Opinion Archives - Page 13 of 14

A Matter of Interpretation

By BusinessWest Staff August 6, 2007

Sections Supplements

Is Application of the Bay State’s Anti-SLAPP Statute Too Broad?

In 2006, concerned citizens of the town of Falmouth filed suit in Suffolk Superior Court seeking review of a decision of the state Department of Environmental Protection. The suit named both the department and the town. The town responded with counterclaims against the plaintiff/citizens for malicious prosecution and abuse of process, essentially claiming that action was only brought as a tactic to delay the community’s plan to construct a sewer collection and treatment system.

What makes the case remarkable was the town’s aggressive choice to counterclaim against its residents for protesting proposed land development. The trial court recently dismissed the town’s counterclaim under the provisions of the anti-SLAPP statute and awarded the plaintiff/citizens $30,000 in fees expended in defense of the town’s counterclaims. This case demonstrates how the reach of the anti-SLAPP statute has evolved.

In 1994, Massachusetts enacted the so-called anti-Strategic Lawsuit Against Public Participation (anti-SLAPP) law. Since then, the statute has been widely used in many circumstances perhaps never envisioned by the original lawmakers

The Mass. Supreme Judicial Court (SJC) describes the original legislative purpose behind anti-SLAPP as a quick method to dispose of meritless suits brought by large private interests intended to deter or punish common citizens from petitioning the government in lawful exercise of their political or legal rights. Plaintiffs in SLAPP lawsuits commonly allege that the defendant defamed them, maliciously prosecuted claims, or otherwise unlawfully interfered with the plaintiff’s business interests.

When the first cases involving anti-SLAPP reached the trial court, many judges inferred the existence of a requirement that the matter involve a matter of ‘public concern.’ The SJC subsequently rejected that narrow interpretation of the statute, finding that the Legislature specifically considered and rejected such a limitation.

As a result, Massachusetts appears to be the only state instituting anti-SLAPP that failed to include public concern as an element of the petitioning activity. Thus, the Bay State’s anti-SLAPP statute has been invoked in such cases as a trademark dispute between corporations; a dispute between two psychiatrists, one of whom rendered an unfavorable expert opinion concerning the other’s medical practices; a lawsuit between a divorced couple over the veracity of the ex-wife’s claim of physical abuse; and breach-of-contract actions between commercial landlords and tenants. While important to the litigants, these cases are hardly the David v. Goliath scenarios involving political rights that the law was arguably initially aimed at.

When a defendant’s right to petition clashes with a plaintiff’s right to recover for injury allegedly caused by the defendant, the power and breadth of the anti-SLAPP statute becomes clear.

The statute identifies five types of actions that broadly define the right to petition, which the law is intended to protect. They include what most would agree is classic petitioning activity, such as: making statements at a legislative hearing, voicing one’s opinion regarding an issue under consideration in a governmental proceeding, making statements aimed at encouraging governmental review of an issue, and enlisting public participation to affect governmental review. The definition also contains a catch-all clause protecting “any other statement falling within constitutional protection of the right to petition government.”

The protection provided by the anti-SLAPP statute (G.L. c. 231, §59H) allows defendants in SLAPP suits to file a special motion to dismiss the case early in the proceedings. If the defendant can show that the plaintiff’s claims of harm are solely based on the certain petitioning activities described above, the burden shifts to the plaintiff to demonstrate the following:

• That the claimed petitioning activities are devoid of any reasonable factual support or any arguable basis in law; and
• That he or she has suffered harm.

If the plaintiff cannot meet this burden, the sanction is that the plaintiff’s case is dismissed, and costs and attorney’s fees incurred by the defendant in bringing the special motion to dismiss are awarded. Some argue that because of the broad language used in the statute, the Legislature has created a cure that is worse than the affliction.

Since 1994, more than 600 decisions involving the anti-SLAPP statute have been reported. Use of the anti-SLAPP statute is widespread because it is broadly phrased to apply to almost any enterprise or action where business activity, citizens’ interests, and government regulation or control do or could possibly intersect. The language of the statute provides the special motion-to-dismiss remedy to a defendant who claims her actions are based on the exercise of her “right to petition under the Constitution of the United States or of the Commonwealth.”

In January 2007, the SJC re-examined the anti-SLAPP statute in Cadle Company v. Schlichtmann. Schlichtmann was engaged in a lengthy legal battle with a debt collection agency, Cadle, over certain debts allegedly owed.

Interestingly, Schlichtmann was the attorney featured in the book A Civil Action and portrayed by John Travolta in the movie of the same name. Schlichtmann also represented clients who allegedly had been victimized by Cadle’s “fraudulent business practices.” He allegedly made numerous statements to the news media claiming Cadle was doing business illegally, using strong-arm tactics, hiding assets, and that the principal of Cadle was a fugitive from justice.

Schlichtmann also set up a Web site that described Cadle as “a collection arm of a fraudulent enterprise” whose “sole purpose and intent … is to defraud consumers and businesses.” The Web site provided links to news articles containing Schlichtmann’s statements, copies of demand letters, court pleadings and documents, and contact information for Schlichtmann’s law firm.

Based on the content of the Web site, Cadle filed suit against Schlichtmann alleging defamation, libel, tortuous interference with advantageous contractual business relations, and unfair and deceptive trade practices. It sought monetary damages and a permanent injunction against Schlichtmann for maintaining what it claimed were false accusations on his Web site. This lawsuit demonstrates the clash of rights that the anti-SLAPP statute is intended to address.

Certainly Schlichtmann had the right to petition the Commonwealth to take action against Cadle. Meanwhile, Cadle had the right to try and prevent or recover for damage from what it claimed were demonstrably false statements.
The SJC concluded that Schlichtmann had created the Web site “at least in part to generate more litigation to profit himself and his law firm.” Based on that finding, the court ruled that his special motion to dismiss was properly denied because the statements were published not as a member of the public who had been injured by the alleged practices, but as an attorney advertising his legal services.

It is this type of mixed-motive scenario that forces courts to make difficult decisions between one person’s right to petition and another’s right to prevent or obtain relief for damages caused by dissemination of false information. To further complicate these issues, the court’s decision is usually made shortly after a suit is filed and before a plaintiff is fully able to develop the factual basis of its claim through discovery.

The Massachusetts anti-SLAPP statute was passed despite then-Gov. William Weld’s veto, which described the statute’s effect as “a bludgeon where the scalpel will do.” It cannot be denied that anti-SLAPP has altered the legal landscape in Massachusetts. It is a potent weapon for those who are petitioning for change while seriously affecting the ability or willingness of people to bring suit for defamation or injury to business interests.

As a practical matter, the anti-SLAPP statute seems to give the upper hand to a defendant. If the plaintiff fails in her attempt to exercise her rights, she must pay the defendant’s attorney’s fees and costs. No such risk exists for the defendant if the special motion to dismiss is denied.

This reality, coupled with one’s ability via the Internet to widely disseminate information, creates challenging issues for lawyers, litigants, and the courts, for which there are no easy answers.

Robert S. Murphy Jr., a partner at Bacon & Wilson, P.C., is a civil litigator with extensive experience in representing both plaintiffs and defendants; (413) 781-0560;[email protected]

OPINION

By BusinessWest Staff July 9, 2007

Opinion

UMass System Needs Independent Campuses

The debate about governance at the University of Massachusetts, motivated by President Jack M. Wilson’s vision for “one university,” has paid scant attention to the history of state university systems. Across the nation are experiments that enable us to draw conclusions about the elements necessary to achieve the highest level of educational excellence.

Massachusetts has a less mature state university system than some other states. Undoubtedly because of the large number of outstanding private colleges and universities located here, Massachusetts created a state university system relatively recently, in 1991, several decades after such systems were created in places like California, New York, Texas, and Illinois.

The experience of those states demonstrates that systems need to give considerable independence to individual campuses to achieve the best results. The University of California is a case in point.

Arguably the best state system of higher education in the country, its 10 campuses are parts of a single university and substantially independent. By contrast, states in which a single individual serves as chancellor of the flagship campus and president of the system, like Michigan, tend to have single-university systems in which the other campuses are clearly subordinate branches.

The University of California has repeatedly given greater independence and authority to its campuses. The system began in a form that resembles Wilson’s vision; the entire university was governed from Berkeley — its medical campus in San Francisco, its agricultural experiment stations in Davis and Riverside, and the outpost, the Southern Division of the University of California, later known as UCLA.

In the early 1950s, Berkeley and UCLA assumed greater independence with the creation of chancellors for the two campuses. When Clark Kerr became president of the university in 1958, he worked to realize a vision of nine independent campuses, each distinctive and excellent. In the eight years in which he served as president, he gave more independence to existing campuses and created new ones to form the group of universities we know today.

Kerr recognized that the independence of the campuses was essential to both realizing excellence and shaping distinctive identity. Change in large organizations is inherently difficult; anything that reduces bureaucracy and levels of governance makes them more nimble in responding to problems and opportunities.

urthermore, university governance, by its very nature, is highly participatory; you cannot motivate and accomplish change without an immediate relationship with the faculty.

To build collaboration among campuses with strong leaders and distinctive identities, one needs to institutionalize regular communication at every organizational level. At the same time that the University of California gave authority to the chancellors, it created annual systemwide conferences of students and faculty to build stronger unity among the campuses. It built systemwide councils for chancellors, provosts, vice chancellors, and faculty senate leaders.

What, then, is the systemwide role? The system, in extensive consultation with the campuses, should develop policies for the entire university in matters such as intellectual property, tenure and promotion, construction financing, compensation, and benefits. It should build community among the campuses, lobby for them, and help them achieve excellence.

There are few more important questions than the future of public higher education in Massachusetts. The state lacks a master plan for higher education, and it needs one. Such a plan would better ensure educational opportunity for its students. Its development must be a highly public process, conducted by a body with broadly representative and respected membership.

Only in such a public conversation can we arrive at wise decisions and policies with the legitimacy to guide higher education for decades to come. –

Carol T. Christ, former executive vice chancellor of the University of California- Berkeley, is president of Smith College. This article first appeared in the Boston Globe.

Spoke in the Wheel

By BusinessWest Staff July 9, 2007

Sections Supplements

Complementary Medicine Gains Mainstream Acceptance

Bridget Griffin Thompson said market demand is partly responsible for the inception and subsequent growth of Cooley Dickinson Hospital’s Center for Complementary Therapies.

Progress has been slow in coming, but the words are nonetheless proving prophetic.

Almost a decade ago, Marcia Angell, former editor-in-chief of the New England Journal of Medicine, wrote in that publication that, “since many alternative remedies have recently found their way into the medical mainstream, there cannot be two kinds of medicine, conventional and alternative. There is only medicine that has been adequately tested and medicine that has not, medicine that works and medicine that may or may not work.

“Once a treatment has been tested rigorously,” she continued, “it no longer matters whether it was considered alternative at the outset. If it is found to be reasonably safe and effective, it will be accepted.”

That acceptance has been slow in coming, to be sure, but once-fringe therapies such as acupuncture, meditation, and herbal treatments have gained a significant foothold in the American health system, to the point that many proponents reject the term ‘alternative medicine,’ instead preferring the more inclusive ‘complementary medicine.’ Even hospitals are starting to come around.

Consider Cooley Dickinson Hospital, one of the few in Massachusetts to offer a complimentary medicine program in-house. After launching its Center for Complementary Therapies in 2004 with therapeutic massage, prenatal and postpartum massage, and Reiki, the program recently added acupuncture, aromatherapy, healing touch, healing music, and self-hypnosis/guided imagery to its roster of services.

Bridget Griffin Thompson, coordinator of Complementary Therapies and Women’s Health at CDH, said the hospital is simply responding to the needs and desires of its constituency and embracing an admittedly slow-moving trend toward such services in the hospital setting. She cited Hartford Hospital and Memorial-Sloan Kettering Cancer Center in New York among those facilities that have institutionalized alternative-healing methods.

“It’s consumer-driven,” Thompson said. “Interest been growing for some time, and we’ve formalized it over the last couple of years. Since then, we’ve added a lot of different modalities and started integrating it into our inpatient population.”

Then there’s Dr. Deborah Hoadley, who operates the Heron Pond Health & Wellness practice in Longmeadow, taking an integrative, mind-body approach to programs in chronic disease, weight loss, general wellness, and her specialty, Lyme disease . She mentioned Lyme disease as an ideal milieu for modalities such as meditation and massage, when conventional doctors typically treat it with antibiotics only.

“Any patient who has ongoing symptoms can benefit from the mind-body approach,” Hoadley said. “That’s because stress hormones increase the production of free radicals, which are molecules that contribute to inflammation in the body. Therefore, any medical condition that has an inflammatory component will benefit from stress-reduction techniques.”

This month, BusinessWest examines some of the factors driving the growth of complementary medicine in traditional settings — and what barriers to further growth still exist.

Growing Influence

The National Center for Complementary and Alternative Medicine estimates that more than half of all U.S. adults have sought treatment in non-traditional modalities, with the majority using them in conjunction with traditional medicine — lending support to the term ‘complementary.’

Cooley Dickinson’s growing program, Thompson said, first grew out of childbirth education, with expectant parents desiring more control over their own health decisions and, as a result, seeking innovative models for childbirth care. Thompson soon discovered that patients across the health care spectrum were becoming more open to non-traditional care, but were unsure how to ask for it.

In the past, she explained, patients who had received complementary care or were simply interested in it were reluctant to share that information with their regular doctor. “Today, I’m finding that people want to be a partner with their practitioner. It’s important for consumers to talk to their doctors, to make sure everyone is on the same page.”

Too often, Dr. Harvey Lederman said, that page is being written by the wrong authors.

“We have a medical model in this country that’s increasingly driven by the pharmaceutical industry’s demand for profits, where most data is generated for the purpose of marketing instead of caring for patients,” said Lederman, who incorporates non-traditional herbal and nutritional treatments at Pioneer Valley Family Medicine in Northampton.

That pharmaceutical influence, he explained, poses a trap for doctors who want to stay abreast of the newest medical information but find that much of it is paid for by drug companies. He noted, for example, that 80% of medical research is now funded by such firms, when 30 years ago, 80% of it was paid for by academic medical institutions.

“Even the most prestigious journals present what they want me to read. So the more knowledgeable a physician is, the more influenced he is by the pharmaceutical industry.”

The good news, in Lederman’s opinion, is that consumers seem to be ahead of doctors when it comes to being open to treatment alternatives not promoted by major drug makers.

“Patients intuitively know what they want,” he said, noting that they’re increasingly using the computer to research alternatives to industry-backed pharmaceuticals.

“They see alternative treatments as an adjunct to conventional treatment, not something that will replace it.” That’s partly why vitamins and herbs are the fastest-growing segment of complementary health, he added, although modalities such as acupuncture and Reiki are gaining more acceptance as well.

“I tend to use certain nutrients and herbs in my practice, and I hook patients up with other treatments that might be helpful to them. You can’t be an expert on everything,” he said. “But the very fact that you’re receptive to alternative medicine, I think, makes you a draw for patients who don’t want their doctor to be closed-minded about all this.”

In the meantime, he hopes patients develop some skepticism about what they’re hearing from drug companies, and want to do their own research. “That’s certainly an appropriate reaction,” he said. “You can’t turn on the TV or read a magazine without being bombarded with new diseases that are only diseases because someone has a new drug to treat them.”

Looking for Alternatives

Where Lederman focuses on herbals and vitamins, Thompson said her program puts more emphasis on other modalities. She said people shouldn’t see alternative health as being in competition with traditional modes, but as another spoke in the wheel of healing.

“It has been huge,” she said. “People are just so thankful for what we’re doing here. Many people have been accessing complementary therapy outside the hospital, so they’re excited that we have it here.”

Thompson noted that some patients would rather not enter a hospital by choice, while others are more comfortable being treated there because they know the licensing and training guidelines will result in a high standard of care.

Hoadley admitted that many patients are surprised that massage and yoga can affect the body’s response to Lyme disease and other conditions, but said they’re increasingly open to the idea.

“A large number of people are turning to complementary therapies,” Hoadley said. “We’re seeing more patients seeking an integrative approach to their health.”

The mainstream medical community, it seems, is paying attention.

Joseph Bednar can be reached at[email protected]

OPINION

By BusinessWest Staff June 25, 2007

Opinion

The Coming Crisis for Medicare

The trustees of the nation’s Medicare trust funds have released their 2007 annual report, and once again the news is grave. As the result of health care costs increasing at a much greater rate than wages, the hospital insurance trust fund is projected to be exhausted by 2019. Indeed, Medicare is in far worse shape than the Social Security trust funds, which are also ailing but are not projected to run dry until 2041.

The one glimmer of hope in this bleak picture is that a “Medicare funding warning” has been triggered for the first time by the numbers in the trustees’ report. This action will finally force Washington to address Medicare seriously, and fix a system that threatens to bring our economy to its knees not many years from now.

Medicare’s main source of money is supposed to be the dedicated revenues generated by premiums and payroll taxes. But because of the rapid growth of Medicare expenditures, program costs financed by general revenues are projected to exceed 45% in 2013.

Under the 2003 Medicare reform law, whenever a forecast says that the 45% threshold will be crossed within the next seven years, the trustees are to issue a determination of “excess general revenue Medicare funding.” That determination has now been made in two consecutive years, so a “Medicare funding warning” has now been declared.

The warning requires President Bush to propose legislation that responds to the alert by early February 2008. The law then requires Congress to consider the president’s proposals on an expedited basis.

No one can predict the outcome of this exercise. But it will at least focus lawmakers’ attention on an incontrovertible fact: Medicare is not just undercapitalized; it’s a severely flawed system. Revenues and spending are inherently mismatched.

Exacerbating the problem is the fact that over the past 40 years, medical costs have outstripped economic growth by 3% annually. Advances in medical technology and patient treatment have driven of this trend; while the benefits of these advances are obvious, the price tag is huge.

With this crisis looming, why have no serious efforts been made to treat the root of the Medicare problem? For one thing, there are few, if any, incentives to prudently control the cost of medical treatment. It is well-documented that retirees will undertake treatment as long as the value of that care is more than their co-payment. As for providers of medical care, such as doctors, nurses, and hospitals, any desire to restrain costs through cheaper treatment alternatives is often overridden by self-interest or the perception that more expensive treatments are in order.

Finally, politicians have virtually no short-term incentives to tackle the Medicare problem. The reason is clear: any change that leaves the elderly worse off than before will lead to swift condemnation and ballot-box reprisals by a large and vocal segment of the population. And pressure from much younger workers who fund Medicare is nearly non-existent.

However, more encouraging signs may come from individual states’ experiments with health care, particularly those of Massachusetts and California. If a state can build a comprehensive medical care solution, it can provide guidance and even encouragement for a national approach.

Given the magnitude of the problem, there is unlikely to be a silver bullet. To bring costs and benefits closer together, policies need to target the inequities caused by incentives that tend to increase costs at an alarming rate.

Even this may be insufficient. Increases in taxes, cuts in benefits, and possibly means-testing of beneficiaries may be needed. Implicit in such policy change is the realization that all stakeholders — not just the young — need to bear the burden of making Medicare sustainable. It may be tough medicine to swallow, but we can’t keep blindly passing Medicare’s costs on to future generations.-

Thomas J. Healey is a senior fellow at the Kennedy School of Government. This article first appeared in the Boston Globe.

OPINION

By BusinessWest Staff June 11, 2007

Opinion

Hunger Does Not Discriminate

Recently, the nation observed National Hunger Awareness Day. The Food Bank of Western Mass. — the region’s hub of public emergency and privately donated foods — and local partners hosted public education events. This year’s theme was The Face of Hunger May Surprise You, and it was quite appropriate.

That’s because it regularly surprises me. Last month, a corporate volunteer at our 30,000-square-foot warehouse in Hatfield shared with me that when she was a child, her mom struggled to put food on the table. Or, I’ll never forget the time a successful businessman approached me after a presentation at a local civic club to confess that his wife secretly collected food stamps after he was laid off from work early in their marriage.

More and more Americans are vulnerable to income and, in turn, food insecurity due to job insecurity, stagnant wages relative to the rising cost of living, high levels of debt, divorce, or a sudden accident. One out of three households that receive food from the Food Bank has at least one working adult. Hunger does not discriminate.

The term “hunger” — the recurrent and involuntary access to food due to lack of resources — conjures up images of starving children in the Third World. Yet, 10 million people in the United States experienced “very low food security” in 2005 according to a report released by the U.S. Department of Agriculture last fall. Hunger, simply put, has become a permanent feature in United States, despite our being one of the richest and most productive countries on the planet. Worse still, another 17 million people are food-insecure — at risk of hunger due to difficulties putting adequate food on the table on any given day.

The good news is that 3 million fewer people were food-insecure nationally in 2005. The bad news is that food insecurity has increased in many high-cost states like Massachusetts. This seemingly intractable feature of our societal landscape is both an urban and rural phenomenon.

Chronic food insecurity is on the rise as evidenced by a growing demand for emergency food from the Food Bank. Last year, almost 6 million pounds of food — or approximately 4.5 million meals — went to 400 frontline nonprofit programs: food pantries, meal sites, shelters, day care centers, after-school programs, and councils on aging. Half of this food travels to Hampden County.

Our economic system may not ensure that everyone is guaranteed adequate food. Our society should. It’s the right thing to do on moral and economic grounds. We know that food insecurity is a leading cause of poor health and educational achievement among children. Healthier, well-fed families are more productive on the job and at home.

The Food Bank is committed to making food available to those who need it now. We are equally committed to reducing the need for emergency food tomorrow. To do this, the public must embrace public policy that can achieve this end. Right now, Congress is considering the Feeding America’s Families Act (H.R. 2129), the nutrition title in the U.S. farm bill. Co-sponsored by Mass. Rep. Jim McGovern, this act, if approved, will improve access to food stamps and raise the minimum monthly household benefit level from $10 to $32, among other things. The unrealistic $10 benefit level was set decades ago, and today, the average benefit equals one dollar per person, per meal.

Just as food stamps assist families with accessing food by supplementing earned income, so, too, public policy can improve the quality of food available and the choices that families make about the food that they consume. Improved public health will reduce public costs elsewhere. On Beacon Hill, the Legislature is considering Protect our Children’s Health: An Act to Promote Proper School Nutrition (H.B. 2168). Soda and junk food are feeding an epidemic of obesity and diabetes among our children. This bill will require public schools to provide nutritious food options to help children learn good eating habits and reduce the risk of health problems. Supporting these two public policies are crucial steps to ensuring a hunger-free Western Mass.

Andrew Morehouse is executive director of the Food Bank of Western Mass Inc.; (413) 247-0312.

