Vol. 2 | Winter 2009

Big GrowthBusiness successionby the book

The historian-collectorside of Tony Tirri

Thriving in the U.S.

Intellectual Property: your new source of

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P U B L I S H E R ’ S M E M O

A C-Level CommunityAcurious thing happened when the fi rst edition of C-Level was put in the

mail last Spring. It wasn’t that we received so many calls, emails and letters of thanks and congratulations – for which we remain grateful beyond measure. It was the tone, even the passion, that took us by surprise. The

hunger for something different. The genuine appreciation for the companies, people and topics covered.

In the weeks and months that followed, as the comments and conversations continued, it occurred to us that we had created something quite special indeed. Not the magazine, necessarily, as special as we think it is. Rather, a community. Like-minded C-level executives (chief executive offi cers, chief fi nancial offi cers, chief marketing offi cers… chief level offi cers) coming together around a series of stories and ideas. Busy people taking a time out to refl ect on angles they’re not getting from any other source – connecting, if you will, to a more human side of that which we call business.

If you recall or can refer back to my letter to you in the fi rst edition, that is, in fact, the purpose and role of C-Level: to bring you stories that not only inform and help you manage your business and your risks, but also have those same stories inspire by focusing on the human side. The story behind the story.

In this edition, we bring you some great inside looks. Like Johnny Marquez. Everyone thought he was crazy when making decision after decision, but he proved them all wrong. You’ll also read about the journey that led Humberto Berríos to the biggest meeting – and decision – of his life. And the thought process followed by Angel Rodríguez as he engineered a textbook business succession and secured his company’s legacy.

Then there’s Monica Maldonado, the vivacious “Cartagenera” who has done so much for the cause of minority- and women-owned businesses in America, while building her own in Atlanta. Read the story behind Hernán and Luis Ayala’s bold innovation at the Port of San Juan, and the story of another innovation, this one by our friends at Universal Insurance.

As was the case in the fi rst edition, we know you’ll love the Fine Living and Fun Living stories this time around. You know Tony Tirri as a tough, no-nonsense businessman who created an empire in Puerto Rico. Here, you’ll learn an entirely different side of the man. The same with Luis Soto, who changes from his business attire when he gets home and puts on a different kind of suit.

Last time, the magazine’s feature story called your attention to the brave new world of cyber risk. This time, our C-Story alerts you to the risks, but more so to the opportunities, found in your intellectual property. The future of your company and of Puerto Rico may very well lie in those pages.

Finally, following two pages of socializing and networking (On the Agenda), we bring you an editorial to provoke some thinking on the biggest challenge facing the business world, and particularly the insurance industry, going forward.

Please keep the comments and conversations coming. This is your magazine, the center of our very special C-level Community. Let’s nurture it. Here’s to its growth!

Ramón A. (Tony) PérezChairman of the BoardFulcro Insurance, Inc.

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PUBLISHER’S MEMO

2 C-Level becomesa Community

DARING LEADERS

6 Johnny Marquez Crazy like a fox

8 Humberto Berríos The fateful moment

C-STORY

12 Breakthrough growthBecome a player in IP

A LEVEL ABOVE

22 Business succession Here’s how to get it right

26 The U.S. market Open for business

NEXT LEVEL

30 Cranes that roll Bringing innovation to the ports

38 ‘Aerial’ photography GPS at a new level

THE PLANFINE LIVING

42 The collector’s mind Tony Tirri’s Islamic fascination

46 Insuring your collection Consider it an investment

FUN LIVING

50 Reinventing cycling in Puerto Rico Luis Soto’s 400-meter dash

ON THE AGENDA

54 Voices heard Around and about

FULCRUM

56 Global warming, global warning Global insurance companies react

CPublisherFulcro InsuranceEditorAlex Díaz787.923.0743SalesJanyra Pérez Blanco787.616.2929jperez@fulcroinsurance.com

Design & ProductionArteaga & Arteaga787.250.0006

Copyright© 2009 Fulcro InsuranceNo part of this publication may be reproduced,

stored in any retrieval system or transmitted in any form or by any means electronic, mechanical, photocopying, recording or otherwise, without

prior written permission of the Publisher. Fulcro Insurance ALL RIGHTS RESERVED.

204 San Francisco St. Old San Juan • 787.725.5880 • www.fulcroinsurance.com

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DA R I N G L E A D E R S

You know when you see these older businessmen from “el campo” presiding over large and successful businesses, and they look sort of rough around the edges (unpolished, you think

to yourself), their businesses located in unappealing neighborhoods, and yet there they are, prominent and wealthy, humble as can be, working hard and living gracefully?

