The economic pendulum of any major metropolitan area will, at one point or another, swing wildly in one direction. The test of a skilled CEO comes in when strategy must be deployed in the face of volatility.
In a post-election year, where CEOs in all industries find themselves grappling with seismic shifts, from health care to regulatory challenges, they are tasked with steering their companies toward continued success.
Our panel of experts gathered at the Business Journal’s Miami office on March 3 to reflect on past experiences and share insights about what may lie ahead for South Florida’s economy. The discussion was moderated by Editor-in-Chief Mel Meléndez and sponsored by Comcast Business, AvMed, Wells Fargo, the Business Development Board of Palm Beach County and the Greater Fort Lauderdale Alliance.
It is part of the Business Journal’s ongoing Roundtable Series, where leading CEOs, CFOs and HR executives discuss topics of interest to readers.
MEET THE PANEL
Chairman/CEO, Promise Healthcare
999 Yamato Road, 3rd floor, Boca Raton 33431
Co-managing shareholder, Greenberg Traurig P.A.
333 S.E. Second Ave., Suite 4400, Miami 33131
President, PrimeTime Amusements
5300 N. Powerline Road, Fort Lauderdale 33309
Managing principal, 13th Floor Investments
848 Brickell Ave., PH 1, Miami 33131
President/co-founder, Terra Group
2665 S. Bayshore Drive, Suite 1020, Miami 33133
Market president, BBVA Compass
1450 Brickell Ave., No. 2000, Miami 33131
President/CEO, Power Financial Credit Union
2020 N.W. 150th Ave., Pembroke Pines 33028
President/CEO, Sapoznik Insurance
1100 N.E. 163rd St., North Miami Beach 33162
Chairman, MSC Cruises
6750 N. Andrews Ave., Suite 100, Fort Lauderdale 33309
Bob Swindell (Pictured above)
President/CEO, Greater Fort Lauderdale Alliance
110 E. Broward Blvd., Suite 1990, Fort Lauderdale 33301
Founder/CEO, GreenTeam Service Corp.
4811 S.W. 28th Ave., Fort Lauderdale 33312
The rate at which the U.S. economy has grown in recent years — about 2.2 percent annually — has underwhelmed some. Talking heads have thrown around adjectives like “lackluster” and “unfortunate.” But in sunny South Florida, CEOs see it differently.
“If you characterize the economy as ‘stuck in neutral,’ then I hope it stays neutral forever. We’ve had unprecedented seasons of growth,” said Roberto Muñoz, South Florida market president for BBVA Compass, a U.S. bank with operations scattered through the Sun Belt. It ranks among the 25 largest commercial banks in the country based on deposit market share.
“We see this as a very robust environment,” he added, touting BBVA’s local growth in 2016 and similarly strong projections for this year.
Arnaud Karsenti, managing principal of Miami-based real estate development firm 13th Floor Investments, echoed Muñoz.
“Neighborhoods are being created overnight; people now want to live, work and play in different areas of Miami,” he said. “Just give people something fresh, something new. And that’s not to say, ‘If you build it, they will come.’ But if you address needs … they’ll bite.”
Rachel Sapoznik, founder, president and CEO of Sapoznik Insurance, ascribes to Karsenti’s perspective of offering novelty. At her North Miami Beach-based firm, Sapoznik aims to succeed by being progressive.
“As an organization, we’ve changed the dynamics of the health care insurance industry by bringing new programs to employers [and promoting wellness through preventive measures],” she said. “So when people say they’re stuck in neutral, it’s because they’ve chosen to stay stuck in neutral. We need to move the pendulum. We’re seeing our clients growing and being very bullish on the South Florida market.”
The theory, perhaps, is that South Florida is insulated from the economic monotony of other parts of the U.S. because its development has reached an equilibrium level. That is the perspective of Allan Prindle, CEO of Pembroke Pines-based Power Financial Credit Union.
“The question you’ve got to ask is, well, was ‘the old normal’ normal? A lot of it was smoke and mirrors,” he said. “It was inflated — a fake normal. Today we’re doing a lot more smart growth in South Florida.”
Jumping into the conversation, David Martin, president and co-founder of Miami-based real estate development firm Terra Group, pointed to the cause-and-effect nature of development: With growth comes hurdles.
“We do have some challenges that we have to deal with, like affordability and wage growth, and also transit issues and those types of things,” he said. “But … our elected leaders are talking about it, and bond issuances are being made to make that kind of smart growth.”