OPINION

By BusinessWest Staff May 28, 2007

Opinion

Massachusetts Should Embrace Biotech

For decades Massachusetts has been fertile ground for the life sciences. Our unique concentration of extraordinary universities, teaching hospitals, research facilities, venture capital, and talent, spurred by a tradition of entrepreneurialism, provides a strong foundation for growth in the biotech industry. These strengths have brought thousands of jobs and billions of dollars in life science investments to Massachusetts.

For us, that success is more than a commercial matter. Each family can speak poignantly about a family member or friend with a disease or debilitating illness. You cannot be in the company of someone you love, powerless to help them, without appreciating the vital importance of stem cell research and other biomedical breakthroughs. In many ways, the health of this industry and the health of our society are closely linked.

But we cannot afford to rest on our laurels. Competitor states and foreign nations are investing billions to attract our researchers, institutions, and industries. The University of Wisconsin-Madison outspends both Harvard and MIT in research and development. India and China, to say nothing of states such as California, are actively working to attract signature companies away from Massachusetts. At the same time, federal funding through the National Institutes of Health, of which Massachusetts typically receives a large share, is flat and likely to diminish. Politics, especially around stem cell research, impaired the innovation and calculated risk-taking that make breakthroughs possible. It is essential that the Commonwealth step up to maintain and extend our global leadership in the life sciences.

We are doing just that. Working with all sectors of the industry, we have developed the Massachusetts Life Science Initiative. This 10-year, $1 billion investment marks a new partnership between state government, industry, academic medical centers, and public and private higher education, and will accelerate statewide life sciences growth into high gear. We want to support this industry on the path from inspiration to commercialization, from ideas to cures.

That begins with support for new ideas and innovation. The rate of innovation in Massachusetts in recent years has been triple that of the national average and we have no intention of letting it slip. To bring the best and brightest to those facilities and others, we will offer life science grants to young, promising researchers who may not yet have attracted federal funding.

Playing to our world leadership in stem cell research, we will also create a Massachusetts Stem Cell Bank to be housed at UMass-Amherst. Once completed, the bank will hold the largest collection of stem cell lines in the world and make our rapidly growing catalog widely available to researchers. Already, a group of competitive institutions have agreed to contribute to the Stem Cell Bank, underscoring the spirit of collaboration so distinctive about our biotech supercluster.

The state will also develop innovation centers to provide industry and the academic community access to cutting-edge facilities and technology. These centers will serve as regional economic engines throughout the Commonwealth, as new companies and jobs open up in the cities and towns around them.

Finally, when an idea is ready to become reality, we will help guide it to the marketplace. Breakthroughs are often lost in investment gaps typical of the movement from early academic research to industry development. We will designate grants to translate discoveries into applications and support partnerships to move new ideas along. We will also work to help life science projects in Massachusetts win federal assistance. Job growth here in the industry is fueled, in part, by federal support, and our companies lead the nation in these awards per capita. Every new job created in the life sciences results in two additional jobs in support services for suppliers, vendors, and construction. What’s good for the life sciences and biotech is good for Massachusetts.-

Deval L. Patrick is governor of Massa-chusetts. Therese Murray is president of the Massachusetts Senate. This article first appeared in the Boston Globe.

Arlene Rodriguez

By BusinessWest Staff May 14, 2007

Cover Story

Age 39. Dean of the School of Arts, Humanities and Social Sciences, STCC

Arlene Rodriguez was born 143 years after Daniel Shays died.

But she feels like she knows the Pelham farmer whose name was permanently attached to the insurrection of 1786-87, which stirred fear in Gen. George Washington and gave strong impetus to the Constitutional Convention.

Such familiarity was but one byproduct of a special project she co-organized last fall on Shays’ Rebellion, one important act of which was played out only a few hundred yards from the Springfield Armory. It was that landmark which, upon its closing, was converted into Springfield Technical Community College, where Rodriguez serves as dean of the School of Arts, Humanities, and Social Sciences.

In that capacity, she has been involved in a number of other programs — from a partnership between STCC and the Community Music School to Rosa Parks Day events to organizing activities for Hispanic Heritage Month — that characterize both her community-minded spirit and her belief that learning takes place inside the classroom and out.

And such learning mustn’t end with a college diploma, she told BusinessWest, adding that the Shays program, Reconsidering the Debt: Scholars Revisit Shays’ Rebellion, offered keen insight into the man who led the revolt and the so-called Regulators who fought beside him.

“Scholars came together and talked Shays all weekend; it’s a great story, and it happened right here,” she said. “I think it’s fascinating, this idea of people getting together and voicing their opinion about something and fighting or arguing with the government; that’s a concept that’s truly international.”

Rodriguez taught courses ranging from English Composition to Latino Literature at the college for a number of years before becoming dean in 2005. She credits deans she worked under with instilling an imaginative, outside-the-box approach to education and teaching.

“I had some great deans who never told me ‘no,’” she said. “They were great role models.”

In her spare time, Rodriguez likes to read (she prefers history and fiction and is fond of the works of Japanese author Haruki Murakami) and write — she’s penned several short stories, most about her parents and life in their hometown of Aibonito, Puerto Rico.

As for the story of her career and her involvement in the Greater Springfield community — there are obviously many chapters still left to write.

OPINION

By BusinessWest Staff May 14, 2007

Opinion

Transparency is the new watchword in government, but we continue to have a public pension system that puts obfuscation first.

Personally, I think we should pay the Commonwealth’s public servants more, not less. However, this payment should come in the form of current salary, not post-retirement benefits. Skewing compensation toward post-retirement benefits is bad for workers and bad for taxpayers, but it is inevitable as long as those benefits are less transparent than wages. By putting compensation into pensions and health benefits that are not transparent, local governments can look like they hold the line on salaries but still reward their workers.

The most natural way to fix this problem is for governments to follow the private sector out of defined-benefit plans and into defined-contribution plans akin to 401(k)s. The transparent nature of defined-contribution plans, in which employers pay regularly into workers’ retirement funds, reduces the incentive for governments and unions to skew compensation toward hard-to-measure post-retirement benefits.

Today, public employees have been promised almost $13 billion more in pension benefits than Massachusetts has set aside money to pay for. We owe another $13 billion for other post-retirement benefits to public workers. The average U.S. state funds 83% of its pension liability. The Commonwealth has funded only 73% of its debt, and a lot of cities of towns are in much worse shape. Quincy has funded only 58% of its pension liability; Springfield has funded less than half.

In any employment relationship, workers receive compensation in the form of salaries, pensions, and health benefits. Ideally, the tradeoff between these different forms of compensation reflects employer costs and employee desires. However, when firms are spending someone else’s money, then there is a strong tendency to load compensation toward non-transparent forms of payment.

In their heyday, Detroit’s Big Three automakers paid extraordinary benefits rather than salaries, so management could satisfy the shareholders by being tough on wages and still avoid being whipsawed by Walter Reuther and the United Auto Workers. Today, these firms are suffering from these debts. Our local governments have pensions that are too high and salaries that are too low, because everyone screams at the prospect of a public servant getting paid a decent wage, but no one who isn’t a CPA can figure out how much a benefits package is worth.

Why is this a problem? From the workers’ perspective, overloading pensions relative to salaries means that they are essentially lending money to municipal governments. That just makes no sense. Because much of their compensation comes only after decades of service, municipal workers have too little today to spend on housing, schooling, and food.

From the taxpayers’ perspective, the pension system’s unpredictability and lack of transparency means that cities and towns will continue to have regular fiscal crises when health and pension costs exceed expectations. Plus, the current system creates enormous incentives for people to game the system by pushing up their wages in their final years of service.

Moving to defined-contribution plans for new public employees would be a step in the right direction. In the private sector, defined-contribution plans are ubiquitous. They allow workers to move more readily across firms. They make payment more transparent and reduce the risks posed by unfunded liabilities. Defined-contribution plans for public employees would have the same benefits.

Contract negotiations would be restricted to the size of the employer’s contributions, and those payments would be transparent. This transparency would eliminate the artificial incentive to backload payment into pensions — a system that does no good for either taxpayers or our public servants.

Edward L. Glaeser, a professor of Economics at Harvard, is director of the Rappaport Institute for Greater Boston. He is a guest columnist for the Boston Globe, where this article first appeared.

‘Where the Rubber Meets the Road’

By BusinessWest Staff April 30, 2007

Sections Supplements

After 32 Years, NESEA Has an Audience for Sustainable Energy Education

David Barclay, executive director of NESEA, in the organization’s Greenfield offices.

Staff at the Northeast Sustainable Energy Assoc. in Greenfield say their phones have been ringing more than ever, and that is bolstering their efforts to create a larger national presence for the organization, which has been educating business professionals and the public about renewable energy for three decades. The road ahead is still long and winding, but as NESEA’s executive director says, this group has the means — and the drive — to reach its destination.

David Barclay says that sometimes, the more things change, the more they stay the same.

As executive director of the Northeast Sustainable Energy Assoc., headquartered in Greenfield, he explained that NESEA began 32 years ago, in the midst of the oil embargo of the ’70s that created mass shortages across the country. At the time, U.S. cars got an average of 25 miles per gallon.

“That’s almost exactly what it is today,” he said, noting further that Ford Model Ts, in their heyday of the 1920s, also got about 25 miles to the gallon.

It’s an illustration of the steady pace of the use of fossil fuels in the country since the advent of the automobile, but also of the energy-saving practices of its residents, which generally tend to be more reactive than proactive.

“There is a tendency now, as then, to get concerned about energy when it is scarce, and not when it isn’t,” he said. “At the time of our inception, as the fuel shortage became less of an issue, many states did away with their energy offices.”

But Barclay has hope for the future. NESEA, a non-profit organization made up of about 2,000 members, is seeing its fastest-growing years on record, and is functioning in a world that, increasingly, sees the value and the importance of its mission: to bring clean electricity, green transportation, and healthy, efficient buildings into everyday use, in order to strengthen the economy and improve the environment.

“What is notably different now are rapidly rising prices and catastrophic climate change,” he said. “Those are realities that have captured people’s attention — in a largely positive way.”

‘The Energy Crisis Has Everyone’s Attention’

Now, NESEA is moving ahead with plans to capitalize on this new awareness, working to increase its membership, which is largely made up of business owners and their employees spanning a 10-state area from Washington, D.C. to Maine.

The organization also hopes to grow and expand its many professional networking and educational programs, and to become a greater presence across the nation in general — its work has been most successful in New England for many years, and Barclay said the time is right to expand west.

A dozen NESEA chapters are now scattered across the Northeast, and members pay annual dues to the organization. About two-thirds of the group’s funding is derived from its membership, either through fees, donations, or revenue from programs hosted by NESEA, the costs of which are often offset by regional and national sponsors. An annual fund drive is also held, and in general terms, the balance of NESEA’s $1.3 million annual operating budget is funded through state, federal, and foundation grants.

Key NESEA programs include building workshops and conferences for professionals, including the largest and longest-running energy conference in the Northeast each year, the Building Energy Conference.

There is also still a strong emphasis on energy-efficient transportation practices, and the organization has a robust education division, which creates programs for both children and adults, and also writes curriculum for school systems.

The Greenfield Energy Park, adjacent to NESEA’s offices, is a local educational offering, including resources and classes for all ages — from business owners to school children.

The group first planted its roots in Greenfield, moving to Brattleboro, Vt. for a time before its current location, on Miles Street in Greenfield, became available. NESEA acquired its headquarters in 1996, and since that time has served as an advocate for several types of sustainable energy, including solar, wind, and hydro-power.

Sandy Thomas, Project Manager for NESEA’s Building Energy Conference and director of the Greenfield Energy Park, said she too has seen vastly increased awareness of NESEA’s work, a development that is as telling as it is encouraging.

“There has been a sharp rise in interest, especially among business professionals,” she said. “The energy crisis has everyone’s attention, and there is a feeling that this is where the rubber meets the road.”

Thomas added that NESEA is in a unique position to help business professionals make choices in regard to sustainable energy.

“There aren’t very many organizations where designers, policy makers, engineers, architects, builders, and many others can join together,” she said. “We network people who need to know each other, and people are listening … they’re calling more than ever, and demanding to know the facts.”

When asked if the new interest NESEA is generating is bittersweet given the many years the group has been advocating the same message, Thomas said she understands the delay.

“Change comes hard to people,” she explained. “The greater number of people listening is icing on the cake for us. I think more people are taking their impact on the environment more personally, hearing these predictions of struggle ahead, and hoping to make the world a better place for their kids and grandkids.”

‘The Means to Get There’

There are other advances that are pushing NESEA’s mission ahead, said Barclay – including the gradual leveling of costs associated with ‘going green.’

“There is a myth that it costs more to be green, and I want to break that myth,” he said, noting that while some green building and energy still costs more than conventional tactics, the returns are better than they’ve ever been, and new techniques and technology are driving those prices down.

“It’s easier with new construction, because you’re not limited to what can be done within an existing design,” he said. “But architects and engineers in particular are consistently finding new ways to reduce consumption at no additional cost.”

Wind power, for instance, is now on par with the price of conventional forms of energy production, said Barclay. Solar still has a way to go to reach that point, but he expects that a decade from now, use thereof will have driven that price down, too.

“To expand the use of renewable energy, individuals, the private sector, and the government all have to work together,” he said. “By connecting businesses to one another and continuing our educational efforts, we have the means to get there.”

‘Planting Seeds Early’

Moving forward, NESEA is now in the midst of a number of initiatives aimed at reaching larger audiences across the country.

“NESEA has traditionally been a New England organization, and we are attempting to broaden that,” said Barclay. “That’s a major effort. We’re working with our chapters to expand their rolls, and we have a much larger public outreach effort underway, to connect with consumers or to connect them with the professionals involved with our organization who can help them succeed with renewable energy practices.”

NESEA’s educational programs are also in the process of expanding — the division’s director, Chris Mason, said he recently completed a curriculum development project with the Pennsylvania public school system, and would like to hold a conference for educators similar to the Building Energy Conference. To do that, he said at least one major sponsor would be necessary.

“It’s a mission to get this into classrooms across the country,” he said. “There is so much activity in the renewable energy industry that people don’t know about; working with children, we’re planting those seeds early.”

And in broader terms, NESEA is revamping its recruitment and membership programs to attract new members and better serve them. Kevin Maroney, trade show manager for the Building Energy Conference, has also been working with NESEA’s membership base, and said that he’s in the process of creating a comprehensive program to present to new or potential partners.

“It’s geared toward making our organization more attractive,” he said. “We asked ourselves the question: ‘as a membership organization, how can we best serve companies?’ And the answer is largely found through advocacy and public policy, all geared toward allowing smaller companies to get the same attention as large corporations.”

Maroney said NESEA is also working now to put together a discounts package, which would allow members to use their membership for savings within a number of partnering stores and organizations.

“Everything is geared toward sustainability,” he said. “And by sustainability, we mean using renewable resources, but also ensuring our members stay in business. Like any industry, there are best practices to learn from. If society is responsible, I think the direction in which we need to move is clear.”

‘We Have an Opportunity to Grow, to Thrive’

Maroney used the metaphor of the American auto industry to illustrate his point — it is imagery that seems prevalent within NESEA’s offices.

“We can learn a lot from that industry — from what worked, and what did not,” he said. “The big thing that has not gone well has been sustainability. I think that’s an issue that started very early on for car manufacturers, and many problems can be rectified if they’re addressed early.

“In my opinion,” Maroney said of the renewable energy sector, “our industry is in its infancy. We have an opportunity to grow, to thrive, and to see what’s working, and what isn’t … by doing that, we can make things happen.”

Jaclyn Stevenson can be reached at[email protected]

Policies, Not Public Appearances, Define ‘Commitment’

By BusinessWest Staff April 16, 2007

Opinion

Much has been said and written recently about Gov. Deval Patrick’s “commitment to Western Mass.” — whatever that is — and whether he will live up to it.
This happens every time there’s a new occupant of the governor’s office, an individual who, during the campaign for office, continually pledged his or her undying support for the region west of Worcester. There is rampant speculation during the first 100 days or so of the new administration about whether the individual in question will pay much attention to this part of the state, and then close scrutiny of everything said or done in search for clues to what will (or won’t) unfold.

The local media dissects such things as the number of people from the 413 area code placed on transition teams, advisory boards, or commissions; the number of visits to the region; and the general tone used when referring to this area. All this is a byproduct of the inferiority complex so rampant in this region, but also a very real feeling that, as some people have said for years, the Pioneer Valley would be better off if it tried to secede and become part of Vermont.

Usually, the governor-watching ends after the first few months in office, when there are more and better things to do with ink and air time, but sometimes it doesn’t; indeed, the local newspaper made sport of former Gov. Mitt Romney’s continued absence from the Big E years after he was elected.

From our vantage point, commitment to this region does not equate to speeches before area chambers of commerce (Patrick has done a lot of that), placing people from this area in state jobs and positions of authority (he’s trying), or even reopening the so-called Western Statehouse closed down by Romney. Patrick vowed to reopen an office in Springfield if the budget permits him to do so.

No, commitment, in our view, means contributing to real progress with the issues that impact this region most — poverty, high dropout rates in urban high schools, job-training programs needed to secure a better workforce, and, in the case of Springfield, programs and people that will help ensure that the city moves forward from its recent fiscal nightmare and doesn’t slide backward.

These are the things to be watching for, and it’s obviously much too early to formulate any opinion.

In our view, Patrick should be far less concerned about any “commitment” to Western Mass., real or imagined, and more focused on those issues stated above, because they impact every region of the state. Indeed, as much as we’d like to think that our problems are unique, they aren’t. High dropout rates are as much of an issue in Lawrence as they are in Holyoke, and workforce development is as big a concern in Fall River as it is in Springfield or Chicopee.

While being visible is important, and this region likes to feel connected — because in large part, it isn’t — programs and policies, and not public appearances, are what define commitment.

Aside from some effective appointments to the Finance Control Board, Romney didn’t honor his commitment to Western Mass. But, in the larger scheme of things, he didn’t honor his commitment to the state as a whole, and that is the bigger issue.

Moving forward, Patrick shouldn’t dwell on whether he opens offices in Springfield, Pittsfield, or anywhere else in this region — those are mostly symbolic gestures. Instead, he should focus on programs that will improve quality of life across the Commonwealth.

And we don’t really care if he comes to the Big E.-

OPINION

By BusinessWest Staff April 2, 2007

Opinion

Health Care Costs are Everyone’s Concern

Suddenly, everyone is concerned about the cost of health insurance. Massachusetts municipalities are raising taxes, cutting services, and even contemplating bankruptcy because of the cost of employees’ coverage. The Commonwealth’s financial reports must soon reflect a $13 billion item for retiree health benefits, hitherto left off the books. Non-profit agencies are realizing that the new health insurance mandate applies to their employees, too. The state’s Health Care Connector Board is struggling to devise an ‘affordable’ health plan, in the face of protests about cost from future customers.

To which those in the business community can only say: “Welcome aboard.”

Employer-sponsored health insurance covers almost three-quarters of the non-elderly population of Massachusetts, and the rapid rise in insurance costs — at a rate that outpaces general inflation by a 3-to-1 margin, averaging 8.6% annually — has long been a principal issue for business owners. The high cost of health insurance, currently averaging $4,147 per year for individual coverage and $11,504 for a family plan, threatens the survival of ‘legacy’ companies (think of the automobile and airline industries) and is a major deterrent to the creation of new industries and jobs, particularly lower-skilled and entry-level positions.

If Massachusetts is serious about leading the nation on health care reform, we must expend as much effort on decreasing cost as on increasing access. The state’s new health insurance law does not take on costs directly, but by extending insurance coverage to every citizen it lays important groundwork for further steps. The individual mandate and concomitant employer responsibilities should eliminate “free riders” from the system, those who can afford health insurance but choose to go without. Fairer funding of free care provided by hospitals will reduce cost shifting and improve transparency. The anomalous tax treatment of health insurance is partially addressed. And, as we are seeing, the new law is giving the cost issue more public visibility.

It is a real, serious issue, and it is an issue for everyone. Those 8.6% average increases, with spurts into double digits, play havoc with the budgets of cities, states, non-profits, and households, as well as the budgets of businesses. There are things we ought not do to control cost, such as rationing — but there are things we can do, ranging from developing a rational health care delivery system with properly aligned incentives, transparency, and electronic medical records to tiered networks which encourage consumers to seek medical care in the most cost-effective settings.

At the Associated Industries of Massachusetts, where virtually all of our members provide the benefit, health care costs have been the number-one concern over the past 15 years. We are convening a group of the state’s leading employers to focus on cost containment, and we look forward to working with health care providers, hospitals, doctors, nurses, pharmaceutical companies, medical device companies, insurers, public officials, and fellow employers toward finding solutions. Failure to get this issue resolved has serious consequences, not just for the recently passed law, but also for our economic future and the well-being of our Commonwealth.

Thomas Wroe Jr. is chairman of the Associated Industries of Massachusetts, and chief executive officer of Sensata Technologies Inc. in Attleboro.

OPINION

By BusinessWest Staff March 19, 2007

Opinion

Make an Investment in Human Capital

“An investment in knowledge,” Benjamin Franklin said, “pays the best interest.”

In preschool classrooms across the region, our future workforce is in training.

Every day, thousands of children enrolled in quality education and care programs are developing the skills and tools they will need in order to succeed in school, the global workplace, and in life.

Studies have consistently shown that children who become early learners become better learners for life. Kids who experience all the benefits of early education get better grades, stay in school longer, and are more likely to go to college. They grow up to be better educated, more motivated, and more productive adults, which makes them better citizens of our community and better employees for the companies — your companies — that do business here.

The children currently in the care of organizations like Springfield Day Nursery will be the adults best suited to perform the most challenging jobs in years to come.

In conference rooms throughout the business community, public officials, strategists, and those responsible for economic development are talking about young children and early education. Why? Because they know the key to realizing business success and economic prosperity is through an early investment in human capital. The idea of early childhood education as an economic development strategy is gaining momentum as a number of influential business groups and companies, including MassMutual and Verizon, have stepped forward in support of new investments in early childhood education.

As the nature of our economy continues to shift to high-tech and biotech industries, better-educated and more highly skilled employees are needed. Preparing tomorrow’s workforce and positioning Massachusetts for future economic growth requires making substantial improvements in children’s early learning opportunities. If you want an advance look at the people who will comprise tomorrow’s workforce, pay a visit to an early childhood center.

But despite the growing volumes of research, statistics, and speeches on the economic and educational benefits of early childhood education, 6,000 Massachusetts children each day — 1,477 in Springfield — grow up without the preschool experience that will allow them to answer the school bell ready and able to learn.

