Enterprise 2Q 2012 by The Warren Group

NEW JERSEY CHAMBER OF COMMERCE

www.njchamber.com

a quarterly focus on the people and the issues that drive New Jersey business 2Q 2012

OIL FROM SOIL

THERE ARE 175 BILLION BARRELS OF OIL LOCKED IN THE SANDS OF WESTERN CANADA – AND NEW JERSEY COMPANIES HOLD THE KEY

 PAGE 12

Also Inside: When Partnerships Go Bad: A Survival Guide Cutting-Edge Business Banking

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table of contents

cover 12 There’s oil in the sands of

Western Canada. And wellinvested energy companies are looking to hire New Jersey contractors to help them tap it.

features 04 Message from the President

Our work on the Canadian oil sands project shows the unique value of the State Chamber. We bring new business opportunities to our members.

21 Upcoming Event – New Jersey

Focus on: news 06 The jobless rate for Iraq and Afghanistan

veterans under the age of 25 hovers at about 30 percent, double the rate of their civilian peers, a figure that must change.

Chamber Forum 2012 James Carville and Mary Matalin bring their happy marriage and outrageously divergent political points of view to the N.J. Chamber on Sept. 27.

22 News Makers

New chief executives at Rutgers and Johnson & Johnson

07 A new rule at the DEP brings common sense to

the permitting process

08 State Treasurer Tells N.J. Chamber Members:

‘10 Percent Income Tax Cut is Good Business’

education 09 A New Team-Building Exercise for Your

Company: Shaping Young Minds

10 Why Teacher Tenure Reform Matters 11 Businesses Team with Colleges to Develop a

21st Century Workforce

accounting 16 He Danced with his Staff in the Streets;

Now this Accounting Firm CEO Discusses the Surprising Results

18 Cutting-Edge Business Banking 20 Managing Your Supply Chain,

and Sleeping Well at Night

21 When Partnerships Go Bad: A Survival Guide

president’s message

BY THOMAS A. BRACKEN

State Chamber is Helping New Jersey Companies Strike Oil in Canada Think about this for a moment. What country exports the most oil to the United States? Is it Saudi Arabia? Venezuela? Russia? How about none of the above? The correct answer is Canada. Our neighbor to the north accounts for 22 percent for all the oil imported to the states. Saudi Arabia is a distant second. Canada’s proven petroleum reserves stand at 175 billion barrels, making it the world’s second largest holder of reserves after Saudi Arabia, according to the U.S. State Department. Nearly all of Canada’s oil reserve is a form of petroleum that sits in the sands of Alberta in Western Canada, and this enormous ocean of oil is about to make Canada an even bigger player in the world energy market. But they have a problem. Executives from companies like ExxonMobil and Suncor strike the same refrain: They have the billions in capital. They have the will. But they lack the contractors in Western Canada with the technology, expertise and products needed to help them push back the frontier and get to the oil. This is good news for the United States, and particularly New Jersey, because these energy companies are turning to the New Jersey Chamber of Commerce and companies in the Garden State for the help they need – services like engineering, environmental expertise, facility management, architectural design, software development, hardware and more. At the request of the Canadian Consulate, the New Jersey Chamber identified and vetted more than 60 New Jersey companies – some of them Chamber members and some not – and then teamed with the state’s Business Action Center to sponsor a “matchmaking” event in East Brunswick. Lt. Gov. Kim Guadagno described it as “speed dating,” where Canadian and New Jersey Companies met one-on-one for brief, get-to-know you interviews. When the program opened, Canadian energy ex4 |

ecutives stood up and appealed to these New Jersey firms to help them with the challenging, but extremely lucrative, work of extracting oil from the oil sands. (Read more about this on page 12). John Prato, consul general of Canada in New York, attended the matchmaking program. He said New Jersey “has everything we need: a history of manufacturing, engineering and environmental jobs. This is the first event of its kind in the U.S, and we picked New Jersey by design, not by accident.” Having served as the master of ceremonies at this event, I saw close up just how serious the Canadian executives are about hiring companies here in the Garden State. This was an enormous opportunity for the New Jersey firms in attendance. Dozens of the New Jersey companies at the East Brunswick affair are now concluding contracts with their new Canadian partners. Our work on the Canada Oil Sands Project shows the unique value of the State Chamber – we bring new business opportunities to our members and to the state of New Jersey as well. In this case, out-ofcountry opportunities. Following our event in East Brunswick, we were contacted by representatives of other countries asking us to connect them with New Jersey contractors to fulfill their service and product needs. We plan to use our success with the Canadians as a template for matchmaking with these countries. We are proud to showcase the hard work, expertise, skills and products of New Jersey companies. We are excited by the prospect of opening new markets to our members – generating even more business opportunities for them. Stay tuned. ❖

Thomas A. Bracken President and CEO New Jersey Chamber of Commerce

CHAMBER STAFF

Thomas A. Bracken President and CEO

Dana Egreczky Senior Vice President, Workforce Development

Michael Egenton Senior Vice President, Government Relations

Alfonso Romeo Director of Member Services

Ray Zardetto Director of Communications

Scott Goldstein Communications Manager and Enterprise Editor

Ric Principato Interactive Designer

New Jersey Chamber of Commerce Staff

216 West State Street Trenton, N.J. 08608 Phone: (609) 989-7888 www.njchamber.com

Upcoming N.J. Chamber Event The 15th Annual New Jersey Chamber of Commerce Open House

June 14, 2012 | 5 p.m. to 8 p.m. N.J. Chamber Offices, Trenton One of the state’s premier networking events. We put up a huge white tent in the backyard of our Trenton headquarters and all of our members are invited for this fun and free event, featuring food, live music, drink and, of course, good conversation. Attendees traditionally include government dignitaries. For information on attending, got to www.njchamber.com. For information on sponsoring, call Al Romeo at (609) 989-7888 ext. 147, or email aromeo@njchamber.com.

NJCC Board of Directors Officers Chairman

Jeffrey C. Scheininger President Flexline/U.S. Brass and Copper Corp. First Vice Chair

GROW. WISELY.

