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Month: June 2003

HIRE CALIBER

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Opinion

Mary Ellen Scott, president of United Personnel Services, has forged a successful career in the challenging staffing industry, a field she joined somewhat reluctantly nearly 20 years ago. She’s also made her mark in the community, taking a lead role with several business and economic development groups.
Like many women, Mary Ellen Scott said her early career path was defined largely by her husband’s professional travels. Manhattan; Teaneck, N.J.; Boston; and Springfield. Those were some of the places where her first husband, Jay Canavan, found management positions at non-profits ranging from the Museum of Fine Arts in Boston to the Quadrangle. As she followed her husband from city to city, Scott managed to find jobs, she told BusinessWest, but not a career.

But the last time she followed him, however, she did.

That was when Jay, then 51 and in search of work after a five-year stint at the Quadrangle, decided to start his own company, an employment agency, in Hartford. He asked her to join him in that venture, but she told him she already had a job — director of human services at Gemini Corp. in Springfield. She eventually acquiesced, however, and, after the company survived a rocky start, she took the lead role in making it one of the most successful staffing services in the region.

Jay Canavan passed away in 1999, several years after officially retiring from the business. Mary Ellen, who remarried in 2001, continues to grow the company now known as United Personnel Services. The company has three offices — Springfield, Hartford, and Easthampton — and recorded 20% growth last year, in the midst of sluggish economic times that usually pose stern challenges for this industry.

Meanwhile, Scott has taken an increasingly larger role in the community. She is currently president of the Springfield Chamber of Commerce, and board member

at the Economic Development Council (EDC), the Springfield Enterprise Center, and Springfield Symphony. She enjoys being active, and is upbeat about the region and its prospects for further development.

In a wide-ranging interview, Scott talked about the process of making the transition from employee to entrepreneur, and the risks and rewards that are part and parcel to that change. She also weighed in on the economy, and the prospects for the Pioneer Valley and the city of Springfield, which has been her home for 25 years.

"We’ve seen some good things happen in this city, but there are lot of challenges ahead," she said, referring to both the economy and the controversies that have damaged the city’s reputation. "There’s lots to do and no money for anything. But Springfield is resilient, and it has a lot going for it."

Work in Progress

Scott says she is asked often about the state of the local economy, especially during trying times like these.

She theorizes that her vocation might have something to do with that; those in the staffing business will often know what’s happening before those in other sectors. Also, her involvement with various business and civic groups helps keep her ear to the ground, and people want to know what she hears.

But she told BusinessWest that, despite all that, her crystal ball doesn’t work better than anyone else’s, and she admits to being puzzled by the current economic slump, which follows some, but not all, of the patterns of traditional downturns.

"Some sectors have really been hit hard, while others don’t seem to be impacted nearly as much," she said. "The economy is down — a look at the skinny help-wanted section in the paper will tell you that — but we’re having a very good year at this company; how do you explain that?"

Canavan has seen a number of economic cycles since she segued into the staffing industry two decades ago. She and her husband started in the booming mid-’80s and rode the wave that defined the end of that decade — expanding the operation into Springfield as they did so. They then toughed out the prolonged recession of the early ’90s, when many companies in that sector did not, and positioned itself to capitalize on a surge in the use of temporary and temp-to-hire workers in the mid- to late ’90s.

"It’s been a bit of a roller coaster," she acknowledged. "But that’s what this business is like. For the most part, I’ve really enjoyed the ride."

How she got on the roller coaster is an intriguing story. As she told BusinessWest, Scott initially rejected her husband’s requests to join his entrepreneurial venture. However, new management at Gemini — which saw things differently than Scott did on many personnel matters — and Jay Canavan’s difficulties with finding the right idividual to help him get the company off the ground eventually led them to team up.

"He couldn’t pay a ton of money, and joining a start-up operation was a risk that many people weren’t willing to take, so he really had a hard time finding the right person," she said. "Eventually, we decided that if we were going to do this, we should do it together, so I gave my notice."