We know all too well what happens when children enter kindergarten without the skills to learn — skills like listening, following directions, getting along with other children, knowing their letters, writing their names, and taking personal responsibility for their actions in the classroom. We know they fall behind their peers on day one and rarely, if ever, catch up. Imagine being five years old and already experiencing the defeating emotions of failure. And who will be to blame when that child someday joins a gang, grows up unemployable, and lives in poverty?

Right now in our community and across Massachusetts, there is a growing effort to spark and sustain economic development. Topping the list, which includes securing developable land for business, retaining graduates from our regional institutions of higher education, commuter rails, safe neighborhoods, and affordable housing, should be a quality public and private education system that includes preschool and all-day kindergarten.

Springfield’s renaissance does not rest solely in a balanced budget. It lies in the ability of forward-thinking adults who understand there is no future without prudent investments made today. When it comes to securing the workforce that will fuel our community’s health and well-being, quality, affordable, accessible early education and care for Springfield’s children is truly the little engine that could.

To learn about local initiatives supporting early education and care, including the George A. and Irene E. Davis Foundation’s Cherish Every Child and the Early Education for All Campaign, log ontowww.sdn.org

Joan Kagan is president and CEO of Springfield Day Nursery, the region’s largest non-profit provider of early education, care, and parenting support services.

Don’t Let the Pendulum Swing Back Too Far

By BusinessWest Staff March 19, 2007

Opinion

Take in a public hearing on tax-rate classification in any local city with a split rate, and you will likely hear some long-time resident rise out of his or her chair and say, “raise the taxes for businesses … they can afford it.” Or something to that effect.

This is an attitude that also seems to prevail among many local office holders — who often have only the local chamber of commerce to offer a differing opinion and thousands of voting homeowners filling their ears — not to mention many in the Statehouse. They won’t use that language, or anything approximating it, but their actions often convey that basic belief.

This is part of the reason why ‘Taxachusetts’ came to be part of the lexicon, and we fear there may be good reason to start hearing it again after many years in which it didn’t apply as much as it has historically. It’s not one big thing that is causing alarm bells to start ringing, but lots of little things that, together, could add up to something big and troublesome.

The latest was Gov. Deval Patrick’s proposed changes that would ultimately raise the income tax burden paid by businesses by some $500 million a year. He calls it “closing loopholes,” but it amounts to a tax hike. The bottom line is that, if these proposals become reality, businesses will have additional expenses, and they will have to recover them through higher prices, smaller raises and reduced benefits for employees, or other steps.

That is the basic math, and it really can’t be argued.

But there’s more to this than adding a few cents to the cost of a loaf of bread or a microchip, increases that most consumers won’t notice and certainly won’t attribute to a governor closing tax loopholes. Indeed, if the small additions to the cost of doing business in this state keep coming, then eventually, companies will start going — to other states that have a more realistic take on how much businesses can afford.

Patrick’s initial response to early criticism of his tax proposals from the Greater Boston Chamber of Commerce is to say that it is a minor increase in the overall corporate income tax burden, 4% by his administration’s estimates. He’s right, but he’s missing the larger point — that this hike comes on top of a larger loophole-closing tax-burden increase implemented by a Romney administration that, by and large, did little if anything to improve the business climate in this state, and, in fact, made it worse.

During his tenure, companies doing business in the Bay State were visited by increases in unemployment insurance levies and a new health care insurance program that will add tens of millions of dollars in additional burden for the business community. Add up all these small paper cuts, and it could amount to a fairly substantial wound, one that might give business owners thinking about coming to Massachusetts or expanding here some good reasons not to.

Like Romney before him, Patrick is faced with a difficult budget situation and choices to make about how to address it. And Romney, like most politicians, to be fair, veered away from the hard choices and chose those that were easier and more politically correct — like closing tax loopholes for businesses that, as everyone knows, can afford it.

But, also like Romney, Patrick was swept into office on the wings of rhetoric to the effect that he would strive to make the Commonwealth a more attractive place in which to do business, something that needs to be done in a state where job growth has been anemic, at best, since those robust times before 9/11.

A small increase in the income tax burden, by itself, is not a huge deal, but, when put in the context of other steps taken lately, it is another sign that the pendulum is swinging in the wrong direction.

Like that homeowner at the tax classification public hearing, the governor and all those on Beacon Hill should understand that there are limits to what businesses can afford — and this state simply cannot afford to ignore that.

OPINION

By BusinessWest Staff February 5, 2007

Opinion

Why the Control Board Should Stay in Control

During a recent appearance at American International College, Lt. Gov. Tim Murphy stated that it’s time for the Finance Control Board that has been managing Springfield for the past 30 months to go. I believe that once he and Gov. Deval Patrick fully understand Springfield’s situation, they’ll come around to my way of thinking — which is that the control board’s work is not finished.

During the FCB’s first two and a half years, I have watched as the city has made steady progress, due in large measure to the board’s undivided efforts. Created by unanimous vote of our legislators, the control board was a thoughtful response to a very complex situation. Rather than impose a single receiver, as was the case in Chelsea in the 1980s, the Legislature created a body that would be reflective of the democratic process. Elected officials — the mayor and the rotating position of City Council president — represent two of the board’s five votes.

Beyond the financial difficulties Springfield experienced prior to the election of Mayor Charles Ryan and the arrival of the FCB, the city was quite literally starving for legitimate attention. Corruption placed a stranglehold on the way Springfield conducted its business.

As a result, very little of the city’s business got done — and not very well.

Thanks to the FCB’s hiring of some effective managers, Springfield’s $41 million budget deficit has been eliminated, and the city now operates with a balanced budget. More than 20 contracts have been negotiated. (It wasn’t that long ago that our police, firefighters, and teachers were working without contracts.) Our resource-deprived departments are now gaining ground on the adoption of 21st-century technology. (It wasn’t long ago that records were kept on index cards and filed in cardboard boxes.)

According to the Finance Control Board, more work needs to be done, particularly in the area of technology: a computerized financial-management system still needs to be implemented. The city should have a centralized payroll system. There is more work to integrate data so that various departments can come to the same conclusions on matters such as permitting and licensing. Zoning reform is still a work in progress.

These critical initiatives — too long neglected — require an effective, non-politicized body in place so that they can move forward in an expeditious manner.

During the receiver’s four-year tenure in Chelsea, citizens were given enough time to lay the groundwork for a new form of government. The charter-review process resulted in the hiring of a city manager. According to my research, two successive city managers have kept Chelsea’s finances in good order for the past 20 years.

I’m not suggesting we need to adopt Chelsea’s solution. Chelsea is a city a fifth the size of Springfield with a land mass about the size of Springfield’s South End. I am advocating for time equivalent to that given Chelsea so that we can conduct a charter review.

Springfield is a complex, $450 million enterprise that gears up for a management change every two years. Can you imagine a private enterprise preparing for a transition in the corner office every 12 months? We need time to review the best practices of other cities our size, facing our urban challenges. Certainly there are ways to combine professional business management with political leadership.

If the Patrick administration is concerned about Springfield, and I have to believe that it is, it needs to keep the Finance Control Board in Springfield for at least two more years. If it’s a simply a matter of semantics, label the next two or three years of the FCB’s tenure transitional. Place the onus on the citizens of Springfield to get their collective act together to lay the groundwork for life after the control board.

In the meantime, allow the FCB to finish what it was created to do.-

Nancy Urbschat is owner of TSM Design in Springfield; (413) 731-7600.

OPINION

By BusinessWest Staff January 22, 2007

Opinion

A State of Fiscal Confusion

Governor Romney claimed Mass-achusetts is headed for a billion-dollar surplus and can afford a tax cut without sacrificing services, then made emergency spending cuts because the state is contending with an unbalanced budget.

Governor Patrick restored Romney’s spending cuts, then warned that the state is facing a billion-dollar deficit in this year’s budget.

Is it any wonder that the public is confused about the true condition of the state’s fiscal affairs?

The saga began more than a year ago when Romney started holding monthly press conferences to announce state tax revenues. He claimed they were rising at a rate that would produce a billion-dollar surplus in fiscal 2006 and called for an immediate income tax cut. During the gubernatorial campaign, Lieutenant Gov. Kerry Healey and Attorney General Thomas Reilly joined the billion-dollar surplus bandwagon, using the claim to justify their support of a lower income tax rate.

Unfortunately, Romney’s assertions had no basis in fact. Although tax revenues in 2006 did rise by a billion more than estimated, the budget depended on $600 million in reserves, so the actual surplus was much smaller.

For fiscal year 2007, which started on July 1, the Legislature once again ill-advisedly balanced the budget with reserves, betting that revenues would exceed the forecast and not actually require their use. In the meantime, however, growth in tax revenues was slowing markedly — from an increase of more than 8% in fiscal 2006 to an estimated 4% in FY ’07.

In October, Romney suddenly announced more than $400 million in emergency spending cuts, citing slowing revenue growth and the budget’s dependence on reserves. The amount of reserves in question — about $250 million at this stage — is too small to warrant ‘emergency’ action with six months remaining in the fiscal year. While Patrick’s decision to restore the cuts leaves the state with a tight 2007 budget, there is still a reasonable likelihood of ending the fiscal year on June 30 without drawing on reserves.

The back and forth on FY ’07 has created an unnecessary and confusing distraction from the real problem, namely how to produce a balanced budget for FY ’08.

Patrick’s estimate of a billion-dollar shortfall is based on calculating the cost of maintaining current state programs next year, plus funding new obligations like post-retirement medical care, while assuming that the growth in tax revenues will continue to slow.

Although the precise shortfall is hard to project, this bleak fiscal picture is consistent with the numbers presented by Romney’s fiscal experts in briefing Patrick’s Budget and Finance transition working group, which I chaired.

In September, the Taxpayers Foundation released a detailed analysis of state finances for the next five years. Even with optimistic revenue assumptions, the study concluded that the state will fall billions of dollars short in meeting priorities like healthcare, local aid, higher education, and capital investments.

The Patrick administration faces a huge challenge in managing sky-high expectations with limited resources, a task made more difficult by the overblown rhetoric and confusion surrounding state finances.

Michael J. Widmer is president of the Massachusetts Taxpayers Foundation.

OPINION

By BusinessWest Staff January 8, 2007

Opinion

Rewarding Corporate Honesty

Small public companies have been bristling under the Sarbanes-Oxley Act, the post-Enron law intended to restore trust in corporate financial reporting. The Securities and Exchange Commission plans to relieve these small companies of some of the act’s requirements. Presumably, the costs imposed on these corporations outweigh the benefits to investors, so some recalibration seems appropriate.

But as the SEC considers which changes to Sarbanes-Oxley might be in order, it has a chance to do something else: reward honest corporations, large and small, for their good behavior.

The 2002 act includes two types of regulations. One type should apply to every public company — for example, basic accounting regulations. With good reason, the act specifies activities companies have to report, how to calculate various items in their accounting statements, and so on. Such regulations need to be standardized, because investors, regulators, corporate boards, and corporate management need identical measures to evaluate and compare the financial statements of enterprises.

The second type of regulation demanded by the act is different and more far-reaching. It directs companies to set up specific corporate structures and internal controls that are thought to discourage abuses. For instance, the act requires companies to form compliance committees within their boards of directors — even if there are only a few directors on a given corporation’s board. Right now, these regulations are standardized, too. But they shouldn’t be.

Corporations can be honest with different structures, depending on their history, size, type of business, and culture, and on the kind of people who work there.

Not all honest organizations follow the same business processes and internal controls. When all public corporations are required by law to follow the same internal structure and compliance rules, honest corporations that have not previously practiced the standard rules must change their internal processes.

This is not as easy as it sounds. Each organization has its own culture — automatic ways in which people expect one another to behave. Like all habits, these are efficient because they do not require the actors to continuously evaluate their actions or weigh the pros and cons of every decision.

Culture and processes, like all habits, are hard to change. This is both their virtue and their disadvantage. As every driver in a new area or an employee in a new organization knows, even good habits of safe driving or collegial behavior are hard to adjust to in an unfamiliar environment. Right now, Sarbanes-Oxley imposes on honest corporations the costs of changing familiar, honest habits into different honest habits.

These costs can be exorbitant and unnecessary. Why should honest companies have to change their ways? Because these corporations have withstood fraudulent competitive practices, they should be exempt from provisions of the act that impose costs of changing corporate internal habits and culture.

Obviously, rogue corporations should indeed change their culture and internal processes. Which is to say, they should change their bad habits. So the second type of regulations — the rules mandating changes in corporate structure — should apply to them and to them alone. And indeed, when rogue corporations are found in violation of SEC rules, most settlements with them include requirements for changing internal processes, which is as it should be.

Applying certain regulations only to rogue corporations would reward the good guys. Those who are freed of the required cultural changes can reap the rewards of lower costs, a better image among customers and investors, and a competitive advantage over those who gained a competitive advantage by illegal means.

How to distinguish the honest from the rogue? This can be done either automatically — you’re out unless proven to be dishonest — or by letting corporations apply for an exemption upon certain evidence of good behavior. Once the principle of reward is adopted, the rules to implement the principle could be designed. In sum, the SEC should consider rewarding corporate honesty by bestowing competitive advantage on the good guys.

Tamar Frankel, a Boston University law professor, is author of Trust and Honesty: America’s Business Culture at a Crossroad. This article appeared in the Boston Globe.

OPINION

By BusinessWest Staff December 26, 2006

Opinion

A Model for Tackling the Energy Challenge

On July 20, 1969, the United States reached the moon, beating the decade’s-end goal set by President John F. Kennedy. Many saw the original timetable as too ambitious. Yet with the country committed to the mission, and with the mission accelerated by federal policies promoting the necessary technological advances, the U.S. flag was planted in lunar soil sooner than even many optimists expected.

Winning the race to the moon was a technological triumph, to be sure, but its benefits reached deep into the nation’s psyche, inspiring a generation of children to believe that they could play a role in the nation’s most exciting ambition and providing fuel for the nation’s innovation economy.

Project Apollo surfaces repeatedly as a model for tackling the energy challenge. Given the urgency of the situation, achieving a secure energy future will, indeed, call for a similar commitment in funding, policies, and passion. The execution, though, will have to be different. More than a discrete undertaking with a single goal, the energy project will have to deliver a broad portfolio of solutions, playing out on timetables measured over a few years to several decades.

No single technology can meet current or projected energy demands. Humankind uses energy at the rate of 14 trillion watts. Supporting that much primary energy use would require about 10,000 large coal plants, at 500 megawatts of electricity each. To generate an equivalent amount of electricity with solar power, today’s deployment would need to be increased several thousand-fold.

Adding to the pressure for multiple approaches to this vast challenge, the time for initiating meaningful steps to curb climate-threatening carbon dioxide emissions is short. It will take a long time to change the energy mix appreciably. Yet we are probably only decades away, at best, from the point of no return on greenhouse gas concentrations.

The university research community has embraced these challenges, with many faculty and students invested in finding energy solutions. Superb work underway on many campuses today, from Berkeley and Stanford to MIT, from the University of Michigan to the University of Texas to Georgia Tech, encompasses an impressive range of new and evolving technologies.

The tireless enthusiasm of students is one reason universities have the potential to play key roles in energy innovation. In addition, while integrating new technologies on a broad scale into an immense and mature sector of the economy will pose complex challenges, universities have expertise to share not only in technical fields, but also in economics, planning, architecture, political science, and management, among others.

Federal energy research funding that is sporadic, at best, is one reason university research has not realized the promise of the post-1970s energy crisis. Happily, this situation is changing. The Department of Energy has increasingly emphasized basic energy research in a range of areas — a welcome recognition that we have much yet to learn on the way to truly game-changing energy technologies.

To fully realize its potential, though, the university community must lower some internal barriers. The standard academic research model of a single investigator, or a small group of people, working on narrowly defined problems is important but, frankly, not sufficient in an energy context. We must develop organizational structures and incentives that encourage large multidisciplinary teams and, where relevant, permit true working partnerships with industry and government groups.

Project Apollo’s inspiration ultimately produced the scientists, engineers, entrepreneurs, and policy makers who have fueled this country’s innovation economy. Today, our nation hungers for a similar inspiration, one that will refocus the attention of our schoolchildren toward science, mathematics, and technology. In fact, our future economic success could depend on it.

Susan Hockfield is president of MIT.

The Pension Protection Act of 2006

By BusinessWest Staff December 26, 2006

Sections Supplements

How the Changes Will Impact Your Bottom Line

Earlier this year, President Bush signed the Pension Protection Act into law. This immense measure (more than 900 pages) overhauls the funding and disclosure rules for defined benefit plans, revises the deduction limits for qualified plans, addresses conversions of pension plans to cash balance plans, liberalizes payout and rollover rules, and, makes a number of other changes relating to pension plans and their beneficiaries.

It also revises specific rules related to charitable giving and makes a number of charitable reforms. As an employee, you will likely see positive changes to the qualified retirement plans at work, so watch for these over the next couple of years. What follows is a summary of a few of the provisions that may affect individuals:

Many Prior Pension, IRA and QTP Provisions Made Permanent

A number of pension, IRA, and Qualified Tuition Program (QTP) changes were made in 2001 but were scheduled to “sunset” at the end of 2010. The act makes these provisions permanent including the following:

Increases in the IRA contribution limits, including the ability to make catch-up contributions;
For individuals age 50 and over, catch-up contributions to 401(k), SEP and Simple IRA plans;
Increases in limits on contributions, benefits and compensation under certain deferred compensation, tax-sheltered annuity and qualified retirement plans; and
Expanded and liberalized QTP rules related to contributions and distributions.

Rollovers OKed for Non-spouse Beneficiaries

Pre-act law did not allow non-spouse beneficiaries to roll over inherited qualified plan accounts to IRAs. The new law permits rollovers of distributions from an eligible retirement plan of a deceased employee to a non-spouse beneficiary’s IRA, beginning with distributions after 2006. For example, children who inherit their parents’ IRA will no longer be required to pay taxes on the balance immediately, but will be allowed to roll it over to their own IRA.

Rollovers of After-tax Contributions

For tax years beginning after 2006, the act permits an employee to make a direct rollover of after-tax contributions from a qualified retirement plan to either another qualified retirement plan or a tax-sheltered annuity, provided that the receiving plan separately accounts for the after-tax contributions and their earnings. Prior to this change, the rollover options of after-tax contributions were limited.

Charitable Giving Using Tax-free IRA Distributions for Those age 70 1/2 and Older

Under prior law, there was no special tax treatment for distributions from regular or Roth IRAs that were used to make charitable contributions. The distributions were subject to the rules at the time and may have been fully or partially taxable. The contributions were subject to the deduction limitations and may have been reduced by the overall limitations applied to itemized deductions.

Under the act, for IRA withdrawals in 2006 and 2007, there is an exclusion from gross income (up to $100,000) for qualified charitable distributions. To be a qualified charitable distribution, the IRA trustee must make the contribution directly from the IRA to a charitable organization as defined by the Internal Revenue Code, and the distribution must be made after the date the owner of the IRA attains age 70 1/2. Only those amounts that would have been taxable are considered to be qualified charitable distributions. No contribution deduction is taken for those amounts that would have been taxable but are now excluded from income. Note that qualified charitable distributions may be used to meet the required minimum distribution rules even though it is the charity and not the IRA owner receiving the funds.

Recordkeeping Requirements for Charitable Contributions

For contributions made after 2006, the act disallows deductions for monetary gifts (cash, check, etc.) unless the donor maintains appropriate records that include either a bank record or a written communication from the donee organization showing the donee’s name, amount, and date of the contribution.

This article contains only a general discussion of the rules, and you should consult with your tax advisor for additional information or assistance.

This article is not a tax opinion. To the extent that this article includes any tax advice, it is not intended or written to be used by the recipient or any other party for the purpose of avoiding penalties that may be imposed by the Internal Revenue Code or any other tax authority.

Jana B. Bacon, CPA is a member of the Firm of Wolf & Company, P.C. a regional certified public accounting and business consulting firm, with offices in Boston and Springfield, and Albany, New York;www.wolfandco.com)

OPINION

By BusinessWest Staff December 11, 2006

Opinion

The Ticking Time Bomb in State Pensions

President Bush recently signed into law the Pension Protective Act of 2006 in an effort to strengthen the financial health of corporate defined benefit pension plans.
However, little attention is paid to a retirement sector in even greater financial straits: state government pension plans. These plans are facing a $1.3 trillion shortfall that presents a serious threat to their very survival — as well as to every taxpayer in the country.

State pension programs — which cover 12.8 million Americans and manage assets worth $2.3 trillion — are a pillar of the nation’s retirement system. By comparison, corporate defined benefit pension plans cover 44.1 million participants but possess fewer assets — about $1.7 trillion.

At first glance, state plans seem to be nearly as healthy as their corporate counterparts: they face a shortfall of $348 billion under current accounting rules, according to the National Assoc. of State Retirement Administrators. This implies they are 86% funded, versus 90% for corporate plans.

However, these projections are misleading. The real shortfall of state-defined benefit pension programs is closer to $1.3 trillion, which translates into the plans being 64% funded. This alarming gap could set off a crisis whose magnitude would dwarf the $200 billion government bailout of the savings and loan industry in the 1980s. Just as disturbing, this threat is largely ignored because of opaque accounting.

Opaque accounting dramatically distorts the liability side of the pension ledger. The key question is whether pension plan liabilities are being properly measured. The liabilities of defined benefit pension plans are measured by using a discount — or interest — rate.

Unlike corporate plans, which must use high-quality corporate bond rates as their discount rate, state pension plans are allowed to use the much higher expected return on the assets they manage, artificially shrinking their liabilities.

This practice perniciously disguises the actual health of state-funded pension programs. As with corporate plans, state plans should be discounted using long-term corporate bond rates instead of the expected rate of return on assets, which is the current practice of most state governments.

Consider how distorting this practice is. Specifically, the average expected return on assets across state pension plans today is about 7.89%, according to the NASRA. Based on this return, their liabilities are estimated at $2.5 trillion. If, however, the plans use as their discount rate the more credible 10-year Treasury rate, at about 4.9%, their liabilities would weigh in at $3.5 trillion — a whopping 42% increase.

Startling as this finding is, it simply stems from applying to state-defined benefit pension plans the same accounting principles that corporate plans must live by.

States must be honest about their pension liabilities and the true value of plan underfunding. They must then take assertive steps to close the gap through a combination of benefit reductions, tax increases, and tapping other sources of non-recurring revenues. Issuing bonds to fund pension liabilities, for example, doesn’t solve the problem, but it makes it more visible by moving the obligation onto the state’s balance sheet, thus encouraging more responsible management.

Longer term, states will probably follow in the footsteps of the corporate sector and both freeze their defined benefit plans and shift employees to defined contribution plans.

