Md. RESIDENCE: Barrington AGE: 47


Providence Business News

June 17-23, 2013

www.pbn.com n 5

education

Gist pushing forward with five-plan reform plan By Rhonda J. Miller

senior, projects are also part of high school graduation requirements, Gist Armed with a new two-year contract, said getting students a solid foundaRhode Island Commissioner of Educa- tion through high school is just a start tion Deborah Gist says she’s staying in building a skilled workforce that can the course with her five-year plan to help strengthen the state economy. “In addition to entry-level people transform education in Rhode Island – who have a strong work ethic and know including closing the skills gap. how to work with others, job growth With this month’s renewal of her in the state - and the nation - requires contract, following criticism from post-secondary educateachers’ unions about the tion,” said Gist. That could NECAP requirement and include traditional colGist’s leadership style, lege, technical training or the commissioner said apprenticeships, she said. the state must do more to The state Board of close the skills gap – the Education approved the gap between available two-year renewal of Gist’s jobs and qualified workcontract on June 6, the ers - than just continue to day before the previous push forward with eduagreement – a three-year cation standards that incontract with a one-year clude the New England extension – expired. Common Assessment Pro“I’m very enthusiastic gram, or NECAP, as part Bill McCourt about the two-year conof high school graduation Rhode Island tract,” said Gist. “We’re requirements. going to continue tireManufacturers Association “There are many things lessly implementing the executive director we’re doing to close the five-year strategic plan we skills gap,” Gist said last developed working with week. “In addition to having our stu- parents, students, teachers and comdents leave high school with a mini- munity and business leaders across the mum level of skills, we need more stu- state.” dents participating in post-secondary That guiding document, “Transeducation. We’re not just competing forming Education in Rhode Island: with Massachusetts. We’re competing Strategic Plan 2010-2015” has several priorities, including to “ensure educawith the world.” While coursework and capstone, or tor excellence.” miller@pbn.com

‘When you look at education and where we are today, it is kind of crisis management.’

PBN FILE PHOTO/RUPERT WHITELEY

CHARTING A COURSE: Fresh off receiving a new contract, R.I. Commissioner of Education Deborah Gist plans to move forward with efforts to close the state’s perceived skills gap.

The goal in that category is “all educators will be effective and committed to accelerating student performance.” One of the major criticisms of that perspective, from teachers, has been that many factors can influence a student’s academic progress, such as poverty or a lack of adequate academic support at home. So teachers, many educators say, should not be evaluated so heavily on student academic progress. “Evaluation is being implemented for all educators – teachers and principals and for me,” said Gist. “It’s based on multiple measures. They are not being evaluated solely on student performance.” Some of those measures include classroom observation, leadership in school, involvement with parents and

contribution to the school community, she said. “No one is expected to be a miracle worker,” said Gist. “Some educators can take a group of students and move them along significantly academically. We want to recognize teachers who are doing a great job and find out how they’re doing it and use them to inspire others.” Along with the emphasis on teacher evaluations, Gist said she will receive quarterly evaluations of her own performance, which she said she welcomes but which hasn’t been done consistently during the time she’s been working in Rhode Island. Some in the teachers’ unions said even a closer monitoring of Gist’s perSee Gist, page 9


6 n www.pbn.com

Providence Business News

June 17-23, 2013

Gambling from page one

According to the schedule laid out by the Mass. State Gaming Commission, which is responsible for awarding all licenses under the state’s 2011 Gaming Act, the slot parlor should be the first to get a green light, possibly by the end of this year. Spokeswoman Elaine Driscoll said the commission is now investigating the 11 groups that submitted applications for licenses in January, along with a $400,000 nonrefundable fee, for the slot parlor and two of the resort casinos, one in eastern Massachusetts and one in western Massachusetts. The groups considered suitable to go on to the next phase of the process in the slot-parlor race will be chosen by the end of this month and then face an October deadline to submit a final application. “Suitable” bidders for the eastern and western resort casinos will be determined in August or September, Driscoll said, with a final award expected in the first half of 2014. The process for awarding the third resort-casino license, reserved for the southeastern part of the state, is trailing behind because of an effort to give preference to the Mashpee Wampanoag tribe. The tribe has so far been unable to secure federal approval to build a casino in Taunton, prompting the Gaming Commission to open the bidding for a southeastern casino to any commercial group. The review selection process for a southeastern casino will take the same path as the other three licenses, but because even the initial applications haven’t been submitted yet, a decision likely will not be made until fall of 2014, Driscoll said. Other than the Mashpee tribe’s plan for Taunton, the potential locations for other southeastern casino proposals are uncertain. Regardless of the precise location of each new license, the expansion of gambling in Massachusetts surely will have a strong impact on Twin River and Rhode Island’s other existing slot parlor, Newport Grand in Newport. A January 2012 report commissioned by Rhode Island from Christiansen Capital Advisors LLC estimated that

COURTESY TWIN RIVER

BET ON IT: Twin River Casino employee Alicia Chattman deals to Lyn Dupree and Brian LeBeau, during training for this week’s introduction of table games.

the state would lose more than $100 million in annual gaming revenue with the full arrival of Massachusetts casinos. Hoping to mitigate at least part of that bleak fiscal scenario spurred the state to allow Twin River to host table games. A similar proposal for Newport Grand was shot down by Newport voters in a referendum last November. Newport Grand leaders, who said Massachusetts casinos would pose an existential threat to the former jai alai fronton if it didn’t add table games, have not publicly discussed their future plans since the election. Attempts to reach CEO Diane Hurley were unsuccessful. As they prepare to open their expanded offerings next month, Twin River executives are now confident they can now compete with Massachusetts casinos wherever they eventually appear. “From the beginning it was clear generally where the [Massachusetts facilities] would go – but we have our own plan on how we are going to compete,” said Twin River Chairman John E. Taylor Jr. Twin River is spending $7 million on renovating the current slot-machine hall to accommodate 66 new table games and a new VIP lounge for high rollers. The work, being done by Gilbane Building Co. of Providence, will fit entirely within the building’s existing footprint. The new games include blackjack, craps, roulette and baccarat.

A poker room is not in the initial plans, but could be added if there is demand for it, Taylor said. To make room for the new table games, Twin River is removing about 200 slot machines, reducing the total capacity to 4,500. Taylor said at Twin River’s busiest moments, only about 80 percent of the slots are in use, pointing to significant excess capacity that he expects will be harnessed through greater overall traffic due to table games. Twin River has already hired 350 new workers, many of them dealers, and plans to double that during the summer. Taylor said about 80 percent of the new employees are coming from Rhode Island and many have experience working in the currently downsizing Connecticut casinos. In studying the potential impact on Rhode Island of Massachusetts casinos, Christiansen Capital estimated which potential Bay State gaming locations would have the largest impact on Rhode Island revenue if they were selected. Christiansen’s worst-case scenario included full resort casinos in Foxboro, Mass., and New Bedford, in addition to slots at Plainridge and a casino in the western part of the state. The bestcase scenario placed the Boston-area casino at Suffolk Downs in East Boston and the slot license at Raynham Park (the Worcester slot proposal had yet to emerge at the time of the report). Eighteen months after the report was put together, the Foxboro scenario

is off the table – local officials rejected a casino near Gillette Stadium – but Crossroads Massachusetts LLC, led by Foxwoods Casino, has proposed a casino near Interstate 495 in Milford, Mass. The Milford plan still faces local opposition and stiff competition from Wynn Resorts’ bid for Everett, Mass., and Caesars Entertainment’s bid for Suffolk Downs, so something similar to Christiansen’s middle-impact scenario still looks realistic despite the uncertainty surrounding the southeastern license. Eugene Martin Christiansen, chairman of Christiansen Capital Partners, said recently that the revenue projections in the Rhode Island report for table games at Twin River should still be on track. If Plainridge wins the bid for a slot license, it would start a $125 million expansion of its property off of U.S. Route 1, which has hosted harness-racing since 1999. To the east, Plainridge faces competition for the slot license from Raynham Park, a former greyhound-racing track that has hosted only race simulcasts since Bay State voters banned dog racing in 2008. Raynham Park would spend $250 million to build a new slot parlor that would employ between 400 and 600 new workers, according to a presentation to Raynham town officials on the plan by B&S Consulting of Stonington, Conn. Massachusetts Gaming and Entertainment LLC, led by Chicago-based Rush Street Gaming, wants to build a slot parlor in Worcester. And PPE Casino Resorts, led by The Cordish Companies of Baltimore, is searching for a new slot-parlor site after town officials in Boxborough, Mass., rejected a proposal to build there. Back at Twin River, Taylor said the size and experience of the bidders for Massachusetts licenses guarantees that the new Lincoln casino will be facing tough competition regardless of precisely who and where it comes from. For a source of optimism, he pointed to Twin River’s regional market-share growth – from 15 percent in 2009 to 27 percent now – and the momentum generated by expanding. “If you look at the field of people bidding on licenses in Massachusetts, they are the best of the best,” Taylor said. “They all come at the business from a different perspective, but we are going to be competing against the best operators in the world.” n

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Providence Business News

June 17-23, 2013

www.pbn.com n 7

Are kickbacks beginning to come back? A settlement between the federal Consumer Financial Protection Bureau and a Texas homebuilder is drawing renewed attention to a controversial issue that was prominent during the years preceding the housing bubble: kickbacks in home real estate transactions. Put another way, do you know where your money is really going when you pay thousands of dollars in loan fees and closing charges? Is your reKenneth R. alty broker or builder Harney getting an extra piece of the action through side deals with lenders or title agencies – all at your expense through higher charges? The CFPB’s allegations in its case against Dallas-based Paul Taylor Homes Ltd. illustrate how these arrangements can work: According to the settlement, the builder created partnerships with two lenders – one a bank, the other a mortgage company. In reality, however, according to the CFPB, “both entities were shams” designed to funnel kickbacks to Taylor for referrals of home purchasers needing mortgages. “Though the partnership entities had names – Stratford Mortgage Services and PTH Mortgage Co. – and appeared to be the funding sources for the loans, they in fact were shells with no separate employees, office space or real substance, the CFPB alleged. They did not advertise their mortgage businesses to the general public, instead servicing only Taylor purchasers. “Paul Taylor Homes denied any wrongdoing as part of the settlement. Asked for comment for this column, a lawyer for Taylor Homes, Van Shaw, said Taylor “has chosen to settle this matter to avoid the expense of potentially extended litigation with the government. The company now considers the matter closed.” As part of the settlement, Taylor must pay the federal government $118,194, the amount of money the builder received from the alleged kickback scheme starting in 2010. “This was the second such case the CFPB has settled in the past two months. In April, the agency fined four large mortgage-insurance companies – Mortgage Guaranty Insurance Corp., Radian Guaranty Inc., Genworth Mortgage Insurance Corp. and United Guaranty Corp. – a total of $15.4 million for alleged illegal kickbacks to lenders. The under-the-table payments, said CFPB Director Richard Cordray, “inflat[ed] the financial burden of homeownership for consumers” by raising their mortgage premium charges. The firms admitted no wrongdoing as part of their

The Nation’s Housing

Do you know where your money is really going?

settlements. “Federal authorities have been investigating and taking action against real estate kickback schemes since the mid-1970s. Federal law prohibits the giving or accepting of fees, kickbacks or “things of value” in exchange for referrals of customers who are applying for or obtaining a home mortgage. Cases have ranged from the prosaic – lenders or title agencies providing realty agents cash, free trips to resorts, tickets to sporting events – to subtler schemes. For example, a realty firm or builder might put up 10 percent of the capital to start a partnership with a lender or title agency but get kickbacks totaling 70 percent of the profits, based on the

volume of referrals. Though federal law permits “affiliated business arrangements” among real estate and settlement service providers, those arrangements must have economic substance – they are adequately capitalized, no partner receives compensation based on referral volume, they have separate office space and employees, among other requirements. Many large real estate brokerages and homebuilders have such affiliate tie-ins and are required to disclose their existence to clients and advise them that they have other choices for services. Industry proponents of these arrangements argue that they provide faster, more reliable service in trans-

actions at a fairer cost than can be achieved by consumers going out and shopping on their own. But critics such as Doug Miller, executive director of Consumer Advocates in American Real Estate, dispute this. He argues that tie-ins often squeeze out service providers who choose not to affiliate with a big realty firm or builder, reduce competition and raise costs to consumers. “I’d like to know the last time removing competition causes prices to go down,” Miller said in an interview. n Ken Harney is a member of The Washington Post Writers Group. He can be reached at kenharney@earthlink.net.

WHAT’S YOUR TROPHY MOMENT?

Growing up in the Depression, most of us never had a chance to participate in organized sports because we had to quit school to support our families. Shortly after my 80th birthday, my nephew Robert, who is the Track & Field Coach and Athletic Director at Classical High, introduced me to throwing weights. After months of practicing in my back yard, I competed in the Rhode Island Senior Olympics and finished first. Over the past three years, I have won local, state and regional competitions, culminating with a gold medal at the 2011 National U.S. Masters Track and Field Ultra Weight Pentathlon Championship. My entire career has been defined by hard work - serving in the Marines, working construction, building bridges, and swinging a sledge hammer. I didn’t realize it at the time, but those 75 years of physical labor became my training ground for the ultimate gold medal in my golden years! Antonio Palazzo, 84

2011 U.S. Masters Track & Field Ultra Weight Pentathlon National Champion


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June 17-23, 2013

Rhody has plethora of top tables with view Now that the summer season has gotten under way, the search is on for outdoor tables with the best views. Restaurateurs, hosts and concierges all are fielding calls and emails daily from diners in search of restaurants located in scenic spots with picture views or that “table with the best view in the house.” Since we do most Bruce Newbury of our dining out in the Ocean State, when thoughts turn to tables with a view it is natural to assume that an ocean view is what is desired. But that is not always the case depending on the perspective of the diner. I received a very nice photo posted to my Facebook fan page of the new view from Simpatico Jamestown, which is also new or at least made over. The former Trattoria Simpatico changed hands over the winter and the new owners made a substantial investment into a near total makeover inside and out. Simpatico has long had the reputation for fine dining on the island of Jamestown going back before the restaurant boom. According to the new owners, the philosophy of the design theme was to open doors, lift up the windows, and literally take out the walls to get to the glorious gardens. One obstacle in the way was a large fence that blocked the view from the restaurant’s deck. The new owners rectified that and now the view takes in the harbor and the Jamestown waterfront. So I asked my radio listeners for their choice of which restaurant they might pick for its view. I was on location in East Greenwich so I thought I might get a list of only West Bay eateries, but that was not the case. Kim from Barrington was shopping at Dave’s Marketplace where I was set up to broadcast. She took a moment to think and then picked The Port on lower Thames Street in Newport, just open for its second season. Some may remember this restaurant and raw bar under its previous iteration, H2O. Ann from Warwick had two choices, both in Narragansett. She named Spain on Ocean Road, at the top of the list for many visitors for years. Her other choice was one that she and many others hoped to visit again this year. The historic Coast Guard House in Narragansett was badly damaged last fall by the storm called Sandy. The 125-yearold restaurant required an extensive rehabilitation to repair the numerous broken windows, smashed chairs and flooded floors. Co-owners Robert Leonard and Providence municipal court judge Frank Caprio told local media they never had any doubts about the future of their landmark restaurant with its signature view. What may have been an

Dining Out

COURTESY THE CHANLER

SPECTACULAR SCENERY: A view of the Atlantic Ocean as seen from the dining room of the Spiced Pear Restaurant at The Chanler.

obstacle to the restaurant’s comeback was overcome thanks to the Narragansett Town Council, which at the 11th hour approved the deck-construction phase for the establishment. The deck was cleared to open on Memorial Day weekend, marking the first time the Coast Guard House had received visitors in six months. The lower level of the restaurant is not quite finished and the owners hope to have a formal grand reopening later in the summer or possibly in early fall. Then the tide turned, so to speak. Longtime listener J.B. emailed from Worcester to say the restaurant with an unsurpassed view for him was the Top of the Hub in Boston, still a favorite after so many years. WaterFire’s Bronwyn Dannenfelser was next. “When I think of a restaurant with a view, I think of WaterFire,” she said. “I have to choose among any of three spots,” she continued. “Ruth’s Chris Steak House, and of course it is always a pleasure to visit Dimitri [Kriticos] at Café Nuovo.” Dannenfelser described Nuovo’s location as “at the crux” of the installation as she and the WaterFire team refer to the line of wood-burning braziers running the length of Memorial Boulevard down to South Water and Dyer Streets. She added a fairly recent entry to the Waterplace basin restaurant row, Jacky’s Waterplace, and tossed in a recommendation for sushi at the same time. We choose restaurants with a view for many reasons, from sunsets to natural beauty to the view of a busy cityscape. Sometimes a choice has to be made between a great view and a memorable meal. Here in Rhode Island, we seldom if ever have to make that choice. The menu at our restaurants is almost always guaranteed to be as stunning as the view. As longtime Newport wine expert and former restaurateur Len Panaggio said, “Bring the view inside and serve it!” n

The Narragansett Town Council … at the 11th hour approved the deck construction.

