Joshua Lagan ’14, one of the Top 10 Student Sports Business Leaders in the country, received the BIG Initiative Award at the Michigan Sports Business Conference(MSBC)in October. Joshua has worked with ESPN as a Statistics Analyst and at MasterCard as a Marketing Analyst. In addition, Joshua is the co-founder of SportsBusinessU, a website dedicated to creating a community for current and future sports business professionals. Among his other accolades, Joshua was named a “Rising Star in Sports Business” by SportsNetworker and a “Thirty under 30” winner by Sports Launch. Joshua plans to follow his passions for strategy development, technology, innovation, and consulting.

Joshua Lagan ’14, third from left, receives the MSBC BIG Initiative award.

This article first appeared in the UConn Business magazine, Volume 2, Issue 1 (Fall 2010)

UConn Faculty and Northeast Utilities Collaborate for the Finance Academy

David McHale, Executive Vice President and Chief Financial Officer of Northeast Utilities System, was reading a book a few years back about why people with original ideas succeed in business, when he had an idea of his own.

The book, entitled Mavericks at Work, advocated taking risks and investing in your employees as a way of moving your company to the next level – a concept that appealed to McHale and led him to the idea of creating an in-house college curriculum for his own employees that is called the Finance Academy.

The two-and-a-half year program, which began in 2008, is taught in partnership with UConn School of Business Executive Education faculty and experts from NU.

The company also partnered with the UConn School of Education to help train NU employees to be teachers.

“The idea was really born out of the need to support the organization as we strategically navigate through the new energy economy,” said McHale. “But fundamentally it was to make them better business people and help drive good answers for this company. My  sense was that the world was getting more sophisticated and complex and we needed a work force that was going to keep pace with this. The bigger issue was how to do it.”

McHale knew what he didn’t want – a general exposure to business concepts – and that led him to UConn School of Business’s Executive Education Program, which stresses  experiential learning for its students. Going in deep, and actually testing the theories that are taught in the classroom, was exactly what McHale had in mind.

The end result is an interesting mix of general business classes, in subjects such as accounting and finance, taught by School of Business professors, and industryspecific courses run by experts from NU. Many of the latter courses also involve simulation of real-life job experiences, such as rate case hearings before the state Department of Public Utility Control and investor presentations for the sale of company stock and bonds.

“I wanted this program to have a special feel that was interesting, where people would want to engage and work in teams and experience something away from the norm,” said McHale. He participates enthusiastically in many aspects of the program, such as playing the role of Attorney General Richard Blumenthal during rate case hearings and getting up in a bucket truck to explain the importance of NU’s capital program.

UConn graduate Steven Casey ’87, now Manager of Financial Development at NU and director of the Finance Academy, said he had 60 employees apply for the 30 spots in program the past two years.

“We’re making a significant investment in our own employees and, with UConn’s help, we’re customizing it to what they need to know for our business so they can come back and apply the learning to the job they’re in or a future job down the road,” Casey noted. NU will spend about $275,000 with UConn on the academy in 2010, when three different classes with a total of 85 to 90 participants will take place simultaneously.

The core offering of the academy is a five-semester program that begins with a four-hour online course covering the basics of electricity and then progressed to fundamental classes on the electric and gas markets. After that, students move on to accounting, revenue requirements and rate design, and finance.

The basis of the revenue requirements and rate design course is the simulated rate case, which comes at the end of six weeks of classroom learning, Casey said. Students work in groups of five or six and each team has to create a rate case as if they were preparing it for the DPUC.

“People just love it, but it’s really a lot of work and very nerve-wracking,” Casey said, adding that he, McHale and other NU executives play different roles in the mock hearings.
Sal Giuliano, the Manager of Corporate Real Estate at NU and a UConn graduate from the
Class of 1980, recently completed the revenue and rate design course. “I had a little bit of apprehension going in because the mock hearing was very formal and structured as much as possible to mirror the actual hearing at the DPUC,” Giuliano said. “But it was very insightful and I certainly got an appreciation for the folks who do this work for the company.”