While not as economically advantageous in the long term, the latter are often more popular among workers and are more transparent. Under defined contribution programs, politicians would not have the luxury of granting employees generous pension allowances that state plans are ill-equipped to afford, or to consistently defer contributions.

And that would be a relief to taxpayers, once they become aware of the $1 trillion pension bombshell headed their way.-

Thomas J. Healey is a retired partner of Goldman Sachs & Co., and currently a senior fellow at Harvard University’s Kennedy School of Government. He served as assistant secretary of the Treasury under President Reagan.

‘Jackpot Justice’?

By BusinessWest Staff December 11, 2006

Sections Supplements

Today, Medical Liability Means Never Having to Say You’re Sorry

Attorney Ronald Kidd says the nuances of physician liability and medical harm can be difficult for jurors to navigate without expert witnesses.

Could the Bay State’s malpractice problem — and the soaring costs that accompany it — be solved with more openness and civility between doctors and injured patients? Some proponents of changing the current system think so.

It’s been well-documented that the Commonwealth’s system of medical malpractice has forced doctors in high-risk specialties, such as obstetrics and neurosurgery, to pay more than $100,000 in annual insurance premiums — while forcing many others out of the state entirely.

“It’s been shown time and again that when malpractice premiums are high, the physician workforce shrinks, and patients have less access to the care they need,” said Dr. Kenneth Peelle, president of the Mass. Medical Society (MMS). “The current medical liability system is not working for physicians and definitely not for patients.”

Peelle cited the typical long stretch between the filing of a malpractice claim and its resolution — five years on average — and cited a study suggesting that the system pays one-quarter of the people without a legitimate claim, and doesn’t pay one-quarter of the people with a legitimate claim.

“We think the current system is badly broken, and it’s broken from the patient’s perspective,” agreed Dr. Alan Woodward, a former MMS president who now chairs the group’s task force on liability reform.

He noted that only one of every 16 injured patients ever sees money, and it’s not unusual for a monetary award in one case to be 40 times that in another, very similar case. “That’s jackpot justice,” he said. “And it’s justice delayed — and we think that’s justice denied.”

Woodward further explained that the system is heavy on overhead, meaning about 30% of award money actually goes to plaintiffs, with more than 60% going to lawyers, expert witnesses, and layers of administrative infrastructure.

John Bagley, an attorney with Springfield-based Morrison Mahoney, disagrees that the system is in need of fixing, noting that physicians win around 90% of jury verdicts, but only after a lengthy, diligent laying out of the facts.

“There’s a perception in the health care community that the jury system doesn’t work in malpractice cases,” Bagley said, “and I think that’s a misperception based on the fact that the verdicts that are publicized tend to be big plantiffs’ verdicts. And that skews what juries are actually doing.”

He noted that many physicians he has represented over the years say that it’s a stressful thing to endure a lengthy litigation and trial, but when all is said and done, most feel good about the experience.

“The time it takes is just a part of doing business for a trial lawyer,” Bagley said. “The court system can only accommodate a certain number of civil trials at one time, and criminal trials take precedence. Also, on the state court level, where almost all medical malpractice cases are tried, courts are underfunded and understaffed, so that adds to the backlog.”

But there is a better way, Woodward claimed, one that promotes openness between doctors and injured patients, while meting out justice more quickly, more consistently, and with an eye on improving safety in medical settings.

In this issue, BusinessWest delves into the concept of health courts, and the establishment of a climate in which doctors aren’t afraid to tell patients they’re sorry. But first, let’s take a look at how the typical malpractice case is conducted today.

Long Road

In Massachusetts, all malpractice cases have to be approved by a three-member tribunal, made up of a judge, a lawyer, and a doctor. The physician must be in the same field as the defendant doctor but from a different county.

At the tribunal hearing, the plaintiff must provide expert testimony from a doctor. Without this testimony and the favor of the tribunal, the suit may still proceed, but the plaintiff must put up a $10,000 bond. If he loses the case, he loses the money.

Once the case moves to trial, several standards need to be met to formulate a successful malpractice case, beginning with what type of duty the doctor owes to the patient, said Ronald Kidd, an attorney with Robinson Donovan in Springfield.

“When you get in a car and go out on the road, you owe the duty of a reasonably prudent driver to everyone else on the highway — prudent, but not perfect. That’s a critical concept,” he explained. “In almost all cases, a similar duty is owed by a health care provider to a patient.”

The second factor, obviously, is whether a breach of that duty has occurred. That could mean one of two things, Kidd said: a doctor doing something that a reasonably prudent physician would not have done if faced with the same or similar circumstances, or failing to do something that a reasonably prudent physician would have done.

The other two factors are harm, and whether there is what Kidd calls a “proximate causal relationship” between the breach and the type of harm that resulted. And because this area can get technical, often requiring some knowledge of medical practice, both sides in a malpractice case rely on expert testimony, typically from other physicians, to make their case.

“That’s one place a medical malpractice claim differs from a typical tort claim,” Kidd said. “In a normal situation, a juror, in the absence of any expert opinion, can decide whether it was negligence to leave a rollerskate out on the porch where the letter carrier could step on it, or negligence for you to be on the wrong side of the road when the accident occurred.

“But jurors are usually not competent, in the absence of expert testimony, to decide whether a doctor failed to meet the standard of a reasonably prudent physician faced with the same or similar circumstances,” and whether an error in judgment directly resulted in harm, he added.

The law requires expert opinion in such situations — typically someone from the same specialty as the defendant, although that isn’t exclusively the case. Such witnesses on both sides help convince a jury whether or not a doctor acted within the accepted standard of care.

Cases often come down to which expert makes a stronger argument, Bagley said, but that goes beyond speaking skills; for instance, an expert who presents peer-reviewed medical articles to support a certain claim has an advantage over an expert on the other side armed only with his or her opinion. In general, he asserted, malpractice cases are decided on the merits by thoughtful juries. “A well-tried case can be a very impressive thing.”

Some tricky instances arise, Kidd noted, when the accepted standard of care changes over time, which it does in many situations. Take, for example, prostate cancer.

This condition can be detected with a test of a protein called the prostate-specific antigen, or PSA. “It has long been understood that elevated PSA in the adult male is suspicious for the presence of prostate cancer, and would warrant further evaluation,” Kidd said.

But how elevated? In the past, physicians called for further tests when a man’s PSA measured 10 or more nanograms per milliliter of blood. Today, the standard is 4. If a patient sued after a physician failed to order further evaluation, a question might then arise as to when the test took place, before or after the standard changed.

“You can’t expect that, the day after this is published in the New England Journal of Medicine, that this becomes the standard of care for every practice in the commonwealth,” Kidd said. “What is a deviation today might not have been three years ago. Reasonable people can differ over what is the standard of care.”

Let’s Talk

However, that very concept — reasonable people differing — is exactly what’s being lost in the current malpractice climate, Woodward said.

“There’s a culture of silence,” he told BusinessWest. “You’re told to talk only to your lawyer, and you can’t attempt dialogue that might improve patient safety and prevent a reoccurrence. This system thwarts direct communication.”

Part of the reason is that any kind of contrition on the doctor’s part may be used against him in court, which is why Woodward supports an ‘I’m sorry law’ that would make physician apologies inadmissible in court.

“An apology can be therapeutic to both parties,” he said. “In this situation, it’s an important part of the doctor-patient relationship.”

Such a law is just one part of a plan proposed earlier this year by Lt. Gov. Kerry Healey and endorsed by the MMS. Other elements in the plan include tightening the tribunal system to make the standard of proof of negligence more difficult before a claim can proceed; a hard cap of $500,000 on non-economic damages; a reduction in attorney fees from 25% for verdicts over $500,000 to 15% for verdicts over $600,000; and the funding of a patient safety initiative through the Betsy Lehman Center for Patient Safety and Medical Error Reduction.

The bill had made no headway even before the recent elections, and now that Healey is wrapping up her time in a lame-duck administration, it has no chance. But Woodward would not stop with those recommendations.

He sat on a task force of the Joint Committee on the Accreditation of Healthcare Organizations (JCAHO), which was tasked with improving patient safety across all institutions. Members talked about ideas that have been around awhile, such as electronic order entry, but they had some more radical ideas in mind as well — including full disclosure of medical errors and apologies to patients.

Those changes should, in the opinion of the task force, come as part of a complete overhaul of medical liability, one that replaces the current climate of mistrust and gag orders with one of openness and constant improvement.

“We are looking at a system of health courts where we have experts rather than the general court hear cases,” Woodward said. “Medical testimony is often beyond the expertise and understanding of the average person, so it’s better to have someone well-educated and versed in this type of litigation.”

Bagley disagrees. “It’s not a perfect system, but the system works,” he said. “Decisions in these cases are made by lay people, but that’s true of all types of cases. Juries admittedly do not have a medical background, but, having done this for 25 years, I can tell you that good lawyers should be able to present medical evidence effectively through qualified, expert witnesses.”

Bagley sees other problems with a health court system, noting that patients already have options for alternative dispute resolution, such as mediation and arbitration, if they do not want to go the trial route.

“If the proposed solution is to basically move malpractice litigation out of the judicial system, some constitutional issues would have to be dealt with — particularly the right to a trial,” Bagley said. “Just as someone in an auto accident has the right to a court action, someone who is injured through malpractice has a constitutional right to file an action.”

The only area of the law exempt from tort action is workers’ compensation, in which there is no burden to prove fault. However, he said, medical liability is “a whole different concept,” one in which proving or disproving fault is a central factor — and one not likely to change.

However, proponents of health courts envision appropriate, consistent compensation being paid more quickly to patients who merit it, and doctors allowed to speak with — and apologize to — those who have suffered wrong, all the while striving to fix the problem instead of wishing it away through a wall of lawyers.

“When it comes to litigation, when we ask patients what they want, it’s full disclosure and an apology — and to make sure it doesn’t happen again to someone else,” Woodward said. “They also want fair economic compensation, which they clearly deserve, and a system like this has the potential to compensate many more patients than 1 in 16.”

Culture Shock

However, it’s not just the liability landscape keeping doctors from saying they’re sorry; it’s the very culture in which they were trained, said Thomas Gallagher, an associate professor of medicine at the University of Washington. “The vast majority of doctors haven’t had any training in disclosure, and these conversations are really difficult.”

A recent survey revealed that 94% of doctors would be willing to disclose an error if it did not increase the risk of litigation, said Cecil Wilson, board chair of the American Medical Association (AMA).

“Patients deserve to know, and the AMA supports that, but in practice, disclosure may not be as frequent and complete as it should be,” Wilson said. “Our perception is that fear of medical liability litigation is one of the major deterrents.”

But something needs to be done, Woodward said, if only to stem the growing physician shortage in Massachusetts — and to allow the doctors who remain to work confidently and without fear. “If they view new patients as potential litigants, they practice more defensive medicine, which costs this country more than $100 billion a year in tests and consultations doctors wouldn’t order if they weren’t worried about legal ramifications,” Woodward said.

“We have to do what we can to change this system,” he concluded. “It’s obviously broken to those who look at it objectively. We need a kinder, gentler, more efficient, and more just system for everybody — both physicians and patients.”

OPINION

By BusinessWest Staff November 27, 2006

Opinion

A Smarter Look at the Bay State’s Costs

We aren’t in Taxachusetts anymore.

Think about the reasons young college graduates, working couples, or even retirees cite when they say they are leaving for North Carolina or Florida. The costs that are driving our workforce to other states and keeping new employers away are for housing, transportation, and energy — all of which are taking more money out of the family checkbook than other states.

Now that the debate about a tax rollback that would save most families only a few dollars a week is over, the new administration needs to work with the Legislature to find creative ways to control those big- ticket costs that even the anti-tax Pioneer Institute recently pegged as the leading cause of job and population loss.

House lots the size of football fields. Old farms converted to Anywhere USA subdivisions. New water pipes, utility lines, and roads flung farther afield while downtown infrastructure crumbles. The ever-expanding time and distance of commutes — these are things we can start to control, and when we do, costs will drop for all of us, and our tax dollars will be put to more efficient use.

Neighboring states have started to put price tags on ‘building anything anywhere.’ Maine spent $200 million on building new schools in the last two decades, even though the school population is declining — the children are just more dispersed. Rhode Island estimates it will spend $1.5 billion by 2020 on additional fire, police, utility, and road costs and lost urban tax revenue from haphazard growth.

While much attention in our state is focused on the brain drain due to high housing costs, a recent study by the Center for Housing Policy found that transportation actually eats up more of working families’ paychecks. Add to this a finding by Boston Consulting Group that after job availability, access to outdoor activities is the second- most important reason college graduates decide to stay or leave the state. Clearly, the next governor needs to encourage employers to locate in places where people already live, build affordable homes near public transportation, and preserve the parks, beaches, and forests that attract workers, as well as tourists, from around the nation.

To start working in earnest on the kind of reforms that will save us time and money in the next decade, the new governor and legislature need to:

Fund our crumbling transit systems. Let’s put jobs, schools, and shopping closer to homes and transit, adds seats to the T and commuter rail, and expand public transportation statewide to take some of the burden off our choked roads. Right now, we can’t even afford to fix what we have, so we need to consider a full menu of funding options. Proposing to cut tolls while we are raising T fares is exactly the wrong direction to take;
Enact zoning reforms and local aid incentives that remove impediments to affordable housing, encourage towns to recreate the traditional New England village, and protect land of ecological importance. Two-acre lot minimums are sending developers into cornfields. We need to reward towns that grow smart with funds they need to provide local services, not hamstring them into absorbing growth they can’t afford;
Invest $250 million more each year in public infrastructure. The state’s financial managers put a limit on how much new debt the state can take on and retain a good bond rating. Neutral experts believe the state can afford to borrow more to fix our deteriorated infrastructure.

The Patrick administration should build on the Romney administration’s attempt to coordinate investments and policy in transportation, housing, energy, environment, and economic development, ending the ‘silos’ of government that have led to contradictory planning, turf wars, and wasted tax dollars. The new governor and Legislature need to show real leadership in tacking the costs that have lightened our wallets for some time now.

Bold initiatives will cost money in the short term, but in the long term, families will stay and save money, and government will spend less.

Kristina Egan is director of the Massachusetts Smart Growth Alliance.

OPINION

By BusinessWest Staff October 30, 2006

Opinion

Don’t Give Up on Union Station

Congratulations to Mayor Charles Ryan and his staff for orchestrating the recent planning exercise that developed a new vision of the future of the city of Springfield. With technical assistance from the nationally respected Urban Land Institute (ULI), the city’s public and private sectors collaborated in formulating an exciting new blueprint for the city.

The resulting strategy is designed to leverage our abundant resources to secure a bright future for Springfield’s residents and businesses.

But, as we know only too well, the planning is the easy part; the implementation will be much harder. The entire Springfield community will be challenged to support the vision and to cooperate in undertaking specific project initiatives. We all need to become fully engaged as the implementation process unfolds over the next several years.

I am delighted that the city has decided to continue to pursue the redevelopment of Union Station as a priority project. This opportunity was underplayed by ULI, but it makes good sense to continue to focus on Union Station for a number of compelling reasons:

Union Station is an important part of Springfield’s history, and it has great potential for anchoring the northern section of downtown;
As a multi-modal transportation facility complete with commuter rail, Union Station could serve as the transit hub for all of Western Mass.;
A large portion of space in this handsome building could see new life as office space with ancillary retail uses;
More than $40 million in public funds have been committed to the project;
Much has already been accomplished; the property is in public ownership. Its roof has been repaired and the asbestos removed. Architectural and engineering studies are complete; and
Union Station will complement the other critical initiatives recommended by ULI, and it will not compete for the same public resources.

Make no mistake about it, we need to move quickly to bring this project to fruition. A new project manager should be designated, replacing the Pioneer Valley Transit Authority. All the work products prepared by the consultants and engineers should be reassessed with an eye toward devising a practical redevelopment plan that is firmly grounded in market reality. Access issues need to be resolved with Conrail, and commitments need to be secured for the transit operations. A request for proposals should be issued to find a private developer. This is a long and daunting ‘to-do’ list, but it can be accomplished with concerted effort by all involved.

In a larger context, I am very upbeat about Springfield’s future. I believe the city has turned a corner and that momentum is now building. The new federal courthouse is about 60% complete. The public improvements in the State Street corridor will start next year. These projects are only the beginning.

The ULI process challenges us to focus on undertaking a new series of strategic initiatives. These include the redevelopment of the existing federal building, attracting retail to Main Street, developing residential housing on Court Square and in the South End, and continuing riverfront revitalization. Efforts to rehabilitate housing and to stabilize our neighborhoods are also essential.

I look forward to working with Mayor Ryan and Springfield’s emerging private-sector leadership in securing all of these opportunities.

What can you do? Springfield needs to move beyond the cynicism and pessimism of the recent past. We need to turn the page and focus on our future. I hope that you will join me in enthusiastically supporting these efforts to recapture Springfield’s greatness. Let the work begin!-

Richard E. Neal is a U.S. Congressman representing the state’s Second District.

OPINION

By BusinessWest Staff October 16, 2006

Opinion

Tough Times, Tough Choices

“The next governor and legislature will face a staggering mismatch between expected revenues and the costs of a broad array of important priorities . . . potentially in the billions of dollars . . .” This cheery conclusion comes from the Mass. Taxpayers Foundation’s recent report on the Commonwealth’s fiscal condition.

The report states that the fiscal 2006 budget surplus of $400 million has already been spent, the fiscal 2007 budget is out of balance by about $500 million, and only very tight spending controls on everything in the fiscal 2008 budget will deliver a balanced budget during the first full fiscal year of the next gubernatorial administration.

Yet here we are, four weeks away from the November elections, and every candidate for governor is promising more money for local aid, higher education, K-12 education, and healthcare reform. At least Green Party candidate Grace Ross makes no bones about where the money to fund her priorities will come from – $3 billion in new taxes – a bad idea for a state that’s already among the most expensive places to live, work, and do business in anywhere in the U.S.

For now, the budget is mostly balanced — although the taxpayers association’s analysis about the structural deficit in this year’s budget is right on — the economy is doing OK, and most people won’t accept, at least not easily, the daunting reality that’s spelled out by the report. So the next governor is going to face the more difficult challenge of encouraging and demanding caution and discipline at a time when most people might not be convinced that it’s time for broccoli instead of ice cream and cake.

Independent candidate Christy Mihos has done a great job of spelling out the significant economic and fiscal problems we face, but blames the whole thing on Republican leadership. That’s a bit much. Romney vetoed exactly $500 million in fiscal 2007 spending, which was promptly overridden in its entirety by the Democratic Legislature. In addition, many of the Romney administration’s ideas on spending, housing, local aid, education reform, and the like have never even received a hearing on Beacon Hill, much less a vote.

Democratic nominee Deval Patrick has worked hard to avoid becoming trapped into one position or another on the state’s financial situation — choosing not to support the voter-supported rollback of the income tax to 5%, not ruling out the possibility of raising taxes down the road, and avoiding specific commitments on spending. But he’s also done a good job of pointing out that huge cuts in state aid to cities and towns during the fiscal crisis a few years ago translated into whopping increases in property taxes at the local level, as cities and towns scrambled to make up the lost revenue.

Republican nominee Lt. Gov. Kerry Healey carries the political baggage associated with this financial quagmire. Yes, the economy is OK overall, but it’s much better for high-wage workers than it is for middle- and working-class families. Cities and towns haven’t fallen apart, but they’ve created and raised fees, laid off public safety employees and teachers, and supported numerous Proposition 2 1/2 overrides to make up for big reductions in local aid, and voters have felt the squeeze on their incomes as a result.

Healey also walks a fine line between blaming the Legislature for inaction on good ideas while she promotes herself as a check on their bad behavior. If she blames them too much for poor performance, she raises questions about her own effectiveness, and if she takes too much credit for working with them on key issues, she risks having to explain why so many good ideas have never gone anywhere.

Still, she’s the only candidate who’s made it clear that if the choice comes down to cutting state spending or raising taxes, she’s going to fight to cut spending. At a time when the Commonwealth’s budget writers and elected officials will face tremendous pressure to raise taxes just to stay “even,” voters would be wise to keep this in mind.

Charles D. Baker was secretary of health and human services and secretary of administration and finance under Governors Bill Weld and Paul Cellucci.

Big Fish

By BusinessWest Staff October 16, 2006

Sections Supplements

Winstanley Associates Builds a National Reputation from Tiny Lenox
Nate Winstanley, left, and Ralph Frisina at their Lenox offices.

Nathan Winstanley, owner of the advertising and design firm Winstanley Associates, knows that some companies are drawn by marketing and advertising agencies with New York or Boston mailing addresses.

But when it comes right down to it, what businesses large and small want are value and results, and this explains why his agency, based out of offices on Main Street in tiny Lenox, is taking work that might otherwise go to Madison Avenue.

Winstanley and partner Ralph Frisina have actually built two such businesses — they created Lenox Softworks a decade ago to handle software development, Web design, database marketing, and other forms of new and emerging media and technology applications — that boast an impressive portfolio of local, regional, national, and international clients.

That list includes Springfield-based Spalding Sports, GE Plastics in Pittsfield, and Worcester-based Polar Beverages, said Winstanley, adding that assignments for these clients and others have ranged from branding to market research; public relations to design of both products and packaging. Often, it’s many or all of the above.

This one-stop shopping phenomenon, combined with a team approach to handling projects, has prompted companies to get out the map and find Lenox, said Winstanley, noting that, while the rural location may raise some eyebrows with CEOs, it is an attractive draw for talented marketing and graphics professionals not enamored with big-city life or cost of living. And this has played a big role in the company’s steady growth in recent years.

“We work in a 200-year-old inn,” he told BusinessWest. “I can’t tell you how many times other companies have called to ask if they can use our boardroom for meetings instead of their own.”

Frisina has a different, even more poignant take: “I can go fishing in 10 minutes if I want to,” he said. “People in New York City can’t.”

Take Me to the River

Regardless of the proximity of favorite fishing holes, though, Winstanley Associates has enjoyed both national and regional success for more than 20 years, and is currently positioned to expand further with a solid set of national and local projects.

The company, which specializes in advertising, public relations, and design, including that of products and packaging, was founded in 1984 by Winstanley. Frisina, with rod and reel in hand, joined the firm two years later. Both men brought with them different sets of skills that they say blend well and lend themselves to the work in which the firm specializes.

Winstanley has a background in writing and marketing, having worked previously in public relations, as a speech writer, and later as Marketing and Communications director for General Electric, while Frisina remains actively involved as an artist and illustrator as well as a partner and creative director.

Winstanley said those strengths helped build a springboard for the company, launching it into a number of diverse projects early on in the areas of design, marketing, and interactive media. The firm has many recognizable brands in its portfolio, including Adirondack Beverages, Spalding, and Smith & Wesson, with which Winstanley recently announced a variety of new product launches and packaging design projects.