Ralph Izzo Chairman, President and CEO Public Service Enterprise Group Second Vice Chair

Amy B. Mansue President and CEO Children’s Specialized Hospital Treasurer

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focus on news

One Way to Support Our Veterans: Hire Them EMPLOYERS WHO HIRE VETS ARE ELIGIBLE FOR A FEDERAL TAX CREDIT OF UP TO $9,600 BY JACK FANOUS

Following World War II, as servicemen returned home from victory in Germany and Japan, American businesses rewarded the troops with praise, recognition and a willingness to hire them. Those troops became the Greatest Generation, working in factories and industries across America so effectively that our economy grew into the largest the world had ever seen.

JACK FANOUS

Our work at the G.I. Go Fund is designed to pave the way to the same prosperity for our post9/11 veterans. Since our organization’s founding, we have worked to assist our veterans, particularly those of Iraq and Afghanistan, by connecting them to employers, schools and crucial benefits. Chief among our concerns is helping them land quality jobs. The jobless rate for Iraq and Afghanistan veterans under 25 hovers at about 30 percent, according to a recent survey by the U.S. Department of Labor, an astronomical figure that must change as troops return from a decade of war. Part of what has led to the high veteran unemployment level is that many companies overlook the intangible qualities of veterans – they are hardworking, highly motivated and determined.

They can be great leaders in any company. At our job fairs throughout the state, we see company after company welcoming veterans and discovering how hardworking these men and women are. The government is helping to get veterans hired as well. President Barack Obama and Congress recently passed the VOW to Hire Heroes Act, which provides employers a tax credit of up to $9,600 for each veteran hired. We are seeing the positive effects of this legislation already. With the help of the N.J. Chamber of Commerce, we hosted a successful “Job and GI Bill Fair” at Rutgers-Newark. The event drew more than 70 exhibitors and more than 500 veterans and their families. We will continue to connect veterans and employers, and we are hopeful that, working together with the private sector, we can and will fulfill the promise that was made to veterans of generations past, and make 2012 the Year of the Veteran. ❖ Jack Fanous is the executive director of the G.I. Go Fund, a nonprofit organization that provides transition assistance to all military veterans. He can be reached at fanous@gigofund.org or (973) 802-1479.

Jobless Vets December unemployment rates: • One out of three veterans ages 18 to 24 were without work the last quarter of 2011, double the rate of civilian peers. • For veterans of Iraq and Afghanistan, the unemployment rate was 13.1 percent, compared to 8.3 percent for the U.S. overall. • 800,000 veterans are jobless. • 1.4 million live below the poverty line. • One in every three homeless adult men in the U.S. is a veteran. Source: Bureau of Labor Statistics

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Unraveling the Red Tape:

The State DEP Can Help the Economy and Protect the Environment BY MICHAEL EGENTON

One of the biggest obstacles to economic development in New Jersey has long been our state’s notorious mountain of red tape. Developers with plans to build or expand offices, manufacturing plants, shopping malls and homes here are met with volumes of outdated regulations that from time to time conflict across various state agencies, resulting in frustration and ultimately stalled projects. To address this chaos, the state Department of Environmental Protection has recently instituted a new policy called the “Waiver Rule” MICHAEL EGENTON that allows the DEP to waive strict compliance with regulations in limited circumstances so good economic development projects can move forward. This kind of common sense flexibility – which the New Jersey Chamber of Commerce has fought for – is exactly what New Jersey needs, especially as we begin to emerge as a state that leads, not follows, the nation back to economic prosperity. These waivers won’t just be handed out. A waiver rule application will be approved by the DEP only if the project poses no risk to public health and to the environment. Applications will be subject to strict, case-by-case technical reviews by the DEP and will require approval by the commissioner. To ensure transparency, all waiver applications and decisions will be posted on the DEP website. Under the rule, the DEP can consider a waiver only after determin-

ing that at least one of four circumstances exists: Regulations conflict with one another; strict compliance creates an unduly burdensome situation; a waiver creates a net envi-

ronmental benefit; or a public emergency exists. This new rule brings common sense to a DEP permitting process that until now has brought confusion and left a trail of good projects sometimes stuck forever in limbo. In other words, it will give New Jersey a new reputation – a reputation for practicality and flexibility. ❖ Michael Egenton is senior vice president, government relations, at the New Jersey Chamber of Commerce.

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focus on news

New Jersey Chamber of Commerce Breakfast Series

STATE TREASURER: 10 PERCENT INCOME TAX CUT IS GOOD BUSINESS BY SCOTT GOLDSTEIN

The Christie administration’s proposed 10-percent, across-theboard income tax reduction is driven in part to help businesses that pay taxes through the owners’ personal income taxes, state Treasurer Andrew P. Sidamon-Eristoff told a group of about 85 New Jersey Chamber of Commerce members on March 30. Those business owners are often in the state’s highest income tax brackets, and are subjected to a tax rate that is higher than all but four states in the nation, the treasurer said at the roundtable breakfast in Monroe presented by the N.J. Chamber. “That informs us as we promote a 10 percent tax reduction,” he said.“This impacts business.” Businesses whose taxes are paid through their owner’s income taxes – not the Corporation Business Tax – are mostly small firms such as S-Corps, LLCs, LLPs, sole proprietorships or partnerships. The Christie administration is seeking support on the income tax cut proposal from the Democrat-controlled Legislature, which has proposed a pair of alternative tax relief plans. Another problem with the state’s high income tax rate for high earners is that it is a highly volatile revenue source for the state that peaks in vibrant economic times and drops sharply in difficult times, Sidamon-Eristoff said. “That’s a problem with budget planning and being competitive,” he said. “We get hit with swings year after year.” The income tax rate for those who make less than $150,000 is a different story. It continues to be a significantly lower rate than those in all other states in the region, including Connecticut, Delaware, Pennsylvania, Maryland and New York, according to a chart the treasurer provided at the breakfast. The Christie administration, meanwhile, has made headway in containing the state’s property taxes, which have risen on average of about 2 percent annually the past two years, compared to about 7 percent or 8 percent increases in the previous years, going back to 2000, he said. “That means we are getting to the underlying 8 |

forces that push up property taxes,” he said. “We would like to see all the state taxes go down.” ❖ Scott Goldstein is communications manager for the New Jersey Chamber of Commerce.

B.J. Agugliaro, managing partner at PricewaterhouseCoopers and a member of New Jersey Chamber of Commerce board of directors, asks a question during the Q&A session with the state treasurer.