The venture, known then as United Industrial Temporaries, struggled to get off the ground. "We didn’t have an order for three months," she said. "I got a paycheck, but Jay didn’t get one for nine months."

The economy was booming then, with unemployment at 2.3%, and companies were desperate for good help. The problem was establishing a reputation and breaking into the market. "Those were scary times," she recalled. "The phone didn’t ring."

Eventually, it did, however, as some of the larger insurance companies, like Aetna and Travelers, placed some orders. United opened a Springfield office soon thereafter, and that facility provided some cushion for the company when the Hartford financial services sector went through a period of downsizing in the early ’90s.

Scott said she quickly assumed many of the managerial responsibilities from her husband, who eventually retired in 1995. She presided over strong, steady growth and watched the company crack the Inc. 500 list of the country’s fastest-growing companies in 1993 and 1995. Current revenues are approaching $6 million.

Today, a staff of 18 works in the company’s Main Street offices in the former Springfield Five Cents Savings Bank building, where Scott says she acts largely as the company’s public relations person. "I’m the face in the community," she said. "I still do some sales, but mostly I try to promote the company and keep our name visible."

She described the staffing industry as one that is relatively easy to get into — despite her own personal experiences — but one that is much harder to stay in because of the heavy competition and the economy’s wild mood swings.

She said United has done well because of its diversity and also its ability to "go the extra mile," as she put it. "When one side of this business is down, the other seems to pick up."

Canavan described herself as a good delegator who doesn’t micromanage, but does like to challenge employees.

"I like to give people responsibilities — and then I expect them to handle those responsibilities," she said. "I try not to step on anyone’s toes, and I essentially just let people do what they were hired to do. We have a very collegial atmosphere here. I want people to say they enjoy working here; that’s important."

She said she has no real pearls of wisdom for women, other than advice to give their entrepreneurial talents a chance to flourish.

"It’s scary to go from getting a paycheck every week to the situation we faced when we started — when we didn’t know if we’d get a paycheck," she said. "But what makes it scary also makes it fun."

Getting Down to Business

As Scott’s status in the local business community has grown, she has become involved with a growing list of business and civic groups, including the EDC, the symphony, and the Enterprise Center at STCC. She told BusinessWest that she understands that some of the requests for her participation are made with the goal of achieving gender diversity on those boards, but she acknowledged that the pool of women business leaders is not particularly deep, and thus her phone rings often.

Two groups she has become very involved with is the Affiliated Chambers of Commerce of Greater Springfield, and, more recently, the Springfield Chamber — she’s the first woman to be named president of that group — which was created in 1996 and now boasts nearly 900 members.

Scott told BusinessWest she’s been involved for years with the thorny subject of tax classification — she’s one of the few business owners who also lives in the city and thus sees the issue from both sides — and the ongoing effort to bring the commercial rate down, thus making it more attractive to current and prospective businesses.

"That’s just a part of the larger issue of making the city more business-friendly," she said, adding that the Chamber and the Albano administration have made it a priority to not only attract new businesses, but work to retain those already here. "Retention is a very big part of that equation, and it often goes overlooked. Everyone’s focused on bringing new businesses here, but you also have to create an environment that makes companies want to stay."

Meanwhile, she says that perhaps a bigger challenge will be enticing people to live in the city.

"Young people are not opting to move to Springfield, and that’s a big problem," she said, noting that, while a long list of attractive suburbs certainly contributes to the dilemma, the city’s struggling schools and other quality-of-life issues don’t help, either. "Springfield is just not an attractive option for many people.

"I’m not sure how we go about changing that situation," she continued. "But it’s something we all have to work on."

She told BusinessWest that a confluence of recent issues — everything from the economy and the state budget to the controversy enveloping City Hall, to the pending departure of UNICARE and its 800 employees from 1350 Main St. — has created a number of challenges for Springfield that will certainly test its mettle.