Over the years, said Winstanley, he and Frisina have tried to cultivate a comfortable work climate at the firm that values individual talents as well as a team-based approach, but, more importantly, one that also takes into account the importance of careful, deliberate work processes. And as the company continues to expand (Winstanley said it is in a “fairly aggressive growth mode”), that corporate mission is becoming even more intrinsic.

“Everybody works on different things here, because it’s important to keep people fresh and working on a variety of different things,” he said of his company’s 30-odd employees.

“I think that when you boil it all down, two things we really focus on are, first, we work very hard to understand the dynamics of each business issue we are presented with,” he continued. “When you pay that kind of due diligence, what you end up with is a clear statement of purpose when you work. Two, we look for employees who have a certain distinction — a sense of developing a voice and telling a good story. Both of those strengths lead to projects that are consistently well-built.”

School of Thought

It also leads to wide-ranging projects with clients, which Winstanley Associates often handles from the proverbial soup to nuts.

“Ten years ago, it wasn’t uncommon that one large client would have a number of agencies working with them on one project,” said Winstanley, adding that his firm can, and often does, multi-task. “We can help with packaging, design, and the business communications piece — both internal and external communications — and provide one source for many aspects of a job for many of our clients. And we believe that the quality of messaging is improved when it is controlled by a single source.

“We also do a lot of research, which is underutilized in our industry,” he continued. “We use focus groups, research groups, feasibility testing … we don’t make it big and formal, but we use it enough to give ourselves a grounding so we don’t get too far off track with a project or how we feel the end result will be accepted by the client or the public.”

This set of diverse qualities has helped the Berkshire firm earn a reputation as a company that can handle various aspects of a project under one roof, with the added benefit of having the agency’s principals working closely with the client.

“We’re probably not set up ideally for a multi-billion-dollar company,” said Winstanley, “but for companies worth a couple-hundred million, we fit the bill. And if you’re of that size, you’re working with Ralph and I and a senior team, not someone who will be moved off the project in a few months or who will leave the company in a year to go elsewhere.”

Frisina added a wrinkle to that policy for the benefit of potential clients: “Your art director will not be an intern.”

Going Swimmingly

The company’s client list and portfolio of recent projects provide evidence of its versatility and ability to take a project from start to finish, said Winstanley.

Over the past year, the Polar, GE, and Spalding accounts have taken on particular visibility, he noted, adding that those three clients have required not only assistance with marketing and packaging new products, but also with design of the products themselves, in many cases, as well as some key, targeted positioning in various markets across the country.

“Polar just recently completed a new line of packaging that involved a fair amount of research on our part,” Frisina said, explaining that the client requested fresh designs to attract new customers and effectively introduce a high-end line of beverages called Cape Cod Dry.

Similarly, Winstanley worked with Spalding to create support materials for the new NBA game ball, which will be put into play later this month, as well as the successful Neverflat ball, so-called because it will keep its bounce longer than traditional products, which was introduced last year.

“We were very involved with the actual design of the ball as well as support materials and the marketing of it,” said Frisina. “Now, Spalding is developing a Neverflat soccer ball, and line of basketballs for the All-Star Game in Las Vegas, which we’re also involved with.”

Frisina said those Vegas-themed balls will include designs inspired by Sin City, such as the surfaces of craps tables and hotels on the strip.

And through a completely different type of relationship with GE Plastics, Winstanley has helped introduce a predominantly industrial product — the hurricane shutter — to more residential consumers. The item is now being made more widely available to customers by GE through a partnership with Home Depot.

The product is selling particularly well in Southern states, where residents are taking the task of battening down the hatches much more seriously in the wake of Hurricanes Katrina and Rita.

“What we’ve done in this case is take an industrial product and help put a consumer overlay on it,” Frisina said. “Marketing was all done in the Southeast, and we created some successful store displays for Home Depot.”

Despite its national reach, the company continues to work closely with several regional companies of varying sizes, such as the Berkshire Museum and Lenox-based Legacy Banks, for which they’ve created some distinctive art used in posters, billboards, and print ads.

“Most of our work is national, but some of the projects I like the most involve regional art work,” said Winstanley. “One thing that helps us is that Ralph could make his living as an illustrator, without question — he won’t say that, so I will. For a long time, we worked with entities such as Shakespeare and Co. and the Berkshire Museum’s Festival of Trees. We used to do a fair amount of illustrations for smaller and local clients, many of which we still have, because they love the fact that we’ll work with them and give them our best creative work.”

Beyond the Sea

Winstanley added that Legacy Banks is a good example of a company that has crossed over to work with the sister company, Lenox Softworks, which has emerged as a leading player in Web site design work, database marketing, and software development — all services that are in growing demand from clients.

“Legacy Banks needed a secure server environment, and we provided that by essentially building an entire data center,” he explained. “That’s probably the best example of cross-over between the two companies.”

Having two companies under one roof is an added plus for clients with various needs, especially new-product development and introduction, Winstanley noted, adding that, to continue to hone that identity as an all-encompassing marketing and design resource, the company has extended its services gradually, yet steadily, into the new media market with Lenox Softworks as a primary driver.

Formed 10 years ago with the assistance of two professors from Rensselaer Polytechnic Institute, Lenox Softworks continues to move forward with the goal of understanding and developing technology and media, and further, applying it effectively for clients.

“Lenox is essentially the new-media-development arm of what we do,” Winstanley said. “The two companies have shared employees, but we explain the relationship as sister companies in order to build both companies individually while still offering integrated services.”

Lenox Softworks adds a new, and increasingly necessary, facet to the services Winstanley Associates can provide.

“What that does is alleviate a lot of the coordination that needs to happen internally,” he explained, “because we’re aware of the various things that need to go into the product development.”

Increasingly, Lenox Softworks also allows both companies to respond to important marketing trends, among them database marketing and online marketing.

“The old days of direct mail have morphed into database marketing,” said Frisina. “We’ve been very aggressive in offering services such as search engine optimization, and have invested considerable resources aimed at getting the right message to the right people; that’s becoming more and more imperative as the Internet gets bigger and more complicated.”

Collaborative projects between Winstanley Associates and Lenox Softworks are common, but Winstanley said Lenox provides services independently as well.

“When we started Lenox Softworks, the Internet hadn’t really caught on,” he said. “Today, we’ve evolved with the Internet to create back-end data solutions for clients, and provide integrated communication-applications for Winstanley clients. But it also functions alone, in the areas of software development and educational multi-media development.”

Lenox Softworks has also developed long-standing relationships with national publishers, among them John Wiley and Sons and McGraw-Hill, for which the firm develops companion CDs for textbooks.

The educational sector is one area where Frisina said both companies are seeing substantial growth, and in the coming years will look for additional opportunities.

“Our growth plan includes trying to become a good-sized regional agency within 100 miles and with some distinctive category experience,” said Frisina. “We’ve had a lot of sporting goods-related clients, the food business has been big, and we have a good understanding of the needs of educational and industrial clients.”

Hook, Line, and Sinker

That knowledge, augmented by experience, is primarily what is driving the firm forward and creating a national name for the company that, essentially, bunks the idea that companies must look to Boston or New York for marketing ideas and results.

“Being in Lenox is our biggest strength and biggest weakness,” said Winstanley. “Sometimes, people want a large agency out of one of those two markets. But at the same time, our work shows that you don’t have to be from a big city to produce great work.”

A number of people at Winstanley Associates and Lenox Softworks share that opinion, as well, and it’s those employees that Winstanley and Frisina actively recruit.

“A lot of people want to be in the ad biz but don’t necessarily want to be in New York City,” he said, “so we’ve tapped that talent and brought them here. There’s less overhead, and they’ve found out they can do a lot without big-city costs.”

In short, Winstanley Associates has been built on the premise that there’s nothing wrong with being the big fish in a small pond.

Jaclyn Stevenson can be reached at[email protected]

Find Your Market Niche

By BusinessWest Staff October 16, 2006

Sections Supplements

And Build a Stronger Brand

Many business leaders think their logo is their brand. Actually, that’s just one element of it. You can easily purchase a new logo and stationery package, but a new graphic look, unsupported by an understanding of your market niche, is just artwork. A new look alone is really a waste of money. Your brand is so much more than that.

Ultimately, your brand is the way people feel about you — good, bad or indifferent. Since it is the summation of your customers’ total experience with your company and/or product, unless you are creating a new company, product, or service from the ground up, you can’t just wave a magic wand and create a brand.

It is the indelible mark imprinted in your customers’ minds. Your logo just happens to be the symbol representing it.

Think of your favorite sports team. Its logo represents a lot of emotion. Another logo can just as easily conjure up feelings of dislike, yet they are both just symbols. A logo is the visual equivalent of Pavlov’s bell. It incites a memory of an experience and a feeling, and it helps to condition your customers.

The primary marketing aspect to be concerned with is positioning. Your brand’s position in the market is the basis of your identity and value proposition, and it helps to define your niche. Your positioning becomes the very heart of what is communicated to your target audience because it demonstrates your advantage over your competition. It focuses your advertising on the benefits that your customers actually get from your product. When you fully understand your customers, you can create an image that represents your product as a direct reflection of what they want.

Apple was brilliant in positioning the iPod as the MP3 player of choice. It’s not a unique product. There are many competitive MP3 players on the market that work just as well, with similar features. Apple was smart, though. It came up with a sleek design, positioned it as the cream of the crop, and created a desire among a specific market niche, discriminating potential MP3 player users. Apple created the perception that the iPod was the MP3 player of choice. It was so successful in branding it through its positioning that iPod is now a status symbol and the MP3 player wanted by millions. In fact, people are starting to refer to all MP3 players as iPods regardless of the brand, like calling a bandage a Band-Aid or a tissue a Kleenex. Now that’s branding!

One trap that many business owners fall into is believing that their brand is what they think about their product, when in fact that’s not necessarily true. Your opinion is not nearly as important as your customers’ impressions about your product or service.

It is possible for you to guide customer perception of your product, however. Positioning is all about determining who your customers are, what is appealing to them and what they want and need, then determining why you are their best source for your product. Positioning turns your business focus to the only people who matter, your customers. It creates a customer-centric culture and is the first step toward creating your brand.

Positioning shows you where your niche is. You need to reach a critical mass of your target demographic with your message, so no matter how hard a salesperson pressures you to try his media, if your customers don’t pay attention to it, it’s a waste of money. If your positioning is done properly, you will know your customers so well that poor, money-wasting choices will be eliminated.

There is a way for your company to create a unique position in a crowded marketplace. Consider the following coffee industry example. After everybody copied its flavored coffees, Dunkin’ Donuts chose to develop specialized products. They went after a market looking for tantalizing cold drinks. Their Coolatas remain a hugely popular warm-weather treat with average, everyday Americans, and their Smoothies are another blockbuster success. Dunkin’ Donuts is careful about creating messages that appeal to everyday folks.

Starbucks went to market differently. The average-Joe appeal position was taken by Dunkin’, so rather than being a wannabe or a me-too, they chose to capture the attention of a different kind of customer. For these customers who don’t mind higher prices, the Starbucks appeal is as much about the cup as what’s inside. They consider themselves Starbucks drinkers, and this actually becomes a part of their identity.

Dunkin’ Donuts and Starbucks are both powerful brands that got that way through consistent and diligent positioning strategies. The common denominator is that the customers of both want beverages, but the companies went after different segments of the population. They thoroughly know their customers, and they create and market only products that appeal to these folks. They don’t try to be all things to all people, but rather stick to their own niches.

So, what is your niche? Have you clearly identified your customers and positioned your product to appeal specifically to them? Remember that your perception is irrelevant; so as long as you understand the demographics and psychographics of your customers, you can create a brand that is relevant and holds appeal to them. Once you do that, you can grow.

Christine L. Pilch is a principal with Your Brand Partnership who helps businesses position and brand themselves for accelerated growth;yourbrandpartnership.com; (413) 537-2474.

OPINION

By BusinessWest Staff October 2, 2006

Opinion

Quenching the State’s Growing Energy Thirst

People stuck in elevators, ATMs and cash registers shut down, television stations off the air, surgeons waiting for the operating room lights to come back on. Scenes from Hurricane Katrina? No. These incidents occurred during California’s rolling blackouts in 2000.

To ensure there is enough power in Massachusetts, the next governor will have to confront the state’s energy challenges. The state set four power records this summer. Even though the lights stayed on, we could face energy shortages as soon as 2008, according to the power grid operator for New England.

The state got into this situation the old-fashioned way: more demand than supply. Basically, residents’ lives and jobs are more dependent upon electricity. Computers, iPods, mobile phones, and bigger homes, to name a few, all contribute to the increased use of electricity. But even though Massachusetts has increased its use of electricity by 250 megawatts a year, we have not substantially increased electrical generation since 2001.

If Massachusetts is going to attract more businesses, jobs, and residents, then the state needs to have enough electricity for businesses to expand and to ensure that the lights stay on.

And the state has to face some difficult facts: It cannot simply conserve its way out of the problem by becoming more efficient or turning to renewable sources to generate power. Massachusetts businesses are leaders in energy efficiency, spending almost $100 million a year on programs in that area. Consumers and businesses have given the Massachusetts Renewable Trust Fund a half a billion dollars since the fund was created. Even with these investments in energy efficiency, the state’s net energy use is still rising.

With predicted shortfalls as soon as 2008, increasing supply through renewable wood and hydroelectric, wind, and biofuels generation is a step in the right direction. However, these largely intermittent resources, with significant siting challenges, may not be available soon enough to provide the power the state needs. Emerging technologies are exciting and should be encouraged, but they likely won’t be available in time.

So, if the state is going to improve its economy then it must build more facilities to increase the production of energy, improve the delivery infrastructure, and be more energy efficient . One way to make the cost of living and doing business in Massachusetts more affordable is to have a balanced energy policy that will provide electricity that is affordable and readily available for businesses and residents.

Here are three suggestions that the next governor should implement in the first 100 days in office:

First, we need more power, so we need to build. There are a lot of companies willing and able to build more generation capacity in Massachusetts — and pay for it. There are numerous liquefied natural gas projects that would bring more energy to Massachusetts. There are utilities poised to put up new transmission lines. These projects all need to be undertaken. We need to bring more partners to Massachusetts by saying yes to projects that make sense. Doing so will bring more jobs and residents to work in the state while insuring reliable power.

Second, we need to make the permitting process work faster. Right now, getting the required permits for an energy project can take years and a lot of money. As a result, Massachusetts has not been building the power it needs. Our energy challenges are too demanding to waste time and money in a waiting game where no one wins. We need a thorough, predictable, and swift process that is fair to everyone and helps the state meet its energy needs.

Finally, we need tax incentives for renewable and alternative energy development in Massachusetts. Additional development of these energy resources will provide a more balanced approach to solving the challenge we face that also helps our environment and creates jobs.

For now, the lights still turn on when we hit the switch. But the next governor has to act in a forceful and comprehensive way. There are hard choices to be made in siting, demand reductions, transmission line development, energy efficiency programs, and green power generation. But, the way to do it is to have a balanced energy policy that delivers affordable and reliable electricity for everyone.

Richard C. Lord is president and chief executive of Associated Industries of Massachusetts, a nonprofit, nonpartisan association of employers and institutions. Angela M. O’Connor is president of the New England Power Generators Association.

OPINION

By BusinessWest Staff September 18, 2006

Opinion

The End of Binge-spending Days

In 1981, I learned about cycles the hard way. I invested in Texas real estate when it was at an all-time high only to see values, and my investment, take a nosedive. This experience alerted me once again to the law of cycles: What is up will eventually come down, and what is down will go up.

When I took office, the Massachusetts economy was down. My team and I went to work to find ways to economize and to eliminate duplication and waste. We cut back on “nice to have” spending that we just couldn’t afford. We had our share of disagreements with the Legislature: the budgets I proposed did not cut school funding, for instance. But we were steadfast in avoiding new taxes. And, of course, our success in managing during the down years benefited from the state’s rainy day fund. Thanks to the courage and foresight of prior Republican governors and Democratic legislators like former speaker Tom Finneran, money saved during the good times helped to smooth out the bad.

Over the last three years, Massachusetts has come back. Businesses are hiring again, and we even read stories of employers creating incentives to retain older employees in the face of worker shortages. Our state and local tax revenues have gone through the roof. In fact, state tax receipts have exceeded forecasts by over a billion dollars for each of the last two years. A year ago, we refilled the rainy day fund.

Which brings us to today. When things are up, it’s easy to forget the law of cycles, and to spend like “up” is the only direction the economy will ever go. That’s just what happened in this year’s budget debate. On June 30, the Legislature passed a budget that spent not only all of the record tax revenues and all of the billion-dollar surplus, but also $500 million from the rainy day fund. The Legislature’s bet must be that if the Massachusetts economy keeps booming next year, no one will be the wiser. But there may already be signs that this is a bad bet: Tax revenues are below forecast for each of the last two months. And the law of cycles will not go away. Sooner or later, a downturn is inevitable. The spending spree will lead to deep cuts, big borrowing, a call for higher taxes, or all of the above. The fingers of blame will be pointed in many directions, but spending— runaway spending— will be the real culprit.

While we did address some of our critical infrastructure needs relating to state roads, bridges, and our system of public higher education, the budget included line item after line item of less-than-essential projects, such as merry-go-rounds and gazebos.

Every legislator and politician knows this spending can’t be justified, so why do they do it? Because it gets politicians praised — and re-elected. There’s no courage involved in spending more money. Drawing a line on spending is hard and fraught with criticism. When I vetoed $458 million of excessive spending in the budget this spring, I knew that community newspapers across the Commonwealth would decry my elimination of local pet projects. And, I knew that the Legislature would over ride most of my vetoes. In fact, they overrode all of them, to a chorus of community acclaim. But someone has to say “no.”

This year’s budget battle is history, but my concern is that the spending binge will continue unabated. Social service advocates always want more. Last month, I vetoed a bill mandating free pre-school for everyone, which would have cost over $1 billion a year. Government unions will want more. We have attempted to limit increases in state employee contracts to roughly 2 percent annually, unless there are significant concessions. But the unions will be expecting a more generous deal from the politicians they endorse in the fall elections — and if history is a guide, they’ll get it.

Yogi Berra famously said: “It’s déjà vu all over again.” He’d learned the lesson of cycles. We’ve seen cycles here in Massachusetts often enough to have learned as well. But we’ll need a hefty dose of courage from politicians and vigilance from citizens if we are going to be as well-prepared for the next inevitable downdraft as we were for the last one.

Mitt Romney is the governor of Massachusetts.

Position Statement

By BusinessWest Staff September 18, 2006

Sections Supplements

PeoplesBank Will Aggressively Expand Its Reach

Joe LoBello, left, and Doug Bowen have charted an ambitious course for PeoplesBank.

Facing life in a stagnant, over-banked market, many area community banks have opted to go public or form mutual holding companies, steps that provide capital and some flexibility. Holyoke-based PeoplesBank has opted for another course, however. It is planning to stay mutual, and has announced ambitious plans to add six more branches over the next two years. The bold initiative was formed in response to current industry trends and recent banking history — and the firm belief that it will repeat itself.

Joe Lobello said he started getting calls seemingly within a few minutes after the story broke about his plans to build six new branches over the next two years, on top of three more opened this year, thus expanding PeoplesBank’s reach into Springfield, West Springfield, Northampton, and other communities where it has lacked a presence.

“People thought I was out of my mind,” said LoBello, longtime president of the Holyoke-based institution. “Everyone knows this area is seriously over-banked and saturated with branches; they thought I was crazy to be adding to six more.”

But there is a method to this perceived madness.

It is grounded in both recent industry trends and some Western Mass. banking history lessons. The former involves continued conversion of local mutual banks into either stock banks or mutual holding companies — Chicopee Savings just went public this summer, and Hampden Bank recently announced plans to do likewise — while the latter concerns the track record of banks after they have gone that route. Statewide, nearly all of them, including Springfield Institution for Savings and Woronoco Savings Bank in this market, were acquired by larger institutions within a few years of going public, actions that were accompanied by loss of market share to remaining community banks.

LoBello firmly believes that history will repeat itself, and he is positioning his bank for when it does.

The expansion blueprint, the lynchpin of a five-year plan crafted by bank officials and consultants in late 2003, calls for the bank to move aggressively into several communities where it has lacked presence beyond ATMs. The first move was into Westfield, with a branch that opened this past spring, followed by the opening this fall of the bank’s first branch in Springfield, at a site on Wilbraham Road in the city’s Sixteen Acres section, and the bank’s second location in South Hadley. On the drawing board are three more locations in Springfield — the locations have not been announced — as well as a branch in West Springfield on Memorial Avenue, another in Northampton at a yet-to-be-disclosed location, and still another in Wilbraham.

That will give the bank 20 locations by the end of 2008 and a presence in most larger communities in Hampden and Hampshire counties, said LoBello, adding that this portfolio will be accompanied by status as one of the last mutual banks left in the region and the third largest in the state. “We’re a vanishing breed,” he explained, noting that, by his count, PeoplesBank and Monson Savings are, or soon will be, the only mutual banks left in Hampden County.

But a breed apart, he continued, noting that he is a firm believer in the mutual bank model, even as fewer institutions follow it. “That model allows us to focus on customers, employees, and the community, rather than shareholders; for more than 120 years, it has been a winning strategy for us.”

Recent performance would validate that claim; the bank has seen double-digit growth over the past year in assets, deposits, and loans, and strong numbers at recently opened branches. Indeed, the East Longmeadow branch that opened in late 2004 is nearing $60 million in deposits, far ahead of industry averages for that time span, and the Westfield branch is approaching $15 million in just over one quarter.

“We’re picking up market share, and that’s why we have confidence in what we’re doing,” said LoBello. “We’ll do well as we expand the franchise because it will be very convenient — people can bank with us in virtually any community in Western Mass.”

This issue, BusinessWest takes an indepth look at PeoplesBank’s blueprint for the future and why it makes perfect sense — to LoBello, if not to some others in the local banking community.

Branching Out

LoBello fully understands why some in the banking community believe mutual institutions are dinosaurs. The access to capital — tens if not hundreds of millions of dollars garnered through IPOs — would seem to give stock banks and mutual holding companies a decided competitive edge and better odds of survival, he said, stressing that word seem.

And he wouldn’t criticize any bank for taking either step — some institutions believe they need that capital if they are to achieve growth in a stagnant region with at least one bank branch at seemingly every intersection. Still, he prefers life as a mutual bank and has some evidence that such institutions remain independent longer — and can grow at comparable if not better rates — than stock banks.