Part of the appeal of the program is that employees such as Giuliano, who has 25 years with NU, work side-by-side with people who have recently started their careers – for instance, Mohammad Nauman ’07 MBA, who has been employed as a Risk Management Analyst at Northeast Utilities for about two years.

“I’m really grateful that I was accepted into this program,” Nauman said. “The things that I have learned, I never would have learned. Never. The whole experience has been great.”

Dr. Shantaram Hegde, Professor of Finance and fomer associate dean of Graduate Studies at the School of Business and director of the Executive Education program at UConn, said he and other UConn faculty worked with NU officials for six months to develop the program.

“It was an intensive effort to develop this program. In a conventional program you learn and then apply what you’ve learned. We wanted to accelerate that process in this program,” Dr. Hegde said. “Northeast Utilities has an enlightened management and a very strong conviction that empowering their employees is a good investment.”

The partnership with NU is good for the school on a number of levels, Dr. Hegde said, because it offers faculty an opportunity to learn more about the gas and electric industries.

“We typically look at a larger cross-section of firms. What this allows us to do is to dig deeper into a particular industry and see how the financial management operational tools can be applied to that firm’s challenges and problems,” said Dr. Hegde. At the end of the day, that’s what McHale wants his employees to do, too, which is why the company is also offering a case studies course in which employees study business concepts and then apply them to NU.

“Although it’s still a little early in the program, I think we are already developing better business people,” McHale said. “And I would bet that when we look back five years from now, we’ll see a lot of people who have contributed something significant to the company.”

This article first appeared in the UConn Business magazine, Volume 2, Issue 1 (Fall 2010)

Finding value in your firm’s law team

Today’s difficult economy demands that firms find new sources of competitive advantage.  Recent research by Professor Robert Bird finds an answer in one of the most unlikely of sources – a firm’s legal environment.

For too long, Bird explains, companies have overlooked an opportunity for capturing marketplace value right in their own offices. “We know that corporate counsel can skillfully evaluate risk, manage litigation, and confront regulatory challenges. We also know that the legal department is too often shunted aside when big business questions arise.”

When executives roll out a new product or consider a merger, lawyers are usually consulted for their legal advice but rarely their business advice. “Legal experts can be an incredible source for corporate decision making,” Bird’s research shows. “Lawyers and
non-lawyers alike can use their knowledge of the legal and regulatory environment to discover new markets and expand on existing ones.”

Examples of using law as an opportunity already exist. While most executives viewed Sarbanes-Oxley as yet another regulatory burden, a visionary few used SOX to improve their firm’s investor ratings and streamline financial controls. These firms used compliance with SOX as a vehicle to consolidate key financial processes, eliminate  redundant information systems, broaden responsibility for financial controls, and integrate distant business units with new acquisitions. These SOX firms have attracted the attention of investor rating services which evaluate the strength of the financial control environment as a positive factor. Such rating services have a significant impact on investor relations
and the firm’s cost of capital.

Bird’s research identifies numerous examples of the business benefits of a legal perspective. When the head of PepsiCo’s Frito Lay division became concerned over the increasing threat of health-related product liability lawsuits, he worked closely with in-house attorneys to find a solution. Instead of simply perceiving these lawsuits as threats, managers and lawyers reframed the problem as an impetus to create new products. Reformulating existing products to satisfy consumer demands for healthier foods, in 2004 PepsiCo became the first consumer products company to remove trans-fats from its snacks, and as a result, captured a significant first-mover marketing advantage from the decision. “These events are scattered throughout firms and in the
pages of academic journals,” Bird explains, “but are rarely tied together as pieces of a
firm’s overall business plan.”

A large retail firm being sued for firm-wide sex discrimination was burdened with a cumbersome judicial consent decree. The firm could have responded by challenging the consent decree in court, looking for loopholes, or by simply paying a penalty and promising to follow the law. Instead, the company instituted an automated hiring promotion system that allowed applicants or employees to enter into a pool for any position that met their
qualifications and interests. The system reduced the effect of subjective biases, expanded the pool of applications for every position and promoted the advancement of employees that otherwise might not have sought or attained higher positions. For example, when one female employee applied for a job as a cashier because she believed “that’s where women went,” the automated system bumped her to a higher job level based upon her extensive prior experience. This system was so successful that Home Depot voluntarily expanded it beyond the jurisdiction where it was originally imposed by the consent decree; the system is now used company-wide.