And you wonder how they did it, without the formal education you had to undergo, without family wealth to fi nance their ventures.

Rags to riches stories are always inspiring. They include daring risks along the way by folks whose simple beginnings ingrained a stoic work ethic combined with a matter-of-fact, what’s-the-big-deal approach to making what to others would appear to be big decisions. No spreadsheets needed. No fancy projections or formal market research. Just gut instinct about what will work.

‘‘Everyone saidFor Johnny Marquez, it certainly worked. All four

of his big decisions. The fi rst came in the late 1950s, when at 12 years of age he decided to go work at the Rio Piedras Market (Plaza del Mercado). He learned the ropes, saved a bit of money and three years later he paid $50 and borrowed $100 to buy his own vegetable stand, selling only eggs and tomatoes.

“Everyone said I was crazy, since I was only 15, but I knew what I was doing,” he recalls. “The opportunity came up, and I grabbed it.”

He sold eggs and tomatoes in that single stand for a bit more than two years, learned the ropes some more and decided to go for it again, this time selling his stand and purchasing a truck and four other stands, which he consolidated into a single large stand to sell a wide range of vegetables to retail and wholesale customers (Pueblo Supermarkets among them). That is, he expanded and diversifi ed the business.

Johnny Marquez plays the probability game differently than most Johnny Marquez plays the probability game differently than most people. The odds are against him, you say? Too risky a move, you people. The odds are against him, you say? Too risky a move, you

warn? Nahhh. You’re just not seeing it right, he would say.warn? Nahhh. You’re just not seeing it right, he would say.

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I was crazy’’

“I had established great relationships with farmers around the island, and I would pick up the merchandise every day and bring it to the market,” he told C-Level. (Translation: he broadened his supply chain.)

Eleven years later, he was at it again. The legendary Domingo Dominguez was selling one of his two “almacenes”, or distribution centers, and Marquez jumped at the chance. “Everyone said I was crazy again,” he said. It was becoming the story of his life.

He bought the business, which sold all kinds of food (not just vegetables), ran it for eight years, and then came an even bigger moment. Driving from Luquillo to Río Piedras on more than one occasion, he came along a large plot of land for sale in Canóvanas. He noticed an absolute lack of food retail or wholesale options for residents and small businesses in the area and decided to buy the land and fi ll the void.

As fate should have it, his Río Piedras distribution center was destroyed by a fi re and Marquez used the insurance money to complete the development in 1981 of what became Plaza Gigante Supermarket, across

from where Los Colobos is today.

Sure enough, “everyone thought I was crazy,” he said with a chuckle. “But there was nothing else for miles in any direction. Every bone in my body told me it was the right thing to do.” (Does any business university teach Bone Analysis 101?)

The business thrived from day one, and Johnny Marquez has never looked back. In 1988, after a split with his partner, Marquez kept the Calle Loiza location in Ocean Park, renamed it Plaza Loiza Supermarket, and in the years since has added four others for today’s chain of fi ve, diversifi ed into the gas station business (three Gulf stations in the Rio Piedras area) and invested heavily in real estate (owns 60 Section 8 housing units, three strip malls, and land around the island).

His four children (lawyer, doctor, technology professional and auto technician) run various parts of the business, but Marquez is not letting go yet.

Everyone’s waiting to see when he’ll make one of those crazy moves again.

Marquez’s simple beginnings Marquez’s simple beginnings ingrained a stoic work ethic ingrained a stoic work ethic combined with a matter-of-fact, combined with a matter-of-fact, what’s-the-big-deal approach what’s-the-big-deal approach to making what to others would to making what to others would appear to be big decisions. No appear to be big decisions. No spreadsheets needed. No fancy spreadsheets needed. No fancy projections. Just gut instinct about projections. Just gut instinct about what will work.what will work.

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Seize themoment

You spend a lifetime You spend a lifetime dreaming and preparing. dreaming and preparing. You work your way up, You work your way up, waiting for the chance. waiting for the chance. For that fateful moment. For that fateful moment. Sometimes, as with Sometimes, as with Humberto Berríos, it comes Humberto Berríos, it comes unexpectedly. Suddenly. unexpectedly. Suddenly. When it does, will you be When it does, will you be ready? He certainly was.ready? He certainly was.

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The biggest meeting in Humberto Berríos’ life lasted only 30 minutes. Shell’s top managers in Puerto Rico had been complaining for months about the low returns of the company’s Tropigas subsidiary

on the island and had called a meeting to decide once and for all what to do.