"UNICARE’s leaving will have an effect on a lot of businesses downtown, especially the restaurants, bars, and clubs, and even the parking authority," she said. "It’s going to take some time to replace that many workers and fill that much office space, and that’s why we have to keep working to make the city business-friendly."

She said the controversy that continues to swirl around Albano and many current and former members of his administration, won’t help in the regard, but she’s not sure just how much damage the prolonged FBI investigation and the Feds’ almost weekly raids of downtown bars and city agencies will have on the city’s psyche and its economic development efforts.

"There’s a bit of a dark cloud over the city right now," she said, "and that’s too bad in a way, because Mayor Albano has done a lot to revitalize downtown and give it some life."

The Bottom Line

When pressed to comment on the prospects for the local economy, Scott said the region is in what she called a holding pattern.

"People are hesitant to make moves," she said, "because they don’t know what’s around the corner. They’re looking for some sign that things are better, and they’re just not seeing one they can believe in.

"Business owners are waiting for something positive to happen," she continued.

Plenty of positive things have happened to Scott since she arrived in Springfield. Some of her success can be attributed to the whims of the economy and some good fortune, but mostly, she’s made her own luck.

She believes Springfield and the Pioneer Valley can do the same.

"We have a lot to build on here," she said. "But we can’t wait for it to happen — we have to make it happen."

The Albano Administration Betrayed Springfield

By
Opinion

BusinessWest turned some heads last month when we suggested that Springfield Mayor Michael Albano could no longer effectively lead the city in the final months of his term and should thus step aside. We said the ’starting-over’ process should begin now, not next January, when his eight-year tenure comes to an official end, or when he gets another job — a task made more difficult by the specter of a probable indictment.

Some people wondered what a business publication was doing focusing on City Hall and what the mayor is doing or, more to the point, not doing. And some readers must have been confused because, only 16 months before, we were strongly endorsing Mayor Mike over respected challenger Paul Caron.

Well, some things have happened in the past year and a half that have prompted us to reconsider some of those earlier opinions. Summing them all up, we’d call it a betrayal of the city’s residents and the business community. Meanwhile, we believe what happens in any city hall has an important impact on any community’s economic health and well-being. That’s why we reacted as strongly as we did to recent events.

The perception of this city has been damaged to such an extent that the Albano administration has become a source of chaos and embarrassment to both area residents and the business community, not the instrument of progress that an administration should be. The residents and the business owners of Springfield deserve better, and they deserve it now.

You might ask, what should people in business expect from City Hall?

Often, they expect too much, which can be a problem in itself. Indeed, almost any time a business fails or never gets off the ground, the entrepreneur in question will say, ’the city didn’t do anything to help me.’

And while such claims are often an exaggeration and a cop-out, sometimes they are not. Springfield is a good case in point.

Any city or town government can do things to make it easier for businesses to succeed — everything from a small grant or loan to help get a company off the ground; to help with zoning, traffic, or parking; to a tax-incentive plan that makes coming to a community more attractive. And local government can set a tone that makes businesses want to come to a city and stay there. The phrase business-friendly is often overused, but some communities are certainly more friendly than others. Springfield is friendly to a chosen few, friends of the mayor, and that’s wrong.

A municipal government can and should deal with matters in a fair and equitable manner, and that’s what we didn’t see from the Albano administration. Instead, we saw grants, loans, leases, and no-bid contracts — some possibly against state law — go to people with connections to Albano.

We know and understand that a certain amount of graft and favoritism happens in many large cities. But in Springfield it was carried out to a degree that it created a sense of frustration in the business community, a feeling that insiders and power brokers were running the city — and running it into the ground. Businessmen and developers have voted with their feet and located their companies and buildings in other Western Mass. cities and towns rather than hire Albano’s friends as "consultants."

