Hartford Business Journal

50 HARTFORDBUSINESS.COM | September 26, 2022 Editor's Take EXPERT'S CORNER Gubernatorial candidates find bipartisan agreement on need for public-private partnerships P ublic-private partnerships are not a sexy political talking point, even in an election year when the state's highest government office is up for grabs. But the two leading gubernatorial candidates are talking about them, and it could have significant implications on future state policy touching on everything from trans- portation infrastructure and economic develop- ment to fiscal stability. There seems to be bipartisan agreement between Gov. Ned Lamont and GOP challenger Bob Stefanowski that we ought to get the private sector more involved in major projects or initiatives that carry big price tags. The goal, generally, is to offload some of the risk and upside in state projects to private interests so taxpayers don't have to shoulder more debt. The policy focus is smart given Connecticut's long-term debt issues. The more we can focus on private players providing upfront capital to fund government-backed projects the better. But such deals carry risks and aren't easy to negotiate. Both candi- dates are cognizant of that. "You need somebody at the top who knows what they're doing so they don't get taken advantage of," Stefanowski told HBJ in a recent interview. "Because, private equity will come in and rip off your shirt if you let them." Stefanowski said his background in corporate finance — including stints at UBS and GE — make him the right candidate to make deals that benefit both taxpayers and partners. And he's got a number of areas where he said he'd consider tapping private industry. For example, he said we should look at the benefits of privatizing state-owned airports, including Bradley International Airport. He'd even consider tapping a private investor to take over a piece of a highway to install high-speed lanes that drivers could access for a fee — as long as non-toll roads are still available to drivers. He points to private equity firm The Carlyle Group's nine-figure revamp of the I-95 rest stops more than a decade ago as a potential model. Carlyle Group provided upfront capital and then shared fuel and conces- sions revenues with the state. It later sold off the rest stops to a European infrastructure fund. Lamont, during his first term, has been a major proponent of public-private partnerships. In fact, his administration pushed a bill, which eventually passed in 2021, that eliminated several hurdles he said effectively blocked such partnerships from happening, particularly related to transportation projects. He's announced several key initia- tives with private industry, including a $75 million Connecticut Small Business Boost Fund program, which provides low-interest loans to small businesses and nonprofits. He said private banks — including Citizens Bank, M&T Bank and First Republic Bank — have agreed to match the state funding to broaden the loan pool to $150 million. One of the bigger public-private part- nerships was the state's harbor devel- opment deal with Eversource and Orsted. The two companies agreed to upgrade the State Pier in New London to meet heavy-lift requirements for offshore wind development. The state agreed to spend tens of millions of dollars to help with the upgrades. That project, however, has been hit by cost overruns: an initial $93 million price tag ballooned to over $230 million. It's also under federal investigation, underscoring some of the risks and complications of public-private deals. I don't wear rose-colored glasses when it comes to these types of deals. They are difficult to negotiate and could put taxpayers at greater risk if not done correctly. (The city of Chicago received criticism earlier this century when it outsourced control of its parking meters to private investors in exchange for an upfront payment. Following the deal, critics decried Chicago's escalating costs of parking and other issues.) One area where I think a public-pri- vate partnership can work and will happen is with the renovation of the aging XL Center. Proponents who say the nearly half-century-old building is in need of a major renovation have failed to convince legislators to allocate, at first $250 million in funding, and then a smaller $100 million aid package. Both Lamont and Stefanowski have touted the building's importance to the region's vitality, but say they want private funds to co-invest in a renovation. Oak View Group — which manages 300 sports and entertain- ment venues globally and redevelops others — took over management of the XL Center last year and has expressed interest in investing in the property. My prediction is an XL Center public-private partnership deal gets struck within the next few years, regardless of which candidate wins this November's election. Greg Bordonaro Employee relationships are key to a business's success By Ken Cook W hen you hear the term "business relationships" what pops into your head? Customers? Naturally. They are the relationships that matter the most. Or, are they? There are suppliers, vendors, part- ners, etc. These are the resources that keep the business oper- ating. You need parts to manufacture product. You need IT, telecom and accounting support. All of these are important elements for smooth and profitable operations. For me though, the most important relationships that are often overlooked are employees. Employees are like family. You see them every day. Your bonds and connections become familiar, if not familial. And with that comes a level of comfort. However, employee relationships aren't always nurtured. Routines develop. One-on-one and team rela- tionships are accepted for what they are. Any effort to work on employee relationships and improve them goes by the wayside. The daily tasks of the job get prioritized, and any focus on internal interactions is directed toward getting things done. And yet, the simple truth is employees control a company's destiny. And that's the irony: Internal relationships — too often taken for granted — are in reality critical to your success. Here are two reasons why: 1. What your employees do, or don't do, is what causes customers to take action (or do nothing). And customer actions are usually defined by whether they buy or don't buy. Therefore, employees control the company's destiny because they control the point of purchase and are the greatest influence on the custom- er's buying decision. 2. In looking at the value of employee cohesiveness and involvement, Richard Whiteley in "The Custom- er-Driven Company," studied the identi- fication of problems in a large factory. Four percent of the problems were known to senior management. Nine percent of the problems were known to general supervisors and 74% of the problems were known to supervisors. However, 100% of the problems were known to the rank-and-file employees. The employees know what problems exist, and what barriers prevent customers from being satisfied and brand promises delivered upon. I can think of no better two argu- ments for focusing on the quality of internal relationships. It is essential for employee relationships to be the best they can be. The challenge is how to do this seamlessly within the day-to-day activities. What can leadership do? Research points toward two distinct sets of action that can produce positive results. First, employees follow what their leaders model. Second, employees who know they're appreciated and make a difference are much more satisfied. Therefore, leaders should lead by example. Demonstrate clear apprecia- tion for work being done. Respect each person's contribution to the whole. Ask employees for ongoing feedback and their ideas to improve things. Ask employees to point out gaps between the company's strategic intent and the customer experience. Let employees know the impact their work has on the company's success, and how their work together drives the business. Also, deter- mine what resources and training employees require. An organization with connected and aligned employees is an organization that is mustering its most powerful resource. The phrase "employees are our most important asset" is not just a passive slogan. It has substance and impact on the day-to-day activities of the business. Strong relationships among and between employees helps those employees feel empowered. Empowered employees become employee advocates, delivering satisfied customers and sustainable competitive advantages. This frees leadership to do what they should do best. Set a clear direction. Assemble resources to get the job done. Model behaviors. Focus on the strategic relationships essential for the growth of the business. Ken Cook is the co-founder of How to Who, a source for expertise on how to build strong relationships, and how to build business through those relation- ships. Learn more at howtowho.com. Ken Cook

• Cover