It was 1995. As a Shell consultant for the previous four years, Berríos had worked only on Tropigas, a liquefi ed petroleum gas (LPG) distributor in a crowded local market that included several competitors, squeezing margins to a minimum.

Berríos arrived at the meeting a bit late and heard the by-then common question. “What should we do?” His ears popped open. Could this be the day?

He had become Puerto Rico’s foremost LPG expert, having spent his entire career in the fi eld. As a Mobil Oil executive for 13 years (1972-1985), not only had he managed Mobil’s Puerto Rico LPG operation, after rising diligently through the ranks – operations, fi nance, IT, HR… He had also spent three years traveling the world as part of the company’s New York-based LPG International Division. The Persian Gulf, Madagascar, Angola, Asia, South America – he got a crash course in the global oil and LPG market.

As the meeting moved quickly from issue to issue, the memories kept coming back. Years before Mobil, as a high school student, Berríos had worked at Tropigas. The company and the industry became his passion. Tropigas had become the Pampers and Coke of Puerto Rico’s growing LPG marketplace. “Busca un Tropigas” (go get a Tropigas) was often heard from the back of a restaurant in every corner of the island, referring to the traditional tank of gas used for cooking – even if the restaurant manager was a regular customer of a competing brand.

In 1995, the company faced stiff competition. Empire Gas had taken over the #1 spot. But Tropigas had great assets, all of which fl ashed in Berríos’ mind as he heard the Shell folks debate and ponder. The company boasted one of only two LPG import piers and storage tank facilities on the island (at the Port of San Juan), along with 10 fi lling plants well distributed throughout Puerto Rico, where customers from every corner would come fi ll or buy their tanks, and where the company’s

fl eet of trucks were dispatched every morning to deliver the product.

Berríos had spent the better part of his four years as a consultant advising Shell on what to do. The game plan was fresh in his mind. He had pleaded Shell to buy Progas and one or two other competitors. He had told them that the name of the game going forward would be LPG’s market advantage as a cleaner fuel than oil, gasoline and coal – 20% lower CO2 emissions than

oil, 50% lower than coal, a gasoline substitute that could yield far greater mileage at a lower cost, oil changes every 15,000 miles; not to mention zero ground and water pollution hazard, low sulfur and a clean burn.

He knew in his bones that much more could be done to pitch LPG to a far broader customer base – taxi drivers and corporate fl eets, which instead of

fi lling up with gasoline could visit Tropigas stations and do much better with LPG; regular drivers who could do likewise; homeowners who could benefi t from gas stoves, refrigerators, dishwashers, gas appliances of all kinds; industrial clients who could likewise gain from gas-powered boilers at their manufacturing plants, instead of powering with far more costly and far less eco-friendly electricity.

LPG, he was convinced, was the fuel of the moment and of the future, and Tropigas the company best positioned to lead the way and profi t big. And yet there was Shell, wanting out.

“Who should we sell it to?” Of all the questions asked that day, that was the one Berríos was waiting for. He looked around to gauge the reaction of others and raised his right hand, as if taking an oath.

“I’ll buy it.”

The words came out without hesitation. His hand was fi rm. His voice sure as could be. He was bitten by the entrepreneurial bug as a teenager working at Tropigas, the dream percolating in his chest ever since, but the chance had never come. When he left Mobil in 1985, he had a wife and four children and was sure it would happen then. But God, he would tell himself, must have had other plans.

“Owning the right business “Owning the right business at the right time and running at the right time and running it the right way is the best it the right way is the best way to manage the risks way to manage the risks inherent in today’s business inherent in today’s business world. It gives you greater world. It gives you greater freedom. So it’s critical freedom. So it’s critical that more Puerto Rican that more Puerto Rican executives be bitten by the executives be bitten by the entrepreneurship bug. We entrepreneurship bug. We would all be better off.”would all be better off.”

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purchase agreement, Berríos called Enron and made an offer to acquire its Progas subsidiary on the island, a key acquisition Shell had not been willing to do.

“Puerto Rico is not big enough for so many competitors,” Berríos told C-Level, adding that Progas provided the company greater market share and enhanced scale.

Under Berríos, Tropigas also expanded its infrastructure, making improvements in its port facilities and more than doubling the number of fi lling stations to 26.