Bruce Newbury’s “Dining Out” food and wine talk radio show is heard Saturdays and Sundays on WPRV-AM 790, weekdays on WADK-AM 1540 and on line and mobile app on iHeartRadio. He can be reached by email at bruce@brucenewbury.com.


June 17-23, 2013

Gist from page 5

formance is not enough. “While it appears the Board of Education did put Commissioner Gist on probation because of her inability to lead, our members still believe their voices need to be heard,” said Patrick Crowley, spokesman for the National Education Association Rhode Island, one of two teachers’ unions in the state. In May, nearly 700 teachers attended a public hearing sponsored by the teachers’ unions where many voiced their criticism of Gist. Some categorized Gist as a “bully,” unresponsive to teacher input on educational issues, overly wedded to time-consuming, standardized testing and teacher evaluations, and a leader who never looked back to see if anyone was following. Many teachers have urged changes in policies supported by Gist, the Board of Education and the Rhode Island Department of Education. “We will be engaged in both active and passive resistance to RIDE policies we believe are not in the best interest of students, parents and teachers,” said Crowley. “I meet with teachers every week and do focus groups and surveys,” said Gist. “I’m going to meet with teachers and get their ideas. In order to respond to what we’re hearing, I need very specific ideas from them on how to better

Providence Business News engage and communicate with them.” Many in the business community have supported Gist and said they are pleased with the renewal of her contract. “We’ve been engaged with Commissioner Gist for a number of years. I sit on one of the committees engaged in education-reform efforts,” said Janet Raymond, senior vice president for economic development and operations for the Greater Providence Chamber of Commerce. “I think it’s important to keep the momentum going in the right direction. I believe it will take more time to implement some of her efforts. “She’s really working to prepare our students for jobs of the future,” said Raymond. Gist has met with manufacturing leaders who are encouraging more education and training opportunities for Rhode Island students to prepare for those jobs of the future, including advanced manufacturing. “There are a lot of folks accusing her of trying to do too much too fast,” said Bill McCourt, executive director of the Rhode Island Manufacturers Association. “But when you look at education and where we are today, it is kind of crisis management. “It can be painful. Ask any business leader who’s been through change – and they all have – it’s a painful process,” said McCourt. n

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Big East from page 3

Like the school, Convention Center Authority officials are confident that Providence College will draw fans in its new league. “We believe the Big East and PC will be fine,” said James McCarvill, executive director of the Rhode Island Convention Center Authority. “Many fans will miss some old rivalries but the home schedule will be very attractive going forward.” While the old Big East plans to remain in Providence when it becomes the American Athletic Conference, at least for the immediate future, it’s unclear where the new all-Catholic Big East that Providence College is joining will be based. The new league does not have a commissioner yet and it’s unknown where its headquarters will be located, although speculation has centered on New York City, where the old Big East basketball tournament was held. At its offices in the Gateway Center on Park Row in Providence, the old Big East employs about 30 people full time, plus interns and contractors, Aresco said, the same as it had last year when the league included 16 teams. When planned departures and new arrivals shake out over the next year, the new American Athletic Conference will have 12 teams (assuming no one else leaves or joins.) As he looks to put his stamp on the smaller, realigned conference, Aresco said an organizational reshuffling will be in order and it could include some downsizing. “Things will evolve,” Aresco said. “We will have to do different things in the office. We will reorganize and I am looking at how we can be more efficient. We have fewer members but some complex tasks ahead.” In his first year at the helm of the Big East, Aresco’s primary focus was

keeping the conference viable and then negotiating a new television deal while many of the biggest schools went elsewhere. In addition to establishing an identity for the new American Athletic Conference, Aresco said major projects include finding a new site for the league’s basketball tournament, establishing ties to football bowl games and creating a digital platform to stream video. Aresco himself will move to Providence full time – he had been splitting his time between here and New York – in July as the conference name changes. But he’s still renting at the Residences downtown, and moving up to a larger apartment, not buying. Despite its long, successful run, the Big East always faced some challenges because of the different sizes and objectives of its members, especially the divide between the smaller nonfootball schools and the rest. Although the American Athletic Conference will not have the geographic or historic rivalries of the old Big East, Aresco said the new league’s members will have greater similarities in terms of the role of athletics within the institutions. All invited members will play top-tier football and the U.S. Naval Academy will be the only one that won’t play in the basketball league. From the offices in Providence, Aresco will be watching over members who have spread south and west to places including Orlando, Memphis, Dallas, Tampa, Houston, New Orleans and Tulsa. The Big East has a long-term lease in the Gateway Center, but Aresco declined to say exactly when it expires. “We think that overall it is the conference we want to have with schools that think this is the best place for them,” Aresco said. “The financial condition of the league is sound and TV revenue is adequate, but we want more and now we will have to prove what we can do on the field and court.” n

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Providence Business News

7 reasons to conduct a review We all have a tendency to go into a lull over the summer. But summer is actually a great time to do a midyear review and make some smart moves for your business while your competitors are taking it easy. Bill McBean, a successful entrepreneur turned author, suggests you work smarter, not hardDaniel Kehrer er. “Often, business owners think they can review their business or implement needed changes after they’ve enjoyed the summer,” says McBean. “But what happens is, you come back from vacation and immediately get slammed trying to catch up.” Then, suddenly, the year is almost finished and valuable opportunities have passed you by. Here are seven reasons McBean suggests a midyear review is a good idea: n Some changes will take a while to implement. If you want to make changes such as ordering new inventory, hiring and training a new employee or putting a marketing campaign together, it will take time to get those things rolling. n You can act while your competitors are procrastinating. Set a goal to take action on at least one or two important changes. Do it while your competitors are sitting on their hands. n You know things now that you didn’t know at the beginning of the year. If you did a year-end review last year, you probably raised some important questions. n It’s a good time to re-grip the reins. Midyear is a good time to assess your own control of the situation, and see if you have developed the kind of culture you want, and have motivated employees to give their best. n Nothing good comes from waiting to look at the numbers. Now is the time to check sales figures against projections and examine reasons you’re doing well, or not. n It’s a great time to go after new opportunities. You will be able to evaluate products and services that could add value to your current customers while attracting new ones. Ask yourself: What are my key strengths, and how can I leverage them to grow revenue? What weaknesses can I shore up? Are there offerings I’m just not good at that I should eliminate? n There’s no better time to remotivate employees. One great way to re-motivate employees is to set an end-of-summer goal and pre-holiday objectives. You can then develop a summertime special around that goal, and give employees an opportunity to upsell customers. “Keep in mind that most employees are looking for extra summertime cash,” says McBean. n

Bizbest

Daniel Kehrer can be reached at editor@bizbest.com.

PBN PHOTO/BRIAN MCDONALD

JUICED UP: Jon Mason shows off a display of Swing Juice in Providence’s East Side Marketplace, the product of his seven-yearold effort inspired by a golf outing with a friend.

This energy drink swings for fences Lincoln company steadily growing sales among health-conscious consumers By Rhonda Miller

A

miller@pbn.com

growing Rhode Island energy beverage company started with one of those offhand, but perceptive, comments that rang true enough to launch a company. “I was talking on the phone with a friend of mine. We were playing golf the next day and had an early tee time,” said Lincoln resident and Swing Juice founder Jon Mason. “My friend said, ‘That’s no big deal. We’ll just drink our swing juice and we’ll be ready to go.’ ” A graduate of Providence College with a major in marketing, Mason started creating Swing Juice Hybrid Energy Drink after more than a year of research. “I didn’t have a food and beverage background, so I started working with a flavoring company,” said Mason. The company’s expertise covered the FDA regulations and other details so Mason could concentrate on developing his product. “I created the formula, and they produced it,” said Mason. Growing up playing sports, then baseball at Providence College, and continuing to play golf and tennis, Mason wanted his drink to be what he considered healthier than some on the market, some of which had drawn public concern about high amounts of caffeine. “I try to make healthy choices in my life and I wanted to put some choices out there to reflect that,” he said. “At the time, there were a lot of beverages out there. It was becoming one of the hot sectors. Ours was designed to be a healthier version for people with an active lifestyle,” said Mason. “The ingredients are designed to give you a boost without taking you too far over the edge. The ingredients are in moderation and are to give a boost to con-

COMPANY PROFILE Swing Juice OWNER: Jon Mason TYPE OF BUSINESS: Beverage company LOCATION: One Industrial Court, Lincoln EMPLOYEES: 3 full-time, several parttime during the summer YEAR ESTABLISHED: 2006 ANNUAL SALES: WND

centration and focus.” While the specific recipe is proprietary, the Swing Juice website lists the ingredients as: ginko biloba, to help sharpen focus and maintain concentration; ginseng to reduce the effects of stress, improve performance and maintain concentration; taurine to restore fatigued muscles; caffeine at 25 mg. per serving (by comparison, a cup of coffee can contain can contain from 95 to 200 mg of caffeine, according to the Mayo Clinic), which raises focus and alertness; Vitamin D to promote healthy bones; niacin to ease depression and anxiety; vitamin B12 to alleviate nerve pain, numbness and tingling; and Vitamin B6 to reduce muscle spasms, leg cramps, hand numbness and some neuritis conditions. There are no artificial colors in the three flavors of Swing Juice, pomegranate-berry, orange-mango and sugar-free lemonade-iced tea. Swing Juice is produced in northern New Jersey, said Mason. “It’s mainly because the facilities are there for the type of product we make,” said Mason. “I’d like to have it made in Rhode Island, if we had the facilities.” Sales of Swing Juice are steadily increasing, from 1,000 to 2,000 cases per month in 2009 up to the current volume of 3,000 to 6,000 cases per month,

with each case containing one dozen 20-ounce bottles. Swing Juice has been chosen as the official performance beverage of the Ocean State Waves, a summer collegiate baseball team whose home turf is Old Mountain Field in South Kingstown. The team was recently added to the New England Collegiate Baseball League. “We are thrilled to have Swing Juice on board in our inaugural season,” said Ocean State Waves owner Jeff Sweenor. “Swing Juice is a great product to have in our dugout.” “This relationship is a natural fit – a home run,” Mason said in a press release from the baseball team. “The Waves are a great addition to the NECBL and to the South County community.” Swing Juice is also renewing its distribution to regional Whole Foods markets in the region in June, said Mason. The energy drink is available at Shell Gas convenience stores in Rhode Island, Massachusetts, New Hampshire and Maine. It is also available in some independent grocery stores, including East Side Marketplace in Providence. Marketing for Swing Juice includes a strong social media component, including the website, Facebook, Twitter and YouTube, said Mason. And with summer upon New England, marketing for Swing Juice will help boost employment for several part-time interns, said Mason. Mason will continue as the company’s lead marketer, out on daily marketing excursions, hopping in his car in the morning and topping off breakfast with Swing Juice. He has some more Swing Juice before he goes to the gym. “I love the stuff,” said Mason. “I drink it every day.” n


Providence Business News

June 17-23, 2013

www.pbn.com n 11

HEALTH CARE

Obamacare shows hospital savings as patients gain Bloomberg News Less than five months before the Affordable Care Act fully kicks in, hospitals are improving care and saving millions of dollars with one of the leasttouted but potentially most-effective provisions of the law. While much of the focus on Obamacare has been on the government rush to open insurance exchanges by Oct. 1, 252 hospitals and physician groups across the U.S. have signed up to join the administration’s accountable-care program, in which they share the financial risk of keeping patients healthy. Under the program, hospitals and physician practices take responsibility for tracking and maintaining the health of elderly and disabled patients. If costs rise beyond an agreed-upon level, hospitals may become responsible for reimbursing the government. If they cut the cost of care while maintaining quality, hospitals share in the savings. The government expects the savings may be as much as $1.9 billion from 2012 to 2015. Early indications suggest they are starting to add up. “We’re providing better care because we’re keeping people out of the hospital,” Kenneth Davis, president of Mt. Sinai Hospital in New York, said in a telephone interview. Mt. Sinai has reduced emergency room visits by 54 percent among highrisk patients. Similarly, New Jersey’s Hackensack University Medical Center saved about $16 million last year on care of about 11,000 Medicare patients who are part of the hospital’s accountableKenneth Davis care proMt. Sinai Hospital president gram. And at Coastal Carolina Health Care in New Bern, N.C., monthly emergency room visits dropped to 340 in February from 521 in April 2012. Less than 10 percent of Medicare’s 51 million beneficiaries are treated by accountable-care groups, according to the U.S. Centers for Medicare and Medicaid Services. And the federal government has not yet weighed in with data to support the growing evidence that these new groups are saving money or improving health care. Still, broader indicators suggest that changes spurred by the law, including formation of the accountable-care groups, are improving the health system, said Jonathan Blum, deputy director of the Medicare agency. The proportion of Medicare patients who were readmitted to a hospital within 30 days of a discharge fell by 1 percentage point last year to about 18 percent, the first significant decline in five years. And the growth of national health care spending per person in the U.S. dropped to about 3 percent a year in 2009 and has remained at that level, half the pace that health costs grew in 2007. “There is something fundamentally changing in health care,” Blum said in a telephone interview. “Hospital admissions are being better managed and are being reduced.” The ACO program works by offer-

‘We’re providing better care because we’re keeping people out of the hospital.’

ing hospitals two options of incentives. Hospitals can take on risk immediately, in which case they get 60 percent of any savings – and potentially face losses – or they can forgo taking on risk in the first three years and decide after that whether they want to continue the program. In that case, they get a 50 percent portion of the savings during the first three years. “I think it is a watershed,” said Bruce Merlin Fried, a partner at the law firm Dentons in Washington, who serves as general counsel to the National Association of Accountable Care Organizations. “There’s no going back.” At hospitals and physician practices who have signed on, individual patients such as Gerald Medlin, 69, are seeing a

2013

higher level of service and better care. When Medlin’s health began failing in January, his daughter, Beth MedlinJackson, found herself in a bind. Her dad, suffering from kidney failure, respiratory illness and dementia, lives by himself in South Carolina. She lives in San Diego. Medlin’s physicians at Coastal Carolina Health Care, a participant in the accountable-care program, assigned Debbie Sutton to take charge of him. Sutton’s job, which exists only because of the health law, is to manage care for patients considered at high risk of hospitalization. She made sure Medlin’s hospital doctors and his primary-care physician were coordinating care, that Medlin kept up with his prescription

Hospitality

medicines and that his daughter was in the loop. “She’s kind of the eyes and ears on the ground there,” MedlinJackson said in a phone interview. Hackensack University Medical Center, meanwhile, has been hiring nurses to identify high-risk patients. Those patients are now instructed to call their nurses directly when they feel ill, instead of their doctors’ offices. Mount Sinai Hospital in New York employed a multimillion-dollar supercomputer called “Minerva,” originally built three years ago for genomic studies, to mine patients’ medical-claims data and identify those at highest risk to be admitted to the hospital, said Davis, the hospital’s president. n

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ReAch AN AuDieNce of AfflueNce & iNflueNce

Week after week, Providence Business News is read by business and political leaders across southern New England. They hold company meetings, dine out often and recommend local hotels to visitors. PBN-branded news is also available digitally. The daily e-newsletter goes to 11,000 area professionals. The weekly 10 Things to do This Weekend! is e-mailed every Thursday morning. And PBN.com attracts about 50,000 unique visitors each month.