Michael Egenton (left), senior vice president of government relations at the New Jersey Chamber of Commerce, moderates the session with State Treasurer Andrew P. Sidamon-Eristoff.

Sidamon-Eristoff attracted a full house. PHOTOS BY: Ric Principato

focus on education

A New Team-Building Exercise for Your Company: Shaping Young Minds, and Tomorrow’s Work Force BY DANA EGRECZKY

Paintball. Picnics. Conferences. Spa days. These are activities companies use to build employee morale. Now your company has the opportunity to become involved in a team-building exercise with a higher purpose: the New Jersey Chamber of Commerce Foundation’s “LearnDoEarn Workshopitition.” With this event, your employees can spend a day or two working with area high school students to help them understand the expectations of college life and the work world – a concept foreign to many high school students. The program, a combined workshop and competition for the students, immerses the students in engaging and intense learning experiences. Your employees team up to inspire students to channel their energy into constructive thinking that works in the real world. Your employees will gain the unique satisfaction that comes with imparting wisdom, and helping build a stronger workforce for tomorrow.

The LearnDoEarn program (Learn More Now, Do More Now, Earn More Later) was created by the Chamber Foundation in response to employers’ concerns about the availability of qualified workers. It provides students with a roadmap that identifies the courses students need to take, the grades they need to earn and the attitudes they need to acquire to be ready for college and careers. The program is currently in use by over 400 schools in the state. Students learn to shake hands and “work” a crowd for critical nuggets of information. They play the role of employers competing for the best engineering, managerial and secretarial talent. They experience the college admissions process from a behind-the-scenes perspective. And students learn to make business decisions about budgeting, personnel, product design, manufacturing and sales. Teams with the best strategies, as evaluated by our judges, win the event. This curriculum works. Just ask folks from Prudential’s Black Leadership Forum, an employee resource

“Your employees team up to inspire students to channel their energy into constructive thinking that works in the real world.” The New Jersey Chamber of Commerce Foundation makes it easy for your company to participate. It will pair your employee volunteers with a local high school. Foundation staff will provide two hours of training for you employees, and be on site for the activities with students. Your small tax-deductible contribution to the Chamber Foundation can make it all happen

group, that has been using LearnDoEarn with students in Newark, Plainfield and Philadelphia schools for three years. Or the Linden Industrial Association – several of its members combined forces to raise program funding and will be spending a day in Linden High School delivering LearnDoEarn messages to all 160 of the school’s ROTC students. Or Elizabethtown Gas, which

Students learn to make business decisions about budgeting, personnel, product design, manufacturing and sales at the New Jersey Chamber of Commerce Foundation’s LearnDoEarn Workshopititions.

sponsors a two-day Workshopitition for all 220 ninth graders at Abraham Clark High School in Roselle. Other companies sponsoring LearnDoEarn and its Workshopititions in schools include Capital One, ConocoPhillips, Wells Fargo, Verizon, Colgate-Palmolive, Roche, PSE&G, Infineum, TD Bank, BAE Systems, IBM, The Merck Institute for Science Education, and more. The students never fail to surprise. The LearnDoEarn games put them in situations they have never faced before, and they find an outlet for their competitive sides that are rarely exposed during a typical school day. In the midst of all the excitement, your volunteers will be building the strong workforce you will need in the future. ❖ Dana Egreczky is president of the New Jersey Chamber of Commerce Foundation. To get involved in the LearnDoEarn Workshopitition, call Julie Rita at (609) 989-7888 ext. 126. ENTERPRISE 2Q 2012 | 9

focus on education

Why Teacher Tenure Reform Matters to New Jersey’s Business Community BY JEFF SCHEININGER

Tenure reform and teacher quality reform are important to the business community. We hire the graduates of New Jersey’s schools, and we need a steady stream of literate and numerate young people to make our companies successful. It’s workforce readiness, plain and simple. And that’s why the New Jersey Chamber of Commerce supports state Sen. Teresa Ruiz’s (D-Newark) tenure reform legislation, TEACH NJ (A-2839).

JEFF SCHEININGER

Our state boasts a long history of excellence in education for many of our students. However, we cannot allow our successes to distract us from the hard work necessary to address our deficiencies. Unfortunately, New Jersey suffers from one of the nation’s largest achievement gaps between rich and poor students. I see this frequently in my manufacturing company in Linden. We have tried to hire production personnel and have been shocked to find that applicants cannot subtract fractions. The problem, 2 ¾ minus 5/8 =, was answered correctly by only six of 100 applicants, and most of them had high school diplomas. As a small business owner, I can tell you that we do not have the resources to re-educate employees in the basics. It is important to understand where our competition comes from. Not long ago we thought of Pennsylvania and North Carolina as our chief competitors. Now they are Singapore and India. This international competition is here to stay. We must do a better job educating our children, particularly in math and the sciences, if we are to create and retain jobs here. Education and entrepreneurship have been the agents of our prosperity; our economic stability depends on them. Nothing short of a revolution in the delivery of public education in New Jersey and in America will ensure our continued economic and social preeminence. TEACH NJ is an important step toward that goal. u First, this legislation, and the teacher evaluation pilot that is its partner, will provide ongoing teacher professional development. Every

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enterprise – education included – must work to fully develop the talent and skills of its most important asset: its employees. u Second, the teacher tenure award and removal processes need to be streamlined. The bill would require that decisions such as awarding tenure are based on a teacher’s performance and not solely on how many years they have been in service. As for tenure removal, the current process takes too long and is too expensive – six figures per teacher. Those same funds could be used to provide resources to great teachers, or to build good teachers into great teachers. Allowing ineffective teachers to remain in the classroom causes students to endure inadequate instruction. Retention of inadequate teachers also damages the morale of great teachers who understand the importance of their profession and resent under-performing colleagues, especially when those colleagues pass along students with learning gaps that need to be remediated. u Finally, and most importantly, students deserve an education that prepares them for the demands of college and/or a career. We know this is possible. Research shows that the most challenging student populations beat the odds and achieve lifelong success because of great teachers. To ensure this outcome, every teacher in every New Jersey classroom must be at the top of their game every day. The system must provide these consummate professionals with the data necessary to monitor student growth, performance, and achievement, and must use that same data to evaluate the performance of the educator. A great teacher is one of our society’s greatest treasures and TEACH NJ will create far more of them. ❖ Jeff Scheininger is chairman of the New Jersey Chamber of Commerce and president of Flexline/U.S. Brass and Copper Corporation, a Linden manufacturing firm.

