As the business leaders at Table One started reflecting on 2016 and talking about the year ahead, Rick Martindale quipped to Plattsburgh’s new mayor, “What hat are you wearing today, Colin?”
The question drew laughs (and a suggestion of cloning), but as the morn- ing’s conversation progressed, it became clear that past success and future potential for many of the businesses represented at the table— and others around the region—is directly related to an entrepreneurial spirit and the ability to switch hats—and perspectives—when necessary.
Joining the discussion at the table were:
Rick Martindale, Senior Partner at Martindale Keysor & Co., PLLC, a certified public accounting firm in Plattsburgh.
Cristina Lussi, Vice President of the Crowne Plaza Hotel in Lake Placid, which was established by her parents in 1969.
Colin Read, new Mayor of Plattsburgh, Professor of Economics and Finance at SUNY Plattsburgh, and Owner of the Champlain Wine Company in downtown Plattsburgh.
Michael O’Connor, Senior Vice President and Investment Advisor with Wells Fargo Advisors in Plattsburgh.
Peter Trout, Chief of Services at Behavioral Health Services North (BHSN), which serves the tri-county area with 24 behavioral health services and social service programs.
Jim Kopaska, Plant Manager of Johns Manville, a Berkshire Hathaway company which manufactures building products such as residential and commercial insulation, roofing, mechanical insulation and materials.
Kerry Haley, Executive Director of The Foundation of Champlain Valley Physicians Hospital (CVPH), which raises money to support CVPH, as well as many community health programs that serve the region.
Julie Huttig, Owner of Huttig Nissan and NAPA Auto Parts on Route 3 in Plattsburgh.
Looking Back and Ahead
There was a sense of satisfaction about 2016 despite election uncertainty and change. Many found themselves balancing local needs with national demands, and others wondered how labor regulations might change under the new administration and affect seasonal employees and overtime; others wondered about trade.
Wells Fargo Advisors started 2016 after a strong 2015. Mike O’Connor admitted that his most significant challenges were nationally driven— making sure that customers knew that his firm was a separate entity from Wells Fargo Bank after its unauthorized account scandal; and keeping his clients’ investments on steady course as the presidential election loomed. “A good deal of what we do is emotion driven,” he said. “With the election cycle, people have been either afraid or excited, and we’ve been trying to temper emotion and keep people in place with their investments, rather than reacting.”
Although Martindale Keysor doesn’t compete nationally, Rick Martindale said the accounting business in general is at an all-time high, and 2016 will have been his firm’s best year yet. “We’ve carved out several niches for ourselves, which have contributed to our suc- cess. We’re probably the largest auditing firm for nonprofits in the North Country,” he said. The firm has clients in the Tri-Lakes area, and a few in Burlington, and does a great deal of work north of the border, thanks to relationships the firm has built with Canadian accounting firms.
Peter Trout characterized 2016 as an exciting year as BHSN participated in the shift away from the fee-for-service healthcare model to prepare for value-based care and payments. “There’s a lot of research that shows that good health care is only a 20 percent predictor of positive healthcare outcomes,” said Trout. “The other 80 percent is predicted by what are labeled as ‘social determinants of health’— where someone lives, how they eat, how they socialize. We’ve been busy partnering with primary care and hospital initiatives to bring primary care to our main adult program in Morrisonville, where we’ll be able to serve as a one-stop shop for primary care, substance abuse, and mental health services all within the confines of one build- ing.” Over the last year BHSN also expanded school-based services to every school district in the county. In addition, BHSN is nearing the final architectural design stages for a new facility, and “we should be breaking ground as soon as the ground thaws in June, maybe July,” Trout said with a wink.
2016 was a big year for The Foundation of CVPH. While the hospital’s new affiliation with the University of Vermont Health Network is a great thing for health care in the region, Kerry Haley pointed out that a lot of donors like to keep their dollars local. “We’ve worked hard to get the message out that dollars stay local and support our community,” she said. “Our staff is paid for by the hospital, so all of the dollars we raise go right back into our community.” One of the big grants they secured this year was $200,000 from the NYS Health Foundation. It’s been used to expand pickle ball courts, Fitness in the Park programs, and other programs that encourage community fitness.
For Johns Manville, it was a great year nationally. “Right now there is a significant shortfall of housing starts versus population growth. That means there is good opportunity for growth in our industry, and a lot of reason for optimism and stability in our business,” said Jim Kopaska. The Plattsburgh plant is a small one, with only 31 employees and a very small footprint, but it’s very efficient. It does the same dollars in sales as the 220-person assembly piece part plant Kopaska previously managed. Recently the plant implemented a change in shift structure. “We have two shifts that run 10 hours, 4 days, giving employees long weekends,” said Kopaska. Previously the plant operated on 12-hour shifts that had work-life balance upside down for our team members. Kopaska said the employees were initially resistant to the change. “Now they wouldn’t go back if we tried. It has tipped the scales of work-life balance in the employees’ favor while also increasing our productivity. It’s been good for our people and our business.”