Reach this audience of affluence & influence with your advertising, in print & online. - Average annual household income: $307,000 - Average age: 50 - Average times they dine out each week: 3.8 - More than half are company owners or partners - About 20,000 make hotel referrals for personal & professional visitors - About 24,000 make the company decision on meetings and catering - Total audience (print & online): 79,900

To learn more about how you can cost-effectively build your hospitality business in 2013, contact PBN Senior Account Manager Dave Dunbar today at 401.680.4801 or email dunbar@pbn.com. HosPiTAliTy iNdusTry AdvErTisErs iN PBN:

Here, it’s all about you.


Providence Business News

12 n www.pbn.com

June 17-23, 2013

Making sales calls on social media outlets Hello Mr. Gitomer, I read your article on LinkedIn in the Daily Herald Business Ledger here in the Chicago Suburbs. I am a fan. You make great points and observations that many people miss. I’m in the process of retooling my profile. I can’t help but to ask if you have ever made a sale through LinkedIn? Thanks, Kyle The simple answer Jeffrey Gitomer is YES. But it ain’t that simple. I have a business brand, a personal brand, and a social brand. All of which are interconnected. All of which are

sales moves

mature. All of which provide value messages. All of which create attraction. All of which generate leads. All of which make sales. My marketing mantra is the core of my social effort: I put myself in front of people that can say “yes” to me and I deliver value first. Long before social media, or as I prefer to refer to it business social media, my marketing mantra was the hallmark of my sales success. As a writer and speaker in the early ’90s, I built my brand in print media and created attraction through value messaging. Still do. It was hard to create attraction (leads and sales) if you weren’t in print. The huge difference (and your ad-

vantage) is that now there are a variety of additional media and social media outlets available. Most of them are free. And you can become attractive on all of them, if you choose the right path. The value-messaging path. The path that will attract the all-important CLICK. CLICK means someone wants to see more. Especially if they’re looking to buy or connect. There are very few “one source” sales anymore. Too many options available. People, you included, click around before they connect, interact and especially buy. The omnipresence of mother Google, combined with the advent of

PBNFocus Report

business social media, has created new and better ways to search, find, connect, attract and interact. And one social media outlet proves, promotes, and reinforces the other to someone that clicks around. Everyone clicks around. People searching do not just search one source. They keep searching until they find comfort enough to click, and click again in the same spot. And my value messages promote multiple clicks. One click means nothing. One click means you get a “look.” Two or more clicks on the same page or site gets a deeper look and maybe a connection. Especially in social media. Your customers, your prospects, and your potential connections are clicking you. And you can’t stop them. n Numbers matter. The number of followers and connections you have can be the difference between click and no click. Your prospect is seeking some comfort and assurance that you are safe to connect with or do business with. n Comments, ratings, recommendations and endorsements matter more than numbers: especially in the business world. If you have 500 business connections on LinkedIn, it pales in comparison to who has recommended and endorsed you. Recommendations and endorsements are proof. So are positive ratings and comments. And many businesses live and die by them. n Rule of the more the more. The more a prospective customer clicks on you and your stuff, the easier it is for them to make a buying decision in your favor. n Final point of understanding. Building and growing your “attraction platform” is not just about what you say, post, or do; it’s all about what others think of what you say, post and do combined with what actions they take as a result of it. Am I perfect at it? Heck no. Do I work on making it better every day? Heck yes! “OK, SO DID YOU MAKE A LINKEDIN SALE?” No, I made hundreds of them. I have more than 15,000 connections on LinkedIn, and EVERY DAY I post a value message. Here’s what happens: People comment, people share the post with THEIR connections, people email me, and people call our office. EVERY DAY. And whether they want a $20 book or a $50,000 training program, the cost of that lead (and that sale) was ZERO. Understand it was a value message that created the attraction and the sale(s), not an ad or a self-promoting message. Next week you’ll see the detail of what my social game plan is, how one element ties into and supports the other, and how that creates attraction that leads to sales. n

I put myself in front of people that can say “yes” to me and I deliver value first.

MaNufacturiNg coming July 8tH

These days, successful manufacturers in Rhode Island have discovered new ways to engage in their old business. In the upcoming annual focus report on Manufacturing, PBN will look at some of these success stories and how these companies balance government initiatives, competitive pressures, and their own profitability. Included will be the Top List of Area Manufacturers. Manufacturing executives make up the largest single category of PBN subscribers. If you want to sell to them – anything from telecommunications, security, office equipment, meeting space and more – then advertise!

Your message will also be seen by the political leaders of RI.

Call 401.680-4801 to advertise, for best positions call today! Reserve your advertising space before July 1.

400 Westminster Street, Suite 600, Providence, RI 02903 401-273-2201 www.pbn.com

Jeffrey Gitomer is president of Charlottebased Buy Gitomer. He can be reached at (704) 333-1112 or email to salesman@gitomer.com


Providence Business News

June 17-23, 2013

www.pbn.com n 13

HEALTH CARE News Briefs Okereke chief of thoracic RIH joins national surgery at The Miriam research study for PROVIDENCE – Dr. Ikenna Okereke been appointed chief of thoracic traumatic brain injury has surgery at Rhode Island Hospital and PROVIDENCE – Rhode Island Hospital is joining a national research study to assess the treatment of traumatic brain injury with the naturally occurring hormone progesterone. The multisite study is funded by the National Institutes of Health and will be led locally by Dr. Lisa Merck of the department of emergency medicine. It is currently being conducted at 36 sites around the country. Traumatic brain injury, which is caused by sudden damage to the brain from an outside force to the head, such as that sustained in a car crash or fall, is a significant public health concern, hospital officials said. Nearly 2 million adults and children in the U.S. sustain traumatic brain injuries each year, resulting in approximately 50,000 deaths. Nearly 80,000 of those affected will require specialized care for the rest of their lives due to resulting disabilities. “Traumatic brain injury has a profound and devastating effect on our patients,” Merck said. “Prior studies on progesterone indicate that this naturally occurring hormone may serve to protect the brain following such an injury. The clinical trial will help determine if progesterone, plus standard medical therapy, improves patient outcomes over standard medical therapy alone.”

Reynolds grant supports education on aging PROVIDENCE – A $1 million, fouryear grant by the Donald W. Reynolds Foundation will help residents and practicing physicians learn how healthy aging and its interactions with disease affect older patients. The grant, announced on June 7, was given to the Warren Alpert Medical School and the School of Public Health at Brown University. The grant will fund the development and delivery of aging-related curricula at two Lifespan teaching hospitals affiliated with the medical school, Rhode Island Hospital and The Miriam Hospital. The grant builds upon the previous work of Dr. Richard Besdine, also funded by the Reynolds Foundation, to integrate aging throughout the curriculum of the Alpert Medical School to reach “every student, every course, every year.” Besdine is the director of the Center for Gerontology and Healthcare Research, director of the Division of Geriatrics in the Department of Medicine, and first Greer professor of geriatric medicine at the Alpert Medical School.

Payment-reform summit backed by Healthy RI PROVIDENCE – A “Payment Reform Summit” will discuss leading payment-reform models, the terms used to describe them, and what they might mean for Rhode Island. The planned June 19 summit is being sponsored by Lt. Gov. Elizabeth H. Roberts and the Healthy RI team, the task force helping with the implementation of health care reform in the state. The summit will feature Chas Roades, chief research officer with The Advisory Board Company in Washington, D.C.

The Miriam Hospital. He previously served as assistant professor of surgery at Indiana University School of Medicine and chief of thoracic surgery at the Richard L. Roudebush VA Medical Center in Indianapolis. A surgeon specializing in thoracic surgery, or surgical treatment of diseases of the chest, Okereke’s expertise is in minimally invasive thoracic surgery to treat lung and esophageal cancers, and chest wall. “His background and expertise in both complex and minimally invasive thoracic surgery allows us to extend our spectrum of care and further enhance our surgical capabilities,” said Dr. William G. Cioffi, surgeon-in-chief at Rhode Island Hospital and The Miriam Hospital. “He will be joining Dr. Thomas Ng, an established thoracic surgeon, to broaden our services.”

It pays to examine the health of your medical liability insurer.

COVERYS MEMBER COMPANIES RECENTLY EARNED AN ‘A’ FOR FINANCIAL STRENGTH FROM A.M. BEST.

Chartercare’s chairman is honored by AHA WASHINGTON – Edwin J. Santos, chairman of the board of Chartercare Health Partners, was recognized as a “Grassroots Champion” by the American Hospital Association, in partnership with the Hospital Association of Rhode Island, officials announced on May 28. Santos was recognized for his exceptional leadership in generating grassroots and community activity in support of a Chartercare’s mission. He was one of 52 individuals honored this year. The award is presented annually to one individual from each state, with winners being chosen by the state association. For many years, Ed has been dedicated to improving the well-being of all Rhode Islanders,” said Kenneth H. Belcher, president and CEO, Chartercare Health Partners. “As a board member at Chartercare and Roger Williams [Medical Center], he has set an example for others by generously giving of his time and energy to ensure a better, healthier future for the community.”

Langenus named to Blue Cross board of directors PROVIDENCE – John C. Langenus has joined Blue Cross & Blue Shield of Rhode Island as the newest member of its board of directors, the health insurer announced on June 5. Langenus brings to the role an extensive background in health insurance, according to Blue Cross. “John’s 35 years of experience and leadership in the healthinsurance industry will be invaluable to Blue Cross as we work to become more consumer centric and deliver more innovative products for Rhode Islanders,” said Peter Andruszkiewicz, president and CEO of Blue Cross. As president and CEO of Anthem National Accounts, Langenus was accountable for Anthem’s largest business unit with 12.3 million members. Langenus has also held leadership positions at companies that include Coventry Healthcare, Evolution Benefits, and CIGNA, HealthCare. Langenus has served on other boards, including the University of Hartford Barney School of Business and W.J. Gallagher Insurance Consulting. n

Medical Professional Mutual Insurance Company and ProSelect Insurance Company, both Coverys member companies, were recently rated ‘A’ for financial strength by A.M. Best. We earned this distinction as a result of excellent capitalization, strong underwriting results and favorable historical investment income. In short, it means we will be there when you need us. And that should make you feel a lot better. To find out more, visit us online at www.coverys.com

Medical Professional Mutual Insurance Company ProSelect Insurance Company • MHA Insurance Company Washington Casualty Company

THE WPRO MORNING NEWS WITH

GENE VALICENTI


Providence Business News

14 n www.pbn.com

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June 17-23, 2013

PBN.com breaking news, June 6 - 12

R.I. ranked among most expensive states for vehicle repairs IRVINE, Calif. – Among the 50 states and the District of Columbia, Rhode Island ranked No. 13 for largest repair costs associated with a car’s check-engine light, according to a new report released last week by CarMD.com Corp. In the annual Vehicle Health Index report, the average car-repair cost for such service in the Ocean State in 2012 was $371.30, an increase of 12.24 percent from the 2011 list, when the state ranked No. 25. On average, the labor-rate associated with check-engine-light repair was $127.58 and parts cost an average of $243.72 in Rhode Island in 2011. Comparatively, in New Jersey – the most-expensive state – average carrepair costs were $392.99 in 2012. Following New Jersey were the District of Columbia at $391.62, California at $390.37, North Carolina at $389.91 and Maryland at $387.78. In 2012, the average cost of checkengine-light-related repairs in the U.S. was $367.84, an increase of 10 percent from 2011.

Big Brothers Big Sisters opens center in Johnston CRANSTON – Big Brothers Big Sisters of the Ocean State has opened a donation center on Route 44 in Johnston to help serve communities in the central and northern parts of Rhode Island. According to a release from the nonprofit, the center is intended to create an additional, sustained source of revenue for the social service activities of Big Brothers Big Sisters of the Ocean State. The staffed center – located on Route 44 at 59D Putnam Pike – will accept donations of “gently used” clothing, small household items, books, toys and homedécor items and provide donors with tax receipts. Due to space constraints, furniture and appliances cannot be accepted. The facility is the sixth such center in Rhode Island. The Johnston donation center will be open seven days a week, from 9 a.m. to 6 p.m. Monday through Saturday and from 10 a.m. to 4 p.m. on Sunday.

Mayors host education and IT employment fair

For information on programs visit www.pbn.com

PROVIDENCE – Roger Williams Park Casino hosted a free job fair on June 11 for local residents looking for work, organized in conjunction with Providence Mayor Angel Taveras and Cranston Mayor Allan W. Fung. The event, the fifth in a series of eight industry-specific Mayors’ Job Fairs open to the public, was specifically tailored to the education and information technology sectors. Participating companies that accepted applications ranged from the Providence School Department and Johnson & Wales University to Atrion Networking Corp. and FM Global, among others. Eighteen companies in total had representatives at the fair, Ann S. Gooding, director of communications for the Providence Office of Economic Development, told PBN.