Businesses Team with Colleges to Develop a 21st Century Workforce BY DIANA LASSETER DRAKE

At the end of March, Jill Biden, wife of Vice President Joe Biden, visited Mercer County Community College in West Windsor to discuss the role of community colleges in developing a highly skilled 21st century workforce. Biden’s visit followed the launch of President Barack Obama’s Community College to Career Fund, an $8 billion investment in his 2013 budget to train workers in areas such as advanced manufacturing, clean energy and information technology. Biden, a community college educator, said she has seen workers getting the skills they need. New Jersey’s 19 community colleges, with postsecondary training expertise in areas as vast as the culinary arts, health care, manufacturing and glassblowing are a valuable resource for New Jersey businesses. Companies are increasingly partnering with community and four-year colleges and universities to ensure that they have a skilled and efficient workforce – especially important in tough economic times. “Job training and workforce development have always been a part of the community college mission,” and now more than ever, said Lawrence Nespoli, president of the New Jersey Council of County Colleges in Trenton. “On top of the training that community colleges do individually, they joined together five years ago to create a training consortium. If a business in New Jersey has employees who need training, through this consortium we can deliver the combined expertise of the 19 community colleges to provide training on that company’s worksite.”The consortium has trained some 50,000 workers at more than 2,200 New Jersey companies. Because of the recent economic downturn, many businesses are retooling their existing employee base with specific skill sets, said Mary Ellen Caro, vice president of enrollment management and learner services at Thomas Edison State College in Trenton. “Companies [are looking at] employee training … as a strategic advantage,” she said. “We are taking on the role that complements internal training.” For example, Thomas Edison State College has a growing partnership with the shipping compa-

ny UPS, a major New Jersey employer. “We have created programs for them” in areas like logistics, Caro said. As firms restructure, they “are looking for external partners to provide them with the training they used to do in-house,” says David Finegold, senior vice president of lifelong learning and strategic growth at Rutgers University in New Brunswick. Rutgers has developed deep strategic relationships with companies like Johnson & Johnson, with whom it developed a mini-MBA in digital marketing and social media. “We did this program [locally] and we’re now delivering it throughout J&J’s global organization,” says Finegold. Rutgers also works with companies that take advantage of New Jersey’s customized training grants to upgrade the skills of their front-line workers, Finegold said.

“Our responsibility is to make sure our students are employed 20 years from now. Businesses don’t necessarily think about that because it’s not their job.” — R. Barbara Gitenstein, president, The College of New Jersey A strong relationship between the business community and academia is essential to meeting the ongoing demands of New Jersey’s workforce, says R. Barbara Gitenstein, president of The College of New Jersey (TCNJ) in Ewing. “It has to be a partnership,” she said. “A school like TCNJ is not in the strict job-training area. We are developing long-term skills for long-term employment and economic health. Our responsibility is to make sure our students are employed 20 years from now. Businesses don’t necessarily think about that because it’s not their job. Both sides have to listen to one another.” ❖ Diana Lasseter Drake is a freelance writer based in New Jersey. ENTERPRISE 2Q 2012 | 11

PHOTO COURTESY OF the government of Alberta

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CANADIAN ENERGY EXECUTIVES TO N.J. CONTRACTORS:

‘WE NEED YOUR HELP’

A MEG Energy drilling rig in Alberta. (Photo courtesy of MEG Energy)

BY SCOTT GOLDSTEIN AND RAY ZARDETTO

THERE’S OIL IN THE SANDS OF WESTERN CANADA, AND WELLINVESTED ENERGY COMPANIES ARE LOOKING TO HIRE NEW JERSEY CONTRACTORS TO HELP THEM TAP IT.

A MEG Energy pipeline featuring a wildlife crossing. (Photo courtesy of MEG Energy)

anada’s largest energy companies are seeking suppliers from the Garden State to help them tap into the vast oil reserves of Alberta – a region estimated to hold 175 billion barrels of recoverable oil in the form of petroleum that occurs naturally in the sands of western Canada. These energy companies are looking for services of New Jersey firms to help them drill for oil and operate facilities in the oil sands – the kind of partnerships that can lead to lucrative contracts for New Jersey firms that offer services like engineering, environmental expertise, facility management, architectural design, software development, hardware and more. That was the message from executives from the Canadian energy companies who met with 75 prospective suppliers at a matchmaking event in East Brunswick on March 27, coordinated by the New Jersey Chamber of Commerce, the state’s Business Action Center and the Consulate General of Canada. At the request of the Canadian Consulate, the New Jersey Chamber identified and vetted more than 60 New Jersey companies – some of them Chamber members and some not – and then matched them with Canadian energy executives to meet one-on-one at the East Brunswick event. Dozens of the New Jersey companies at the event have already entered contracts with their new Canadian partners. “We are looking for products and services and sometimes people to come up and work on the oil sands,” said Kendall

At the request of the Canadian Consulate, the N.J. Chamber identified and vetted more than 60 New Jersey companies, and then matched them with Canadian energy executives to meet one-on-one at an East Brunswick event.

N.J. Chamber President Tom Bracken served as master of ceremonies at the matchmaking event.

ENTERPRISE 2Q 2012 | 13

MAKING MONEY OUT OF SAND In 2010, production from the oil sands in Canada was 1.6 million barrels per day. While seven billion barrels of oil sands crude oil have been produced to date, this represents only a small portion of the overall resource. Continued demand for oil is expected to contribute to ongoing growth in oil sands production.

John Prato, the consul general of Canada in New York, said New Jersey “has everything we need: a history of manufacturing, engineering and environmental jobs. This is the first event of its kind in the U.S., and we picked New Jersey by design, not by accident.”