After 10 years at the helm and seeing his business plan executed as envisioned at that fateful meeting in 1995, Berríos decided to realize yet another dream. Of his four

children, the three boys had joined the company and were ready to take over, while dad was longing for a new phase in his life. They engineered a successful succession, Berríos stayed on as chairman, and the patriarch went on to focus on breeding Paso Fino horses, one of which has won several international competitions.

Back at the ranch, Humberto Jr., Gabriel and Gustavo are focused on promoting LPG’s environmental pluses, during this time of growing eco concerns, to take Tropigas to the next level. “The timing could not be better,” said the chairman.

For his efforts, the successful risk-taker has won numerous accolades, most notably the 2003 Ernst & Young Entrepreneur of the Year Award.

“Entrepreneurship is what I always wanted to do,” he concluded. “Like me, there are so many executives in Puerto Rico with the ability to do it. I know far too many who don’t because they say they’re already comfortable, so why bother. But with the economy as unpredictable as it is, the riskier move is to keep working for someone else. Owning the right business at the right time and running it the right way is the best way to manage the risks inherent in today’s business world. Ownership provides greater security and the wealth and equity to realize your dreams. It gives you greater freedom. So it’s critical that more Puerto Rican executives be bitten by the entrepreneurship bug. We would all be better off.”

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“Are you sure?” he was asked at the meeting.

“Yes,” was his quick reply.

“How much do you think the company is worth? What would be your offer?”

He was ready for that question as well, after spending four years going through every number and writing every spreadsheet, knowing where all the skeletons were and how much every asset was worth. He knew every client and had a close relationship with many of them. Berríos had negotiated all the supplier contracts and knew the price and cost structure better than anyone at the company.

He was clear what the company was worth and what

it would fetch in the market were it to be sold, hoping all along that he would be the buyer.

“$4.2 million.”

There was a moment of silence, followed by a brief discussion of the particulars. They wanted to know how Berríos would fi nance the acquisition. And he explained convincingly. Tropigas had abundant, high-value, free-and-clear real estate that could be used as collateral.

“OK. Done. Congratulations.” The deal was sealed. A few months later, Tropigas was his, as was the dream of owning his own business.

The decision did not come free of risks. After all, Tropigas had been losing market share for some time, the brand no longer as dominant. While the market potential was huge in his mind and powerpoint presentations, Shell never moved to capitalize. Berríos was confi dent, but success was far from self-evident. It was up to him now to make it happen.

True enough, he now acknowledges. “But in moments like that, you can’t hesitate or second-guess yourself. I was sure I could get it done. The plan was sound. The vision, the concept, the idea – it all made too much sense, and that made the risk manageable.”

The fi rst step was clear. The ink not yet dry on the

The decision (to buy) did not come free of risks. Tropigas had been losing The decision (to buy) did not come free of risks. Tropigas had been losing market share, the brand no longer as dominant. While the market potential market share, the brand no longer as dominant. While the market potential was huge, Shell never moved to capitalize. Berríos was confident, but success was huge, Shell never moved to capitalize. Berríos was confident, but success was far from self-evident. It was up to him now to make it happen.was far from self-evident. It was up to him now to make it happen.

DA R I N G L E A D E R S

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Innovation has always driven the great leaps of growth in the Innovation has always driven the great leaps of growth in the global economy, but never like today. It is the defining force global economy, but never like today. It is the defining force of the Knowledge Economy, the source of growth among the of the Knowledge Economy, the source of growth among the

world’s leading companies, and it is yours for the taking. world’s leading companies, and it is yours for the taking. But if you want to join the innovation game, make sure you But if you want to join the innovation game, make sure you

master the rules of Intellectual Property.master the rules of Intellectual Property.

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Yes, the economy is still lousy. True, it’s tough to raise revenues. But – and it’s a BIG but – are you

looking in the right place?

Every so often the time comes for C-level executives to stop and rethink. After years of recession and slow growth, this certainly qualifi es as one of those times.

Much has been said about the world of business being in the midst of a seismic transition. First there was the industrial era. Then the information age. And now, we are told time and time again, the

moment has come for the knowledge economy.

But wait a minute. Exactly what is the knowledge economy? It is such an amorphous concept. The most common reply to the question goes something like this: In the knowledge economy, the most important competitive advantage is, well, knowledge – knowing more than anyone else so you can outfox the competition and get the deal.

Sometimes, the knowledge economy is lumped together with the information economy. But of course, since it takes so much new knowledge to drive the digital revolution. And sure enough, digital is part of the knowledge economy, but only a part.