Professor Bird’s innovative work has received accolades from academic circles: “Pathways of Legal Strategy,” was published in the Stanford Journal of Law, Business and Finance and received a junior faculty best paper award. The article explains that firms knowingly or unknowingly interact with their legal environment in their ordinary operations. Bird discovered that while some firms avoid legal obligations altogether, some merely comply with the letter of the law and overlook hidden value. “Each possibility is available,” Bird says, “but most companies just comply with the law and move on. That’s a lost  opportunity for firms.”

Bird is currently finishing a working paper that is already cited in the literature: “Law, Strategy and Competitive Advantage.” This paper explores how a firm’s past experiences might influence whether its executives view the legal environment as a threat or an opportunity. The experiences of individual managers with government regulators or the legal system might influence how strongly they perceive rules as barriers. The presence of legal advice in-house or outside the firm might impact the strength of relationships that develop between lawyer and manager. Certain heavily-regulated industries that interact
with government officials and navigate complex regulations on a regular basis might be in a better position to think strategically about law than their less-regulated counterparts. “We just don’t know why one firm uses law skillfully and another does not,” Bird says.  “Considering the possible sources helps answer this important question.”

Bird’s work has also attracted attention from other universities. Presenting at the University of Michigan’s Ross School of Business, Bird spoke with fellow instructors interested in incorporating legal strategy into scholarly research. “We were intrigued by this timely and innovative concept,” said Lynda Oswald, the Michael R. and Mary Kay Hallman Fellow and
Professor of Business Law. “We invited Professor Bird to speak to our faculty, and his research was well received.”

Faculty from the Opus College of Business at the University of St. Thomas also invited Professor Bird to speak about his research. The focus of the lecture was to help students understand the importance of the legal system in the business environment. “We held a forum that was well attended by students and faculty,” explained Michael Garrison, Professor of Ethics and Business Law and Department Chair, “and his work helped our undergraduates think of regulation as a opportunity and not just a cost.”

Professor Bird was also invited to present at two universities in Turku, Finland. Faculty  there were interested in how principles of strategy applied to an emerging scholarly  movement in Europe known as proactive law. “The University of Turku and the Turku University of Applied Sciences were most gracious,” Bird said, “and offered a wonderful opportunity to interact with international scholars interested in the intersection of law and business.” In addition, Bird is serving as a special topic advisor for a forthcoming issue of the American Business Law Journal on the topic of “Law as a Source of Strategic Advantage.”

There is much that can be done to take advantage of legal opportunities. Top leaders can  treat their company counsel as full partners in the business planning process. Managers  can involve lawyers earlier in contract negotiations and budding legal problems. Formation of teams with legal and non-legal experts who work closely together can help develop  creative and effective solutions that impact regulation.

Furthermore, non-legal personnel who manage compliance, ethics, or other regulatory-related functions can be given greater decision making power to exploit opportunities and participate in decision-making. They should also be allowed to take a more proactive attitude toward planning for anticipated changes in the law. If, through government  contacts, a compliance department learns that change is on the horizon, preparation can cut costs, avoid last-minute efforts to comply, and earn goodwill with regulators. The less a decision-maker perceives a legal rule as an immutable barrier, the more likely potential  opportunities for competitive advantage will become evident.

Work in this area is just beginning and Bird analogizes the research to early debates over the role of information technology in the 1980s and 1990s. “About twenty years ago,” Bird said, “firms openly questioned the value of IT. Some executives saw little benefit beyond back order processing. Writers questioned whether it could provide a competitive  advantage at all. Law today is like IT twenty years ago. Law is now the last great resource
of competitive advantage, and with ongoing vigilance, managers can unlock this untapped opportunity inside their own companies.”

STUDIES CITED

Bird, Robert C., “Pathways of Legal Strategy,” Stanford Journal of Law, Business and
Finance, vol. 14, iss. 1, pp. 1-41.