Dilling, manager of regulatory and government affairs for Laricina Energy. “We are resource constrained, but the capital is there, so we are looking to New Jersey to help us push back the frontier.” That sentiment was echoed by representatives of five other big energy companies in Canada – Cenovus, Canadian Natural Resources, ExxonMobil, Suncor Energy and MEG Energy. John Prato, the consul general of Canada in New York, said New Jersey has the know-how to help Canada increase its energy production in Alberta, and to multiply profits for companies in Canada and New Jersey. “This state has everything we need: a history of manufacturing, engineering and environmental jobs,” Prato said. “This is the first event of its kind in the U.S., and we picked New Jersey by design, not by accident.” More than 1,000 American companies already are doing business in Canada’s energy industry, and Canada does more than $13 billion in trade with New Jersey every year, making it the state’s largest trading partner by far. New Jersey Chamber of Commerce President Tom Bracken served as master of ceremonies of the networking event and Jim Benton, executive director of the New Jersey Petroleum Council, moderated a pair of panels. Also speaking were New Jersey Lt. Gov. Kim Guadagno and New Jersey Chamber Chairman Jeff Scheininger. “New Jersey is here to do business,” Guadagno said to the Canadian executives in attendance. “We want your business, we are open for business and we are willing to fight for your business.” “We do in New Jersey what you are looking for in Canada,” the lieutenant governor added.“And we do it better than anyone else.” ❖ Scott Goldstein is communications manager and Ray Zardetto is the director of communications at the New Jersey Chamber of Commerce.

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What are the oil sands? The oil sands are the third largest proven or established deposit of crude oil in the world, located beneath a land mass of 55,000 square miles. The oil sands are found in Western Canada, beneath sections of boreal forest, prairies and muskeg soil. However, most of the reserves consist of an extra-heavy crude oil known as bitumen. Bitumen can be extracted using two methods, depending on how deep the deposits are below the surface. About 20 percent of the oil sands resource is within 250 feet of the surface and can be accessed through mining. The ore is dug up and mixed with warm water to separate and recover the bitumen from the sand. The remaining 80 percent of the oil sands resource is too deep to mine, and some form of drilling technology is required to extract the bitumen. Production and investment Canada’s oil sands are developed by the private sector, with major investments from companies based in Canada, the United States, Europe and Asia. According to the government of Alberta, capital expenditures in the oil sands sector were $10.6 billion in 2009 (Canadian dollars). Since 1967, when commercial oil sands development began, production has grown as the technology to extract and process the resource has advanced and allowed commercial operations to become more cost-effective. Various projections forecast oil sands crude production will rise to between 2.1 to 3.7 million barrels per day by 2020. Source: Government of Canada

For more information on doing business with Canadian energy companies, email Ben Steltzer at the New Jersey Chamber of Commerce at ben@ njchamber.com.

How Do Smaller Companies Compete Against the Big Boys? PLYMOUTH ROCK ASSURANCE In an industry traditionally dominated by national players backed by advertising budgets flirting with 10 figures, one New Jersey auto insurance company is making its mark the old-fashioned way. “Many national carriers have built their empires by putting profits ahead of policyholders,” said Gerry Wilson, president of Plymouth Rock Management Company of New Jersey. “We leverage our local presence to deliver personal attention and build meaningful relationships through community involvement.” Ask a Plymouth Rock policyholder the difference between comprehensive and collision coverage, and they’ll likely have a good handle on the answer. Plymouth Rock’s insurance experts take the time to walk through your options and help optimize your protection and savings based on your unique needs. It all ties back to the company’s philosophy of treating customers like people, not policy numbers. It’s a straightforward, yet refreshing, approach. Spreading the word requires more creative tactics. To penetrate mind share clouded by a massive frequency of talking lizards and other gimmicks, Plymouth Rock partners with community organizations and charitable causes throughout the state. Visit a Little League tournament on a Saturday this summer, and you’ll likely see a team or two sporting Plymouth Rock-sponsored gear. If you were at the shore last October, you may have seen the 170 Plymouth Rock employees in blue and green proudly supporting the Juvenile Diabetes Research Foundation (JDRF) Walk to Cure Diabetes on the Avon-by-the-Sea boardwalk.

Plymouth Rock has also partnered with over 80 New Jersey schools, employers and professional organizations to offer exclusive discounts to students, employees and members. Recently, Plymouth Rock teamed with the New Jersey Chamber of Commerce to offer all members and their employees a special 5 percent discount on auto insurance. “Our affinity partnerships are a great way to align ourselves with similar customer-focused organizations and generate word-of-mouth buzz through valuable savings,” said Wilson. “We’re proud to be an endorsed auto insurance partner with the NJ Chamber and support their promotion of a vibrant business environment in the state.” Beyond savings, Plymouth Rock offers innovative services that could only come from a local company. Guaranteed repairs, hand-delivered checks and valet service are available to get things back to normal as soon as possible after an accident. But, true to form, Plymouth Rock would prefer to keep you out of an accident in the first place. If you’re ever too tired to drive, have a little too much to drink with dinner, or just don’t feel safe driving, Plymouth Rock has your back. Play it safe, call a cab, and send them the bill. According to Wilson, “If we save just one life with our Get Home Safe program, it’s well worth the investment.” For more information about Plymouth Rock Assurance and the New Jersey Chamber of Commerce auto insurance discount, visit PlymouthRockNJ.com or call 1-800-801-0977. t

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focus on accounting

He Danced with his Staff in the Streets; Now this Accounting Firm CEO Discusses the Surprising Results INTERVIEW BY SCOTT GOLDSTEIN

Does it help an accounting firm if the staff can dance?

Sarah Cirelli leads WithumSmith+Brown staff in a rehearsal for the flash mob. Cirelli is the senior marketing coordinator at the accounting firm, and a Zumba instructor.

The staff of the New Brunswick accounting firm WithumSmith+Brown pulled off a “flash mob” this past December starring Managing Partner and CEO Bill Hagaman. The routine involved Hagaman and his staff dancing to the song “Party Rock” on a subway train and in the streets of New York City while passersby watched with jaws dropped. The video of the flash mob has become a mini Internet sensation (you can find a link to it on our website, www.njchamber.com.) Best of all, Hagaman, who has served as the firm’s managing partner for three years, said the video and the publicity that followed has lifted the firm’s employee morale, improved staff recruiting and has received glowing reviews from clients. The video of the flash mob debuted at Withum’s annual “State of the Firm” meeting on Jan. 5, where it was an instant hit with the firm’s 450 staffers, said Hagaman, a member of the New Jersey Chamber of Commerce Board of Directors. He talked with Enterprise magazine about the making of the flash mob video and how it has elevated the firm and, perhaps more impressively, his standing among his four kids. Did you ever think you would star in a video that has 20,000 views on YouTube and counting? No, never. It was fun to make. We initially did it for internal purposes but it has taken off. It was written about in trade magazines. The video kicked off the “The Winning is Everything” accounting conference in Las Vegas on Jan. 19. The theme of the conference was thinking outside the box. Who organized the flash mob? Sarah Cirelli, our senior marketing coordinator, was in charge. She came up with the concept, scoped out the locations and hired the videographer. Most of the project was produced internally.