Julie Huttig acquired the Plattsburgh dealer- ship in July 2015, making 2016 her first full year in business. “We’ve gained quite a bit of market share from the Burlington area, and we’ve started to get some customers from the Albany and the Glens Falls area.” Her big- gest challenge in 2017 will be building a new facility that meets the standards most auto manufacturers now require of dealerships. She’s acquired the property, but even after a great 2016, she admits that it’s daunting. “The automotive industry is very cyclical, and we’re headed into a bit of a downward track,” she said. “With the new administration and trade agreements, everybody’s a little bit nervous about what might happen with the cars com- ing from Japan and elsewhere. Manufacturers demand certain standards, but how many cars do we have to sell to pay for customer lounges and chandeliers? Regardless of the standards, we are excited about the opportunities ahead of us,” Huttig added.
Cristina Lussi pointed to similar pressures in the hospitality industry—from the constant growth in inventory to the “product improvement plans” required every 10 years (or less) by hotel chains. “More hotels are being built all the time,” said Lussi, “and with boutique hotels springing up everywhere, you really have to be clever to figure out how to fill those beds.” The Crowne Plaza only recently completed a $3 million upgrade of its facility, and just spent $100,000 on broadband wireless improvements. “And now my 42-inch TVs are obsolete,” she said. “I have to be smart about which products are the most import- ant to my guests. Do they really want shiatsu massage chairs while waiting for their cars?”
Quebec Connections and the Growth of Transportation Equipment & Aerospace (TEA) Sector
Another topic was the region’s growing economic connection to Quebec and how the growth of the region’s Transportation Equipment & Aerospace sector might affect business. Like many in Plattsburgh, Colin Read’s Champlain Wine Company has felt the strain the weak Canadian dollar has put on tourism-related businesses. “We’re not seeing as many visitors from Quebec in the summertime,” he said, but added, “I think that’s temporary.”
Lussi confirmed that—noting that Lake Placid has seen a proliferation of Canadian hikers—and shared that the hospitality business in the North Country had a better up-tic than New York State during 2016. “Right now in Lake Placid, the Crowne Plaza is the leader in occupancy, and it’s because of our diverse business—tourism, conferences, meetings and events.”
While many at the table haven’t been directly affected by the expansion of the TEA sector or arrival of Norsk Titanium, Martindale pointed out that professional services like his are always impacted by more businesses coming to town. “We’re obviously not going to be servicing Norsk Titanium,” he said, “but we may get a fair number of smaller companies—typically vendors—who come to the area to service companies like Norsk more efficiently.”
Trout added that BHSN’s services also would benefit any employer coming into the area. “One in five people in the United States have a mental health issue, and any expansion of the workforce would need the supportive services we offer,” he said.
For others, that possible influx of businesses also means potential. “It means more people to sell more cars to,” said Huttig. And Lussi pointed out that Lake Placid is always happy to host meetings and conferences for Canadian companies. Haley added that new company partners are always a good thing for the Foundation. “Our challenge will be engaging those companies to be a part of supporting community health when their headquarters aren’t here—it makes it more difficult to have that conversation about investing in our programs,” she said.
Of all the businesses represented at the table, Johns Manville will see the most direct impact of the arrival of Norsk Titanium. For Kopaska, it means competition for good employees. “My biggest concern is that Norsk is going to consume a lot of middle-tier employees in the area and that will make staffing very challenging. We have a fairly significant skilled labor gap in the area,” he said.
Workforce Development
That gap—and the accompanying need for workforce development— emerged as one of the most prominent themes of the morning. The other big topic was the role that millennials might play in filling it.
Lussi named labor as her Number One concern, and echoed the need for better training at the primary and secondary education levels. “I need that service worker,” she said. “I’m doing the H2B Visa, which is very expensive, but it’s a guaranteed workforce that knows how to provide my services—they know how to cook, how to clean rooms and they’re trained. Do you know how many college graduates I have who come to work for me and don’t know how to write a letter?”
For the mental health care field, Trout said that workforce development is the biggest concern from top to bottom. “What’s gotten a lot of media attention locally is the lack of psychiatrists in the area,” he said. “We have a strategy, collaborating with CVPH and UVM to develop an employment practice for psychiatrists who would be assigned to UVM, but who would be deployed in in-patient and out-patient settings in the North Country. It’s exciting, but it still has to come to fruition.” He added that the area is also in desperate need of good psychiatric nurses, nurse practitioners and qualified social workers. And for some of the entry- level positions, BHSN has had to bring in people who don’t have a lot of experience, and give them internal training. New minimum wage requirements are also an ongoing challenge, “especially when we’re deal- ing with human lives,” he said. “It’s not a widget that’s being produced.”
For O’Connor and Martindale, a big problem is the lack of a “bench.” O’Connor said that after the financial meltdown of 2003, people from many investment firms went into more stable mergers and acquisitions. “As a result the bench in our industry is relatively thin,” he said. “I think it’s starting to improve, but there aren’t a lot of people to hand things off to, and there are massive dollars that will need to be advised.”