Bird, Robert C., “Law, Strategy, and Competitive Advantage,” http://ssrn.com/abstract=1327795.

This article first appeared in the UConn Business magazine, Volume 2, Issue 1 (Fall 2010)

Family Business Keep Hope Alive

Drive down any Main Street and, more often than not, you’ll pass a sponsor of the town’s  little league, a provider of scholarships for high school seniors, and members of the town  council. You may also pass by architects who designed your office space, a bakery that
supplies bread and holiday treats to your local grocery store, or manufacturing facilities that make everything from plastic gears in your washing machines to springs in your cell phone. These firms thrive on dexterity, deftly balancing the “Mom & Pop” feel of community
commitment while setting their sights on global reach and industry transformation.

They’re family-owned enterprises. Though common, family firms are nonetheless unique. While the public’s heads are turned to grand scale of large publicly-held multinational  organizations, family firms quietly serve as the brains behind  global innovations, the heart behind local, national, and international philanthropy, and the central nervous system of  American free enterprise. Over 90% of all U.S. firms are family-owned, and family businesses employ 62% of the United States workforce. They contribute 64% of the US GDP and they create 78% of all new jobs.

The dexterity of family business pays off via a broad variety of contributions pertaining to community service and social responsibility that cannot be as nimbly managed by larger organizations. A joint study conducted in 2009 by the University of Connecticut Family Business Program and the Connecticut Business & Industry Association found that 80% of family business owners emphasize their family values in the operation of the firm, and at least 79% are dedicated to incorporating socially responsible practices in their business. This all contributes to quality management, high ethical standards, and low staff turnover – as well as potential gains in revenue and profitability. “Being a family firm constantly influences our decisions. The biggest example is in these tough times; we have lost money and worked hard at coming up with alternatives to layoffs. Some examples include cutting back work hours – and for those working full-time, we’ve reduced their pay with the promise that we will reimburse the difference when business returns. We have good people and we are investing in the future,” notes Sam Simons ’95 MBA,  Vice President of Administration at OEM Controls, a Shelton CT-based manufacturer of electro-hydraulic controllers and joysticks for industrial and mobile equipment. OEM Controls was founded in 1966 by Sam’s father, S. Brian Simons ’60, and currently employs over 200 Connecticut residents.

Greg Bachmann ’03 MBA, President & CEO of Dymax Corporation – a 2nd generation Torrington-based adhesives manufacturer – adds, “What comes around goes around. Most of our donations go toward education, and on top of that we reimburse employees 100% for tuition. Our return is having the educational institutions to turn to for a strong employee base as well as a highly skilled, educated work force with a higher degree of job satisfaction, loyalty and self satisfaction. Non family firms tend to be short-term driven
by shareholders who do not live in nearby communities. Philanthropy generally requires a longer term perspective outside of simple shareholder return.”

While the return on investment in social responsibility contributes significantly to the intrinsic value of a company, the benefits can’t just be measured quantitatively, “The return on being socially responsible and philanthropic not only gives you a warm feeling of having helped others but it’s also part of the responsibility of owning a successful company in your community. It is important to have our family involved in giving back to the community
and taking part in making a positive difference in the lives of others,” notes John G.  Sommers, President & CEO of Allied Printing Services, Inc. Allied Printing is a Manchester-based 3rd generation family firm and is one of the largest independent, financial and commercial printing companies in the country.

“My father always said ‘take care of the company and it will take care of everyone who works there’ – and that still stands true for us today at Allied. As a family-run business, we are in it for the long haul. We don’t have to worry about how the stock market reflects on any decisions that we make. We truly have a commitment to our employees, community and family to run a successful business. Being a second/third generation family-owned
business means that we have been raised with the values and principles that Allied was built upon, and we are instilling those values in our people.”

Family business’s contributions are not going unnoticed. The 2009 UConn/CBIA study found that 82% of family firms donate regularly to community organizations, educational initiatives, and religious institutions. The philanthropy of family firms provides a boost to the community and critical support to the education efforts of the future workforce.