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Are you a natural dancer? [Laughing] I was not comfortable. I don’t consider myself a dancer. I spent about three and half hours practicing. We had team practice sessions in each one of the offices. We had a Saturday practice session at a health club in Asbury Park. I got a private practice session. [“Party Rock Anthem”] was not a song I knew. I had to put it in my iPod and listen to it 25 times to learn the beat, the tempo and the cues. Were you immediately on board with starring in a flash mob video? I was skeptical at first. Sarah showed me flash mob videos and how it worked. She played the song. That was last June. It took me a little time to get comfortable with it. We solidified plans in the fall and filmed in December. The staff thought it was interesting so I thought, “Let’s give it a whirl.” We were looking for audio-visual to kick off our annual “State of the Firm” meeting. Were all those dancers truly accountants? One hundred and sixty people participated, and every single one of those people work for us. We do have some people who are dancers. Sarah is a Zumba instructor. We have a couple of women who are former cheerleaders – one is a former cheerleader with the Philadelphia Eagles. And the rest of us are flubbing our way through. Are big groups allowed to just start dancing on the streets of New York City? We got a street permit. Taping was flawless. We had a nice crisp day, everybody showed up on time. It was all done in a couple of hours. The flash mob scenes were one take – one at 1411 Broadway and one inside the subway train. And there was tape of me walking around the streets and bobbing my head. What’s going through your head when you first break into dance in public? What going through my head is “make sure

you are on cue and don’t mess up.” If I don’t start it correctly with the music, everybody else would have been off kilter. It went smoother than we expected. We did some filming of me walking around the city outside places like Madison Square Garden and there were a couple of kids yelling “Who are you! You must be famous!”We got a good laugh out of that. What do you think of how it turned out? You never know how these things turn out until you get the final product. It turns out, it is great for the firm. Great publicity, a positive for employee morale and team building, not only from practicing and doing it, but the fact that we were able to pull it off. Has this been a boon for recruiting? We are trying to be the place where all the cool kids want to work. We have gotten a lot of emails from college students that have seen the video and now want to send us their resumes. And it helps us with senior-level recruiting because they felt the video is indicative of a unique culture that they want to work in. What do clients think of the video? Our clients have been happy with it. One thing I was worried about is clients who think we are not serious enough. It turns out they want to know where the people that have been assigned to their account are in the video.

Bill Hagaman, managing partner and CEO the New Brunswick accounting firm WithumSmith+Brown, led a group of Withum staffers in a flash mob – a dance routine in the streets of New York City that caught denizens of the Big Apple off guard.

Most importantly, what does your family think? My kids all think it’s pretty cool. I have four kids – 17, 21, 23 and 25. They generally don’t like it when I dance because I am not a dancer. They get embarrassed. But this, they passed around to their friends. After all the practicing, do you still like the song you danced to? I do like the song. When I hear it at a basketball game or on the radio, it brings back great memories. ❖

A dance routine on the subway by the Withum group broke the monotony for commuters, who are not accustomed to that kind of entertainment on the train.

ENTERPRISE 2Q 2012 | 17

focus on accounting

Business Banking in the 21st Century BY CHRISTINA P. O’NEILL

Banking on your smart phone. Using your phone as a credit card. Remote deposits over any computer. Banking, one of the world’s oldest industries, has changed rapidly in the information age. Enterprise magazine asked bank executives in New Jersey to talk about some of their cuttingedge products that help companies run their business more efficiently and conveniently. Here’s what they said: OceanFirst Bank OceanFirst was one of the first community banks to introduce remote deposit capture services for businesses. Last year, our business customers were VITO R. NARDELLI given the capability President and COO OceanFirst Bank of accepting credit card transactions via smart phones. As technology evolves, we believe it is important to educate and assist our customers to better understand the benefits and potential risks of electronic banking. Therefore, we are continually enhancing online security for retail and business customers. Wells Fargo Wells Fargo customers who use smart phones and tablet devices, can now keep track of their finances while on the go with Wells Fargo Mobile bankALAN WYOSNICK Business Banking Manager ing services. Wells Wells Fargo – New Jersey Fargo mobile banking apps are available via the Android Market, Apple App Store, BlackBerry App World, Amazon Appstore for Android and HP App Catalog. Wells Fargo 18 |

has more than 7 million active consumer and small business customers using Wells Fargo Mobile – its fastest-growing delivery channel.

BILL JOHNSTON New Jersey Market Executive Capital One Bank

Capital One Bank Our newest commercial credit card service, Purchase Control, allows business owners to manage employee payments by replacing physical cards with limited-use virtual card numbers.

Beneficial Bank Beneficial’s online business banking has been available since October 2009, and continuous upgrades have been made to provide customers access to DENISE KASSEKERT balance information Executive Vice President Beneficial Bank and transaction activity, as well as the ability to transfer money between Beneficial accounts. There also is loan payment capabilities, balance-based automated alerts and bill payment functionality tailored for small businesses.