Indeed, among the more than 80 Massachusetts thrifts that converted to stock after Oct. 31, 1982 (when changes in the law permitted them to do so) only a handful remain independent today. That trend has held in this market, where SIS and Woronoco, two banks that have converted within the past 12 years, have been sold. Meanwhile, another stock bank, West Springfield-based Westbank, is being acquired by New Alliance Bancshares of New Haven, Conn.

With three more community banks now or soon to be public (Westfield Bank is converting from a mutual holding company, where a minority of shares are owned by the public, to a fully public company), PeoplesBank is opting to buck that trend, not follow it.

That was the consensus reached during strategic planning sessions that yielded the five-year plan and the bank’s aggressive expansion plans.

“We looked at the market and, like everyone else, said, ‘its over-banked, it’s over-branched, there’s no growth — what do you do?’” he said. “We came to the opinion that we would create an institution, the only large independent bank left, that would have a presence in every major community.

“That would give us a footprint similar to Banknorth and Bank of America,” he continued, “and that would put us in an excellent position for what we believe will be continued consolidation of this market.”

LoBello is committing a substantial amount of capital — an estimated $2 million to $2.5 million per branch in terms of startup costs — to test the validity of this blend of theory and history, but he approaches the exercise with confidence.

The plan essentially calls for the PeoplesBank to widen its reach to virtually every corner of Hampden and Hampshire counties. This process has been ongoing, said Douglas Bowen, the bank’s executive vice president and chief lending officer, noting that the institution has, in recent years, added locations in Longmeadow, Hadley, East Longmeadow and Amherst, and opened the Westfield branch on East Main Street in April.

The recently opened branch in South Hadley gives the bank two locations in that community (the other is on Newton Street), said Bowen, adding that West Springfield, Northampton, the largest community in Hampshire County, and especially Springfield, are the next frontiers.

The Sixteen Acres office, located near the intersection of Wilbraham Road and Parker Street, gives the bank a foothold, said LoBello, adding that plan is to build on that presence over the next few years. And while competition within Springfield is stiff, and growing, and the economy there is still largely stagnant, LoBello sees opportunities for his bank.

“The Springfield market is a natural extension for our expansion because it is the largest city in Western Mass.,” he explained. “One-fourth of the consumer households in Hampden and Hampshire counties are located in Springfield, and there are more than 4,500 businesses in the city that employ over 106,000 people.”

Checks and Balances

While he wouldn’t reveal where the bank is looking to place sites in Springfield, LoBello said the downtown area would not be in the mix, at least not initially. There are already a number of banks along the Main Street corridor, he explained, and some that have joined the roster in recent years, including Westfield Bank, have struggled somewhat.

Meanwhile, the process of finding sites anywhere has become more complicated and often more expensive, he continued. The reasons? For starters, the seemingly non-stop addition of new branches by all area banks has created intense competition within the industry for sites. Meanwhile, a host of national retailers, including CVS, Walgreens, and others, have been adding more and bigger stores in recent years, often assembling large sites at major intersections to do so.

“There are only so many good locations out there, and sometimes it takes some imagination to create a site,” he said, noting that the Sixteen Acres branch was built on parcels that were formerly home to a liquor store and an appliance outlet. “All the good, easy sites are gone.”

Assuming that sites can be assembled in Springfield and elsewhere, the next challenge is gaining market share, and LoBello said recent history allows him a good dose of confidence.

Over the 12 months that ended June 30, the bank saw assets grow by $200 million, or 18%, to $1.3 billion, making PeoplesBank the largest independent, mutual bank headquartered in Hampden County. Meanwhile, deposits grew by 22%, to $863 million, over that same period, while loans grew at a 25% clip, to $950 million.

And while the overall numbers are healthy, the performance at recently opened branches has been particularly strong, said LoBello, noting that, while mutual banks can afford to be more patient than stock institutions when it comes to growth of specific branches, PeoplesBank has seen quick results in many communities.

“The East Longmeadow branch is the most successful I’ve ever seen,” he said, noting the $58 million in deposits and more than $30 million in loans it had amassed as of early September. “The numbers are tremendous for being open just over a year.”

The Westfield branch is off to an equally solid start.

“For historical perspective, in a normal branch, you’d expect to see maybe $5 million the first year, and another $5 in the second and third — that’s the industry standard,” he said. “We’ve done that in less than six months.”

This absorption of market share comes in a community where a major player, Woronoco, was headquartered before being acquired by Berkshire Bank, and also where Connecticut-based Webster Bank has made one of its initial forays into the Western Mass. market. All this bodes well for LoBello, his loyalty to mutuality, and his ambitious five-year plan.

“We’re very confident that within the next five years there will be further consolidation in this market, among not only the large regional stock banks, but also the smaller stock banks,” he said. “We want to be positioned for when that occurs, because we’ve seen what happens when banks are acquired; when Fleet bought Bank of Boston, every community in this area picked up market share.”

Taking Interest

Lobello said he believes the presidents of area banks that are or soon will be public are sincere when they say their intentions are not to sell their institutions.
But history shows that this is the course that most will eventually take. Just when eventually will arrive he’s not sure. What LoBello is sure of is that his bank will be ready and well-positioned for that day.

That’s why he’s confident and, as far as he’s concerned, certainly not crazy.

George O’Brien can be reached at[email protected]

OPINION

By BusinessWest Staff September 4, 2006

Opinion

Make Investments in Your Community

I have been in my position as president and chief executive officer for the Pioneer Valley United Way for 15 months. During this time, I feel that I have learned as much from my experience as I have contributed to it. Among the many things I have learned is that the success of the work that our United Way does would not be achieved if not for the partnership that we have with our more than 50 member, affiliated, and partner agencies, nor without the scope of services that are provided by their 130 programs and services.

In 2005, the United Way annual campaign raised more money than it did the prior year, and it still was not enough to meet all the challenging needs that our community faces. I have also learned that if we are to be successful and raise the resources that would be necessary to create healthy and strong communities, we will need to do so with the understanding that we are more than just a fundraising entity, but also are an organization that must operate and direct our actions and programs with a set of core values, and with a mission that extends way beyond the work we do through our annual campaign.

Our mission is driven by the need to be able to develop and support effective programs that directly improve the lives of the people in Hampden County, South Hadley and Granby, and that we will do so by providing a commitment to this mission that is grounded in the core values of leadership, integrity, collaboration, and innovation. We provide leadership by serving as a convener, enabler, and a facilitator in addressing community problems, and by educating and bringing together diverse communities around our tables that will help us to promote the work of the United Way, our agencies, and the programs that they provide.

Our second core value suggests that all of this needs to be done with integrity and by serving the communities in which we live and work honestly and with transparent practices. We do so by communicating directly and accurately and by encouraging effective community partnerships to help us carry out our important work. This will be accomplished, as our third core value suggests, by initiating collaborations, strategic partnerships, and community-wide relationships, which have the main goal of providing a catalyst for positive change in our neighborhoods and workplaces.

Finally, we expect that all of our work will be viewed through our final core value of innovation. We want to create value in investments in our work by using the most current technology systems and tools that are available to us that keep our United Way and the work that our agencies do relevant in our community.
At the end of the day, we want to provide an environment that is empowering, that is flexible and that helps us celebrate success.

The United Way campaign will kick off during the month of September at a variety of community-wide events. The goal this year is very simple: To raise more money than we did in 2005.

We also know that whatever it is that we are able to raise will not meet all the needs that our community has. This, together with our move toward impact funding based on the results of our recently completed needs assessment, will help us direct our resources in a way that will provide for strong, healthy and secure communities, and position the Pioneer ValleyUnited Way in partnership with you, our community, to respond quickly and efficiently to the concerns and needs of the larger community.

Your individual or corporate gift to the United Way campaign is the single best investment you can make in helping us reach these lofty goals. We will continue to provide you the accountability and assessment of how your investment is working. Most importantly, this campaign can and will help us create a unified address to the many worthy causes that we face, but with the overriding objective of providing for the well-being of our community and our children’s community.

Joel Weiss is President & CEO of the United Way of Pioneer Valley

OPINION

By BusinessWest Staff August 21, 2006

Opinion

Getting Moving on Health Care

People say nothing is happening in Washington on health care. They say the only thing that has happened is that the crisis has gotten worse. They’re right.

But while Washington waits, Wall Street has acted. Too many big businesses are deciding that to compete and win in the global economy, many jobs no longer will come with healthcare.

While companies such as General Motors struggle under enormous health care obligations, companies such as Wal-Mart are opting out of employers’ traditional health care responsibilities. Wal-Mart currently insures fewer than half of its employees — that’s 800,000 workers left outside the system, some turning to Medicaid just to get health care at all. It’s not right, but it shouldn’t be a surprise. Good corporate citizens are coping with a competitive disadvantage in the global marketplace. GM pays $1,500 in health care costs on every vehicle it manufactures. Toyota pays only $200.

We’re stuck with a 20th century health care system that just doesn’t work for a 21st century economy.

The traditional employer-based health care system can no longer meet all our needs. Costs are too high, and businesses overseas are operating on a whole different playing field.

health care for a family of four now costs more than a minimum-wage worker earns in a year. Certainly, things have gotten worse. Under this administration’s watch, the number of uninsured Americans has grown by 6 million and premiums are up a whopping 73%.

This affects all of us. It matters if the kid down the block isn’t immunized. It matters to your tax burden when simple, treatable illnesses turn into expensive emergency room visits — often the only option for those without insurance. And it matters if we care about our moral obligation to others.

We need to cut health care costs. And we need a health care system that ensures quality, affordable health care for every American man, woman, and child.

We need big ideas and bold solutions, not more of timid Washington tinkering around the edges. If Americans can discover cures for the most devastating illnesses, we can surely find a way to make sure that all Americans benefit from those cures.

Right now the most expensive 0.4% of insurance claims account for 20% of all health care costs. We need to lower costs to businesses with a new federal reinsurance plan for catastrophic care — those with the most serious, and expensive, illnesses. Reinsurance is a simple concept: It’s insurance for insurers; a way for health plans to manage their risks and lower your costs.

Second, no child in America should lack health insurance. Leaving 11 million American children uninsured is wrong and, from the administration that brought us “No Child Left Behind,” it is breathtakingly hypocritical.

Most single moms raising two kids on $36,000 a year don’t qualify for any help. My Kids First plan would change that, covering all children up to three times the poverty level.

Finally, it is untenable for 35 million adults to go without insurance. We need to use every weapon in our arsenal until everyone is covered, including making the Federal Employees Health Benefits Program affordable and accessible for everyone in America with targeted tax credits for small businesses, middle-class families, and people between jobs. Members of Congress give themselves great health care and give taxpayers the bill — if it’s good enough for senators and congressmen, it should be good enough for every American who wants to choose it.

Doctors follow the motto “First do no harm.” So should Washington. We don’t want to reinvent the wheel on healthcare; we need to take what’s already working for those of us who are lucky and make it work for the millions of Americans being passed by. And we need to improve quality and lower costs for those with coverage today.

Americans have a choice. If Congress won’t fix healthcare, then Americans will fix Congress.

US Senator John F. Kerry is a Democrat from Massachusetts.

The Big Chill

By BusinessWest Staff August 7, 2006

Sections Supplements

Suit Filed by Friendly’s Founder Offers Food for Thought on Corporate

A Hampden County Superior Court judge recently denied a motion to dismiss a lawsuit filed by Friendly’s co-founder S. Prestley Blake, which alleges misappropriation of corporate assets on the part of the company’s chairman, Donald Smith, and dereliction of duty on the part of the board of directors, who are now defendants in the suit. While the case could result in a recovery of some money by the company — with the emphasis on could — its bigger implications may eventually lie in the debate it stirs concerning boards, their responsibilities, and accountability.

“A modern day Don Quixote.”

That’s how Friendly Ice Cream Corp. General Counsel, Gregory Pastore, described S. Prestley Blake, who co-founded the company in 1935. The comment, included in a front-page Wall Street Journal article that appeared earlier this summer, was in reference to a suit filed by the 90-year-old Blake alleging self-dealing and other offenses on the part of Friendly’s Chairman Donald Smith, and general dereliction of duty on the part of board members in the matter of investigating those allegations.

The tilting at windmills reference struck a nerve with Blake’s attorney, James C. Donnelly, a partner with the Worcester-based firm Mirick, O’Connell, in this unusual and now quite public lawsuit. Rather than Quixotic, he describes Blake’s pursuit of restitution that could total tens of millions of dollars stemming from alleged misappropriation of corporate assets as responsible, and the board’s response to Blake’s various allegations as irresponsible.

That opinion would seem to have won a measure of validation when Hampden County Superior Court Judge John Agostini recently denied a motion filed by a committee of Friendly board members to dismiss the suit. In doing so, he chastised the board for what he called “lockstep loyalty” to Smith — whose investor group, TRC (The Restaurant Group), acquired Friendly in 1988 — and general ignorance of the company’s activities.

Referring to one long-time board member, Burt Manning, Agostini wrote, “his sworn statements … depict a director who is largely oblivious to his obligations as a director, as well as the nature of the challenged transactions at the crux of this case.”

Agostino had equally harsh language for board member Michael Daly, former CEO of Baystate Health. “Daly remained oblivious and failed to apprise himself of reasonable available, material facts regarding the transactions in question,” the judge wrote. “The record fails to show that Daly exercised meaningful oversight in any of these various capacities, for most of which he received compensation.”

Those comments — and the eventual course of this so-called shareholder derivative action — should be of interest to anyone who sits on a board or who asks individuals to serve on one, said Donnelly, adding that Agostini’s ruling effectively calls upon directors (especially those in question) to meet a higher standard of independence and involvement in company matters.

Meanwhile, Blake’s suit presents an intriguing test case for a state law passed in 2004 regarding dismissal of shareholder derivative actions. Chapter 156D of Mass. General Laws states that a corporation moving to dismiss such a suit shall make a written filing with the court complete with facts to show:

that a majority of the board of directors was independent at the time of the determination by the independent directors; and
that the independent directors made the determination in good faith after conducting a reasonable inquiry upon which their conclusions are based.

Upon reading the lines in Agostini’s ruling — and between them — it seems clear he believes the two-member special litigation committee formed to review the suit and gauge its worthiness, comprised of Daly and new director Perry Odak, was not independent and its inquiry was not reasonable.

Therefore, the case will go forward, said Donnelly, adding that with the judge’s ruling, Friendly’s must provide more documentation on a number of expenses paid by the company, including partial costs of a corporate jet. That burden was shared with another chain owned by TRC called Perkins Family Restaurants. It is Blake’s contention that, with regard to the jet and other expenses, including food for both chains purchased from another of TRC’s divisions, Friendly was effectively subsidizing Perkins, and thus enriching Smith, who owned a much larger stake in Perkins than he did in Friendly.

That’s a charge that Smith and Friendly have vigorously denied in court and in the press (Pastore did not return calls to BusinessWest).

This alleged subsidizing of Perkins and TRC has cost Wilbraham-based Friendly millions of dollars at a time when it has been struggling financially, said Donnelly, adding that Blake’s suit was filed to get that money back. And both he and his client believe the eventual gain by the company will exceed the large legal bills ($2 million and climbing) it will accrue while the case runs its course.

This issue, BusinessWest looks at the suit filed by Blake and what it could mean for Friendly’s, its shareholders, and all those who serve on corporate boards.

Here’s the Scoop …

Donnelly told BusinessWest that Blake first approached him with concerns about Friendly’s and how it was being managed in early 2002.

Specifics of that meeting are confidential, he said, but the general message was that the famously frugal Blake had some questions about how much Friendly’s was paying for a corporate jet — and for Smith’s services, which Smith admitted were part-time.

That admission came in a private meeting between Blake and Smith several months earlier at the former’s home in Florida. Blake sought the meeting to discuss the plane and other issues, including Smith’s work load and compensation, and it represented a small part of the ongoing questioning and criticism of the company’s leadership lodged by the man who, with his brother Curtis, started the company with $547 borrowed from their parents.

The two ran the chain for nearly 45 years — making it a regional fixture in the process — before selling it to Hershey Food Corporation in 1979 for $164 million.

In 1988, TRC acquired the company and took it public in 1997. Blake bought a small number of shares at the IPO, but when the stock price plummeted to $2 in 2000, he bought $2 million worth, making him a principal stockholder with roughly 12% of the company.

And it was at this point that he started looking more deeply into the company’s finances and expenditures, and finding many things that he didn’t like, said Donnelly, adding that that Blake’s suit essentially has two components — the allegations of misappropriation of assets and the board’s inadequate (in Blake’s mind and also Agostini’s) response to those allegations.

It all started with the leased Learjet, said Donnelly, adding that Blake thought that expense unjustifiable for a company suffering losses and a depressed stock price. “It just didn’t seem appropriate,” he said. “Friendly’s didn’t really have any use for it, and jets are expensive.”

After doing some digging, Blake concluded that Friendly was paying more than its share — $3 million was its total bill — for limited use of the plane, and that the jet was primarily devoted to Smith’s personal use. Blake, through Donnelly, asked the board repeatedly to investigate the matter of the jet, Smith’s part-time status and $500,000 salary, and other matters. And when it did investigate, the board found nothing amiss, prompting Blake to file suit in Hampden County Superior Court.

That action motivated a second investigation by a board committee and a subsequent report that found that between 1988 and 2002, Friendly’s paid for 65 hours of flights on the jet that were either for Perkins business or Smith’s personal use; Smith eventually wrote Friendly a check for $65,323, and the problem was attributed to faulty bookkeeping.

No Sugar-coating It

But Blake didn’t stop with the plane.

He also called into question Friendly’s share of the expenses for an office Smith had in Illinois — again alleging that the company was footing too much of the bill for something it didn’t use or need — and also red-flagged food purchases for both Friendly’s and Perkins from another TRC division called Foxtail Foods.

After doing some digging, said Donnelly, Blake concluded that the joint-vendor arrangement that was created favored Perkins — at the expense of Friendly; an expert witness hired by Blake said food costs, relative to to revenue, were higher at Friendly, meaning that that it was not getting as good a deal as Perkins and was, in effect, subsidizing that company.

Blake eventually lodged other allegations, including a charge of favoritism to two of Smith’s sons, who operate Friendly franchises in Pennsylvania, in the form of a $112,500 fee refund, the largest the company has reportedly ever given to a franchise developer.

Collectively, the cases of alleged improper spending and favoritism could add up to millions of dollars in restitution, said Donnelly, and thus are well worth the company’s time and trouble to recover — an opinion not shared, apparently, by company executives or board members.

In fact, when asked about the potential financial gain for the company from the suit when weighed against the cost of the legal action, Donnelly said board members should be joining Blake in his action, not seeking to have the matter dismissed in court.

The fact that the board opted for that course of action — and have now been named as defendants in the case — means that the Blake suit may potentially make it a landmark action for corporate America, said Donnelly.

He told BusinessWest that the case is one of the most significant to date with regard to Chapter 156D, and now that board members are defendants, Blake’s action could break new ground when it comes to defining boards’ responsibilities and liabilities.

“This case is right in the mainstream of some of the important corporate cases that are taking place right now,” he said. “The fact of the matter is that these directors essentially ignored their responsibilities … they didn’t feel like they had to pay any attention to this.

“They felt comfortable just blindly supporting management and not asking the hard questions,” he continued. “And as far as I’m concerned, the danger to the Massachusetts economy and the national economy would be if directors can take the attitude that they just don’t care and still not be accountable.”

Donnelly said the case is already sparking debate regionally and nationally about boards, their responsibilities, relative independence — and how high the bar should be set. In denying the special litigation committee’s (SLC) request for dismissal, Agostini hints strongly that it should be set higher.

In determining that Daly was not to be considered independent, thus meaning the SLC itself was therefore not independent, the judge used Daly’s own words from his deposition to frame his point.

“When asked what precautions were taken in this case to make sure that the jet transactions were consistent with the market, Daly replied, ‘I don’t know. If you have confidence in your management — and I am not just speaking of Mr. Smith, I’m talking about the entire senior team — there is is no reason to question that the arrangements made were not in the best interest of the company, and I have such confidence in the management of this organization,” wrote Agostini, who noted in his ruling that Daly continued to have such confidence when he was functioning as an audit committee member investigating Blake’s charges.

“Daly’s belief that that there was no reason to question the propriety of the aircraft-cost-sharing arrangement,” he wrote, “even when tasked with investigating it … established that he was not able to evaluate Blake’s claims impartially, at least between 2002 and 2004, when he gave his testimony.”

Overall, Agnostini concluded that because Daly was “substantially and personally involved in the conduct challenged by Blake, he may face personal liability for breach of fiduciary duty as alleged in the proposed complaint.”

With that as a backdrop, the Blake case should merit considerable attention from board members and executives who nominate individuals for board posts, said Donnelly, who was reluctant to speculate on how the case may play itself out. The next stage is another round of discovery, he said, which may well determine future action.

Frozen Assets

What Donnelly does know, or believe, is that Blake shouldn’t be viewed as Don Quixote.

Rather, he should be seen as a champion of stockholders’ rights, he said, who is fighting a battle that should be waged.

“He’s a great man,” said Donnelly. “We need more like him.”

George O’Brien can be reached at[email protected]

OPINION

By BusinessWest Staff July 10, 2006

Uncategorized

For the first time in three decades, federal funding for the National Institutes of Health was cut this year. The reduction, which followed two years of level funding, not only imperils the development of lifesaving scientific breakthroughs but also has a detrimental impact on regional economies that are dependent on innovation — and New England is at the forefront.

In numerous areas of scientific advancement, researchers are on the verge of discoveries that will improve health and save lives. But the reduction in federal support could cripple that progress and prompt economic setbacks that have a ripple effect on other industries. That is why Congress should support a 5% increase in NIH funding, which would allow research and development efforts at least to keep pace with inflation and permit some growth to capitalize on the unprecedented scientific opportunities spawned by past federal investments in research.

NIH is the principal federal source of funding for medical research. More than 80% of its funding is awarded through its extramural research program, which supports nearly 50,000 competitive grants at more than 2,800 universities, medical schools, and other research institutions across the country.

With some of the most prestigious research universities and hospitals in the world, New England is a major NIH beneficiary and is at the forefront of medical research. Four New England states — Massachusetts, Connecticut, Rhode Island, and Vermont — score among the top 10 nationally for per-person monetary value of NIH awards received.

From 1998 to 2003, federal investment in NIH doubled, with 15% increases each year. While budget realities make such continued growth unrealistic, NIH funding has been losing ground to inflation for two years, and researchers are already feeling the impact. The number of research project grants has declined each of the last three years, the amount of an average research grant has declined 2%, and grant approvals have declined 19%. Level funding already has forced New England institutions to trim their research programs — setting back research efforts and cutting jobs.