“UConn’s partnership with family firms is strong and recognized in labs and classrooms across campus,” notes Brian J. Otis ’06 MBA, Vice President of Development at the UConn Foundation. “Whether it is supporting teaching, research, or outreach, we’re grateful for the support and proud to work with each and every family and business. As vital stakeholders, family firms help us achieve comprehensive learning models whereby each student can develop into a productive global asset.”

John Sommers emphasizes this partnership: “Education is important to us and is something in which the entire community must invest. The benefits are amazing – education has the power to reduce crime, increase investment, and raise productivity. I’ve seen firsthand that by employing teenagers during the summer, at some time in the future they may become full-time employees. Education has a high correlation with increased earning potential in the United States and sends a message to young people that they are important and an essential part of our society.”

Hughes Family Fund supports EBV and other outreach programs

Volume 3, Issue 3 | Summer 2013

As a successful entrepreneur, Robert Hughes ’92 (CLAS) knows what it takes to get a business off the ground. As a proud UConn alum, he believes the University plays an important role in supporting entrepreneurship and strengthening the state’s business and economic climate.

When Hughes learned the School of Business was interested in helping disabled veterans get back into the workforce, he decided to invest his skills, experience and finances in the effort, engaging his family members along the way. He has worked with his family in business for years, so it seemed natural to enlist them in his support for veterans outreach programs.

Together, they established the Hughes Family Fund in the School of Business to support programs for returning veterans like the Entrepreneurship Bootcamp for Veterans with Disabilities (EBV), a program that equips disabled veterans with the knowledge, skills and support to start and grow their own businesses and attain economic self-sufficiency.

Robert Hughes ’92 (CLAS) and Laurie Hughes Paternoster ’82 (CLAS).

 

“Meeting and working with these veterans has been a great experience,” says Hughes, who with his sister Laurie Hughes Paternoster ’82 (CLAS), has served as mentor and helped guide veterans in the program into the world of business and entrepreneurship. “We work with them and help answer questions about developing a business plan, working with staff, dealing with legal issues and marketing strategies,” says Hughes, who is chief operating officer, president and co-founder with his brother Jack of TopCoder, an international leader in identifying, evaluating and mobilizing software development resources. Brother Greg ’88 (CLAS) and sister Mary Abel are also involved in the company.

“The news is constantly full of the everyday problems faced by returning veterans,” Hughes adds. “These men and women have made a tremendous sacrifice, and upon their return, many struggle with problems related to unemployment, stress and depression. EBV and other veterans outreach programs by the University and the School of Business are working directly to tackle those issues.”

The return to civilian life can be daunting, notes Hughes, based on his interaction with some of the veterans in the EBV program. In the military, the chain of command establishes a hierarchy for decisions and responsibilities, and the work day and schedule are pretty firmly established. “The business world, especially entrepreneurism, is pretty different, with its emphasis on creativity and seizing opportunities,” says Hughes.

Since it was established in 2010, UConn’s EBV program has helped more than 25 veterans open 27 businesses.

“We’ve had some nice success,” notes Hughes, mentioning a woman who developed a business plan for a line of leather products for women bikers. She had countless statistics and data about the size of the market and the corresponding market for men’s products. She had also given much thought to designers and possible retailers. “It entailed a lot of homework and it was very impressive.”

Some EBV participants have teamed up to leverage complementary skills. Two female veterans with military experience related to video analysis and aerial surveillance worked together to develop a plan for a company that would offer surveillance services to local and state governments for law enforcement and environmental conservation purposes.

Another source of business ideas has come from home and hobbies. A man from Minnesota, also known as the “Land of 20,000 Lakes,” devised a plan for a mobile bait and tackle shop that would travel around the lakes during the summer and winter fishing seasons.

“If you think about the problems veterans with disabilities have returning to civilian life, and then you think about the role of a university as a place to learn, to interact with people from different social settings and cultures, and prepare to work and contribute to society, it makes a tremendous amount of sense for UConn and the School of Business to support the EBV program,” says Hughes. “UConn is developing a talent pool for the entire state. Including disabled veterans in that pool is win-win, for the state and for the veterans.”