THOMAS X. GEISEL President and CEO Sun Bancorp and Sun National Bank

Sun National Bank Sun’s Commercial Edition card program for business travelers helps manage travel and entertainment expenses, improve cash flow and reduce out-ofpocket expenses. The program offers tools

to help streamline the procure-topay cycle reduce cost and eliminate paper-based processes. Investors Savings Bank Investors’ business online and bill pay provide access to all banking and cash management services right from a computer, proKEVIN CUMMINGS viding the freedom President and CEO Investors Savings Bank to conduct operations quickly and at any time. Benefits include the ability to improve the accuracy and efficiency of payment processing with Automated Clearing House transactions and wire transfers. Other cash management services include merchant services, lockbox, and remote deposit, all of which allow our customers to accelerate their collection activities. Bank of America Our customers often tell us that they need the expertise that real, live bankers can provide. Someone dedicated to help ROBERT H. DOHERTY them understand President Bank of America New Jersey which products to use, and how to use them to their advantage. That’s why Bank of America is hiring nearly 1,000 small business bankers across the country – 35 who are already at work in New Jersey. Through a relationship with a small business banker, our clients have access to personalized expertise from a banker who knows their business. ❖

Congratulations to Revel Entertainment Group and to our client J.P. Morgan Securities, LLC On the successful financing and opening of Revel Resorts, Atlantic City’s newest and largest casino and entertainment complex A multidisciplinary team of attorneys from the Gibbons Corporate and Real Property & Environmental Departments represented J.P. Morgan Securities in connection with the $1.150 billion real estate financing for Revel Entertainment Group. At closing, this was the largest construction loan issued in the U.S. since 2009. The Gibbons team served as lead real estate finance counsel to J.P. Morgan Securities on the first lien $850 million construction facility piece of the financing. Gibbons is honored to have been an integral part of such a major project with such significant employment and economic implications for Atlantic City and the state of New Jersey.

www.gibbonslaw.com

Newark New York Trenton Philadelphia Wilmington

Gibbons is headquartered at One Gateway Center Newark, New Jersey 07102 T 973-596-4500

ENTERPRISE 2Q 2012 | 19

focus on accounting

Managing Your Supply Chain, and Sleeping Well at Night BY BRIAN SHUBE

The story of mountain climber Alex Honnold recently appeared on 60 Minutes. Alex climbs without a rope up shear mountain faces often higher than the Empire State Building, hanging on by his fingertips. Most of us would never consider such a risk. However, while managing our companies we are constantly faced with risky inventory decisions that affect the health of our businesses.

BRIAN SHUBE

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In recent years, we have seen unprecedented disasters that affect companies’ supply chains. From Katrina in New Orleans to earthquakes in Haiti and Japan (even Hurricane Irene here in the Northeast U.S. that left some without power for nearly a week). We have Somali pirates hijacking ships off the coast of Africa, a war in Afghanistan and revolutions throughout the Arab world. Even if your company is not directly in harm’s way, in this globally connected world, your suppliers or your supplier’s suppliers have likely been impacted. Managers traditionally are forced to weigh the cost of keeping ‘safety stock’ on hand versus the risk of running out of stock. When companies keep sufficient excess inventory, a six-month supply interruption from Japan will not bring their production lines to a screeching halt. However, this posture is costly. The more uncertainty in the world, the more inventory companies are forced to store. If you glance over your shoulder you will see your suppliers are in the same situation, building inventory as a defense against uncertainty. This drives up their costs and they will pass those expenses on to you. In fact, if you follow this path all the way back to the guy who pulls the raw material out of the ground, you will find everyone in the entire chain is doing the same thing.

So how do managers protect their companies while shedding excess cost? The key to managing this risk is knowledge. You must understand what goes into your products. You must see the supply chain as far back as you can, and make your requirements well known to all parties. Tom Collins, vice president of supply chain management at Motorola, told me that prior to the crisis in Japan, he had a very good understanding of his first level suppliers. He was relieved to discover that none were slowed by the earthquake. To his dismay, he learned he didn’t have a handle on his supplier’s suppliers and some of them were shut for extended periods. When asked, most companies can produce a complete bill of materials for products they sell. From that bill, separate the “commodities” from the “specialty components.” A commodity item can be sourced quickly if your primary supply becomes unreliable. A secondary source should be identified and a relationship with an alternative supplier established, usually by purchasing some portion of your inventory from this supplier, at a higher cost if necessary. The solution is much more difficult for specialized components. For these, the primary supplier may be the only source, or the cost to certify an alternative supplier may be prohibitive. In this case, go to extraordinary lengths to integrate with your primary supplier. Get to know its production process, its supply risks and how it is addressing them. If you are confident that your supplier is mitigating the risks, then you can reduce your internal defensive costs while giving your company the best shot of an uninterrupted supply – and giving you the best chance of sleeping well at night. ❖ Brian Shube is president of Brian Shube Consulting Inc, which assists companies develop, enhance and assess the performance and vulnerability of their supply chains. He can be reached at brian@ brianshube.com.

When Partnerships Go Bad: A Survival Guide BY RANDALL M. PAULIKENS

Marriages sometimes end. In fact, studies suggest that nearly one out of every two marriages in New Jersey end in divorce. Then there are corporate divorces – splits between shareholders or members of firms – that happen from time to time. Here are ways to deal with partner disputes – including settlement ideas and practical strategies to help those involved save the firm and their reputations. In New Jersey, partners (the term is used for corporate shareholders, LLC members and true members of partnerships) have a fiduciary responsibility to each other. However, disagreements suggest a fiduciary duty has been violated – in reality or perception. First tip: Consider disputes business, not personal. A typical complaint arises when a partner or group of partners takes advantage of or is perceived to take advantage of the other partner(s), either though compensation or perks, work effort or misappropriation of assets or opportunities. Successful partnerships have mechanisms to police the business relationship. The unsuccessful ones don’t. It is important to periodically review these mechanisms to avoid ruinous fights. Forensic Accountants Enter the Picture To get to the heart of a dispute, forensic accountants should examine expenses, such as travel and entertainment, automobile (is a car really necessary?), country club dues and advertising.

Next, they should examine whether salaries have been paid as agreed, and if the owners’ salaries were paid at “arm’s length.” By arm’s length, we mean the amount paid is comparable to the amount that would typically be paid to an outside party for the same services. Determining this could have a significant effect on the firm’s net income and the resulting valuation. Another question: Have other expenses – such as rent paid to a related party – been properly accounted for and factored into the compensation and valuation metrics? Don’t Hide Information Hiding information actually creates problems for the defense. Remember, it’s not the crime, but rather the cover-up, that gets partners in trouble. It’s better to negotiate settlement terms, and include discounts to ensure collection. A settlement saves the costs and uncertainty of a trial, which reduces costs for both parties. The business and the buyout of the outgoing partner will run smoother if the operating partners focus on the business, and not litigation. In matrimonial matters, the cost of a divorce can ruin the economic health of a family. The damage from a corporate divorce can be just as traumatic. Professionals in the matrimonial field understand this. If business divorce professionals recognize this, then the dispute can be resolved with minimal damage to the firm and its partners. ❖ Randall M. Paulikens is a partner at the accounting firm WithumSmith+Brown and the director of its Litigation/Lawfirm/Valuation Services Group.