Among those spearheading smart growth is Bob Swindell, president and CEO of the Greater Fort Lauderdale Alliance. He agrees that South Florida is on solid footing, especially considering the feedback of his peers in economic development agencies across the country.
“When you talk to people in other places, they’re not seeing that growth,” he said. “But I drive into Miami and I see all of these cranes. Broward County has seen an influx of new jobs. South Florida is different from other parts of the country.”
What, then, is the secret of South Florida’s growth? David Goldfarb, president of PrimeTime Amusements, suggests it’s the region’s diversity.
“When I first moved to Miami, I had to teach myself Spanish because this is such a multicultural place,” he said. “If there is a recession, South Florida will be the last to get hit because everyone wants to be here. It’s become the real melting pot of the United States.”
Muñoz also pointed to South Florida’s geography.
“Not many cities or locations can claim three major ports and three major airports in a 50-mile radius from Fort Lauderdale,” he said. “We’re smack in the middle of a billion-dollar trade zone. It’s an absolute blessing we have.”
Technology presents both challenges and opportunities
Power Financial Credit Union CEO Allan Prindle alluded to smart growth underlying the economic success of South Florida. Bolstering that smart growth is the goal, shared by many, to diversify the region’s business landscape, long dominated by staples such as hospitality, real estate and banking.
Jaret Davis, co-managing shareholder of Miami-built law firm Greenberg Traurig, P.A., points to one specific area contributing to economic expansion.
“We have growth rates that are beyond national averages, especially in tech,” said Davis, who also serves as general counsel to the Technology Foundation of the Americas, the nonprofit that spearheaded 2014’s eMerge Americas tech conference.
So a question: Is technology a friend or foe?
The answer is complex, at least for Davis, who both promotes technology and observes its introduction to the legal industry with a level of trepidation.
As a lawyer, he says, he is “courting obsolescence” as tech increasingly automates law, particularly the more technical and practical parts of the business, such as the drafting of contracts or memos.
“Our entire profession is being disrupted by technology,” he said. “It concerns me that not enough lawyers are accepting that.”
Terra Group President David Martin says real estate is also transforming due to tech innovation.
“We build parking parages, but with Uber and autonomous cars, how will that change?” he said. “Technology is also impacting the way office buildings are set up. More and more people are working from home. And on the residential side, people are living in smaller spaces because of affordability.”
And it’s not just lawyers and real estate developers who are grappling with disruption. Health care is experiencing a shift, too, said Peter Baronoff, chairman and CEO of Boca Raton-based Promise Healthcare.
“Every business is being disrupted,” he said. “Show of hands: Who still carries a BlackBerry?”
Baronoff rattled off a list of 1990s and early 2000s relics that no longer exist — Blockbuster, anyone? — to illustrate the point that technology is bound to change everything. In medicine, telehealth is a prime example of tech-driven transition.
“It’s changed everything,” Baranoff said, discussing the technology that has made access to a doctor just a click away. “Now you can have a doctor at your bedside using just your computer or smartphone, rather than calling someone in.”
But change doesn’t scare him. It’s an opportunity, he said. “I do believe you can teach an old dog new tricks.”
Roberto Muñoz, South Florida market president of BBVA Compass, sees it the same way. Only businesses that accept technology and invest in it will survive in the long term, he said. BBVA has done just that.
“Our bank has spent $2 billion per year to upgrade and transform our technology platform to be among the best in the world,” he said.
Sapoznik Insurance founder and CEO Rachel Sapoznik views technology from a similarly proactive and positive perspective. Tech creates a positive domino effect, she says.
“We have Magic Leap in our market, and we have Uber. They’re not just building their companies here, but creating jobs,” Sapoznik said. “That job creation, with Uber in mind, is creating a whole new growth in the car industry.”
Catering to your team’s needs creates a virtuous cycle
Part of a CEO’s job is to lead, and the outcome of that central responsibility depends largely on how executives approach the task. CEOs must cultivate their talent with as much attention as they apply to client-facing tasks, says Rachel Sapoznik, head of Sapoznik Insurance in North Miami Beach.
“Our most important clients are our employees,” she said. “If we treat them like we treat our clients, then we create loyalty. Then, if and when there is a downturn, they stick it out with you.”
Millennials, in particular, are forcing CEOs to rethink how to create and support a healthy work dynamic. The new generation is derisively referred to by some as entitled, but its members are revered by others for seeking a value-driven workplace, not just a fat paycheck.
“Millennials want a job that has impact,” said Jaret Davis, co-managing shareholder of law firm Greenberg Traurig, P.A.’s Miami office. “This generation wants to know the ‘why’ of a profession. Articulating that is absolutely essential. That’s how you can recruit.”
