Expert Wisdom Regarding 'Risk, Reward and Responsibility'

New Jersey Business, Jan 2008 by Saliba, George N

Jersey City-based Saint Peter's College recently hosted its 36th Annual Business Symposium at the Hyatt Regency Jersey City, where four guest speakers explored the event's theme of "Risk, Reward & Responsibility." Amid the speeches, the college's former president, Rev. James N. Loughran, S.J. (who died unexpectedly in December 2006), was remembered.

The symposium's perennial moderator, Patricia Q. Sheehan, introduced the speakers, who included: Robert J. DiNicola, chairman & CEO, Linens 'n Things, Inc.; Marilda L. Gandara, president, Aetna Foundation; Jerry Della Femina, chairman/CEO & chief creative officer of Della Femina / Rothschild / Jeary & Partners; and The Washington Post's legendary political investigative journalist, Bob Woodward.

DiNicola graduated from Saint Peter's College in 1969, and after a tour with the military, began a retail career with Macy's. After more than two decades, he considered revamping his career - "to take a very large risk" - and was presented with the opportunity to run a company called Zales: The Diamond Store. However, the business had just emerged from bankruptcy and its viability was of great concern. DiNicola said, "The big question for me was, 'Do I leave a rather successful and somewhat comfortable 22-year career in the department store retailing industry behind for the total uncertainty and inherent risk in shifting gears to the specialty world?' And of all things, do that with a company that was on the cusp of total disintegration?"

Ultimately, he followed his instincts and led Zales. He and others used different tactics, among them openly displaying products' prices, and tapping customers' "emotional core[s]," with "commercials that reminded viewers of the people they loved, or of the very happy occasion in their lives." Zales had once again become popular, as it earned shoppers' trust.

DiNicola said, "Although we had risked a lot in the early days at Zales, in the end the rewards were quite significant." In fact, the company grew from approximately 750 stores in 1994, to more than 2,500 locations by the year 2000.

DiNicola had also helped "turn around" GNC (General Nutrition Centers, Inc.) from 2003 to 2007, and is now at Linens 'n Things, with the objective of putting the chain "back on the top." He said there is an "obligation, duty and a responsibility to employees, investors and loyal customers" to do just that.

He praised his Jesuit education and asserted the wisdom: "A great lesson I learned while I was here at Saint Peter's was the fact that you can't do it alone. You need to develop the capacity to surround yourself with the right people to guide, support and be there in a time of need. Clearly, this management tenant is absolutely critical to the long-term success in any program."

The next speaker, Aetna's Marilda L. Gandara, said Aetna is honest - and that sometimes has cost the firm money, in the short-term. For example, Aetna did not partake in the illegal "big rigging" of insurance contracts, as some other companies did.

"I can tell you that there are customers today who are coming to us because they are unhappy when their chairman has been fixing stock prices and doing things that are totally illegal and wrong. And we [at Aetna] are getting a lot of business today because of that. But that doesn't erase the fact that five, 10 or 15 years ago, when this big-rigging was going on, we stood alone and did not get a lot of that business."

She added, "When you talk about risk and reward, sometimes you do get rewarded for doing the right thing, but you also have to be prepared to stand up and take the loss, because it does happen."

On a separate topic, Gandara spoke about the "risk of being first," and how Aetna addressed disparities in healthcare. In sum, Aetna took the risk of asking its insured their races (a move that could have been perceived as inappropriate), in a step to provide better care for patients. Now, the "reward" is healthier patients, as well as customers who come to Aetna because their workforces may be oriented to people of color. Gandara said customers want an insurance company with disease management programs that provide those employees with better care.

"In this case, we really did get the reward, and I know it is really going to make a big difference," Gandara said. "After we did that, other insurers started doing the same thing. Now, the whole issue of disparities in health has really taken wheels and we are beginning to deal with this as a nation. The fact that the insurance companies are in on this is critical to solving this issue."

The next speaker was Jerry Della Femina, a legendary advertising persona who worked on such accounts as Isuzu (Joe Isuzu) and Meow Mix. Over the years, he also owned other businesses, such as restaurants and a food market.

Della Femina regaled the audience with his humor and anecdotes of both success and failure. Among his many points, he said, "I am here to talk about risk and reward and responsibility, but mostly about risk, because there really cannot be any true reward without a certain amount of risk."