Truth be told, and you may be happy to know, the concept is far simpler. The knowledge economy is called as such because it involves any distinctive product or service that your mind, that any mind, can create (using… you guessed it: knowledge!) and that can be commercialized.

That’s worth repeating: the creation, inside your mind, of a product or service that offers a distinctive advantage over all others and that is later developed and sold in the marketplace.

But haven’t minds been creating distinctive products and services forever, you might ask? Yes, but never like today. Not even close. And therein lies the fi rst big insight behind the knowledge economy. Today, the entire marketplace is driven by heaps of innovation taking place.

It is a huge opportunity for you

and all C-level executive looking for new revenue sources, as well as for Puerto Rico as a country looking to create jobs and become a far bigger player in the global knowledge economy.

Own, then profi t

Then there’s the second big insight behind today’s knowledge economy. Once you create something, you have to own it. Own the very idea. Own the creation, even before the product is produced and ready for sale. Sometimes years before.

The creation, the idea, is called an intellectual property. You own it as soon as you create it in your mind, but you have to register it with the local and federal government by way of patents, copyrights and trademarks in order to protect that ownership. Otherwise, if someone else learns of your creation and registers it fi rst, he or she owns it. (See box.)

Why is this so critical to your future? Because the companies leading the world of business today – most of the Fortune 500, for starters,

“Knowledge” in the knowledge economy is the creation, inside your mind, of a “Knowledge” in the knowledge economy is the creation, inside your mind, of a product or service that offers a distinctive advantage over all others. Intellectual product or service that offers a distinctive advantage over all others. Intellectual property is when you property is when you ownown those creations through patents, trademarks and those creations through patents, trademarks and copyrights, allowing you to develop and sell them in the marketplace.copyrights, allowing you to develop and sell them in the marketplace.

as well as the leading companies around the world growing in this sluggish economy – have picked up on these simple insights and are moving aggressively to capitalize on them.

Once a company creates and registers an intellectual property, it immediately invests in its development, marketing and sale. You invest in building the brand. You invest in the people, the human resources, that will drive its success.

Most of those assets are intangible. In the industrial age, and even in the hardware-heavy information age,

most investment was in physical stuff, like machinery and equipment. Since as recently as 2004, and for the fi rst time ever, most business investment in the United States has been in intangible property, the bulk of it related to intellectual property.

That’s more than $1.2 trillion in the U.S. alone. That’s not a typo: $1.2 trillion. By contrast, investment in physical assets is barely $1 trillion. Since the mid-1970s, in fact, investment in intellectual capital has grown from 4% of U.S. gross domestic product to slightly over 10%, with no end in sight, while tangible capital investment has remained stuck at 10% of GDP during this entire time.

In that same period, market capitalization of public companies in the U.S. went from 17% of corporate value to 86%, according to The Invisible Edge, a milestone book on intellectual property written by Mark Blaxill and Ralph Eckardt (2009).

What does that mean? That most of what goes for intangible does not show up on balance sheets as

corporate value, yet investors know when a company has come up with a winning idea and they recognize that value in open trading, as do companies when they engage in mergers and acquisitions.

Hire people to think.Then build a portfolio.

The name of the game, as Blaxill and Eckardt discovered following the most extensive analysis yet published of today’s knowledge economy, has become intellectual capital. Hire people to think. Provide incentives for them to create product and service ideas that are unique and distinctive. Build a portfolio of intellectual properties (patents, trademarks, copyrights and trade secrets). Make sure you own them all. And then go all out to commercialize and capitalize – translation: to sell like crazy and make lots of money.

Maintain an endless portfolio fl ow. As some patents expire, you will always have others in the pipeline and products coming on stream. Innovate, innovate, innovate. Build your business around invention and innovation.

As the owner of a new intellectual property, you can build a supplier or partner network around it. Don’t just pass on your invention to a larger company that will then commercialize it. Stay in the game. Build your own network of companies, each with a piece of the action, and lead the effort.

That’s how the most successful companies in the world today are maintaining their edge. With innovation and collaboration. They create, they patent-trademark-copyright, protect their trade secrets, develop the products and services, build a network, sell the new products, and do it again and again. And again.

By most accounts, companies that

rely on IP and build portfolios have 72% more value-added per employee than companies that do not.

Welcome to the knowledge economy.

Choose your niche.And think big.

Can this be done in Puerto Rico? Can you? We’ve become so accustomed to being a country-factory for other people’s ideas – the place where global companies manufacture the mind creations of thinkers back in American, European and Asian headquarters and labs – that we haven’t developed the vision or culture to create our own blockbuster products and sell them all over the world.