Indeed, millennials want more than just year-end bonuses and health care benefits, said Arnaud Karsenti, managing principal of Miami-based 13th Floor Investments.
“We’ve learned that millennials are driven by a sense of autonomy, sense of mastery,” he said. “They want to learn skills that they themselves feel confident about. What they have is a sense of purpose, something past generations didn’t have.”
Sapoznik says she caters to millennials’ seemingly elevated hunger for self-actualization by fostering an environment that lends itself to work-life balance.
“As millennials grow up and dominate the workforce in larger numbers, we have to start looking to them to create value and create that balance,” she said. “Otherwise, we’ll continue to have problems hiring. We must look at our employees as assets.”
The term “company culture” is often bandied about, and it’s now a new responsibility added to CEOs’ plates, according to Karsenti.
“It’s part of a CEO’s job, maintaining that,” he said. “Company culture is your most important product and where you get the most ROI.”
Bob Swindell, president of the Greater Fort Lauderdale Alliance, said he works to establish a company culture based on transparency and communication.
“If you’re honest and approach challenges openly with your employees, folks respond really well,” he said.
Roberto Muñoz takes a similar approach to creating a familial environment at BBVA Compass, the bank for which he is South Florida market president.
“It’s about inclusion and keeping your employees in the loop — allowing them to be a real part of your organization, especially as it starts to grow,” he said.
Richard Sasso, chairman of the Broward County headquarters of MSC Cruises, offered his simple strategy for inclusion: lunch.
“I go out for lunch with our executives on a daily basis,” he said. “We sit down, we talk about the family — the Little League game this weekend, the daughter’s new school — and then we talk about business and we eat and it creates a bond between departments because interpersonal connections are made. No one stabbing each other in the back. No one working to trump the other. It’s not just working next to somebody, but working with somebody.”
A business that feels like family can also sometimes lighten the load for CEOs. Sapoznik, who started her insurance business at home while her child was still in diapers, knows a thing or two about juggling. Even once Sapoznik Insurance moved from her living room, she tried to handle everything. But a strong company culture engendered trust and allowed her to delegate more effectively, she said.
“It takes time, research, connections. But now I see myself more as a maestro,” she said. “You really can’t do everything yourself, so it’s essential to change your attitude and establish that team environment. It’s liberating.”0
What is the motto that helped you get to where you are today?
- Bob Swindell, Greater Fort Lauderdale Alliance: “Stay focused on your mission.”
- Jaret Davis, Greenberg Traurig, P.A.: “Take risks. As a lawyer, you have to be right 100 percent of the time. But as an executive, if you’re right 50 percent of the time, you’re doing great.”
- James Terry, GreenTeam Service Corp.: “Be patient. You start seeing growth over the 10-year mark.”
- Roberto Muñoz, BBVA Compass: “There’s always going to be fear in what you do, but never let that hold you back. Allow yourself to be bold through that fear. Being bold in those times, you can really punch through and reach out to your ultimate goal. That’s the true mark of a CEO.”
- Allan Prindle, Power Financial Credit Union: “If you risk nothing, you risk everything.”
- Arnaud Karsenti, 13th Floor Investments: “No one is irreplaceable, including yourself.”
What advice would you give to someone interested in someday becoming a CEO?
- Richard Sasso, MSC Cruises: “Don’t be discouraged just because you’re in the mailroom. Starting at the bottom is OK. Think of it as a building block.”
- Swindell: “Say ‘thank you’ early and often. Share credit.”
- Rachel Sapoznik, Sapoznik Insurance: “Be flexible. Be kind. Be agile. Be gracious.”
- Prindle: “People are the most important thing. It’s not what you’re doing, but who you’re doing it with.”
- Muñoz: “Don’t worry about when you’ll become a CEO. Worry about the great work you’re doing day by day to contribute to the company.”
- Davis: “Understand every aspect of your world.”
- David Goldfarb, PrimeTime Amusements: “Eliminate words like ‘can’t’ and ‘won’t.’”
- Karsenti: “Take baby steps … and know that there is a lot of value in just staying in the game. You’re always just one interaction away from a game-changing deal.”
- Peter Baronoff, Promise Healthcare: “You’re always a student of your business, not an expert.”
- David Martin, Terra Group: “Understand the impacts of your mistakes.”
- Terry: “Don’t spend so much time in the clouds that you forget what the dirt feels like.”
Debora Lima covers technology, startups, biotech and transportation.