The job fairs are part of a joint mayoral effort to tackle local unemployment, a partnership undertaken with Workforce Solutions of Providence/ Cranston. One hundred and nine local residents preregistered for the fair, said Gooding. She added that attendance at the previous job fairs has ranged from about 200 for a fair on careers in the military to roughly 350 for a health care industry fair.

CVS specialty pharmacy receives accreditation WOONSOCKET – Nonprofit health care accreditation agency URAC has awarded a specialty-pharmacy accreditation to CVS Caremark Corp. in recognition of quality health care service. The Washington-based organization independently establishes standards in an effort to provide accountability in the health care industry. CVS Caremark’s specialty pharmacy caters to patients suffering from complex or rare conditions, according to a release. Its services include support and assistance handling specialty medications, ongoing disease education and therapy counseling, support and education for specialty patients, as well as managing health care provisions from multiple providers. The URAC accreditation affirms the specialty-pharmacy’s aspirations to “provide the highest level of quality services to patients who need specialty medication,” said Dr. Alan Lotvin, executive vice president of the specialty pharmacy.

Study: Retiree income falling short in R.I. CHICAGO – A new study from consumer-finance website Interest.com has found that senior citizens’ incomes fail to meet a generally accepted threshold for comfortable living in nearly every state, with Rhode Island ranking third-worst in the nation. The Interest.com study operated from the notion that retirees need 70 percent of the annual funds they received while working. Investigators compared the median annual household income for people age 65 and older to that for people between 45 and 64. By that standard, 48 states and the District of Columbia fell short, with only Nevada and Hawaii clearing the 70 percent benchmark. Massachusetts was worst in the country, with senior citizens taking home barely 45 percent of their younger peers. But Rhode Island was not far behind, at 48.2 percent. North Dakota and New Jersey were the only other states to fall below 50 percent. The national average was 57 percent. These numbers posed such a threat, the study’s conductors concluded, because senior citizens must pay the same prices as younger people for most goods and services. In addition, “many senior citizens are significantly underfunded and risk running out of money, especially since people are living longer than they used to and may need to support a two- or three-decade retirement,” said Mike Sante, managing editor of Interest.com. n

For up-to-the-minute reports on the business scene in Rhode Island and Bristol County, Mass., visit www.PBN.com. To sign up for our breaking news or single-subject e-mail newsletters, click “Subscribe” at the bottom of the PBN.com home page.


June 17-23, 2013

Providence Business News

www.pbn.com n 15

Rhode Island & Massachusetts News Briefs

Kilmartin lauds Conn. decision to let electric tax die PROVIDENCE – Attorney General Peter F. Kilmartin this month commended the Connecticut Legislature’s decision to let a tax on electricity production expire on Sept. 30, a move he said will benefit taxpayers throughout New England. According to a news release, Connecticut in 2011 imposed a tax of onequarter of one cent per net kilowatt hour of electricity produced by generators within Connecticut and uploaded to the regional bulk power grid. Kilmartin and Mass. Attorney General Martha Coakley raised serious concerns about this tax, concerned the new tax could raise rates for all New England states that draw power from the grid. Kilmartin said a study showed that New England ratepayers were likely to pay an estimated $38 million to $50 million more to purchase electricity because of the tax, and that approximately 75 percent of the higher energy costs resulting from the tax were likely to be borne by ratepayers outside of Connecticut. Once the tax is eliminated, the savings to Rhode Island ratepayers is estimated to be $3 million to $4 million per year, Kilmartin said.

R.I. joins Wildlife Violator Compact PROVIDENCE – The Senate has passed legislation that would make Rhode Island the 40th member of the Interstate Wildlife Violator Compact, an agreement between states that promotes uniform wildlife law enforcement across state boundaries. The compact will help ease the “undue burden of the legal process” for hunters, trappers and anglers convicted of wildlife violations, according to Sen. Catherine Cool Rumsey, D-Exeter, who introduced the bill in the Senate at the request of the R.I. Department of Environmental Management. Under the compact, a person who is cited for a wildlife violation such as a fishing or hunting infraction in a state other than their own faces a number of legal hurdles. He or she is either required to post bond or collateral immediately, stay in custody until bond or collateral is posted or go to court for an immediate appearance. A person cited for a violation in their home state can accept the citation at the scene and be immediately on their way. With the addition of the compact, a person cited for a violation in any member state would be treated as a resident of that state, and would be allowed to take their citation on-site. Additionally under the compact, license suspensions in one member state could be recognized by all other member states. If a person loses a hunting license in Rhode Island, for example, all other member states can treat this as if the person lost the license in their state as well.

RIAC bond rating is lowered; outlook stable Fitch Ratings announced last week that it has downgraded the R.I. Economic Development Corporation’s approximately $243 million in outstanding R.I. Airport Corporation senior-lien general airport revenue bonds to “BBB+” from “A-.” Fitch re-

vised the rating outlook to stable. According to Fitch, the downgrade reflects the airport’s plans for additional senior-lien-parity debt borrowings, which come at time where the airport struggles to reverse prolonged traffic declines. Higher planned debt will lead to some elevation in overall leverage levels, and could have a modest impact to airline costs and coverage ratios at the current traffic base, Fitch said. Additionally, Boston’s Logan Airport continues to dominant the region, expanding service levels in the Greater New England air-trade service. Fitch said T.F. Green Airport serves a primary origination and destination base of 1.91 million enplanements, but it’s also influenced by a more competitive New England airport environment that has contributed to seven consecutive years of enplanements declines. Above-average concentration risk exists with Southwest Airlines representing 50 percent of T.F. Green’s enplanements in fiscal 2012. A continuation of enplanement losses could further stress the airport’s financial flexibility, negatively impacting credit quality, the ratings company said.

Coakley urging funding for fishery research BOSTON – Calling scientific research “critical” to the future of the state’s fishing industry, Attorney General Martha Coakley is urging the legislature to keep funding for fisheries research within the proposed fiscal 2014 budget. Coakley sent a letter last week to the legislature arguing that the research is critical because it would allow for sonar or other methods to determine an independent count of the number of groundfish in New England waters. In May, Coakley filed suit against the National Oceanic and Atmospheric Administration for ignoring the devastating economic impact of new regulations and for allegedly using flawed science to over-restrict the Massachusetts fishing industry. NOAA recently began enforcing a 77 percent reduction of groundfish allotments across the region. The suit aims to block the new rules from being further enforced or implemented, as well as other relief to mitigate the impact.

Patrick announces mortgage compact BOSTON – Gov. Deval L. Patrick last week announced a new housing compact that creates a goal of providing 10,000 mortgage loans to first-time homebuyers over the next five years. The Home Ownership Compact includes a commitment among lenders to originate a specific number of mortgage loans to first-time homebuyers with household incomes below the median income for the area through the MassHousing and the Massachusetts Housing Partnership programs. National, regional and local banks that already support the compact include Citizens Bank, Sovereign Bank, Eastern Bank, Rockland Bank and Trust, Enterprise Banks and Blue Hills Bank. In a statement, Patrick said the Massachusetts Homeownership compact will help accelerate economic recovery and neighborhood-stabilization initiatives in the commonwealth and retain and attract a “competitive workforce.” n

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June 17-23, 2013

Providence Business News

www.pbn.com n 17


Providence Business News

18 n www.pbn.com

June 17-23, 2013

media

Fifteen years of helping journalists get it right By Rhonda J. Miller

outlets around the world. “When you give international journalists such intensive insight on topics Rhode Island is building a name for itself in the business of environmental they want to report on, and we’re introtraining for journalists, thanks in part duced to leading scientists, of course to the 15-year-old Metcalf Institute for tomorrow they’re going to be my Marine and Environmental Report- sources,” said Italian journalist Laura ing, says spokeswoman Karen South- Daverio, a foreign correspondent for RSI Swiss television who is based in ern. “The [University of Rhode Island’s Beijing. If the local economic Graduate School of Oceanimpact on the institute ography] has an internacan’t be measured in doltional reputation and the lars and cents, it’s the scientists who are part of kind of exposure tourism the immersion workshop and chamber of commerce are likely to be quoted in leaders often pray for. stories around the world,” The stories, for a change, Southern said. “In a time are not likely to mention when Rhode Island is Rhode Island’s struggling working to improve its economy, stubbornly high image and position itself unemployment rate or the as an emerging knowledge skills gap that sends busiKaren Southern economy, these journalists give the state a lot of Metcalf Institute for Marine nesses to other states. Instead, the journalpositive exposure.” and Environmental ists go in-depth on climate Nine more journalists Reporting spokeswoman change, water quality, forfrom around the world estry, coastal habitats and have added Rhode Island scientists to their digital Rolodexes af- marine geology. The scientific information that goes ter spending a week at the institute, located at the graduate school on Narra- out through reporting is likely making gansett Bay, in a workshop from June up for some of the decrease in informa9-15. The group brought the 15-year tion that scientists release through prototal to 200 reporters. These journal- fessional journals about their research, ists give Rhode Island’s environmen- said John King, a professor at the URI tal experts a connection to TV, radio, Graduate School of Oceanography who newspaper, magazine and online media has participated in workshop almost miller@pbn.com

‘These journalists give the state a lot of positive exposure.’

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FULLY IMMERSED: Ginger Vaughn, left, a Houston-based journalist, takes part in a weeklong Metcalf Institute workshop on marine and environmental reporting. At right is Deborah McDermott, Maine bureau chief for The Portsmouth Herald in New Hampshire.

since it began 15 years ago. “Our outreach seems to be growing, but the grants for pure science research have been harder to get because there’s been consolidation,” said King. King and his colleagues have led various environmental field workshops over the years. This year, his focus was on climate change and projected increases in sea-level rise, with hands-on, or more like feet-on-the-beach, experiences along the coastline of the Ocean State. Based in Houston and covering the oil and gas industry for CCTV America, China’s English-language news channel, journalist Ginger Vaughn has also worked in Japan. “Rhode Island is so beautiful and seems so environmentally sound,” said

Vaughn. “It has a lot of resources with the forests and the ocean and the great scientists who are taking us on excursions and showing us how they analyze data.” The immersion not just in issues, but in how scientists work, has gained recognition for Metcalf and Rhode Island, said Sunshine Menezes, Metcalf executive director. “We are one of very few organizations that provide this kind of professional experience. We help journalists understand the scientific method,” Menezes said. “The journalists get a chance to learn how to translate science for public policy, for regulators and policymakers. This also helps them do a better job of translating science for their audience.” n

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Providence Business News

June 17-23, 2013

Get what you need from your firm’s marketing The sales function is built into the DNA of every business. It’s as basic and unquestioned as a “great steakâ€? at a company sales meeting. The story with marketing is quite different. It’s often viewed as a “side dishâ€? to the sales “entrĂŠe,â€? nice but not necessary, particularly when the economy is either very good or very bad. When things are John Graham humming, who needs it and when the economy tanks, “we can’t afford it.â€? There’s something of an “inbredâ€? ambivalence about marketing. Wanting it but not really trusting it. Even more to the point is a pervasive doubt that it’s worth the investment or that it doesn’t really make much of a difference. It’s not surprising that marketing often finds itself on the defensive, never quite sure of its future. Even so, the menu of the value of marketing today is lengthy. Here are five: n Guard against negative public comments. In the past, negative comments were mostly limited to word-ofmouth, with minimal spillover. Now that those same comments are viral, get prepared before you get hit. Make it a continuing priority to encourage satisfied customers to share their thoughts about your business. Make it easy and convenient for customers to post comments. n Create a reservoir of goodwill. It doesn’t appear on the company books, but you can take it to the bank. More often than not, its value is ignored, not taken seriously or dismissed as less than a “softâ€? asset. Whatever else it’s called, it’s goodwill. Avon has banked enormous amounts of it with its long-time national sponsorship of the “Avon Walk for Breast Cancer Research.â€? Bank of America wants more of it. n Help customers help themselves. Ian Gordon of Convergence Management Consultants offers an indispensable marketing insight. He contends that the incredible pace of change in technology, attitudes and products doesn’t give customers enough time to adjust, which causes continual stress, discomfort and frustration. Why is this important? What difference does it make? He points out that whether we admit it or not, we need help to make successful adjustments. Otherwise, we avoid what makes us feel uncomfortable. Recognizing this, businesses that take the customer experience seriously help their customers to help themselves to avoid negative feelings that can lead to opting out. n Fight making unnecessary mistakes. Marketers worth their salt welcome a major marketing challenge, one that flies in the face of “go-

Guest Column

ing along to get along.� Caving in is easy, but maintaining one’s objectivity in the face of pressures to the contrary takes strength, more than most possess. This is a task that often requires raising questions about proposed plans and programs, pointing out deficiencies and even saying something’s not appropriate and why. Such a role can have enormous value for creating discussion, thinking beyond the obvious and the emotional. Would the history of retailer JC Penney be any different if its board had sought the views of marketing professionals and others before draining the company coffers of $170 million acquiring a new management team and $1 billion on making merchandising changes? If a company doesn’t value its marketers’ independence, it should be prepared to make unnecessary and costly mistakes. n Have a clear picture of what you’re doing. In a recent Psychology Today article, Sam Gosling, Ph.D., a personality/social psychologist at the University of Texas, Austin, says there are some things about ourselves that we see quite clearly, such as judging our own self-esteem, optimism and pessimism. But when it comes to other things in which we’re heavily invested, such as intelligence, attractiveness and body language, we have a lot of blind spots. And it’s the same for companies. They not only know what they do well but they can become overly enamored with their excellence. In other words, companies can fall in love with themselves. Kodak is a good example. It saw itself as the premier film company - and it was. And even when digital photography was decimating its film sales, management failed to permit change. The myopia even extended to the company’s valuation of its vaunted patents. They finally went for one-quarter of the company’s “estimated value.� Kodak’s ignominious fate is the story of a company that loved itself to death. There are others. Dell could be one. Blackberry may be another. And there are countless smaller businesses that fail to understand that such self-love is misplaced and dangerous, and is quite different from loving your customers, which is only possible when you stop looking in the mirror every morning. Companies, like people, can become so preoccupied with themselves that they fail to see themselves as they are. When you think about it, getting the most from your company’s marketing has less to do with ads, sponsorships, events, websites and press releases than it does with applying the analytical capabilities and insights of marketers to a company’s basic business issues. n

Companies, like people, can ‌ fail to see themselves as they are.