That may soon change. The government’s Science and Technology Trust has been developing technology corridors precisely for this purpose, to attract top talent from the island and around the world and come up with products and services right here on the island.

Regional consortia, university centers and non-profi t organizations have sprouted throughout Puerto Rico to follow the same game plan: promote entrepreneurship and innovation.

While the government has taken an industrial-policy approach – preferring certain industries (high-tech, biosciences and aerospace, for example) over others – other local players are moving in different directions.

Like green, encouraged and funded by none other than President Barack Obama, who is pumping federal dollars into the innovation of all things green (technologies, renewable energy, smart grids, green buildings and homes, green appliances, etc.), as well as innovations that will drive down the spiraling cost of health care.

Ideas are free for the taking! No one owns an idea. However, when the idea is fi xed in a tangible medium form of expression, it belongs to the one who did. Intellectual property is a general term to describe inventions or discoveries subject to protection. As soon as you create, you own. However, to have ownership of that property in the United States, one must seek protection by registering it with the U.S. Copyright Offi ce or the United States Patent and Trademark Offi ce.

There are three basic ways of establishing intellectual property ownership under the law: patents, trademarks and copyrights. Patents apply to industrial or business inventions or innovations, such as a new product. Trademarks apply to names, designs and logos, while copyrights are used for such artistic creations as books, songs, plays, paintings and sculptures.

There is a fourth type of intellectual property, trade secrets, which as the name implies, involve ideas such as formulas, corporate information and processes that are critical to the success or uniqueness of a company or product. However, trade secrets are not protected by the law in the same manner because these may not be registered anywhere. Other means such as non-disclosure agreements, non-compete clauses and secure employee contracts are used instead.

The objective is for others not to copy your IP and thereby steal your competitive advantage. If someone learns of your product idea and registers it fi rst, he or she now owns it. You may, of course, fi le a lawsuit to reclaim your “property”, but oftentimes the courts rule in favor of the person or company with ownership of the patent, trademark or copyright.

Patents and trademarks must be established in each country separately. If you patented a product idea in the U.S. and Puerto Rico and someone copies it in Argentina, he or she owns it in Argentina.

The process of international registration is facilitated by entities such as the World Intellectual Property Organization (WIPO), which seeks compliance of international treaties by signatory countries, and offers guidance and services in processing registration applications in those territories.

In Puerto Rico, the professionals best suited to represent a company in these matters are usually IP lawyers such as the four featured in this spread, particularly to secure ownership under the law. To build a brand or commercialized a product, marketing experts and business consultants may be better able to help, as well as human resources professionals to hire, incentivize and manage your thinkers and creators. Insurance agents help with risk coverage, and a new breed of fi nancier has emerged to specialize in trading IP assets, securing fi nancing for new IP, and otherwise manage the fi nancial side of your ideas.

Intellectual Property 101

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When it comes to your company’s intellectual property, “better safe than sorry” is more

than an old adage. It is the sort of advice that can save you lots of money, perhaps even your business.

That’s because, on the one hand, your intellectual property can be copied and stolen far more easily than your physical property. Someone gets a hold of your idea for this unique and distinctive product, seeks registration for protection before you do, and you’re out of luck.

On the other hand, you may infringe on someone else’s intellectual property rights and not know it. You come up with this fantastic idea, develop it, go through great expense to market it and sell it, and one day you fi nd out in a lawsuit that your fantastic idea occurred to someone else years prior and he or she had already built a business around it.

What can you do to avoid these potential disasters?

any chancesNot with your intellectual property, advise five experts, who counsel on protecting and insuring your IP to maximize your commercial success

“Get to know intellectual property law,” advises Thelma Rivera, a partner at the Hato Rey law fi rm Goldman Antonetti and one of the fi ve participants in a recent roundtable discussion on intellectual property hosted by C-Level.

“It’s sad to say, but far too many people are simply careless about their intellectual property and are too trusting of other people who have not necessarily earned that trust,” she added. “Protection begins by being extremely careful which conversations you engage in, who you trust with sensitive information about new products, trade secrets and the like. That’s why the fi rst step should always be to seek legal protection of all IP.”

That’s done with patents, trademarks, copyrights and trade secrets the four types of IP subject to legal protection. Patents, trademarks and copyrights are protected through statutes drafted for those specifi c types of property and even have government entities that secure their protection through registration. Trade secrets, the fourth type, must be protected in

other ways. (See box.)