When all is said and done — and as the revelations from the FBI probe have made clear — the record will show that some of those connected to Albano effectively looted Springfield. That’s a strong word, but it fits. They took jobs, those aforementioned grants and loans — some to reputed organized crime members — and sweetheart deals, all with Albano’s approval and, in some cases, with his signature on the agreement.

Even more alarmingly, Albano and his friends stole the city’s reputation and a good deal of the momentum that had been built up from such efforts as the Basketball Hall of Fame, the riverfront, and the downtown entertainment district.

It was this ’looting’ that prompted BusinessWest to step out of its traditional role, to forcefully criticize Albano and his administration, and advocate for moving Springfield forward now.

City Hall can’t do everything for a business, and it cannot, by itself, make a venture work. But a municipal government must be fair and work for all the people — not a chosen few. Because it failed to do so, the Albano administration has failed Springfield miserably.

Banking on the Future

By
Features

Westfield Bank prides itself on maintaining the same reputation for personal service over its century and a half in business. But in many other respects, the institution has had to change with the times — and bank officials are keeping their eyes on the shifting needs of its residential and commercial markets, looking to continue a pattern of measured growth in a highly competitive region for banking.

When Westfield Bank — then known as Westfield Savings Bank — opened its doors for the first time in 1853, 13 people, most of them residents of the growing town, opened savings accounts.

Today, as it celebrates its 150th anniversary, Westfield Bank boasts 10 locations, $813 million in assets, and the third-largest market share in Hampden County. However, ask President Donald Williams about the bank’s long history, and he’ll tell you that more has changed in the past two decades than in the 13 before them.

"When I was hired in 1979, Westfield Savings Bank was a thrift," he said. "Our assets were primarily stocks, bonds, and real estate loans, and our liabilities were passbook savings accounts and CDs."

But by the late 1990s, the bank had taken the word ëSavings’ out of its name to reflect how commercial lending and other business services had become a crucial part of the company’s business. And a decision in 2001 to offer shares in the company for public trading has led to a dramatic increase in the bank’s capital for lending and its flexibility in making larger loans.

In a highly competitive region for banks — one that has seen many growing towns in Western Mass. become overbranched in the past few years — Westfield Bank is taking a cautious look at growth, strengthening its presence in areas where it already has a footprint before turning to new markets.

Yet, steady growth has been one constant in this bank’s 150 years, and Williams told BusinessWest that it intends to remain a strong regional player in savings and lending services.

Humble Beginnings

Back in 1853, Westfield — a community already 184 years old — was a growing town, with a population of 4,300 and rising, a number of growing industries, and a need for more banking services. "We were primarily a provider of low-cost deposits and mortgage loans. That was the reason for the bank’s existence, according to its charter," said Alice Babcock, vice president and director of community banking.

In its first days, the institution shared space — a common practice among banks of that time — with First National Bank until 1866, when Westfield Bank moved upstairs. Continuing its growth largely in the personal-savings arena, the institution had built $1.8 million in assets as the 1900s dawned.

Geographical expansion began with a West Springfield office in 1940 and an Agawam branch in the 1960s. Today, the bank boasts 10 offices in seven communities, including East Longmeadow, Holyoke, Southwick, and Springfield — the latter of which replaced teller windows with a more business-oriented, one-on-one style of banking in an effort to boost the commercial-lending side.

Meanwhile, the bank’s assets have steadily grown through the years, to $3 million in 1913, $7 million in 1923, and $100 million in 1975. That’s a far cry from the $813 million the bank held at the end of 2002, as the last 20 years have brought the most change, with commercial and business banking services leading the way to a new focus, Williams said.

Those changes have hardly come by accident, however. In fact, the bank launched a strategic plan about a decade ago that incorporated three elements: taking ësavings’ out of the name, opening a branch in Springfield, and increasing the bank’s volume of consumer lending. All those elements have come to pass, and the business-lending emphasis is still a developing one, said Williams.