John Graham of GrahamComm is a marketing and sales consultant and business writer. He can be reached at johnrgraham.com.

www.pbn.com n 19

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Page 20 June 17-23, 2013 www.pbn.com

Providence Business News

‘Ban-the-box’ bill opposed by most business groups By Patrick Anderson panderson@pbn.com

Christine M. Cunneen, CEO of Johnston-based employee-screening firm Hire Image LLC, says not all companies throw out any job application with a “yes” next to the “prior criminal convictions” question. With federal equal-opportunity guidelines warning against blanket hiring exclusions for ex-offenders, Cunneen said employers are now digging

deeper to learn whether the applicant’s brush with the law really makes them unhirable. “The guidelines say you shouldn’t have a blanket policy [toward prior convictions] unless you’re in an industry where it’s prohibited by regulation,” Cunneen said. “And in my practice with the human resources community, most employers don’t – they have multifaceted criteria.” Still, Cunneen said employers are

going to find out about criminal convictions if they want to know and attempts to legislate the hiring process, like the current “ban-the-box” bill proposed by Rhode Island lawmakers, would likely be counterproductive. Cunneen is a member of the Society for Human Resources Management’s Rhode Island council, which opposes the bill, along with most business groups in the state. In addition to concerns about gov-

ernment intrusion in free enterprise and the belief that companies should know as much as possible about who they hire, business leaders worry the bill could set the stage for a wave of opportunistic lawsuits. “There are attorneys out there nationally just looking for lawsuits, doing it under the federal laws, but if Rhode Island were to pass it, attorneys would go after that too,” Cunneen said. See Banbox, page 23

Talent war escalating in technology By Rhonda J. Miller miller@pbn.com

PBN PHOTO/TRACY JENKINS

WELL WISHES: Cooley Group Human Resources Director Deb Bedrosian with extruder operators Tyrone West, left, and Saroeun Teang. Bedrosian says there is much more awareness of health issues now than in the past.

Businesses try tough love on health By Keith Regan

participants,” Cormier said. “As more companies see how beneficial participation in wellness programs is, they are Though most would rather dangle a carrot than wield beginning to look at tying those penalties to medical-insura stick, more businesses are moving toward a tough-love ance costs.” Dr. Peter Salgo, an ICU doctor, author and TV host, who approach to corporate-wellness programs, with employees who don’t participate facing higher health-insurance pre- spoke at the recent Worksite Health Awards event sponsored by Blue Cross and the Greater Providence Chammiums and other financial penalties. ber of Commerce, said he knows of one national company Financial incentives and noncash prizes that charges employees who refuse to quit have long been a staple of such programs, prosmoking an extra $650 a month for health-inviding employees a motivation to participate surance coverage. in everything from biometric screenings to And CVS Caremark Corp. in Woonsocket walking programs, nutritional seminars and sparked a reaction when it announced plans to stress-reduction programs. begin docking employees as much as $600 for But nationally, more businesses have befailing to get involved in wellness activities. gun to move past rewards, taking a hard line “That ought to be a powerful motivator,” Salgo with employees who resist efforts to take part said. in preventive programs. A national survey by Harry J. Sobel, a senior vice president Aon Consulting released in March found that with E4 Health Inc., a Providence employee5 percent of companies are using penalties Harry J. Sobel benefits and wellness consultancy, said both alone, while 16 percent use a combination of incentives and penalties can be valuable comE4 Health Inc. incentives and penalties. However, more than ponents of a larger strategy. half of the companies in the survey said they senior vice president “Incentives and penalties force employees are planning to make the shift to imposing to put some skin in the game,” Sobel said. He added that penalties for nonparticipation. That trend is reflected among some Rhode Island busi- companies such as CVS, which is using financial levers as nesses, said Kim Cormier, director of consumer activation part of a long-term plan, take a multidimensional approach at Blue Cross & Blue Shield of Rhode Island in Provi- to employee behavior. “They are trailblazers and they have taken some heat for it.” dence. Wellness, which Salgo called the “defining project of “We have seen an evolution to where some companies See Wellness, page 23 are now including penalties for employees who are nonContributing Writer

‘Incentives and penalties force employees to put some skin in the game.’

Expanding technology opportunities in Rhode Island finally intersected with the pull of family and hometown roots for BatchBlue Software Chief Technology Officer Ray Anderson. Until he began his current job about a year ago at BatchBlue in Providence, Anderson spent six years commuting 75 miles each way from his home in Dartmouth to his job at IDG Enterprise in Framingham, Mass. Before that he worked in Marlborough and Needham, Mass., adding up to 15 years of commuting 65-75 miles each way, five days a week. Some days the one-way trip could be as long as two hours. “My work was extremely interesting and fun, so I stayed in a place for a long time,” said Anderson, who’s found a good match working with BatchBlue and its Batchbook, a cloud application that helps small businesses manage customer relationships. As the technology sector expands in Providence, Anderson exemplifies a combination of advanced skills and a preference to work in Rhode Island that’s a win for the state, as competition for skilled workers in the tech industry sizzles across the U.S. “What’s really happened is that there’s been this upsurge of new Web companies in Providence, several coming out of Betaspring, and others,” said Anderson, who works in the heart of the emerging tech ecosystem on Chestnut Street in Providence. “I didn’t take this job just to get out of the long commute. I could have done that sooner if I wanted to work in something I didn’t like. But I wouldn’t have been happy,” he said. “I’m basically in the Internet business and I found very interesting work in an industry that is emerging in Providence,” said Anderson. “I didn’t have to sacrifice on my compensation package and it afforded me the lifestyle change I was looking for.” Raised in Mattapoisett, Anderson and his wife were determined to raise their two children, now 11 and 13, among both of their extended families. His job in Providence gives him time mornings and evenings with his children, and time to spend time in community activities. His drive to work now, from Dartmouth to Providence, is See Tech, page 21


Providence Business News

Tech from page 20

about 20 minutes, and traffic is hardly noticeable, he said. “It’s 1999 all over again. It’s a talent war. It’s insane,” said James Wright, a partner in East Greenwich-based Bridge Technical Talent, which recruited Anderson for the BatchBlue job. The competition is showing up in companies such as HubSpot, an inbound marketing software company based in Cambridge, Mass., and Dublin, Ireland, which is offering a $30,000 incentive to individuals who refer developers and designers, and who get hired, according to its website. Wright has seen the cycles. “Two years ago there were more candidates than jobs. Now we have more jobs than we have candidates,” he said. Before working in Rhode Island, he worked in San Francisco and Silicon Valley for 13 years. “It’s so dynamic with tech companies like Facebook out there. They started having a WiFi-enabled bus pick employees up in San Francisco and they give them everything you can imagine – food, dry cleaning, yoga,” said Wright. Candidates expect that when they’re being recruited by regional tech icons like Facebook, Oracle and Google. While Rhode Island’s expanding tech sector helps boost the economy and create jobs, many of those jobs sit open, while the state struggles to inch its way out of a stubbornly high unemployment rate, currently at 8.8 percent. The competition for technology talent is a huge challenge in Rhode Island,

HUMAN RESOURCES as it struggles to upgrade its educational system and provide a skilled workforce to attract new business. Year after year, many Rhode Islandeducated graduates leave for higher pay and better opportunities in Massachusetts, Connecticut and other parts of the country. In Rhode Island, as in many places across the country, the pool of developers for specific software is especially slim. “For .NET, Java, PHP and Ruby, all those are in great demand right now,” said Wright. “And there are six or eight companies in Rhode Island that use ColdFusion and it’s hard to find ColdFusion people – there are only so many,” said Wright. Complicating the challenge to attract tech talent is the lineup of new languages continually on the horizon, he said. When it comes to recruiting soughtafter technical talent to Rhode Island and southeastern Massachusetts, Wright focuses on the strengths of the region. “Rhode Island has so much going for it,” said Wright. “A lot of people move here for quality of life – the affordability, the pace. You can buy a house and have a good school system. You’re near beaches and skiing. It’s a nice location between Boston and New York.” While attracting tech talent to the state is a must for companies who are growing quickly, the Tech Collective, the technology-industry association of Rhode Island, is working with its 80 member companies and the Governor’s Workforce Board to encourage and grow IT talent. “A new trend is the Governor’s Workforce Board fellowships that place

Page 21 June 17-23, 2013 www.pbn.com

PBN PHOTO/MICHAEL PERSSON

HOMEWARD BOUND: BatchBlue Software Chief Technology Officer Ray Anderson spent 15 years commuting up to 150 miles daily before finding a job at BatchBlue Software in Providence.

recent IT and bioscience graduates in a company for 12 weeks,” said Tech Collective spokeswoman Giselle Mahoney. “They get paid $700 a week - $500 paid by the state and $200 paid by the company. The goal is, at the end of the 12 weeks, they get hired by the company.” Tech Collective serves a pivotal role in the program, working with the companies to find out what jobs need to be filled, then prescreening and recommending applicants. “In IT there are very specific niches of technology challenges,” said Mahoney. “In general, when students study IT in school, it’s a foundation. “Companies often hire entry-level

people and train them. We offer a lot of training programs in both technical and soft skills,” said Mahoney. “We found the companies need people who can translate IT so they speak with colleagues and project managers,” said Mahoney. “People who can do the coding might get the job, but they won’t move up in the company.” Tech Collective member companies are always hiring, she said. “All through the recession, they’ve been hiring. We’re in the middle of an IT skills gap,” said Mahoney. “I’d say the available technology jobs in Rhode Island are in the hundreds.” n


HUMAN RESOURCES

Page 22 June 17-23, 2013 www.pbn.com

Providence Business News

Executive Compensation in Public Companies (ranked by total fiscal year 2012 compensation) 2013 rank

2012 rank

1

2

2

3

3

6

4

NL

5

7

6

8

7

NL

8

11

9

5

10

12

11

15

12

NL

13

16

14

10

15

14

16

13

17

NL

18

22

19

19

20

28

21

NL

22

NL

23

NL

24

NL

25

23

26

24

27

25

28

27

29

26

30

NL

Salary Bonus Other compensation

Executive & company

Stock awards Option awards

Non-equity incentive plan comp. Change in pension value and deferred comp.

2012 Total comp. 2011 Total comp.

Change in compensation

2012 co. earnings Change in earnings

$6,500,004 $3,750,001

$6,373,092 $2,210,254

$20,330,097 $14,074,790

44%

$3,877,000,000 12%

$5,982,367 $3,057,000

$1,187,000 $701,119

$12,031,640 $11,519,177

4%

$589,000,000 143%

$4,549,997 $2,699,141

$1,682,517 $0

$10,279,728 $9,407,766

9%

$1,905,000,000 2%

$1,272,135 $2,648,388

NA $0

$9,716,970 $4,523,719

115%

$177,481,000 2,641%

$1,200,000 $0 $318,914 $900,000 $0 $157,376

$3,350,509 $2,640,821

$2,000,000 $174,041

$9,684,285 $7,552,582

28%

$335,999,000 -13%

$0 $3,000,001

$3,832,833 NA

$7,890,210 $7,062,926

12%

$3,877,000,000 12%

$766,667 $0 $94,906

$2,025,074 $2,141,742

$2,835,034 NA

$7,863,423 NA

NA

$3,877,700,000 12%

Larry J. Merlo CVS Caremark Corp. President and CEO Scott C. Donnelly Textron Inc. Chairman, President and CEO Jose E. Almeida Covidien PLC Chairman, president and CEO Thomas Wroe Jr. B Sensata Technologies CEO Brian Goldner Hasbro Inc. President and CEO Per G.H. Lofberg CVS Caremark Corp. Executive vice president and former president - CVS Caremark Pharmacy Services Jonathan C. Roberts CVS Caremark Corp. Executive vice president and president - CVS Caremark Pharmacy Services David M. Denton CVS Caremark Corp. Executive vice president and chief financial officer Mark S. Cosby CVS Caremark Corp. Executive vice president and president - CVS/pharmacy John D. Butler Textron Inc. Executive vice president, administration and chief human resources officer Michael J. Clarke Nortek Inc. President and CEO Jeffrey Cote Sensata Technologies Chief operating officer D

$681,250 $0 $32,302 $900,000 $0 $145,448 $290,769 $0 $2,395,379

$2,000,016 $1,250,000

$2,098,511 NA

$6,062,079 $4,560,726

33%

$3,877,000,000 12%

$1,500,010 $750,009

$2,592,000 NA

$5,887,467 $9,594,923

-39%

$3,877,000,000 12%

$909,530 $454,882

$180,491 $1,642,730

$5,873,781 $4,521,863

30%

$589,000,000 143%

$925,000 $500,000 $337,058 $469,730 $0 $27,985

$2,607,000 $0

$1,462,979 $0

$5,832,037 $3,991,507

46%

$9,500,000 NA C

$3,510,176 $989,604

NA $0

$4,997,495 $2,261,523

121%

$177,481,000 2,641%

Steven L. Spinner United Natural Foods Inc. President and CEO David D. R. Hargreaves Hasbro Inc. Executive vice president and chief strategy officer E

$822,200 $0 $77,559 $800,000 $0 $98,000

$2,728,262 $176,170

$917,282 NA

$4,721,474 $3,735,100

26%

$91,342,000 19%

$893,474 $704,220

$1,000,000 $1,207,529

$4,703,223 $4,700,615

0%

$335,999,000 -13%

Frank T. Connor Textron Inc. Executive vice president and chief financial officer Charles J. Dockendorff Covidien PLC Executive vice president and chief financial officer E. Robert Lupone Textron Inc. Executive vice president, general counsel and secretary Vincent L. Sadusky LIN TV Corp. President and CEO Bryan C. Hanson Covidien PLC Group president, surgical solutions Almon C. Hall Nortek Inc. Senior vice president and chief financial officer Martha Sullivan Sensata Technologies President F

$750,000 $0 $49,100 $764,204 $0 $115,745 $537,692 $325,000 $858,669 $670,000 $287,200 $212,443 $535,200 $0 $529,980 $520,000 $0 $1,552,955 $580,830 $0 $26,942

$1,866,743 $933,475

$630,000 $290,799

$4,520,117 $4,373,733

3%

$589,000,000 143%

$1,747,191 $1,036,456

$722,981 $38,716

$4,425,293 $4,489,947

-1%

$1,905,000,000 2%

$1,379,631 $458,550

$445,000 $0

$4,004,542 NA

NA

$589,000,000 143%

$983,485 $744,422

$861,600 $2,623

$3,761,773 $2,231,968

69%

($7,601,000) -116%

$1,223,049 $725,547

$355,965 NA

$3,369,741 $2,709,680

24%

$1,905,000,000 2%

$196,907 $100,135

$616,823 $13,600

$3,000,420 $1,264,530

137%

$9,500,000 NA C

$595,944 $1,154,538

NA $636,443

$2,994,697 $3,205,240

-7%

$177,481,000 2,641%

Peter L. Wehrly Covidien PLC Group president, vascular therapies, respiratory and monitoring solutions, and developed markets Mark C. Trudeau Covidien PLC President, pharmaceuticals Kevin W. Donnelly Nortek Inc. Senior vice president, general counsel and secretary Duncan Billing Hasbro Inc. Executive vice president and chief development officer G

$536,546 $0 $151,828

$1,019,202 $604,623

$650,127 NA

$2,962,326 NA

NA

$1,905,000,000 2%

$420,000 $225,000 $207,981 $450,000 $0 $1,587,594 $485,000 $0 $89,400

$945,965 $623,096

$507,252 NA

$2,929,294 NA

NA

$1,905,000,000 2%

$170,400 $86,655

$533,790 $22,200

$2,850,639 $1,098,073

160%

$9,500,000 NA C

$542,025 $420,550

$280,000 $204,934

$2,021,909 $1,877,969

8%

$335,999,000 -13%

David G. Whalen A.T. Cross Co. President and CEO Deborah Thomas Hasbro Inc. Executive vice president and chief financial officer Scott M. Blumenthal LIN TV Corp. Executive vice president - television John Frascotti Hasbro Inc. Executive vice president and chief marketing officer H

$600,000 $0 $69,038 $515,000 $0 $77,450 $438,000 $103,200 $90,992 $485,000 $0 $67,050

$753,945 $0

$498,660 $70,122

$1,991,765 $1,799,280

11%

$9,148,000 10%

$542,025 $420,550

$320,000 $64,486

$1,939,511 $1,769,212

10%

$335,999,000 -13%

$295,244 $223,376

$309,600 $478,507

$1,938,919 $1,346,653

44%

($7,601,000) -116%

$542,025 $420,550

$280,000 $1,328

$1,795,953 $1,761,904

2%

$335,999,000 -13%

Steven Major Sensata Technologies Senior vice president, sensors I

$374,040 $0 $26,566

$271,188 $528,220

NA $393,914

$1,593,928 $1,718,059

-7%

$177,481,000 2,641%

$1,287,500 $0 $209,246 $1,000,000 $0 $104,154 $1,154,808 $0 $193,265 $800,040 $0 $4,996,407

NA = Not available/not applicable. NL - Not listed last year. Sources: 2013 Proxy Statements (DEF 14A) filed with the U.S. Securities and Exchange Commission. The data in this list follows the new executive compensation rules set forth by the SEC in 2010. B C D E F G H I

Wroe retired in December 2012. Company had loss of 55.9 million last year. Cote moved into the role of chief operating officer in July 2012. Hargreaves became executive vice president and chief strategy officer on Feb. 6, 2013. Previously, he served as chief operating officer. Sullivan became president and CEO upon Thomas Wroe Jr.'s retirement in December 2012. Billing became executive vice president and chief development officer in March 2013. Previously, he served as global chief development officer. Frascotti became executive vice president and chief marketing officer in March 2013. Previously, he served as global chief marketing officer. Major retired as senior vice president, sensors in December 2012.

