Hartford Business Journal

HARTFORDBUSINESS.COM | NOVEMBER 13, 2023 19 Sandwich chain Subway is one of the few companies in Connecticut to establish a dual headquarters. In March, it debuted its new Miami headquarters (bottom photo) and in October it unveiled its newly relocated Connecticut headquarters in Shelton (top photo). PHOTOS | CONTRIBUTED 'Place Matters' Subway's dual HQ strategy still rare for CT, other companies By Harriet Jones Hartford Business Journal Contributor S andwich chain Subway recently reinvested in its home state of Connecticut, cutting the ribbon on a new headquarters building in Shelton, a few miles north of its original Milford home. The building becomes one of two headquarters Subway will maintain — the second was established earlier this year in Miami. The company says Shelton will be home to business functions including human resources, finance and legal, while Miami hosts the brand's consumer-facing operations, as well as staff from the Latin America regional office. The franchising giant joins a select list of companies that have decided to split their executive functions between two sites. The most high-profile name on that list is Amazon, which had economic development professionals scram- bling all over the country, including in Connecticut, when it announced a competition for the site of its second headquarters in 2017. Virginia eventually won the race for what was dubbed HQ2, and phase one of the development opened in Arlington earlier this year. "It is not that common," said Mohammad Elahee, of establishing dual head- quarters, " but I think it will become more common in the future." Elahee is a professor of international busi- ness at Quinnipiac University. He believes the accelerated changes in remote-working technology during the pandemic have made a dispersed headquarters much more achievable. "Even though history has not always been kind to companies with two headquarters, I think in the future, companies can seamlessly operate with two or even more than two headquarters," he said. One company that moved in the opposite direction is consumer pack- aged-goods maker Unilever, which consolidated its headquarters to the United Kingdom in 2020, after almost 100 years of being split between Rotterdam and London. Elahee said past difficulties included the expense of maintaining two sites, and the threat that they might find themselves out of step. "The biggest challenge was when a firm would have two headquarters in two different places, the organiza- tional culture in each headquarters would evolve differently, and that would create division," he said. " If something goes wrong, one headquarters would blame the other headquarters." But improved connectivity can solve that issue, and Elahee now expects companies that go with a dual structure to realize a few different advantages, particularly in a highly politicized environment where states like Florida take issue with big corporations like Disney. "Maybe many firms don't want to keep all their eggs in one basket," said Elahee. " If something goes wrong in one place, they can easily relocate to another." It could also, he said, facilitate companies playing one state off another to generate more tax breaks. Talent considerations Access to particular segments of the global marketplace is another siting factor, along with the geograph- ical availability of skilled executive employees, said Keith Pennington, an assistant professor of manage- ment and entrepre- neurship at UConn's School of Business. "If you want to look a little bit further from the C-suite, but still in upper management, that's a really distinct type of talent pool to draw from," he said. It can tend to create particular places where headquarters thrive. "Look at Minneapolis, for an example of a cluster of a lot of corpo- rate headquarters," said Pennington. "They're all in different fields, but their upper managers job hop from one place to the next within Minneapolis. There's this surplus pool of good upper management that could work at all different kinds of companies." Some companies end up with dual headquarters as a result of a merger — that's the case with New England's biggest utility company, Eversource. It was created from a merger of Hartford-based Northeast Utilities and NSTAR, headquartered in Boston. When the deal went through in 2010, the new company surprised business commentators by maintaining both sites as equal headquarters. "Place matters," said Jim Hunt, Eversource's corporate secretary and executive vice president for Keith Pennington Mohammad Elahee

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