“Trade secrets can be protected with strong confi dentiality agreements and well-drafted contracts that leave no room for misunderstanding,” said Hector Reichard, senior partner at law fi rm Reichard & Escalera, adding that since trade secrets are not subject to patent, trademark or copyright protection, the best advice is to protect it “as you do other things you place in a safety deposit box. Just make damn sure no one fi nds out who is not supposed to.”

Even KFC and Coke, with their famed formulas and secret recipes, “cannot protect their trade secrets any other way,” said Paul Ferrer, also of Goldman Antonetti.

‘But I’ve been using it for a long time!’

An important fi rst step, added Ferrer, is to inventory all your IP and then go about the task of protecting each one as thoroughly as possible. “It can get complicated, because there are so many kinds of IP. But the fi rst thing to do is to sort out the

Don’t take Don’t take

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ones you have and then get in the habit of protecting all new IP assets you come up with.”

One thorny issue is adaptation. What if your great new idea is a twist on an existing product or brand? “It needs to be truly unique and different,” clarifi ed Jean Paul Vissepo, a partner at law fi rm Sanchez & Vissepo. “The legal standard is the likelihood of confusion as perceived by the public. Your new mark must be inherently distinctive to the consumers for it not to infringe on others’ business name.”

Then there are those cases in which a company has been using a product or brand for years without ever registering it and along comes a competitor and obtains a patent or trademark protection for the same product or brand.

“In many cases, the right goes to the company that has been using it for a long time, not to the one that just registered it,” said Rivera. “But again, why take the chance? It’s a really fi ne line and you never know which way the judge will decide. So even if you’ve been using a product

or brand for a long time, protect it and avoid the risk. It’s never too late.”

Speaking of managing risks, obtaining insurance coverage is one way to go, according to Arturo Ortiz, business development partner for Fulcro Insurance.

“It’s important to be aware that traditional insurance policies are not designed to cover the majority of loss exposures that are associated with IP,” he explained. “Through highly specialized policies, you can protect against potential lawsuits if you infringe someone else’s IP and insure for the legal costs and potential losses if you must sue someone for infringing on yours.”

Along this entire journey, Reichard advises C-level executives not to lose sight of the big prize. “In the end, this is about protecting something with the objective of turning it into a major driver of the business. IP can and should be a source of sales and growth, when managed with that in mind. It’s not about legal technicalities. It’s about the future of your business.”

“It’s sad to say, but far too many people are simply careless about their intellectual property. Protection begins by being extremely careful which conversations you engage in, who you trust with sensitive information about new products, trade secrets and the like.”

Thelma RiveraGoldman Antonetti

Making an inventory of all your intellectual property “can get complicated, because there are so many kinds of IP. But the fi rst thing to do is to sort out the ones you have and then get in the habit of protecting all new IP assets you come up with.”

Paul FerrerGoldman Antonetti

“It needs to be truly unique and different. The legal standard is the likelihood of confusion as perceived by the public. Your new mark must be inherently distinctive to the consumers for it not to infringe on others’ business name.”

Jean Paul Vissepo GarrigaSanchez & Vissepo

“In the end, this is about protecting something with the objective of turning it into a major driver of the business. IP can and should be a source of sales and growth, when managed with that in mind. It’s not about legal technicalities. It’s about the future of your business.”

Hector ReichardReichard & Escalera

It’s important to be aware that traditional insurance policies are not designed to cover the majority of loss exposures that are associated with IP. Through highly specialized policies, you can protect against potential lawsuits if you infringe someone else’s IP and insure for the legal costs and potential losses if you must sue someone for infringing on yours.”

Arturo OrtizFulcro Insurance

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As Blaxill and Eckardt have shown, anyone can do it. The authors point to the latest famed example, Facebook founder Mark Zuckerberg, who created the idea while still in college, complete with all its sections and operating systems, and immediately proceeded to protect EVERYTHING. Once he secured total ownership of all the intellectual property, he got the needed investment, brought in partners to develop applications (all the tools Facebook fans love to use), and the rest is history.

Two years ago, Microsoft paid $260 million for 1.6% of Facebook, which means the latter was worth $15 billion at the time. And it has grown exponentially since. When one considers the goodwill associated with the Facebook trademark today and how unknown it was only a few years ago, one begins to get a sense of the boundless pontential behind a sound IP strategy. It has become the driving force behind the value provided to consumers.

“There is absolutely no reason why this can’t be done here in Puerto Rico. Innovation and the intellectual property system that supports it should be at the center of the island’s development going forward,” said attorney Hector Reichard of Reichard & Escalera in Hato Rey (see related story).