LIST RESEARCHED BY Barbara Lipsche Some survey recipients may not have responded; information is the best and most complete available as of press time. It is not our intent to endorse the participants. While every attempt is made to ensure the accuracy of the top lists, omissions and errors sometimes occur. Please send additions or corrections to: Researcher, Providence Business News, 400 Westminster St., Suite 600, Providence, R.I. 02903. To request a survey or to update contact information, write to research@pbn.com.

Upcoming Lists: RI Law Firms (deadline Aug. 9) and Accounting Firms (deadline Aug. 16)


Providence Business News

Banbox from page 20

So-called “ban-the-box” bills, which refer to the criminal-conviction field in standard job applications, have been debated in state legislatures across the country. This is the third straight year a bill has been filed in Rhode Island. In response to heavy opposition from the business community in previous years, this year’s bill has been scaled back. (An early version in 2011 required employers to notify applicants in writing if they were turned down because of a conviction and restricted the ability of companies to perform background checks.) The current bill, filed in the House by Rep. Scott Slater, D-Providence, would prohibit companies from asking applicants about prior convictions until after they had been ruled a finalist or been given a conditional job offer. At that point, the employer would have to hire the applicant anyway unless the conviction has a “direct relationship between one or more of the previous criminal offenses and the employment sought.” There are also exceptions for positions where regulation prohibits the hiring of ex-offenders or in situations where the applicant is not bondable. The potential for differing interpretations of “direct relationship” is what makes human resources professionals and business groups nervous, even

Wellness from page 20

our century,” is in effect the moving of health care out of doctor’s offices and into workplaces and other settings. “There are 300 million Americans out there at risk of being sick and they all can’t come to my office tomorrow,” he said. “But a lot of them will go to work.” Winners of Blue Cross’ Worksite Wellness Awards include Amica Mutual Insurance Co., which recently installed a regulation half-size basketball court at its Lincoln headquarters; Moran Shipping Agencies Inc. in Providence – a Providence Business News Healthiest Employer award winner in 2012 – where novel programs include a sleep-sense workshop and a financial-wellness program; and Advanced Pharmacy Concepts in North Kingstown, where Data Analyst and Wellness Coordinator Peter Mark said wellness efforts were launched in 2010 and almost immediately had participation rates of over 50 percent. Deb Bedrosian, director of human resources at Cooley Group in Pawtucket, sees the impact the wellness program has made on the composite manufacturer’s 130 employees every day. Workers, who collectively have walked around the world several times according to pedometer readings, regularly stop by the BMI machine and traditional scale outside Bedrosian’s office. “There is much more awareness of health issues now,” she said. Cooley has focused on positive incentives – employees can earn Wii Fit consoles by winning in-house competitions – and has been able to at least hold the line on health care cost increases as a result. “We have been very successful the past couple of years at maintaining, if not zero, then very small, single-digit

HUMAN RESOURCES if they support the underlying goal of finding work for residents who have served their time. Several states, including Massachusetts, Maryland, and some municipalities have passed ban-the-box laws. It’s unclear how likely the Rhode Island bill is to become law. Larry Berman, spokesman for House Speaker Gordon Fox, D-Providence, said recently the speaker had not decided whether to support the bill yet. A spokesman for Senate President M. Teresa Paiva Weed did not respond to inquiries. So far the bills in other states don’t appear to have triggered a tidal wave of litigation, said Michael Yelnosky, professor of law at Roger Williams University Law School. In labor law, Yelnosky said lawsuits challenging worker termination, rather than failure to hire, are much more common. But even if fears of opportunistic lawsuits don’t materialize, business groups say the state shouldn’t meddle in the hiring process. “The sentiment behind the bill is laudable, but it would change the order of the hiring process and does raise concerns for employers about being able to do background checks,” said Greater Providence Chamber of Commerce President Laurie White. “The idea is to balance the desire to give someone who is a first offender a chance to get back in the workforce, but not do it by compromising the information at an employers’ disposal to evaluate a portfolio of qualifications.” n

increases,” she said. Greater Providence Chamber of Commerce President Laurie White said the key ingredient to success in wellness programs, even ahead of financial resources, is leadership. “It has to come from the top in terms of setting the tone,” she said. The Chamber – which has co-sponsored the wellness awards for the past 19 years – has begun its own wellness program for its 15 staffers, with a ShapeUp program and a walking group. White hopes to expand wellness efforts next year with a focus on nutrition, including the type – and amounts – of food served at the Chamber’s many events each year. At Hinckley, Allen & Snyder LLP in Providence, Director of Human Resources Megan McCormack said a recurring challenge with wellness programs is “that it needs to be fresh and interesting for everyone.” Financial incentives have proven to be popular, with 80 percent of the eligible employees participating in the program in order to obtain a 5 percent discount on the share they pay of their health-insurance premiums. “We don’t really want to make it a penalty,” McCormack said. “It’s really about rewarding good behavior.” Hinckley, Allen also offers most of its wellness programming during work hours, recognizing that its attorneys and support staff have little free time. One employee has lost more than 125 pounds, and begun to run half-marathons, a health journey that began with a company-funded Weight Watchers at Work program. Though she admitted it’s difficult to “draw a direct line,” the law firm did see a drop in health insurance premiums in its most recent renewal period. “We have seen our costs start to drop and I’d like to think the wellness program is part of the reason that is happening.” n

Page 23 June 17-23, 2013 www.pbn.com

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June 17-23, 2013

Should employees use Facebook at work? As a lawyer who focuses on social media issues, I am often asked whether employers should “block” their employees from accessing Facebook during working hours. These employers are conthat their emBrian Lamoureux cerned ployees are wasting time online, engaging in inappropriate online behavior and exposing their companies to liability. In a perfect world, all employees would studiously do their work at their desks, and not visit any websites unrelated to work. However, as we all know, the reality is that Facebook is the new Solitaire, and companies are struggling to strike a balance between controlling their work environment and giving their employees room to engage with others online. This question involves two critical issues – cultural and legal. The workculture issues are outside the scope of this essay, but suffice to say, some employers view social media access as critically necessary for team-building, marketing, employee morale and general camaraderie within the office. Conversely, other employers view social media as completely unnecessary and distracting from the tasks at hand. This article focuses instead on the legal issues, of which there are many. Employers are most concerned about potential liability caused by their employees. For example, an employee could post some confidential or negative information about a client or customer on Facebook. This could give rise to a claim that the employee – and

Guest Column

by extension, the employer – breached some duty owed to the client or customer. Another common Facebook-specific issue involves harassment. Years ago, sexual and other harassment used to occur in hallways, conference rooms and later, via email. Now, much of this harassment has found a new home online, specifically on Facebook. Status updates, pictures, “likes,” “pokes,” and chats are all fertile ground for harassment. Compounding matters is that employers often are unaware of this behavior, unless and until someone brings it to their attention. Worse yet, unlike traditional harassment, this behavior often occurs after working hours, on the weekend, or on personal mobile devices not owned or controlled by employers. Simply put, the explosion of Facebook in the workplace has made it much more difficult for employers to police their workplace. You may be wondering, “Who cares? Why is it important for me to know what’s happening among my employees online? They’re all adults. I don’t want to know.” This is a natural reaction to a complicated problem. However, employers simply cannot bury their heads in the sand and pretend that their legal obligations end when their employees login to Facebook. To the contrary, employers have a duty under federal and state law to ensure that all aspects of their workplace

are free from harassment. Certainly, employers are generally insulated from liability unless they’re aware of the harassment. But, this begs the question: if the harassment occurs via Facebook during working hours on computers owned by the employer, could an employee claim that the company “permitted” the harassment by failing to have policies or restrictions in place to stop the harassment? This is an open legal question, but it is just a matter of time before an employee sues an employer for failing to implement policies or restrictions that might have prevented the online harassment under the employer’s nose. If you think this risk is remote and far-fetched, think again. Most employers have electronic communications policies which state that the employer reserves the right to review and monitor all computer and network activity and to ensure that company computers are being used for work-related purposes and in compliance with all laws. Does this policy now require employers to ensure that their employees don’t use company computers and bandwidth to harass other employees on social media? A strong argument can be made that it does. It should come as no surprise that Facebook stores virtually everything that occurs on its network indefinitely. Very few people are aware of Facebook’s “download your informa-

If your company’s culture would support pulling the plug on Facebook … [consider] doing so.

tion” feature. This tool stores dozens of pieces of information about all of your activity on Facebook, such as your IP addresses, sent and received messages, searches you’ve conducted on Facebook, friend requests that were sent or received, events to which you have RSVP’d, etc. This is a treasure trove of information which is very easy to have Facebook email you in a zip file. It is impossible to delete any of this data unless you delete your Facebook account entirely. Courts are already starting to deal with this evidence in litigation cases. Lawyers are demanding that other parties download and produce this Facebook file. Facebook users spend billions of minutes each day on the site. Therefore, in a sexual-harassment case or a discrimination case, for example, I can think of no more fertile ground for discovery than scrubbing the litigants’ social media profiles for information and leads to other evidence. So, if your company’s culture would support pulling the plug on Facebook at work, you should give some strong thought to doing so. This won’t stop employees from taking “digital smoke breaks” and using their mobile devices to access social media sites, but it will at least remove their ability to do so using your networks and resources. n Brian Lamoureux is a partner with Pannone Lopes Devereaux & West.

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Providence Business News

June 17-23, 2013

COURTESY KIM FULLER PHOTOGRAPHY

COURTESY LIFESPAN

THE MIRIAM HOSPITAL employees, from left, Karen Joost, Jaime Longval and Monica Anderson accept the fundraising award from Miriam President Arthur J. Sampson at the Southern New England Heart Walk in May at Colt State Park in Bristol.

Miriam Hospital receives award for fundraising Employees at The Miriam Hospital recently received the American Heart Association Hospital Cup at a fundraising event to fight heart disease and stroke. Miriam Hospital President Arthur Sampson presented the trophy to Miriam employees Karen Joost, Jaime Longval and Monica Anderson at the Southern New England Heart Walk at Colt State Park in Bristol. The recipients served as company leaders and helped the hospital recruit 333 walkers, who raised more than $58,000 for the fight against heart disease and stroke. “We are thrilled that so many local

hospitals agreed to participate in this friendly competition for the Hospital Cup,” said Heart Walk Director Michelle Karn. “Health care providers see the impact of heart disease every day, and they understand how important it is to raise funds for cardiovascular research.” Overall, 558 walkers represented Lifespan in the heart walk, raising more than $92,000. The American Heart Association uses the funds to finance scientific research, conduct public and professional educational programs, and advocate for public health. n

Calendar of Events

GSA WORKSHOP The U.S. Small Business Administration will host a General Services Administration workshop from 8:30 to 11:30 a.m. at the Rhode Island Procurement and Technical Assistance Center at 315 Iron Horse Way, Suite 101, in Providence. This workshop will review key components of GSA Schedule solicitation, provide guidance on preparing and negotiating a proposal – including the evaluation factors for award – and tips on marketing a GSA contract after it is awarded. Free to attend. For more information or to register, call (401) 278-9173 or email ssundberg@riedc.com.

MONDAY, JUNE 17 HIRING SEMINAR The Rhode Island Founders League presents a hiring seminar with Tom DeQuattro at 5:30 p.m. at 95 Chestnut St., 4th Floor, in Providence. DeQuattro is experienced in account management and full-cycle recruiting in the information technology field. He is an account manager at Bridge Technical Talent, an IT staffing firm East Greenwich. Attendees will learn how to recruit compatible employees for their business. The format is conversational casual, beginning with a brief presentation and followed by an open discussion and Q&A. For more information, visit foundersleague.co.

TUESDAY, JUNE 18 WOMEN’S ADVANCEMENT CONFERENCE Leading Women will present the Advancing Women’s Excellence in Business Conference from 8 a.m. to 4:30 p.m. at Crowne Plaza Providence-Warwick, 801 Greenwich Ave., Warwick. The conference will offer professional development, one-on-one coaching, networking and access to professional resources for women. In celebration of this year’s theme, Pendulum of Change, experts and industry leaders will discuss women’s advancement in the workplace and share strategies to help women navigate changing professional environments. Keynote speakers include Paula Marshall, CEO and chairman of Bama Cos., and Essie Calhoun former chief diversity officer at Kodak. Cost: $169 members, $189 nonmembers. For more information or to register, email delbaum@karlyngroup.com or visit www.leadingwomen.biz.

SOFTWARE-DEVELOPMENT SERIES Tech Collective will offer the first in a series of software professional development events from 5 to 7 p.m. at Eleven Forty Nine Restaurant, 1149 Division St., East Greenwich. The event, which kicks off a series of software-development events, will feature a discussion on Adobe product suite facilitated by Dave Esposito, assistant vice president and principal enterprise architect at FM Global. For more information, call (401) 521.7805 or visit www.tech-collective.org.

WEDNESDAY, JUNE 19 SUSTAINABILITY PRESENTATION The Rhode Island Chapter of the U.S. Green Building Council will host its inaugural Green Eggs breakfast for networking from 7:30 to 8:00 a.m. at Textron, 40 Westminster St., Providence. Sheila Dormody, director of sustainability for the city of Providence, will talk about the city’s environmental-sustainability goals and actions the city is taking to implement a plan. A 15-minute question and answer will follow. Attendance is limited; preregistration is recommended. Cost: $10 members; $15 nonmembers. For more information and to register, call (401) 780-4337 or email custserv@usgbcri.org

RHODE ISLAND COMMUNITY FOOD BANK’S Kids Café program received its third grant from BankNewport, represented here by bank President and CEO Sandra J. Pattie, center in apron. Included are children who benefit from the program and Boys & Girls Clubs of Newport County executives Barbara Rosa, far left, child care director, and Jackie Lewandowski, far right, director of operations, as well as foodbank CEO Andrew Schiff.