“My concern is like Mike’s,” said Martindale. “I don’t want to work forever. Someday we will need to cash out on our company investment and retire. So we will need to sell our practice, but we don’t have that next generation just yet. And that’s in part because many accountants tend to fall out of public accounting because it can grind you up and spit you out,” he said. “And also many of today’s generation don’t want to work 80 hours/week for three months out of the year, and they find it very easy to jump into industry instead, where it’s typically a 40 hr./ week year-round. It’s hard for Martindale Keysor to compete with IBM in Burlington—the pay scales aren’t the same. What are we going to do down the road?” he asked. “Do you merge, do you bring another firm from out of the area, do you develop a 10-year program for getting out? Nobody wants an 80-year-old CPA. A president, yes; a Supreme Court Justice, yes; but not an accountant.”
Haley has even seen generational challenges with Foundation volunteers. Most are retired community members. “Younger workers have work schedules and want to have time for their activities, so they don’t have a lot of time to fit volunteering in,” said Haley. “Some of our volunteer programs have necessary structures like training, but we’re trying to look at ways we can adjust and be less rigid in our requirements to entice that younger group to be a part of what we do.”
Attracting and Training Millennials
Colin Read pointed out that the labor gap mirrors the recruiting challenges that SUNY Plattsburgh has faced as the state’s high school population declines. “About one-third of our students are drawn from the local area and two-thirds come from elsewhere. We estimate by about 2040 our 18-year-old population will decline by about 35 percent compared to 2010,” he said. “That’s caused the college to re-evaluate its thinking about how to get a bigger piece of a smaller pie.”
“The fact is, millennials are going to be that next workforce,” added Read. “Our challenge is to make sure that our community is appealing enough for them. If they didn’t grow up here, they’re choosing to come here, and we have to compete with towns like Eugene, Austin and Denver.”
“I employ millennials, but I also have two millennial children,” said Huttig. “They’re both in our businesses now, and the challenge is creating that quality of life that makes them want to stay in this area. My oldest son is 27 and lives in Saratoga because there’s more to do for people his age. Plattsburgh needs to be that kind of place if we’re going to keep this next generation in our community and thriving.”
Kopaska pointed out that one of the biggest challenges he sees is helping workers develop the appropriate work mindset. “I was raised in Iowa where agriculture is prevalent and work ethic seems to be born and bred into people,” he said. “In this area there seem to be challenges around initiative, drive and urgency. If it’s prevalent, it’s only going to breed itself as the norm.” While that mindset is worrisome, he said that he’s also found millennials to be fairly innovative and adaptable. “They don’t mind change and are more willing to try new things,” he said. “The generation that’s exiting the workforce brought a lot of stability and reliability. Unfortunately, I hear a lot of manufacturing management trying to structure their workforce around that, but those aren’t the workers you’re going to have going forward,” he said. “That’s not what this new generation thinks about. It’s about resiliency, about overcoming, making it through. That willingness to change can be an advantage if used correctly.”
Johns Manville has started an investment plan for each employee. It’s not a retirement plan, but “a way that we’re investing personally in every one of those employees to create interest and that level of commitment from them,” said Kopaska. We might be giving them more responsibility, or training them in something they’re interested in, giving them variety beyond being a forklift driver.” He admitted that not everyone has bought into the concept. “But to be prepared for what’s next and stay competitive, I think it’s important,” he said.
At the Crowne Plaza, millennials who work for Lussi are also eager for training. “We’ve never had more training or more opportunities to get people into leadership—not just the skills they’re doing at the front desk or as a dining room server—they want to grow,” said Lussi. “My challenge is giving them that training and helping them build the flexible schedules that they want.”
Optimism Ahead
“In my new job, I have to be optimistic,” Colin Read said. “I’ve always made it my business to look for those silver linings. I think millennials want to be engaged, but I think our generation has made it difficult. Because of some of the financial turmoil, a lot of people in our generation are hanging on longer, and that’s not creating the avenues for young people to take positions of higher responsibility and be engaged. I think it’s up to us to create opportunities for young people to get involved.”
The rest of the business leaders at the table seemed up to the task. Cristina Lussi pointed to the draw of our area as an amazing place to live, raise families and welcome tourists. Julie Huttig echoed that in reflecting on how supportive the community has been of her new businesses.
Rick Martindale thinks we’re on the cusp of something great—he’s seen his own children elect to live here and is optimistic that demand will bring opportunities that will attract others. Mike O’Connor added, “I think there’s tremendous opportunity for a ‘me at age 31.’”
Peter Trout’s biggest source of optimism is the fact that integrative care means that mental health conditions are no longer something that “those other people get.” “It’s now in the forefront of whole person health,” he said. BHSN, along with its healthcare partners in the region, is well on its delivering a better total healthcare product and mental health resources where people can more easily access them. For Kerry Haley, the positive response of the community in helping to support The Foundation of CVPH has generated excitement about more community partnerships the next year will bring.
Kopaska’s biggest source of optimism is automation and what it can do from a pro- ductivity standpoint, and for employee health and safety “These jobs will require higher technical expertise, but automation creates opportunity for higher level jobs, and is prob- ably going to fit better with the millennial generation; it’s going to align well.”