Upcoming N.J. Chamber Event New Jersey Chamber Forum 2012 An Evening With James Carville and Mary Matalin Sept. 27, 2012 Pines Manor, Edison

MARY MATALIN

JAMES CARVILLE

Let the fireworks fly. Just in time for the presidential election, James Carville and Mary Matalin bring their happy marriage and outrageously divergent political points of view to the New Jersey Chamber of Commerce’s Forum 2012 on Sept. 27.

Join us at the Pines Manor in Edison on Sept. 27, only five weeks before the presidential election, when James Carville and Mary Matalin, two of America’s best known political commentators, join the New Jersey Chamber of Commerce Forum 2012 for a lively noholds-barred discussion about what

the election will mean to the nation and the business community. The authors of All’s Fair: Love, War and Running for President, Carville and Matalin are key players on the national political stage, each with more than 30 years of experience in politics. Individually, they have worked for Presidents Ronald Reagan, George H. W. Bush, Bill Clinton and George W. Bush. For information on attending or sponsoring, call Amy Kolis with NJBIZ at (732) 246-5730 or email akolis@ njbiz.com. ENTERPRISE 2Q 2012 | 21

news makers

Robert L. Barchi, a renowned neuroscientist, respected educator and academic innovator, and successful fundraiser, was named the 20th president of RUTGERS UNIVERSITY. Barchi was selected April 11 by the Rutgers University board of governors and then ratified by the Rutgers board of trustees. Barchi will begin serving as president of Rutgers on Sept. 1. The board of governors also voted to name Barchi a professor at Rutgers with academic tenure. Barchi currently serves as president of Thomas Jefferson University, one of the nation’s oldest and most respected health sciences universities. Barchi will succeed Richard L. McCormick, an N.J. Chamber Board member, who has served as Rutgers’ president since 2002. McCormick announced in May 2011 that he plans to return to the Rutgers faculty as a university professor this summer.

The NEW JERSEY CHAMBER OF COMMERCE added six new members to its board of directors: Joseph F. Dempsey, president, middle market banking, JP MORGAN CHASE BANK; Toby Enqvist, vice president, Newark Hub, UNITED AIRLINES; Bill Johnson, market executive, CAPITAL ONE BANK; Brian MacLean, vice president of operations, ELIZABETHTOWN GAS; John R. McWeeney Jr., president and CEO, NEW JERSEY BANKERS ASSOCIATION; and Steven M. Rose, president, PASSAIC COUNTY COMMUNITY COLLEGE. “These talented business leaders strengthen our already formidable board of directors that is helping guide the Chamber in its effort to build and maintain a prosperous New Jersey,” said Tom Bracken, president and CEO of the New Jersey Chamber of Commerce. The NEW JERSEY BROADCASTERS ASSOCIATION’s advocacy was instrumental in securing a new statewide emergency communications system (EAS), which replaced the archaic and failing system in late 2011. Linda M. Doherty, president and CEO of the NEW JERSEY FOOD COUNCIL, received the Food Marketing Institute Donald H. MacManus Association Executive Award March 28 in recognition of her outstanding leadership and accomplishments in the food distribution industry. JERSEY CENTRAL POWER & LIGHT (JCP&L) has the highest customer satisfaction among business customers in the eastern United States, according to a study by J.D. Power and Associates. More than 90 utility brands in Connecticut, New Jersey, New York and Pennsylvania were ranked using six factors: power quality and reliability; billing and payment; corporate citizenship; price; communications; and customer service. WELLS FARGO & COMPANY, which operates 313 community banking stores and 460 ATMs in New Jersey and employs over 6,000 in the state, is the most valuable bank brand in the U.S., according to The Brand Finance Banking 500 report, and the second most valuable bank brand in the world valued at $23.2 billion. The annual study assesses the dollar value of the

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reputation, image and intellectual property of leading financial services companies. Wells Fargo maintained its place as the second leading bank brand in the world from last year’s rankings. Jeffery S. Parker was admitted as a partner in EISNERAMPER LLP’s tax practice. Jeff provides guidance on complex tax questions for clients in the financial services and real estate industries. PUBLIC SERVICE ELECTRIC GAS chairman, president and CEO Ralph Izzo on April 17 told shareholders that PSEG is investing billions in projects aimed at improving the reliability of New Jersey’s energy infrastructure, helping the environment and stimulating the economy. He highlighted the company’s $6.7 billion investments in transmission, energy efficiency and renewable energy as well as the efficient performance of its fleet. The VERIZON FOUNDATION and the NEW JERSEY SCHOOL-AGE CARE COALITION held a day of volunteer projects and activities on April 21 at Rutgers Gardens, the botanical garden of Rutgers University, to introduce underserved urban youths to nature. THE PRUDENTIAL FOUNDATION in March approved $5.7 million in grants, including a $1 million over three years to the Community Food Bank of New Jersey. ERNST & YOUNG LLP was presented three 2012 Association of Management Consulting Firms (AMCF) awards during the association’s gala on March 1 in New York. The awards, which celebrate excellence in consulting, recognized the firm’s work on behalf of clients in the areas of change management; finance and risk management; and developing markets. Ernst & Young was the only organization to receive three awards. Alex Gorsky , 51, became CEO of JOHNSON & JOHNSON on April 26, succeeding Bill Weldon, who served as CEO of Johnson & Johnson since 2002. Gorsky previously served as vice chairman of the company’s executive committee with responsibility for J&J’s Medical Devices & Diagnostics Group; global supply chain; health care compliance and privacy; and government affairs.

Financial Incentives for Energy Efficiency

In Our Office “Monthly utility bills were a growing part of our operating expenses. Incentives from New Jersey’s Clean Energy Program™ cut the upfront cost of a new energy-efficient lighting system.”

Now Our Future Looks Bright.

To learn more, visit NJCleanEnergy.com/SSB or call 866-NJSMART to speak with a program representative. NJ SmartStart Buildings® is a registered trademark. Use of the trademark without permission of the NJ Board of Public Utilities is prohibited.

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