BankNewport grant helps combat childhood hunger BankNewport made a $5,000 grant to the Rhode Island Community Food Bank in support of its Kids Cafe initiative, a program that currently feeds more than 600 children at nine sites in Providence and Newport. The food bank, a nonprofit in Providence that solicits, stores and distributes donated food, developed its partnership with the Boys & Girls Clubs and community centers to address the food needs of club members. The program provides workshops, food demonstrations and activities designed

THURSDAY, JUNE 20 EGGS AND ISSUES The Northern Rhode Island Chamber of Commerce will host an event for networking with guest speaker Marcel A. Valois at 7:45 a.m. at Kirkbrae Country Club, 197 Old River Road, Lincoln. Valois is the newly confirmed director of the R.I. Economic Development Corporation. He served, most recently, as vice president of the Economic Development Foundation of Rhode Island Inc., as well as chief operating officer and area vice president of Penske Automotive Group, where he was responsible for overseeing total operations of the Inskip dealer group. Attendees will have the opportunity to meet other business professionals prior to the discussion. Cost to attend the breakfast is $20 for members preregistered; $30 for member walk-ins; $40 for nonmembers. For additional information and to register, call (401) 334-1000 or visit the Chamber’s website at www.nrichamber.com. MARKETING TIPS AND TOOLS The Rhode Island Founders League presents a marketing seminar with Matt Flanagan from 12 to 1:30 p.m. at 95 Chestnut St. Providence. Flanagan, who is vice president of marketing strategy at TwoBolt, a Pawtucket based data-driven marketing company, will discuss how marketing professionals can leverage big data for their companies. The seminar will begin with a brief presentation followed by an open discussion and Q&A. For more information, visit foundersleague.co. BUSINESS AFTER HOURS United Way of Greater Attleboro/Taunton will host a joint business-after-hours event from 5 to 7 p.m. at 247 Maple St. in Attleboro. This is a joint event with The United Regional Chamber of Commerce, the Taunton Area Chamber of Commerce

to promote healthy eating habits in children. “BankNewport is extremely proud to extend our third grant in support of the Kids Cafe initiative in Newport,” stated BankNewport President and CEO Sandra J. Pattie. “It’s the fundamental collaboration between the food bank and the Boys & Girls Club that ensures our local youth have access to nutritious food in a fun and caring environment. We hold the important work of these true community partners in great regard.” n and the Tri-Town Chambers of Commerce. Cost: $5 for members. Register by calling The United Regional Chamber at (508) 2220801. YOUNG-PROFESSIONALS THURSDAY The Greater Westerly-Pawcatuck Area Chamber of Commerce will host its monthly event for networking from 6 to 8 p.m. at the Pavilion Steakhouse, 15A Frontier Rd., Hopkinton. During the event, young professionals can socialize and build professional relationships with other attendees. Guests can stay for mini golf or hit balls on the driving range. A cash bar and free appetizers will be provided. Free to attend. For more information, call (401) 596-7761 or visit westerlychamber.org.

MONDAY, JUNE 24 SCIENCE WEBINAR The U.S. Department of Energy presents a webinar from 2 to 3:15 p.m on ionic liquid pretreatment technologies. Dr. Blake Simmons of Sandia National Laboratories will discuss the latest developments on the discovery, design and optimization of an ionic liquid pretreatment technology that can efficiently process hardwoods, softwoods, agricultural residues and other energy crops. The webinar is free and open to the public. Registration is required. To register, visit www.eere.energy.gov. For more information, email kristin.rubisch@ee.doe. STARTUP MEET AND GREET The Rhode Island Founders League presents a startup meet and greet with Congressman James R. Langevin from 3:30 to 6 p.m. at Tazza caffe & bar, 250 Westminster St., Providence. For more information and to register, visit foundersleague.co or email info@foundersleague.com.


Providence Business News

PEOPLE IN THE NEWS

Pare’s Shevlin receives engineer of the year award John Shevlin, a professional engineer and senior vice president of Pare Corp., was recently named 2013 Engineer of the Year by the Rhode Island Society of Professional Engineers. The award recognizes an engineer who has made significant and lasting contributions to the Rhode Island engineering community. Shevlin started his professional career with Pare in 1986. He graduated from the University of Massachusetts Amherst with a bachelor of science degree in civil engineering. PBN: Tell us about an interesting project you’ve worked on during your career. SHEVLIN: It seems like every project has some unique or interesting aspect to it, but there are two that stand out. The first is the East Bay Bike Path. This was my first engineering project at Pare. I think the project had a very positive impact on the five communities that it passes through. The other project is the Central Artery Tunnel Project in Boston. The overall size and complexity of the design and construction made this a once-in-a-lifetime engineering assignment.

We will go out of our way to serve the needs of our clients – sometimes to our own detriment.

PBN: Part of RISPE’s mission, and part of Engineer of the Year award criteria, is to promote the ethical and competent practice of engineering. How do you demonstrate this in your work? SHEVLIN: By making engineering assessments and designs based on sound engineering practices – even if these are sometimes at odds with a client’s preconceived ideas about a project. Pare has always been very clear with its managers and staff that we must make decisions based on sound engineering and science. We will go out of our way to serve the needs of our clients … but we always make certain that our work is based on sound engineering and does not negatively impact the health, safety and welfare of the public. PBN: Any advice for those about to enter the workforce? SHEVLIN: Get industry experience wherever you can find it, even while still in school. Prior to joining Pare, I and most of my colleagues completed summer internships with engineering, construction or public transportation or utility agencies. This experience is invaluable in helping to identify the type of work and/or engineering disciplines in which you want to specialize. n

BANKING Rick Tjader has been appointed senior vice president, director of project management at The Washington Trust Co., where he will be responsible for technology project management and organizational project planning. Tjader has more than 30 years of finance experience. He holds an MBA in finance from Northwestern University.

FOOD SERVICE

Dr. Song-Min Kosofsky has joined the medical team at WellOne Primary Medical and Dental Care. Previously, Kosofsky worked as a family physician at Thundermist Health Center in South Kingstown. She received her doctor of medicine degree from Saba University School of Medicine in Saba, Netherlands-Antilles, and completed her residency at Louisiana State University Health Science Center.

Lou Cruz has been appointed executive chef at Ten Prime Steak & Sushi. Cruz previously worked as a sushi and sous chef at the Chow Fun Food Group as well as chef de cuisine at Cav in Providence, where he prepared daily orders and menu specials and assisted with the development of the seasonal menus. Cruz received an associate degree in culinary arts from Johnson & Wales University.

Dr. Ikenna Okereke has been appointed chief of thoracic surgery at Rhode Island Hospital and The Miriam Hospital. He previously served as chief of thoracic surgery at the Richard L. Roudebush VA Medical Center in Indianapolis. Okereke received his undergraduate degree from Johns Hopkins University and his medical degree from Washington University School of Medicine.

HEALTH CARE

Melody Shechtman has been hired as the admissions coordinator at Saint Elizabeth Home. Shechtman previously worked in discharge planning at Fatima Hospital and Kent Hospital. She earned her bachelor of science in nursing and master’s in health services administration at Salve Regina University in Newport.

Meghan Coffey has been appointed assistant director of nursing at Saint Elizabeth Home, where she has worked for the last six years. Coffey most recently held the position of admissions coordinator. She earned her bachelor of science in nursing from Rhode Island College.

Page 27 June 17-23, 2013 www.pbn.com

HEALTH INSURANCE

LAW

John C. Langenus has joined Blue Cross & Blue Shield of Rhode Island’s board of directors. Langenus has 35 years of experience in the health-insurance industry. Previously, he was the president and CEO of Anthem National Accounts. Langenus received a B.A. in English from Rutgers University and his MBA from the University of Hartford.

John E. Ottaviani has joined Partridge Snow & Hahn LLP as counsel. He will advise emerging technology and other privately held businesses on organizational, operational and financing matters. Ottaviani received his J.D. from Columbia University School of Law and his bachelor’s degree in mathematics and government from Bowdoin College.

HOSPITALITY

MARKETING

John Gibbons, executive director of the Rhode Island Sports Commission, has been elected to the board of directors of the National Association of Sports Commissions, where he will work closely with the states’ interscholastic and community organizations. He has more than three decades of experience in the travel and hospitality industry. He received a bachelor’s degree in tourism and travel management from the University of New Haven.

Nina Beacher, has been named real estate marketing director for The Carnegie Abbey Club and Newport Beach Club properties. Beacher brings 11 years of property management, marketing and sales experience to her new position. She holds a bachelor’s degree in social welfare with a concentration in science from Bloomsburg University of Pennsylvania.

INSURANCE Danielle SanAntonio has been named marketing specialist at Gallo| Thomas Insurance Agency, where she will oversee creating, coordinating and implementing all marketing campaigns, including advertisements, branding initiatives, trade shows, website development and social media. Danielle holds a bachelor’s degree in communications from Washburn University.

Denise A. Eddy has been named vice president of New England sales and development at the Carnegie Abbey Club, where she will oversee development and overall marketing efforts. Previously, Eddy served as vice president of New England development at O’Neill Properties. She holds a bachelor of science in mechanical engineering from Western Michigan University. n

SAVE THE DATE – JULY 25, 2013 The 9th Annual 40 Under Forty event THANK YOU TO ALL WHO APPLIED Results will be announced July 24


Page 28 June 17-23, 2013 www.pbn.com

OPINION

Providence Business News

Editorials

Rhode Island lucky to have Deborah Gist The more difficult the change, the more determined the resistance. Just ask R.I. Commissioner of Education Deborah A. Gist. Fresh off a new two-year contract to lead the state’s elementary- and secondary-education efforts, Ms. Gist is not backing off her reform agenda. And Rhode Islanders should breathe a sigh of relief for that. The path to the contract renewal was not a simple one, as Ms. Gist’s opponents – many of them teachers – fought against it. But what are they fighting for, maintaining the status quo? Rhode Island is among the states spending the most per pupil in the country. At the same time, the educational outcomes are by any measure – including the now-controversial New England Common Assessment Program – substandard. It is clear that whatever has been done in Rhode Island for years is not working, whether academic achievement is taken into account or workforce readiness is the measuring stick. Ms. Gist has been willing to take on those interests that admit now that reform is needed but really are not interested in reform upsetting their own apple carts. Call it NIMC-ism (that’s Not In My Classroom). Ms. Gist is the key reason that Rhode Island has been awarded two federal Race to the Top grants, injections of funding that help make the necessary changes possible. Her new contract is not only well-deserved, it should have been made longer.

Bryant program does far more than teach Despite the often overwhelming negativity in the public discourse about Rhode Island’s economy and its prospects – 56 percent of respondents to a recent PBN.com poll on this topic said the state deserves all the raspberries it receives – there are many good stories hereabouts, not the least of them being the Bryant University international-business senior practicum. The practicum is the culminating springsemester project for those students enrolled in the international-business program and connects teams of three with companies looking to expand business outside the United States. This year more than 20 companies took part, and Bryant has created smaller versions of the program for the summer and fall months. Companies point to real business that has resulted from taking part in the program, including opening new markets in Europe, Latin America and Asia. One company said that the student work was so good that a call made to research an opportunity resulted in the foreign contact wanting to place an order on the spot, while another was so impressed by a student’s work that it hired her, and she now works on developing international markets. So the next time someone bad-mouths what’s happening in the Ocean State, ask that they read up on Bryant’s international-business senior practicum. n

Some fatherly advice There was a little boy with a bad temper. His one I met should go in a Rolodex file along with a father gave him a bag of nails and told him, every little information about that person to help to cretime he lost his temper, to hammer a nail in the atively keep in touch. You never know when your back fence. The first week the boy had driven 37 paths might cross again. nails into the fence. It gradually dwindled down as Greg Hague, an Arizona attorney and businesshe discovered it was easier to hold his temper than man, has come up with a website which he calls to drive those nails into the fence. Savvy Dad (savvydad.com). Every day, he features Finally the day came when the boy didn’t lose a new story from a son or daughter on some special his temper at all. His father suggested that the boy experience with their dad and how it positively imnow pull out one nail for each day that he was able pacted their life. His readership is nearing 40,000. to hold his temper until all the nails were gone. His book, “How Fathers Change Lives,” is now Then the father led him to the fence and said, available from his website. “You have done well, my son, but look at Greg shared a lesson from his father: the holes in the fence. The fence will never “People focus on role models, but it’s more be the same. When you say things in anger, effective to find anti-models -- people you they leave a scar just like this one. A verbal don’t want to resemble when you grow wound is as bad as a physical one.” up.” With Father’s Day fresh in our rear Lise Johnson told the story of her faview, I’d like to share some of the fatherly ther’s devotion to her mom, who became advice I received while growing up, and esterminally ill. When she was moved to hospecially while getting my start in business. pice, he stayed with her around the clock. Jack Mackay taught me about time He helped feed and bathe her. One nurse management. I still remember him telling told Lise that she was engaged when she me, “If you want to go fishing tomorrow, be started her mom’s care, but no longer. “I on the dock at 2 p.m. sharp.” There I was, didn’t know devotion like that existed in at 2:05 p.m., waving bon voyage to my dad Harvey Mackay this world. I will find a man like your dad.” who was driving away in the boat withOur mutual friend Randy Garn, a Utah out his fishing buddy. Tough love, lesson businessman, remembered how, as a 16-year-old, learned. he asked his dad if he could borrow the car on a FriMy dad insisted that 25 percent of my time day night. His dad said yes, but to be home by 11 should be spent on volunteering, advice I’ve conp.m., or the upcoming prom was at stake. Well, Rantinued to follow. In addition to the benefit to the dy lost track of the time and got home after 1 a.m. organization, you have an unusual opportunity to hone your selling skills, learn how to run meetings, He tiptoed upstairs to his room and thought he was prepare reports, serve on committees, supervise safe until he slid into bed and discovered he wasn’t others, handle rejection and many other skills that alone! His dad was lying there waiting for him. “I’m not mad, but the prom is now gone,” his dad can help you in your career, all while serving your said, without anger. “Randy, I love you so much, community. “One of the most powerful things you can do to but unlike what you did tonight, I do what I say.” n influence others is to smile at them,” my dad said. Mackay’s Moral: It’s funny about fatherly adNot to be outdone, my mother used to tell me that a vice: The better it is, the harder it is to take. smile is an inexpensive way to improve my looks: “If you’re happy, tell your face.” About reputation, my dad quoted the adage, “You Harvey Mackay is the author of the New York Times spend your whole lifetime building a good name best-seller “Swim With the Sharks Without Being and reputation, and one foolish act can destroy it.” Eaten Alive.” He can be reached through his Dad was a big believer in aphorisms, which is why website, www.harveymackay.com, by emailing I end every column with a Mackay’s Moral. harvey@mackay.com or by writing him at Most importantly, Jack Mackay taught me about MackayMitchell Envelope Co., 2100 Elm St. SE, networking. When I was 18, he told me that every- Minneapolis, MN 55414.