"We’re trying to diversify the balance sheet," he explained. "It’s a long process, and we’re hoping to be where we want to be in 10 years." Going public was a major step toward building more flexibility — and allowing loans of up to $15 million — all the while keeping 53% of the ownership in the hands of the bank’s customers.

The push for more commercial lending has, of course, been slowed to some degree by the sluggish economy over the past few years, as businesses are slower to make capital investments.

"It’s a very competitive environment right now," Williams said. "But we’ve maintained a good backlog, and when the economy gets better, we expect to pick up some growth in that area. But, in this region, with so many banks, it will always be competitive."

Branch Boom

That competition is partly the result of a branch boom among area institutions, who have moved quickly and aggressively to place offices in growing communities such as Ludlow, Belchertown, and Easthampton.

Williams said that, for now, Westfield Bank’s strategy is not to compete for additional territory with the community banks that already have footprints in such towns.

"It wouldn’t be in our best interest to compete with some of those community banks solely on rates," he said. "We don’t want to jump markets. Those are local institutions that do a good job. It would be better for us to look for additional opportunities where we already are."

That means expanding the brand in communities that already have Westfield Bank offices, including the placement of additional ATMs in strategic locations, such as in Shriners Hospital and in the American International College campus center, two recent Springfield additions.

Further cultivating existing geographic strengths without building several new branches makes sense, he said, because it’s consistent with the way the bank has grown throughout the years.

Williams noted that, while Westfield ranks behind only Fleet and Banknorth in Hampden County market share, those banks have 30 and 20 branches, respectively, while Westfield has only 10 — so success has clearly been a matter of making each of a limited number of locations as productive as possible. "We’re looking for ways to really solidify that presence."

One challenge for a 150-year-old bank, Babcock said, is balancing the needs of two different clienteles: a new breed of younger customers who value convenience over anything, as well as a number of older customers who have been with the bank for generations and appreciate personal service most.

Leading up to the 150th anniversary celebration, she said, some longtime customers showed tellers decades-old mortgage books from the days when mortgages were paid in person monthly and the books were stamped accordingly. Nowadays, the process is more impersonal — mortgages are billed and paid by mail, and they may be bought and sold by multiple institutions over the life of the loan.

The dilemma, if one could call it that, Babcock said, is that a bank with many decades of history must give older, longtime customers the personal touches they have come to expect, while also investing aggressively in Internet banking — including a Web-based cash-management system launched last year — as well as ATMs and other convenience-minded services that appeal to younger depositors.

"The good news is that we’re 150 years old," Babcock said. "But that’s also the bad news. If we’re going to continue to thrive, we need to meet those different expectations that customers have."

A Banking Continuum

But the bank simply considers that another challenge. What bridges the gap between both types of clients — those who need bricks-and-mortar, personal contact, and those who are happy banking from home — is an emphasis on a relationship, Williams said.

"We’re not looking to get a customer who wants to do just one service with us," Babcock said. "We’re looking at a relationship" — and that means offering a wide-enough variety of services to draw in new customers, such as cash management services and lockboxes, and then making an effort to get to know customers and their needs personally.

It helps, she said, that the bank has very little turnover among its loan officers, and makes an effort to cultivate a continuum of services by not passing customers from employee to employee. "The client gets to know the lender, and vice versa," she said.

The relationship priority also extends into the community at large, as Westfield Bank continues to donate to local organizations through its Future Fund, with an eye on spreading the wealth evenly into all the cities and towns it serves.

Those seven communities could be joined by others in the future — the institution certainly isn’t abandoning all geographic expansion — but, for now, Westfield Bank seems well-positioned to rely on its strengths in building a greater presence in Hampden County.

"Our financial strength, combined with our non-financial assets, like good customer service and strong relationships with our communities, positions us well for our next 150 years of measured growth," Williams said.

There’s that word measured again. And, by any yardstick, Westfield Bank has been one of the county’s financial success stories.

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