Consider some of the work that NIH funding has supported:

The mapping of the human genome was a major advance driving the future of medicine — from predicting risk to preventing illness. Researchers from the Whitehead Institute/ MIT Center for Genome Research, now part of the Broad Institute of Harvard and MIT in Massachusetts, contributed about half of the 3 billion letters of the human genome sequence to free public databases.
At Yale University School of Medicine in Connecticut, researchers recently developed new diagnostic tests for patients at risk for heart failure and new drug treatment strategies for patients who have suffered it.
At the Dana-Farber Cancer Institute in Massachusetts, a research team in 2004 discovered that a vaccine can help a patient’s immune system fight advanced melanoma.
At Dartmouth Medical School in New Hampshire, researchers recently made progress toward finding a vaccine to prevent ovarian cancer.

NIH funding is also an important part of federal research and development funding, and as such is a major catalyst for New England’s innovation sector. The region performs about 8% of the nation’s total research and development.

New England has become a magnet for students and researchers as well as those seeking to bring ideas to market, giving the six-state area a competitive advantage. The funding cutbacks threaten the viability of the next generation of researchers, many of whom begin their careers in this area, and often remain here.

It’s important to send a clear message to congressional leaders: Don’t let the light dim on this crucial creative community by undermining its resources. Our quality of life is at stake.

James T. Brett is president and chief executive officer of The New England Council, the nation’s oldest regional business organization.

OPINION

By BusinessWest Staff June 26, 2006

Opinion

A Modern Touch for the Pension System

It’s time to take a hard look at how to modernize and streamline Massachusetts’s archaic pension system.

There are 106 state and local public employee pension systems. Each has overhead, inefficiencies, loopholes, and, in some cases, mounting deferred expense.
The state pension system has $13 billion in unfunded liability that acts like an anchor on the budget and mortgages the state’s future. Next year, taxpayers are set to pay more than $1 billion just to chip away at the pension debt. Those annual payments will rise to $2.3 billion by 2023.

In addition, cities, towns, and counties waste almost $200 million a year running their own systems, much of that going toward making up for poor returns on investment. A study by the Pioneer Institute found that just 5.7% of local pension systems match the state fund’s investment returns.

Local pension systems are also weighed down with separate investment managers, accountants, and additional duplicative overhead. Maintaining that local control over pension systems comes at a large cost. Taxpayers will pay another $3 billion over 20 years just to make up for poor investment performance in local systems over the last decade.

The pension system is also easily gamed by insiders who know how to work the system to maximize their payout. At the same time, the system discourages bright, idealistic young people from spending a few years in public service before moving on in their education or career, by denying short-term employees any pension benefit.

What can be done to fix this mess? Most companies have started offering their employees a 401(k) option. Recognizing that modernization, other states have followed the lead of the private sector, and Massachusetts should be next.

If we institute changes that bring us more in line with the successes of the private sector, we can stop the $13 billion in unfunded pension liability from growing larger, and immediately deliver nearly $200 million in annual savings while maximizing returns for retirees.

The Healey-Hillman pension reform plan would apply to all new public employees in Massachusetts, except police officers and firefighters, who often retire at an early age and spend their days in hazardous working conditions. It would fold 106 taxpayer-funded state, county, municipal, and authority systems into one, eliminating abuses, duplication, and unnecessary local overhead costs, and give municipalities the benefit of the state pension fund’s strong performance.

Employees could choose to invest the money themselves, continue to have the Commonwealth invest it for them, or opt for guaranteed annual interest equal to the 10-year Treasury bond, currently around 5 percent.

Employees could take their retirement benefits with them when they leave, creating an incentive for young people to spend a few years in public service.

Our proposal will save some money immediately and have significant long-term financial benefits. The system would save more than $100 million over the next decade. Once all state employees are covered by the plan, taxpayers will save $140 million each year.

Municipalities would save about $200 million a year immediately, and could use the savings to return money to taxpayers in the form of property tax relief, or to boost local services. Most important, once all employees are in the new system, taxpayers in Massachusetts will not have to worry about unfunded pension liability dragging down the budget and the economy again.

Our pension reform will transform a broken system into one that is fair to employees, less burdensome to taxpayers, and helps to modernize an out-of-date Massachusetts bureaucracy that is weighing the state down and making it less competitive.

Lieutenant Governor Kerry Healey is the Republican candidate for governor.

Crime Is Killing Springfield

By BusinessWest Staff June 12, 2006

Opinion

Tim Brennan was talking about the bike path that winds its way along the east bank of the Connecticut River. But he might as well have been talking about the city of Springfield as a whole.

Brennan, director of the Pioneer Valley Planning Commission, which coordinated construction of the 3.7-mile Connecticut River Walk and Bikeway, told the local press recently that the path is considered underutilized — roughly 150 users on weekdays and just over half that number on weekends — because of doubts about safety.

And there will certainly be more of those now following the stabbing death of one the path’s few users earlier this month, the city’s sixth homicide of the year, which is slightly below the record pace (18 for the year) set in 2005.

Like the bike path, many of Springfield’s neighborhoods, institutions, and, yes, businesses, are being hurt (or underutilized) because of crime and, equally important, the perception of it. The city has other issues, to be sure, including its fiscal woes and overall image problem, but crime has taken center stage.

It is a factor impacting everything from where people live, work, shop, eat, and go to college, to whether they use the bike path along the river. And in many ways, it is stifling economic development in the area, because, as much as anything else, Springfield is now synonymous with crime.

Some local officials would like to blame the press and its ‘if it bleeds, it leads’ operating strategy for this phenomenon, but when a city this size has five shootings in one night, as was recorded early in May, the problem is not the press.

Rather, it’s the apparent inability to gain any sense of momentum in the fight against crime. Some officials would have you believe there is some, and use easily pliable statistics to back up those claims. But the real measure of progress is public opinion (and traffic counts on the bikeway), and at the moment the public remains skeptical — and, in many ways, afraid.

Recently named Police Commissioner Edward Flynn has taken the fight to the neighborhoods and the city’s housing projects. He is imploring residents to get involved and be part of the solution, not part of the problem by protecting criminals. He’s been very visible — one can see him on the streets and hear him on the radio — and he’s made the word ‘snitch’ part of the local lexicon.

We can only hope that increased patrols and the appointment of area commanders to oversee neighborhood coverage will succeed not only in bringing the crime rate down, but in making people feel better about Springfield in the same way that many residents of Holyoke feel better about their community.

Overall, we believe the city needs additional resources, and that Gov. Mitt Romney should make a stronger commitment to keeping the streets safe in the state’s third-largest city.

When the bike path was put on the drawing board more than a decade ago, it was envisioned as a way to make the city’s riverfront vibrant and more relevant. It was viewed as a way to bring people back into the city for recreation, to create images like those we’ve seen of people walking, running, biking, and roller-blading in Washington, D.C., Cambridge, San Diego, and other cities.

Very little of that has happened, and safety is the reason. And so many other things aren’t happening in Springfield for the very same reason.

The bike path is not just the scene of a fatal stabbing; it’s a symbol of what could be, and isn’t, in Springfield, largely because of public safety concerns. Maybe it can serve as additional motivation in the effort to make this the City of Homes, not the City of Crime, once again.-

OPINION

By BusinessWest Staff June 12, 2006

Opinion

The Real Energy Crisis

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Turn the page of any paper or turn on any news show and you’ll likely hear about the global energy crisis and soaring gas prices. But the real energy crisis is not taking place in the oil fields of Texas and Iraq or the gas stations of New York and California, but rather inside the people and the companies that contribute to our global economy.

In a recent survey conducted by Harris Interactive Inc. less than 15% say they feel strongly energized by their work and only 20% feel very passionate about their jobs. While part of this crisis can be attributed to management (37% of managers are indifferent to their company’s fate) a big part of the problem can be associated with worker burnout; 42% are coping with burnout while 33% believe they have reached a dead end in their jobs, and 21% are eager to change their jobs.

The cost of fatigue, burnout, and a lack of engagement to corporate America is staggering. The Gallup organization estimates the cost to be $250 billion to $300 billon dollars, while workplace fatigue alone costs American businesses at least $77 billion per year, according to the National Sleep Foundation.

There’s no doubt that today’s employees as a whole are under-engaged, overtired, and overstressed. If you’re not convinced just try to eavesdrop on water cooler conversations. You won’t hear anything because they are not there. They’re hovering around the coffee pot or in line at the corner coffee shop. People are clearly searching for their energy, but unfortunately they are finding it in double lattes, diet sodas energy drinks, and other quick fixes that do not last.

After all, there are more Starbucks then ever but America’s workforce is more tired and less engaged than ever.

The fact is that enhanced energy, success, and performance cannot be found in a bottle or cup of espresso and we cannot replace sleep with a double latte. Just as the world must find alternative sources of energy to oil, it’s clear that Corporate America must look to alternative sources of energy besides coffee to power its workforce.

Instead of energy drainers, American businesses must focus on becoming power generators. Considering that only 31% (strongly or moderately) believe that their employer inspires the best in them, one of the most significant actions business leaders can take is to implement programs and business practices that develop positive, high performing engaged employees and teams that are fueled by purpose and enthusiasm.

Ironically, one of the great role models of this business philosophy and practice is Howard Schultz and Starbucks. From the very beginning Schultz realized and trained his managers that they weren’t in the coffee business serving people but rather in the people business serving coffee. He explained his vision that he wanted to build a company that valued, invested in, and respected its employees. One of the ways Schultz did this was by offering comprehensive health insurance to employees that work more than 20 hours a week.

Now, Starbucks spends more on health insurance then it does coffee beans. Schultz also hosts frequent town hall meetings with management and employees and he personally visits 30-40 locations a week to share his passion, enthusiasm, and purpose with his employees. They receive his positive energy and in turn they share this positive energy with their customers.

Judging from Starbucks growth and sales it is certainly a successful formula. But Starbucks isn’t alone. Daniel Goleman, author of Emotional Intelligence explains that a company with positive employees and a positive culture will outperform their negative counterparts every time. Also, consider that if you would invest in the top 100 best companies to work for, you would significantly outperform the market average. Positive work environments clearly produce positive results.

Thus, the answer to the real energy crisis is not a cup of Joe but the attitude, enthusiasm and energy of the Joe that is employed by your company. If you develop, engage and energize him you’ll be one step ahead of the competition.-

Jon Gordon is s a professional speaker, consultant, and energy and performance coach.

OPINION

By BusinessWest Staff May 29, 2006

Opinion

Higher Education Must Remain ‘Affordable’

Community colleges across the country promise access to higher education at an affordable price. These two-year institutions are low in cost and high in value. They are academically supportive, offer flexible class schedules, and respond quickly to the needs of the surrounding community and its employers.

However, the first part of that promise – affordability – is endangered in Massachusetts.

A recent study by MassINC (the Mass. Institute for a New Commonwealth) reveals that the state’s enviable array of private four-year colleges are rapidly rising in price – with tuition now accounting for 33% of a family’s income, as opposed to 25% in 1992-93. Our four-year public colleges are reflecting a similar increase — from 18% to 21% of a family’s income.

As Massachusetts residents turn to community colleges, the traditionally most affordable sector of higher education, where more than half of our residents begin their college careers, they discover that these costs are also rising. For these students, who are often the first in their families to attend college, and generally hold down a part-time or even full-time job, any increase in fees can mean the difference between going to college and going without.

Community colleges are still an unbeatable value, frequently charging only one-tenth the cost of private colleges. Community colleges are the entry to rewarding careers and a low-cost foundation toward a bachelor’s degree.

At this crucial time for the Massachusetts economy — when large numbers of taxpayers are moving out of state for perceived better opportunities and when our innovation economy and current industry are dependent on educated employees — the governor and our Legislature must follow through on the plan to adequately support public higher education.

Our public higher education institutions, once described as state-supported, have for the past decade been more accurately described as state-assisted. Massachusetts, as a high-income state, has the ability to do more for public higher education, but actually ranks 49th in the country in per-capita support for its public institutions.

As a result of the significant decline in support, our annual state appropriation barely covers the cost of employee payroll. This leaves the colleges to find their own operating funds. One result is that maintenance is generally deferred – leaving power plants, buildings, and equipment to continue to deteriorate. And last year, our energy costs rose by a combined total of nearly $1 million at STCC, HCC, and GCC.

Our colleges have become more nimble and creative in pursuing grants and private funding. Capital and major gift campaigns, once the province of private institutions, are increasingly common at state institutions. And as a last resort, colleges have been forced to raise their fees, supplementing inadequate state aid by increasing direct costs to the group that can least afford them – our students. This trend must be reversed.

Our state legislators worked diligently this year to create a seven-year plan to fill the identified funding gap in our public institutions. A joint task force studied the needs for our state and drew up a comprehensive plan which, as the Public Higher Education bill, was passed by the House and moved to the Senate. We urge the Senate to meet the challenge of passing Bill 2380, to carry out this plan and adequately fund the institutions that represent the future success of our young people and our commonwealth.

“Higher education is the gateway to the American dream,” says Ian Bowles, president and CEO of MassINC. “But its cost is accelerating much faster than income … as a region that is struggling with a high cost of living and the out-migration of young families, we should make this challenge a priority.”-

Robert Pura is president of Greenfield Community College, and chairman of the Massachusetts Community Colleges Presidents’ Council; William Messner is president of Holyoke Community College; Ira H. Rubenzahl is president of Springfield Technical Community College

Changing Public Opinion

By BusinessWest Staff April 3, 2006

Uncategorized

Western Mass. Hospital had a patient not too long ago that several staff members remember clearly. Determined to fulfill a simple last wish – finish a plate of turkey and stuffing at the Thanksgiving table – she worked diligently with physicians, nurses, and therapists until November rolled around … and when she got home, she was well enough to stay there.

That story debunks the notion that patients enter Western Mass. Hospital and never leave, and it’s a success story that speaks more to the norm than the exception at the hospital. While not every patient will see as dramatic a recovery, many improve in ways both small and large, and lead long lives.

Western Mass. Hospital, a state facility that operates under the Department of Public Health (DPH), has been in existence for nearly a century, beginning in 1909 as a tuberculosis sanitorium. It has since evolved to offer one of the most comprehensive suites of care for chronically ill patients in the state. Despite those advances, however, Jill Turomsha, director of Admissions, said the stigma surrounding state-run hospitals like Western Mass. – a place of last resort – is a hard one to shake.
“It’s a stigma that began in the early 1900s, and in many ways, it persists,” she said. “But over the years, the hospital has changed and shifted dramatically to meet the needs of the community.”

Turomsha noted that in 1937, Western Mass. Hospital opened a wing for the treatment of cancer, and by 1960 had begun to open its doors to patients with other forms of chronic disease, changing its name from the Westfield State Sanitorium to Western Mass. Hospital two years later. She said educating the public on the breadth of services available at the facility is a particular challenge for all public hospitals, not only in the effort to erase negative perceptions, but also to underscore the importance of long-term and specialized care.

A Deep Breadth

Today, for instance, Western Mass. Hospital includes an Alzheimer’s and dementia unit, reserved for those patients unable to be treated in other facilities due to aggression or other issues.

It also boasts a neurological disorders specialty unit that treats patients with a number of diseases, including ALS, multiple sclerosis, and Huntington’s Disease; a respite care unit, which welcomes patients living at home for five days to two weeks at a time, up to four times a year; an end-of-life unit; an outpatient dental clinic for individuals with no insurance (the clinic is currently not accepting new patients due to the high number of patients); and a respiratory unit that opened in 1996 for ventilator-dependent patients and those with chronic respiratory disease.

Monica LeBlanc, RN, clinical liaison, said the respiratory unit is the latest example of the hospital’s ongoing evolution to meet specific needs within the Commonwealth’s health care landscape.

“Very few places will take patients on vents,” she explained, noting that the cost and staff proficiency level can often be prohibitive. “Up until very recently, these patients were literally living in acute-care hospitals, because right up until the early ’90s, there was nowhere else to go.”

There are health care delivery benefits, she said, that are unique to state hospitals, especially in an increasingly cash-strapped health care industry that is also seeing severe shortages nationwide in skilled health care jobs, and therefore a growing inability to provide comprehensive, specialized long-term care for patients with demanding needs.

“I always tell people to tour the facility before they make a decision,” said LeBlanc, noting that due to its specialized repertoire, Western Mass. Hospital welcomes patients from all over the state, not just the local region. “They need to see what goes on here to understand. Once they do, they’re generally supportive of our work.”

Dr. Ted King, a pulmonologist at Western Mass. Hospital, added that clinically, there are a number of treatments offered at the hospital that acute care and long-term care facilities can’t offer.

“Operated through the DPH, we’re a not-for-profit,” he said, “and in several ways that frees us from the constraints that acute-care hospitals face. Our mission has become to fill the niches that other facilities can’t.”

King explained that, for many acute-care hospitals, ventilator patients must be moved from the facility after about 28 days – respiratory patients consume a large amount of care and resources, he said, beds are often needed for more critical patients, and reimbursements begin to run out. But since Western Mass. Hospital’s state-appointed role is to provide what is officially termed Long Term Acute Care (LTAC), the facility’s goals can be that much more long range.

“Our philosophy is different,” he said. “We’re able to think in terms of weeks and months, not hours or days. We’re able to take the time for physical, occupational, and speech therapy, to wean people off ventilators when we can, to advance people’s diets gradually, and to deal with families much more often.”

Patients, a Virtue

The unit also helps to negate the idea that hospitals like Western Mass. are reserved for the treatment of the elderly or those at the end of their lives. The only state hospital of its kind in Massachusetts and one of only two facilities in the area with a long-term respiratory unit (Parkview Specialty Hospital in Springfield also has one), Western Mass. Hospital has carved a niche for itself in the care of long-term, chronic, or ventilator-dependent patients. Some are as young as 30, such as identical twins Matthew and David Gonyea, who occupy the only double room on the floor; the rest are private.

James Moran, respiratory manager, said a major goal of the hospital is to help patients achieve as high a level of independence as possible. For some, that means living at the hospital but leaving for day trips. The Gonyeas are out regularly, attending baseball games, pizza parties, and concerts; they’re currently planning a trip to see the popular hip-hop group the Black Eyed Peas.

“It’s a myth that people with breathing machines can’t do those things,” Moran said, adding that for other patients being treated in the respiratory unit, independence means eventually returning home, armed with new skills and the benefit of long-term therapy to keep them healthier. For others, it means regaining the ability to eat, or to communicate.

“That sounds small, but for someone who can’t do either, it’s paramount,” he said, noting that speech therapy will be incorporated for patients who may be able to regain the ability to talk, but for those who can’t, staff will turn to developing new communication skills, such as using physical therapy to learn to write messages, or even a series of eye blinks to answer questions.

“It’s very labor-intensive, hands-on care,” said Moran. “We’re also constantly serving as advocates for patients, who sometimes can’t speak for themselves.”
Still, King noted that part of the reason that stigmas surrounding chronic care persist is a lack of understanding or even acceptance of the reality. It makes a lot of people uncomfortable, he said, prompting them to turn a blind eye to what goes on behind Western Mass. Hospital’s walls.

This lack of understanding can lead to additional challenges, including staff shortages and financial strains. In the respiratory unit, a respiratory therapist must be on the unit at all times. There are 11 on staff now at Western Mass., but Moran said he’s short on every shift, reflecting a national shortage in the profession. Springfield Technical Community College, the only local college with a respiratory therapy program, currently has six students enrolled, but Moran fears that’s not enough — especially when, as a public hospital, Western Mass. can’t offer the attractive sign-on bonuses that many private facilities are currently offering.

“It’s a hard sell,” he said, “and not the happiest topic. People think that sick people should either die or get well. They don’t want to think about the long term, literally.”

Giving Thanks

But the tide is slowly turning, with the help of the stories of patients like Matthew and David Gonyea.

And there are other stories, such as those perhaps told around the dinner table — of the year a family member came home from the hospital, focused on little more than some Thanksgiving trimmings, and got to stay a little while longer than she’d even hoped.

Jaclyn Stevenson can be reached at[email protected]

Rebel Thinking

By BusinessWest Staff March 20, 2006

Uncategorized

It took him six years to finish high school – he was too busy causing trouble. But today, Darby O’Brien, founder and president of Darby O’Brien Advertising and Public Relations, has made a name for himself not only in the marketing world but as one of the Valley’s most vocal proponents for positive change. The one thing that hasn’t changed, though, is his habit of sticking in the craw of authority figures.

Darby O’Brien has never played by the rules.

Expelled from four different high schools in his youth, he later opposed the Vietnam War by assuming conscientious objector status and teaching English through the Spanish Apostolate, a social services division of the Springfield Dioscese that once operated in the city’s North End. He cut his teeth as an activist working to preserve various local landmarks, including the Mount Tom ski resort, and stumbled into advertising while seeking financial sponsors for a traveling band of musicians he managed, who hopscotched across the Pioneer Valley playing Irish ditties on a flatbed truck (he knocked on the door of the former Douglas Bewick Advertising Agency in Springfield and came away with a job.)

In 1980, he struck out on his own, and since then has built a name for himself as a reputable – and often renegade – firm with which to work.

“People either love us or they hate us,” he said. “But either way, hey know us.”

O’Brien’s offices in the Village Commons in South Hadley speak to the unconventional thinking that defines the firm – visitors are greeted by the strains of Irish music and a wreath made of beer cans. In the waiting room, they must heave themselves into butterfly chairs – not much more than cloth and a simple metal frame, they’re usually seen at the beach – and the boardroom is a fishing lodge, complete with rods and lures.

The lodge is a byproduct of one of O’Brien’s largest and most visible crusades to date — the ongoing ‘Fishing Buddies’ campaign, kick-started in 1997 to reopen several reservoirs in Western Mass. to fishing, and proof of O’Brien’s complete inability to stand on the sidelines and watch.

“People tell us, ‘don’t stand for anything, don’t lead the charge, because it will cost you business,’” he said. “We don’t listen. We fight the fight, and in doing so we reverse the spin.”

The mission behind the Fishing Buddies was and is loftier than gaining access to a few trout, O’Brien explained. He – along with John Cronin, managing director for the Beacon Institute for Rivers and Estuaries in Beacon, N.Y., and Robert F. Kennedy, Jr., an attorney and director of the Pace University Environmental Litigation Clinic – also formed a local chapter of the national Fishing Tackle Loaner Program at the Holyoke Public Library, for boys and girls who didn’t own fishing poles. They created the Buddy System, hooking kids up with volunteers to take them fishing, and lobbied to legalize recreational fishing at the reservoirs. In 1999, the Buddies garnered an Environmental Merit Award from the Environmental Protection Agency for their efforts, all the while tooling around in an old convertible, Blues Brothers style, with fly fishing garb replacing black suits and fedoras.