Mackay’s moral


OPINION

Providence Business News

Page 29 June 17-23, 2013 www.pbn.com

R.I. must change the debate in order to move ahead At the present time, Rhode Island is consumed by two different issues. The first of these concerns our state’s approach to economic develDo Leonard Lardaro opment. we rejigger the R.I. Economic Development Corporation into a Department of Commerce, or proceed with a marginally changed EDC but give the governor a more substantial hand? The second concerns the extension of Education Commissioner Deborah A. Gist’s contract. The debates on these topics have been very contentious and separate. But what should be happening instead is a recognition that both of these issues are fundamentally related. For as long as I can remember, Rhode Island has never included the primacy of education and the skills of its labor force among its economicdevelopment tools. Instead,

Guest Column

we have relied on tax deals or incentives, hoping these would overcome any deficiencies with our state’s labor force. But Rhode Island’s most glaring economic-development deficiency is not its tax rates, although they are a problem. Rather it is the lack of skills of its labor force, which negatively impacts the cost of doing business here. Thus the economic-development debate we should be engaged in is: What is the appropriate integration into economic development of the improvement of the skills of our state’s labor force? In addition, we need to change the way things here are done, most notably the incorporation of in-house due diligence as a fundamental element of our approach. Unfortunately, our elected officials tend to think linearly and break these interrelated issues apart. During the manufacturing era that might not have been such a large prob-

lem. But it is today. Absent this integration, the potential restructuring of the EDC and its replacement with a Department of Commerce is little more than a reshuffling of resources that currently exist, with the following three issues not addressed by the proposed changes. First, there are no meaningful specifics about ways to improve Rhode Island’s noncompetitive tax and cost structure, which the whole world is well aware of. Second, it is implicitly assumed that the skills of our state’s labor force are independent of the cost of doing business. Employers know all too well that the lack of skills of a state’s workforce raise both hiring and training costs.

Due diligence of cost/benfits here is the exception rather than the rule. I have yet to hear anything regarding any potential reorganization that would make in-house due diligence a central feature of our approach to economic development. passionThe ately debated issue of whether or not the contract of Deborah Gist should be renewed has been settled for now, with a two-year extension. But the discussion should continue. She is not perfect, and she inherited a very difficult job. Like Rhode Island’s physical infrastructure, its human-capital infrastructure has far too many potholes. Gist is in the process of phasing in the requirement that high school seniors successfully demonstrate

Rhode Island has never included the primacy of education … among its economic-development tools.

partial proficiency on the New England Common Assessment Program exam as but one of several high school graduation requirements. Is this too difficult a requirement? If we abandon that, what is the alternative? Do we go back to what we have been doing? If so, how would that remedy the deficiencies with our state’s labor force skills that raise the cost of doing business here? Rhode Island must meaningfully adapt its approach to economic development to the requirements of the information age. Modifying an organizational chart while failing to integrate education, skills and due diligence as primary elements will effectively condemn Rhode Island to continued economic mediocrity. n Leonard Lardaro is a professor of economics at the University of Rhode Island and the author of the Current Conditions Index.

Attitude is important to make health care reform work It was Henry Ford who said, “Whether you think you can or you think you can’t, you’re right.” His wisdom has an amazing array of applications, and our current effort to overhaul the health care system is certainly Ted Almon one. Back in the 1990s the Clinton administration attempted sweeping reform of a system that even then was escalating in cost at an alarming rate. The Clinton plan was called managed competition, or unofficially – Hillarycare. I didn’t think it would work, and I actively advocated against it in much the same way many critics of the Patient Protection and Affordable Care Act, or Obamacare, are so vehemently resisting today. What I didn’t realize then, was that our victory over Hillarycare would sentence us to 20 more years of the dysfunctional status quo. Two decades more of health-insurance premiums rising at twice the rate of inflation, and a health care system growing ever further from meeting the needs of patients.

Guest Column

Grudgingly I came to realize that in our well-meaning zeal to get reform right, we had shot ourselves in the foot. The same is true now. It is Obamacare or the status quo. There is no Plan B. Many Obamacare detractors favor a more market-based, less governmentcontrolled system. So did I back in the ’90s. So what happened to the omnipotent but invisible hand of the markets in which we all had such faith? Over time I have come to realize that health care is a social program that simply can’t be made to heel to normal consumerism. For one thing, we have a federal law requiring all hospitals to treat anyone who shows up in their emergency department regardless of ability to pay. That law was signed by the patron saint of the Republican Party, Ronald Reagan. The Affordable Care Act isn’t perfect either, but it does have several powerful elements of reform. Health-insurance exchanges are one. You see, today’s Republicans insist on preserving commercial insurance as the financing mechanism for health

care. But health insurers only compete on their margin, administrative costs and profits, which make up about 20 percent of premiums. The rest is medical costs they pay to health care providers. But the system is so fragmented that no insurer has the leverage to drive reform back down through the delivery system. As essentially a cost-plus business, insurers actually benefit from rising costs. The health-insurance exchanges set up by Obamacare serve to consolidate the financing of care through a single channel, creating the market leverage necessary to effect real payment reform. Health care professionals know that will transform the delivery system quickly and in a most meaningful way. Last week, the nascent California insurance exchange announced its first round of premium bids from the dozens of insurers there. To many the rates were surprisingly low in light of the gothic predictions from some insurers and their actuaries. Forbes ran several angry columns denouncing the low rates as misleading

and even an “apples and oranges” comparison to existing premiums there, saying the Obamacare exchange rates were far higher. The rates will be higher for some, but they will also be lower for others as the ACA compresses the existing rate bands insurers can use to set premiums. The existing rates aren’t available to everyone, but the ACA/Obamacare rates are. It is easy to offer low rates if you can select only healthy customers. Reform is difficult even if everyone is on the same side. The ACA will surely need to be tweaked. But it won’t be able to overcome obstinate resistance at every stage of its roll out. So if you are hell bent on defeating Obamacare, you could well be successful. But your reward will be another 20 years of costs spiraling out of control. Can we afford that? I think we should decide we can make it work. n Ted Almon is president and CEO of the Claflin Co. and co-chair of the executive committee of HealthRIght.

Reader response A look at PBN.com’s weekly poll, plus this week’s poll June 2-8

This week’s PBN.com Poll

Are Rhode Islanders too negative about the state’s economic climate/performance?

Are you giving more often to charities

Page views: 753

today than a year ago?

• Yes • No • I’m not sure

To vote in this week’s poll, go to PBN.com and follow the link on the home page.

Op-Ed, Letters policy: Providence Business News welcomes opinion pieces as well as letters from its readers on local business, financial and political issues. Opinion pieces and letters cannot have been published anywhere else before appearing in PBN. They should include a daytime telephone number and e-mail address. All pieces may be edited for space and clarity, as well as for length. Send to: Editor, Providence Business News, 400 Westminster Street, Suite 600, Providence, RI 02903, editor@pbn.com, or by fax: (401) 274-0670.


Providence Business News

30 n www.pbn.com

Bryant from page one

six companies in 2009, the program has quickly grown in popularity. This past spring semester, more than 20 businesses took part. In the practicum, teams of three students each are assigned to work with businesses on specific international projects, with oversight from Bryant faculty and staff from the Chafee center. At the end of the semester, they present a written and oral report to both the client and a panel of judges offering specific suggestions for how to enter new markets overseas. “I like to say it is a win-win-win,” Cohen said. “It’s a win for the student, the client and the university.” The Rhode Island economy may well be a long-term winner as well. Several companies, such as Bliss, can point to new business opportunities and newly opened international doors as a result of their participation. As word of the program’s effectiveness has spread, Cohen said the school quickly compiled a waiting list of businesses wanting to take part. With a limited number of students in the IB major – Cohen cites rigorous academic requirements, including overseas study and fluency in at least two languages as reasons why enrollment hasn’t risen more – the program has been expanded to include smaller components in the fall semester and

Paxson from page one

PAXSON: One fact that is very important for people to recognize is that the average level of debt is just that; it’s an average. When you look at students across the United States, there is a lot of variation in how much debt students take on. And it turns out that a very small fraction of students are leaving college with the crippling levels of debt that would prevent them from doing anything but trying to meet monthly payments. At Brown, the average level of debt for students who have financial aid when they leave is $20,000. That is less than a new car loan. When you put it in perspective, the monthly payments are not that high and that level of debt is not significant enough to change people’s career choices. This doesn’t mean we shouldn’t worry about debt – we should. But it’s more a question of deciding what an acceptable level of debt is than going to a system of no debt. PBN: Some Ivy League schools have been very aggressive with financial aid. Is Brown determined to follow them? PAXSON: Brown is very much in line with our peers. Everybody does it in a slightly different way, and universities that have higher endowments are generally a little more generous than universities with lower endowments, but we are all taking the same approach. That approach is that low-income families are eligible for a full ride. Then as family income goes up, the burden shifts more to families and students. One thing I am concerned about is the affordability for middle-income students. If you look at the statistics for Brown, families [who make] $150,000 per year and less have actually seen declines in net tuition in real terms over the last decade. Where we have seen real increases in net tuitions – sticker price minus financial aid – is in families [earning] about $150,000 to $225,000

proach the work on our own,” she said. the summer months. “We made it into a year-round pro- The team found distributors and wholegram so we can satisfy the demand salers who might be good fits for Nattha has built up,” he said. “The more co’s product line. “They gave us a lot of companies hear about the work the freedom. It was a great experience for students can do, the more demand we us, to put everything we had learned in the classroom to use in the real world.” expect.” Her team won that semester’s comAt keepsake and ornament maker ChemArt in Lincoln, Marketing Man- petition and during the end-of-project ager Allison Houle said four groups of presentations, Barkalova’s professionstudents have now worked alism caught the eye of Alex and Ani Group CEO on projects there, includGiovanni Feroce, who ofing a team this spring that was asked to research opfered Barkalova a full-time portunities in the Japanese job before she graduated. market for the company’s “We put in a lot of hard work on the project,” said Frank Lloyd Wright JewBarkalova, who is now a elry Collection. Students senior international busiexplored the feasibility of expansion into Japan ness analyst at Alex and overall and then helped Ani, working on overseas identify possible Japanese projects. “There was a distributors. lot of practice, a lot of re“We have not yet implesearch and teamwork and team issues to be resolved. mented any of their work, but we do plan to,” Houle Alex and Ani first utiGerald Cohen said. “Each year we work lized the IB practicum John H. Chafee Center with the students, we are program in 2011, gaining for International Business astonished at the quality assistance for a planned trade specialist and quantity of work they move into Spain. Based in provide. We would recomlarge part on that experimend the practicum to any local busi- ence, the company last year announced ness looking to expand internationally.” it would donate $1 million to the InterElena Barkalova was a senior in national Business program. At the time, Feroce said the partner2011 when she was part of a team that worked with Natco Products Corp. in ship with Bryant had “proven extremeWest Warwick, helping the manufac- ly valuable in our global business-expansion strategy.” turer explore expansion into Mexico. While students work closely with “We worked with the COO directly, and they let us figure out how to ap- Cohen and other advisers at the school,

‘The more companies hear about the work the students can do, the more demand we expect.’

June 17-23, 2013

Cheryl Merchant, president and CEO of manufacturer Hope Global in Cumberland, said businesses can maximize the value they get from the student groups by assigning an employee to work closely with the student groups as well. “Going forward, I plan to have somebody be my eyes and ears and work with them,” she said, noting that Alex and Ani has used that approach with strong results. “If you could take a project and decide, this is really worth it, and dedicate someone to offer hands-on assistance, I think you could get even more value out of it.” Hope has twice worked with Bryant practicum students and both times received research they could act upon immediately, Merchant said. In fact, one group was busy gathering information on a potential new market when a research phone call nearly turned into a sales call. “They had to stop the call and hand it off, because they were asking for samples and wanted to place an order,” she said. Frank Bliss, meanwhile, said he plans to ask the next group of students to help with a planned push deeper into South America, where a large Catholic population represents an attractive market for the firm. He said other businesses with international ambitions should give serious thought to getting involved. “If somebody is in business and they aren’t getting involved in something like this, they really need to secondguess that,” he said. n

per year and over. PBN: Is Brown looking to compete with schools, such as Stanford, that are aggressively rolling out new online education products? PAXSON: Brown is involved in the online world. We are a member of Coursera. We have three [Massive Open Online Courses] in progress as we speak, and we have been developing some blended online master’s programs. Those are programs where students spend part of their time in person on campus and then do online work and collaborate virtually during the course of the program. I like that model a lot, and I think that is one we will continue to push on. I think of this online world as still being in a very experimental stage. We need to think carefully about the quality of the education that’s being delivered. PBN: How is technology changing the physical demands for colleges, the need for large buildings and traditional campuses? PAXSON: Technology is changing our facilities needs in many ways. One is it is changing the whole way we think about libraries. Of course it is very important to maintain libraries that are archival, that have the manuscripts and materials you can’t find anywhere else. But much of the material that is in libraries now is in digital form. So you look at Brown’s science library, and we have been clearing off floor after floor because the scientific journals are no longer in print. What that gives us is the opportunity to use that space and think about ways to bring students to the library … to engage in very innovative, educational experiences. PBN: This spring people took the decision to build the new engineering school next to the old one, and the findings of the facilities study, as a sign that Brown would not be a major source of investment in Providence outside College Hill. Is that an accurate impres-

PBN PHOTO/TRACY JENKINS

KNOWLEDGE IS POWER: Brown President Christina Paxson says the school is committed to development of the Knowledge District, where the institution currently has its medical school and administration.

sion? PAXSON: We have been involved in strategic planning all year and a big component of that was campus planning and taking a look at where we expand. We know we are going to expand, but in what parts of the city should we expand and how should we do that? The planning effort was fascinating, and we came away from that with principals we will use in the future. One was that core academic functions that involve lots of undergraduates belong on College Hill. … That said, we are very committed to development in the Jewelry District. We have 1,000 people there now. Our medical school is there, administration is there, continuing education, which does a lot of these innovative master’s programs, is there, and we have research facilities there [and interest in doing other things]. PBN: Any you can mention? PAXSON: A conclusion that came out

of the planning was that some of the research enterprises that don’t tie tightly into undergraduate education would be great candidates for the Jewelry District. The Jewelry District is halfway between College Hill and the hospitals, so things that are health-related will be prime candidates for placement there. PBN: Some schools have aggressively built satellite campuses around the world. Does Brown have any interest in that? PAXSON: Brown has decided not to go the satellite-campus route. … That doesn’t mean we won’t be more involved in the international market. Brown has an increasingly international faculty. We are building the Watson Institute for International Studies, so these links abroad are very important. The strategy that fits Brown better is to develop partnerships with organizations around the world. n


Providence Business News

June 17-23, 2013

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Providence Business News

June 17-23, 2013

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06-17-2013 Issue