Hartford Business Journal

www.HartfordBusiness.com January 11, 2016 • Hartford Business Journal 21 INVESTMENT INSIGHTS Federal spending plan good news for CT defense industry By Valerie Dugan D espite a seemingly endless national discussion regarding the capabilities of the U.S. military, Congress' recently passed federal spending bill provides a signifi- cant boost for Connecticut's defense industry. The omnibus bill increases the Penta- gon's budget by more than $30 billion, giving the military the abil- ity to purchase F-35 Joint Strike Fighters to bring the total to 68 — 11 more for the Marine Corps, three additional planes for the Air Force and two more for the Navy. This is significant because the engines for the F-35 are made right here in Connecticut. The bill also boosts the Navy's shipbuild- ing budget by $2.1 billion, keeping the con- struction of two more Virginia-class sub- marines, also in Connecticut, on track. This means that $5.3 billion has been earmarked for the two-a-year build rate for the Virginia- class attack submarines. Also included is $1.4 billion for contin- ued design and engineering work on the Ohio-class Replacement Program, the next generation of ballistic missile submarines that are referred to as "boomers." Not only is this significant for continued employment at firms directly involved in defense work, but it bodes well for the near and long-term future of the region. In addi- tion to the primary defense contractors in the state, smaller contractors also will benefit from hundreds of orders for a wide range of spin-off work. Additionally, a generational shift is occur- ring in the workforce across the defense spec- trum, not just in the shipbuilding industry but in aerospace as well, with older workers reaching retirement age in increasing num- bers and a growing need already existing for younger workers with the necessary skills. A growing demand already has been identified for skilled workers including welders, pipefitters and sheet-metal work- ers in the shipbuilding industry, as well as trades and skills that are needed for aerospace applications. The demand for skilled shipbuilding trades is expected to continue as long as Congress supports the Ohio-class Replacement Program, a new class of 12 ballistic missile submarines to replace the Navy's current force of 14 Ohio-class ballistic missile submarines; and continued production of the Virginia- class nuclear attack submarine. The demand for new hires, especially those who have the desired skill sets for the wide range of defense work, itself will create further demand for the goods and services required by a youthful workforce, from hous- ing to recreation. For investors looking for a modicum of long-term industry stability, defense work in Connecticut is a good place to start. A robust defense industry has long been a mainstay of Connecticut's investment picture and, by all accounts, that industry will continue to provide jobs and investment opportunities into the foreseeable future. While the primary defense contractors receive most of the media attention, and would seem to be the primary focus of most portfolio builders, there also are significant "downstream" investment opportunities among the myriad contractors who contrib- ute to the larger systems. Defense contractors in addition to their subcontractors and the suppliers that pro- vide the raw materials or basic components to the larger corporations together are pro- viding a target-rich environment for invest- ment, not to mention supporting the nation's defensive capabilities. Of course, this does not mean all compa- nies involved in these industries are proper investment targets. As with any potential investment, careful research is necessary, both to make certain the investment is in line with the individual's personal financial objec- tives and to be sure that what is benefitting a company in Connecticut is, indeed, indicative of national and international potential. n Valerie Dugan is a financial advisor with the Global Wealth Management Division of Morgan Stanley in Hartford. THE RAINMAKER How a golfer's spreadsheet builds business relationships By Ken Cook N ed McCrory is the managing partner for Batchelor, Frechette, McCrory, Michael & Co. They are a long-time and very well respected accounting firm in Providence, R.I., serving clients throughout New England and across the country. As managing partner McCrory has helped inject into the firm's culture a strong focus on rela- tionships, emphasiz- ing the strength and depth of the connec- tions they establish with their clients and all others with whom the firm interacts. To achieve this relationship-focused bias McCrory leads by doing. One example is a simple spreadsheet he maintains. First, some quick background. McCrory is a golfer. Not your average weekend golfer, but someone who is passion- ate about the game. He loves to play whenever possible, and is one of the few people I know who can pull off wearing a pair of knickers and make it look good. Golf is an integral part of McCrory's mar- keting effort. The New England golf season runs realistically from mid-March through mid-November. During that nine-month time frame it's not surprising to find McCrory out with clients and friends several times per week. Back to the spreadsheet. McCrory records every round of golf he has ever played. On a simple spreadsheet he lists out all of the mem- bers of the foursome with whom he played. He notes the date and course they played. He designates whether the round was busi- ness or personal. And he notes any function, event, charity, etc. associated with the round. This spreadsheet epitomizes McCrory's focus on relationships. Recording who he played with and where they played is not so much for McCrory; it's for the people with whom he played. Frequently McCrory will get a call from someone who might go something like this — "Ned, remember when we played in that charity event last year at Newport Country Club. Who was the banker that was in our group?" In a few clicks McCrory knows the answer. The caller is happy because he has a banking resource who knows him on a personal level. The banker is happy because he can further a rela- tionship and possibly get a new piece of business. McCrory is happy because he is able to help. This focus on relationships is dynamic stuff because it shifts perspective; it places in the forefront the individual and what their concerns, questions, issues, challenges, etc. might be. The spreadsheet is not merely a log, it is a conduit to connections and insights. Strategic thinking about who you know and how you might help them is powerful. Business success is all about people. The abil- ity to effectively connect people is an asset few individuals possess. Viewed through the lens of relationships, a round of golf is a perfect venue. It is usu- ally about four hours in length, and then a meal or drinks for a few hours afterward. It's social in nature, with lots of opportunity to talk between shots. In other words, a great setting for getting to know someone. McCrory's perspective is based on generos- ity. He thinks about who goes into the makeup of a foursome, inviting people who do not know each other. Strangers become acquaintances, maybe even friends. This benefits everyone. By focusing on relationships McCrory builds stronger relationships with everyone involved. His business comes almost entirely through those relationships; through intro- ductions and connections where McCrory's generosity is returned in kind. One last point. There are about 20 years of golf rounds entered into McCrory 's spread- sheet. There is foresight in recognizing the value of the approach and cataloging it. Rela- tionships take time and effort. You can't sim- ply create them when you need them. Build a relationship for the sake of the relationship. Strengthen a relationship over time; nurture it and respect it. When you need help maybe a relationship might already be there. You won't have to go looking for it or hope to build it. And have fun while doing it. Maybe a round of golf or two. n Ken Cook is the co-founder of How to Who and co-author of How to WHO: Selling Per- sonified, a book and program on building business through relationships. Learn more at www.howtowho.com. Ken Cook Valerie Dugan ▶ ▶ A robust defense industry has long been a mainstay of Connecticut's investment picture and, by all accounts, that industry will continue to provide jobs and investment opportunities into the foreseeable future. ▶ ▶ Strategic thinking about who you know and how you might help them is powerful. Business success is all about people. The ability to effectively connect people is an asset few individuals possess.

• Cover