That wasn’t a job for a client; that was a Darby O’Brien original. And there are plenty of similar deviations, both in the can and on O’Brien’s drawing board, that are fueled by one common variable: Rebel Think.

Reeling Them In

They include a speaking program O’Brien will announce this month in The New Yorker; a T-shirt campaign to raise money for Holyoke’s baseball team for 7- to 9-year-olds, the Elmwood Jets, which garnered support from the likes of Regis Philbin and Craig T. Nelson; a series of recent direct mail pieces that have called into question the track record of the Economic Development Council of Western Mass., (EDC) and its executive director, Allan Blair; the Smarten Up Manifesto, a four-page leaflet launched in response to what O’Brien calls a ‘dumbing down’ of the region; and The Gut, a so-called ‘chronicle of change’ that is published “when we feel like it.”
Those projects are in addition to the ongoing advertising and PR work the firm handles for a number of outfits both locally and nationally. Many are small, specialized, or family businesses.

But O’Brien doesn’t see his personal projects as separate from his work with clients. In fact, he said there has been considerable overlap between the two, from referrals for new business to making a name for himself and his firm in the Pioneer Valley as one that bunks the status quo in terms of both work process and product.

He typically shuns formal research studies, focus groups, and ‘safe’ advertising strategies such as mirroring the style of other successful campaigns.
Darby O’Brien ads, for example, are often text-heavy and include photos and headers that stray from the standard cor

porate image; a recent ad for Foley Connelly Financial Partners of West Springfield, for example, depicts the company’s owners, Chris Connelly and Brian Foley, bellied up to a coffee counter under the words ‘Interesting Micks.’ An ad campaign designed for Epstein Financial Services repeatedly pairs the firm’s president, Charles Epstein, with local business owners he works with in a number of unlikely poses: flipping burgers at White Hut, harvesting radishes with Karen Randall of Randall’s Farm, or reduced to a few inches in height, standing inside a cabinet at Curios Kitchen and Bath.

“A lot of it has been gut instinct,” O’Brien said, harkening back to one of his first major projects, the Marty Dunn for Mayor campaign in Holyoke in 1987. The then 30-year-old Dunn ran against 12-year incumbent Ernie Proulx, and was expected by many to lose by a wide margin. “Marty had conducted a formal survey, and I looked at it and said, ‘if we follow this, we’re going to lose.’ Marty had the courage to let us do it our way – talking to people in Holyoke, at coffee shops, baseball games, and bars.”

The campaign was a success – Dunn won in what was termed across the state ‘the upset of the year,’ and O’Brien won some respect for his business as well as his practices, which rely heavily on what he calls ‘hunch power.’

“We have spent a lot of time over the years defending work that worked,” he said, “and defending successes, which is nuts. Now, there seems to be a swing toward our way of thinking in American business.

“As part of their job, ad agencies push clients to take risks,” he continued. “That can make a potential client stop and ask, ‘well, what risks have you taken?’ And we have an answer. We’ve made a reputation for ourselves as a firm that will fight for good, strong ideas.”

Golf is Bad

And now, O’Brien is preparing to take some of those ideas on the road.

He has created a new speaking program, designed to offer some words of wisdom to corporate America on how to remain on par in terms of effective management.

Heralded by an ad campaign appearing in The New Yorker this month and using the tag line Golf is Bad: Play Too Much, You Lose Your Balls, the project focuses on six key points, all of which O’Brien said were derived in large part from practices that have developed within his own firm in response to some of the pitfalls he’s seen while working with clients to shake up their marketing efforts.

The first of those points is the grabber: Golf is bad for business.

“We’ll present concepts, strategies, and layouts here that clients love,” said O’Brien, “and then the client leaves the office and the campaign dies. A lot of times, they’re dying on the golf course. It’s not the game, it’s this whole culture that surrounds it: people are afraid of what their buddies might think.”

O’Brien said the remaining five aspects of the proposed speaking engagements focus on similar issues that can turn high-level executives into second guessers, among them spouses, focus groups, and the corporate image itself – serious and stuffy.

His advice on all accounts is to do the reverse of what would be considered the norm, to go with the opposite of what your wife or husband thinks, back the loser when it comes to a focus group, and take yourself less seriously. When individuals refuse to take themselves too seriously, he says, they create a confident image, and other people take them more seriously.

“I started to think that maybe the way for all of us to survive in corporate America is to poke fun at it,” he said of ‘Golf is Bad.’ “People have had it with things like off-shore operations that hurt family businesses and corporate scandals. They’re looking around and saying ‘hey! This doesn’t work.’ Essentially, all we have left are ideas. So let’s stop killing them.”

Politics and Ping-Pong

That’s the message O’Brien is sending to national audiences via The New Yorker, but it’s also the gist of many locally focused campaigns, with particular emphasis on point number five: Smarten Up.

“The key to success is smartening it up, in an era in which just about everyone in business seems to believe that the way to win is to dumb it down,” he said, pointing a finger at the Pioneer Valley in particular.

It’s not an opinion he’s shied away from sharing with the public. In a flurry of direct mailings that began in 2004, O’Brien has pointed a finger – and wagged it liberally – at the EDC, with pieces that, for instance, featured the bumper of a car decorated with a sticker emblazoned with the Pioneer Valley’s new logo and slogan, ‘Arrive Curious, Leave Inspired.’

Yeah, people leave inspired, all right, the flyer reads. The last thing they see as they’re walking out the door are the guys who run the EDC smiling and waving and telling them good riddance.

A new direct mail piece, which like its predecessors will be sent to dozens of businesses, organizations, and individuals across the Valley, features a photo of O’Brien smashing a return in ping pong, and challenging Blair to a game. If Blair accepts, and wins, O’Brien promises never to criticize the EDC again.

O’Brien’s beef, he said, stems from one major area – the need he sees in the Valley to keep and create good jobs and opportunities for residents, especially the creative set.

“People think picking a fight with the EDC is just a publicity stunt,” he told BusinessWest. “But it’s about calling attention to the fact that it’s essential we create optimism in the area. We lose that, we lose the game.”

He said part of the problem is a pervasive ‘can’t do’ attitude, offering as one example his interest in promoting outdoor recreation in the region – not just fishing, but hiking, camping, canoeing, kayaking, and the economic benefits they could bring. “There’s no reason places like Mount Tom should be closed right now. And we have some of the best rivers in the Northeast, but no one is paying attention to what an exceptional resource they actually are.”

O’Brien went on to reference the recent announcement that Cabela’s, the nation’s largest direct marketer of outdoor merchandise, has chosen a site in East Hartford, Conn. to open an expansive, interactive retail store, that will include everything from an indoor aquarium to an archery range.

More importantly, though, the new store, slated to open in the fall of 2007, will employ upwards of 450 people, and Cabela’s has committed to at least 20 years at the location. O’Brien sees the addition of the outfitter in neighboring Connecticut as a missed opportunity.

“We could have attracted them to this area,” he said. “We would have been perfect. The Valley is an outdoor hotbed. This is the grip that our politicians and leaders have on us. They need to have the confidence to scout what’s going on nationally and react … and they’re not doing it. This area should not be in the boat that it is in.

“These are not pipe dreams,” he continued. “It all goes back to having courage. It can be done … Northampton didn’t come back to life offering coupons for $4.99 steaks. It came back to life with style and taste.”

Work to Rule

As visitors leave O’Brien’s offices, they might notice a terse sign that tells them in no uncertain terms to ‘Get Out!’

With a fishing lodge for a conference room and any number of bats, balls, gloves, sticks and pucks littering the waiting area, that suggestion could be taken more ways than one. But O’Brien isn’t particularly concerned either way … he’s too busy getting out himself, perhaps backing the losing team, or urging a few more people to jump off that bandwagon.

Love it or hate it, it’s all the same to him.

Jaclyn Stevenson can be reached at[email protected]

Fighting Inflation

By BusinessWest Staff March 6, 2006

Uncategorized

Springfield-based Spalding has been making a name for itself in recent years for essentially re-engineering the common basketball. It started with a product that placed the inflating pump inside the ball itself, and continued with the introduction last fall of something called the Never Flat™, a ball that is guaranteed not to deflate. The product has met with solid early reviews, and sales for the company have been anything but flat.

When Bob Llewellyn talks about concerns over inflation, he’s not referring to the economy and the threat of price increases that Alan Greenspan spent a career working to minimize.

No, he’s talking about filling a ball with air or, to be more specific, the challenge of keeping one filled.

Over time, air will eventually leak out, he explained, adding that this has been a long-time problem for many consumers; people often put their pump and inflating needle in a special place — and then forget where that is.

They may never need to remember, thanks to a new product rolled out (literally) by Springfield-based Spalding last fall. It’s called the NEVER FLAT basketball, a name that is also a slight exaggeration.

The ball stays inflated 10 times longer than a traditional basketball, said Llewellyn, Spalding’s director of Consumer Marketing and Business Analysis, noting that this amounts o perhaps 15 months or so, longer than the lifespan of many balls.

So, in that respect, the ball often never does go flat, he said, adding that the product has become a real hit with retailers and consumers alike. Meanwhile, the new science involved, which includes proprietary pressure-retention technologies and, in essence, changes the air inside the ball, has been nominated for several sports-innovation-related honors.

Indeed, for Spalding, the ball represents another step forward in the use of new technology to improve product quality and enhance sales, said Llewellyn. Five years ago, the company introduced a product called Infusion, which features technology that builds an inflating pump into the ball.

It was introduced with basketballs, but was eventually incorporated into new models in football, volleyball, and soccer lines, he explained, adding that Never Flat, which goes one step further — virtually eliminating the need for a pump — will likely be used in other Spalding products as well.

For now, though, the focus is on the basketball realm, where the Never Flat gives Spalding a real opportunity to expand market share by giving consumers even more options, said Christy Hedgpeth, a former college and pro player who now serves as Spalding’s senior manager of basketball marketing.

Gesturing to a display in the company’s main conference room featuring dozens of different styles and colors of basketball, she said Spalding has greatly increased its number of skews in recent years, a strategy that has succeeded it giving it roughly half of all basketball sales.

The Never Flat will complement the existing portfolio, not render other models, such as Infusion, obsolete, she explained.

“We want to establish is the notion that no matter what price point they may be looking at, people can rely on Spalding,” she explained. “Hopefully, we’ll have something to meet the needs of everyone looking for a basketball; that’s how we’ll gain market share.”

BusinessWest looks this issue at how this new product is helping Spalding in its broader mission to become a stronger, more versatile sporting goods company.

Pressure Points

Lebron James, Shaquille O’Neal, Kobe Bryant, and other NBA players were the real standouts of the NBA All-Star game and related festivities staged last month in Houston.

But there was another, far less heralded, individual putting up some impressive numbers.

Like 26.5. That’s the number of continuous hours that Joseph Odhiambo dribbled a basketball during a special promotion during all-star week, a performance good enough to break a Guinness world record. He eclipsed another one two days later when he spun a ball on his finger for a continuous four hours and 15 minutes, shattering the old mark by 16 minutes.

He accomplished both feats with a Never Flat ball, said Hedgpeth, noting that one was also in use when students from Duke and the University of North Carolina squared off in record-breaking 58-hour basketball game staged in mid-January. The final score was 3,688-3,444, with Duke prevailing. Also tallied, sort of, was the number of times the ball bounced. Using an average-bounces-per-minute multiplier, the final number was projected at 125,000.

These exhibitions and others — Never Flats were used in recent attempts to break the Guinness records for most free throws and three-point shots made in one minute — are part of a broad campaign to introduce the ball to consumers, said Hedgpeth. All-star weekend was the perfect launch platform, she explained, noting that the various events and exhibits — and Spalding had a presence at all of them — were attended by more than 120,000 people.

They took in Odhiambo’s efforts at a facility called the ‘Spalding Record Setting Court,’ and also were exposed to banners, video promotions, and a host of other marketing strategies. “The ball was everywhere people looked,” she said.

To top things off, the company gave a Never Flat ball to an entire section of fans at the Toyota Center during the All-star game— an estimated 200-250 people.

What these individuals took home looked just like a normal basketball — on the surface. Inside, of course, things are much different, and this is what allows the ball to take its name.

Left on a shelf or a ball rack, the average basketball will eventually lose air, Llewellyn explained, noting that the recommended pressure for a ball is 7 to 9 pounds per square inch, and that over the course of a year that number will fall to 3 or 4 psi. Looking at it another way, he said a basketball will fall out of game-ball specifications in three months.

These numbers provide the primary motivation for the Never Flat, which was developed over the course of only a few months through a partnership between Spalding and Primo Innovations, an invention laboratory started by two materials scientists, Dan Sandusky and Michael O’Neill, after they left DuPont. The product attacks air loss through several changes in basic basketball design.

First, the scientists addressed air loss through solid membranes by reducing the porosity of the ball’s internal bladder through the incorporation of new materials that reduce the size and number of holes in the bladder. Next, Primo’s team addressed air leakage from the standard ball’s rubber valve by incorporating a removable plug. The hole in a valve is tiny, said Llewellyn, but air can still get through. Meanwhile, the plug keeps dirt from getting into the valve, further reducing the loss of air.

But the biggest change is to the air inside the ball itself.

Primo developed a proprietary gaseous concoction called NitroFlate. It is comprised of a mix of large and small gas molecules that effectively block the exits used by air molecules as they try to escape through the pores in the ball’s inner membrane.

The combination of these ingredients has produced a ball that lives up to its name, said Llewellyn, adding that the Never Flat exemplifies Spalding’s ongoing work to take the hassles out of playing a sport, but preserving its core aspects.

“The company has adopted the slogan ‘True to the Game’ to describe the products it brings on the shelves,” he explained, “and Never Flat builds on that reputation.”

The new technology has gained the attention of Popular Science, which made it a semi-finalist in its ‘Sports Edge Product of the Year’ competition, and by the Sporting Goods Manufacturing Assoc. (SGMA) which made it one of five finalists for ‘New Sports Product of the Year.’ It is competing against, among other things, a treadmill, an elliptical machine, and a sports bra that comes complete with a heart monitor.

Round Numbers

What the Never Flat technology allows consumers and (soon) college and high school equipment managers to do is forget about the needle and pump. And if that sounds like a big step forward in sports technology — it is, said Llewellyn.

And this was reflected in the reaction by retailers when they were first shown the ball and told about its performance capabilities last fall.

“They all wanted to know when they could get the ball, how many, and if they could have exclusivity,” he said, adding that the product made its retail debut at a Dick’s sporting goods store in Danvers, Mass.

That launch time, around Thanksgiving, is a period when stores are loading up for the holidays and floor and display space is at a premium. “But for this ball, they made space on the shelves,” he explained.

And the balls moved off the shelves as well. Spalding saw its market share in the basketball market jump from just over 40% to nearly 55% in the month between Thanksgiving and Christmas, said Llewellyn, noting that the share dropped back to the mid-40s in the subsequent months, which are generally slow when it comes to sporting goods sales.

Things pick up in the early spring, however, as the weather gets warmer and March Madness and, later, the NBA playoffs commence, said Hedgpeth, adding that Spalding will utilize the marketing slogan ‘enhanced performance under pressure’ to convey how the ball and the individuals using it can perform.

The company is gearing up for the spring with a series of promotional strategies, including print ads, in-arena marketing, as Hedgpeth called it, and a recently debuted television commercial featuring Boston Celtics star Paul Pierce.

Produced in conjunction with Lenox-based Winstanley Associates, the commercial was crafted in a way that seeks to take the target audience (12- to 24-year-old males) inside the basketball. Describing the effects used in creating the ad, Winstanley’s Creative Director Ralph Frisina said they had a dual mission.

“They needed to be so descriptive as to be scientific,” he explained, “yet cool enough to elicit a ‘wow, did you see that?’ reaction.”

Whether total sales volume will eventually wow Spalding executives remains to be seen, but if the Infusion’s performance is any indication — the company projected first-year sales of 250,000 and then sold nearly 1 million — the Never Flat will do well.

“We’re very confident that consumers will embrace this ball because it solves what is, for many, a real problem,” said Llewellyn, who declined to release specific sales goals or projections. “We know this product is a winner.”

A New Spin

As part of its broad promotional strategy for the Never Flat, Spalding supplied retailers with displays that let the consumer know exactly how long the ball they were considering would go before losing perfect pressure and game-ball status.

It reads ‘374 days, 04 hours, and 21 minutes,’ and was calculated to account for several days or even weeks on the store shelf before purchase.

Early indications are that most of the balls won’t be in the store that long. The product, and the technology, seem to be scoring points where it counts the most — the court of public opinion.

George O’Brien can be reached at[email protected]

By BusinessWest Staff February 20, 2006

Departments

Business Confidence Continued to Erode in January
BOSTON — The Associated Industries of Mass. (A.I.M.) Business Confidence Index lost 1.9 points in January to 54.7, a third consecutive loss that has left the monthly index at its lowest point since November 2003. There are rising concerns among employers about economic conditions in the state, especially as national growth appears to be weakening, according to Raymond G. Torto, co-chair of A.I.M.’s Board of Economic Advisors and Principal, CBRE Torto Wheaton. Torto added that employers surveyed were somewhat more positive about the situations of their own operations in the face of the slowdown. Confidence was off in January among both manufacturers and other employers. Manufacturers were on balance negative in their assessment of current and prospective conditions within the state, and expect national conditions to deteriorate as well. Readings were somewhat weaker outside Greater Boston, where confidence has declined in five of the last six months. Large employers were more positive than others on most questions. Rising energy costs, interest rates, and health insurance premiums erode both consumer and business confidence. The monthly survey of A.I.M. member companies across the state asks questions about current and prospective business conditions in the state and nation, as well as for their respective organizations. Readings above 50 on the 100-point scale indicate that the state’s employer community is generally optimistic, while a reading below 50 reflects a negative assessment of business conditions.

Five-Year Watershed Action Plan Underway
WEST SPRINGFIELD — The Pioneer Valley Planning Commission (PVPC), in partnership with the Westfield River Watershed Association and ESS Group Inc., has been awarded a contract under the Executive Office of Environmental Affairs to develop a five-year watershed action plan for the Westfield River. Created by watershed partners, the action plan will outline various issues and priority areas over a five-year period, charting a course of action for state agencies, watershed communities, and other decision makers within or related to the watershed. A steering committee is currently being formed to guide development of the action plan. Current members include The Nature Conservancy, the Westfield River Wild and Scenic Advisory Committee, Massachusetts Department of Environmental Protection, Mass. Department of Agricultural Resources, UMass Amherst and the Massachusetts Department of Conservation and Recreation. In addition, each of the 28 communities in the watershed has been asked to appoint a representative to the steering committee. A series of three public forums will be conducted this spring to solicit public comment and feedback on the plan. For more information, contact PVPC Senior Planner Anne Capra at [email protected] or (413) 781-6045.

Public Input Needed Online for Update-Use Plan on Land-Use Plan
WEST SPRINGFIELD — The Pioneer Valley Planning Commission invites public input via an online survey in the development of Valley Vision 2, the update of the region’s land use plan. Valley Vision 2 maps out a vision for smart growth in the Pioneer Valley based on more compact forms of development in and around existing community centers and preserved open space in outlying greenbelts. Public opinion is vital to developing this update, and PVPC relies on participation by citizens throughout the region in shaping the future vision of its landscape. To read the draft plan and take the survey, visit www.pvpc.org. For more information, contact Chris Curtis at the PVPC, (413) 781-6045,
or [email protected].

Mass. Hospitals Voluntarily Post Staffing Plans
BURLINGTON — Massachusetts hospitals delivered on the “Patients First” pledge beginning Jan. 27 to voluntarily post their staffing plans for public viewing. Through a Web site, www.patientsfirst ma.org, and notices in hospitals, consumers can now find the number and type of caregivers assigned 24/7 throughout each hospital in the state. A special consumer brochure, “It Takes A Team,” is also available at every hospital and explains the many professionals involved in patient care. The staffing plans that are posted on-site in each hospital and on the web will provide an overview of the staff available in each hospital unit, including RN’s and allied health professionals. In addition to the staffing plans, hospitals will document the quality of their care using a common set of nationally recognized measures. A pilot test of some of those quality measures is now underway, under the supervision of a team of leading patient care experts. The quality reports on all hospitals should be available by the end of this year.

Survey: Most Downsized Execs Anticipated News
HOLYOKE — The majority of recently downsized executives polled weren’t surprised to find themselves in career transition, according to a survey of 1,202 outplaced managers by Lee Hecht Harrison. Nearly 80% of executives anticipated their organization’s downsizing, and 57% weren’t surprised to learn they were among those to be laid off. Additionally, 35% of respondents said they had been downsized before and 65% had survived a previous downsizing with their most recent or prior employer. The good news for outplaced employees is that a significant number have become savvy about the changing world of work and have taken steps to ensure their future employability. For example, within the two years prior to their downsizing, 57% of respondents had updated their resumes, half pursued some form of career or skill development, 46% actively maintained their networks, and 44% explored other employment options. Lastly, one reason respondents had generally positive impressions of how their former employers handled their downsizings could be that they had received outplacement services.

Ashe: Housing Market Will Remain Strong in 2006
SPRINGFIELD — Residential real estate once again was the backbone of the U.S. economy last year, and in Hampden County, 2005 was statistically similar to the record-breaking year of 2004, according to Donald E. Ashe, Hampden County Register of Deeds. The number of deeds recorded in 2005 was only 0.7% less than the previous year. The total amount of money collected in 2005 did, however, increase by 3.6% over the prior year. The total number of documents recorded during 2005 was 122,837 and the amount collected from fees was $22.2 million. The most noteworthy change from 2004 to 2005 was the substantial decrease in attachments and foreclosures, according to Ashe. He predicts that the area housing market is in the process of “changing from record sales and double-digit price increases to a more stable condition.” Overall, Ashe said that the fundamental conditions in the housing market are strong and real estate activity will remain healthy in 2006. In other news, Ashe reported that the satellite office in Westfield completed its first full year of operation and collected more than $1.2 million in revenue and recorded more than 10,000 documents.

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Winstanley Associates Builds a National Reputation from Tiny LenoxNate Winstanley, left, and Ralph Frisina at their Lenox offices.

And Build a Stronger Brand

Quenching the State’s Growing Energy Thirst

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PeoplesBank Will Aggressively Expand Its Reach

Make Investments in Your Community

Getting Moving on Health Care

Suit Filed by Friendly’s Founder Offers Food for Thought on Corporate

A Modern Touch for the Pension System

The Real Energy Crisis

Higher Education Must Remain ‘Affordable’

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Winstanley Associates Builds a National Reputation from Tiny Lenox
Nate Winstanley, left, and Ralph Frisina at their Lenox offices.