Join the IPX league

Today, you have other things you can do with your intellectual property, in addition to developing partnerships and selling products. An entire market has developed to trade not just the developed products, but the patents, trademarks and copyrights themselves – particularly patents, given the big marketable innovations behind this type of IP.

The company leading the IP revolution

is Ocean Tomo, a C h i c a g o - b a s e d merchant banking fi rm that recently launched IPX, the Intellectual

Property Exchange I n t e r n a t i o n a l .

Similar to a stock and commodities exchange,

IPX is the place where people buy and sell IP. Just as traditional

exchanges have companies listed, so does IPX, with a list of companies that have “especially strong intellectual

property, including patents, trademarks and copyrights.“

Ocean Tomo has divided those companies into a set of indices: the 300 Patent Index, the 300 Patent Growth Index, and the 300 Patent Value Index. Companies listed include big names with “strong IP” spanning the gamut of industries: American Express, Alcoa, Aegon, Adidas, Baxter, Best Buy, Cartier, Citigroup, Coke, DHL, Ebay, Esprit, Gannett, Goodrich, Grupo Bimbo,

Home Depot, Intel, Kellog’s, Levi Strauss, Macy’s, Marriott, Prudential, Rite Aid, and others. But there are also unknown types of all sizes.

The indices and IPX use a robust methodology to calculate the value of an IP, the innovation ratio (IP value/book value) and the revenues a company earns from licensing its IP.

Also proliferating in the U.S. and around the world are IP advisory and venture capital fi rms. One of the more interesting ones is Intellectual Ventures out of Washington state. On its website, the fi rm articulates a vision of “creating a more effi cient and dynamic invention economy” and extols the virtues of its Invention Science “infrastructure”, a series of services to conduct IP analysis, licensing, networking and otherwise “manage and monetize a portfolio of inventions protected by intellectual property rights.”

Many fi nancial institutions have developed derivatives and other instruments to facilitate the sale and trading of IP assets and therefore provide liquidity to this emerging innovation marketplace.

Build a global brand

While most of the attention is focused on patents, no company should overlook the importance of trademarks as a source of signifi cant growth and market value.

Think Disney and world-leading family entertainment comes easily to mind. Coca-Cola is synonymous with refreshment, Apple with fun

In the industrial age and the hardware-heavy information age, most investment In the industrial age and the hardware-heavy information age, most investment was in machinery and equipment. Since as recently as 2004, and for the first was in machinery and equipment. Since as recently as 2004, and for the first time ever, most business investment in the United States has been in intangible time ever, most business investment in the United States has been in intangible property, the bulk of it related to intellectual property.property, the bulk of it related to intellectual property.

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computing, Starbucks with a unique fast food experience. Armani equals exquisite Italian design in fashion. So does Ferrari in automobiles.

If these companies were for sale, this brand power – their biggest competitive edge in the marketplace – would drive the negotiation and the price. Yet, it’s not a tangible asset, or at least what is generally understood as one. It’s not real estate or a pile of inventory or accounts receivables, and it certainly doesn’t show up on the companies’ fi nancials. The value is in the goodwill associated with the brand name and what it means to consumers.

The amount of capital invested by leading companies in building these intangible assets is monumental. The trick is to create the name, design, symbols, slogan and logo (corporate ID, store ambiance, your look and feel), secure it with trademark protection, and then build an entire business around it: a reputation for quality and great service, reliable distribution, a phenomenal experience, all those things that develop a strong customer following, a contagious employee culture, great word of mouth – in sum, high goodwill, a great brand.

And that, in turn, creates the market value an investor or some other company will want to acquire in the future. That is the potential of sound trademark management. Own

the name, protect it, give it deep brand power, and make it the driver of your company’s value, reputation, sales and growth.

As common as this is among the world’s great companies, it is a game most Puerto Rico businesses and C-level executives are not playing, as revealed by a glance at the names, logos, cultures and branding of the island’s leading local companies. Most local executives underestimate the importance of branding and goodwill as a driving force behind their companies’ sales and market value and fail to make the needed investments.

The same IP power applies to copyrights, in the case of authors, songwriters, screenplay writers, painters and all art-related professionals and companies. Judging from the proliferation of Puerto Rican singers and songwriters selling their CDs around the world, the island’s music and recording industry is playing the game quite well, thank you – a lesson local painters, screenplay writers and authors would be well advised to heed.

While the island’s recording industry is well developed and honed for global business, industries like publishing of literary works (songs, books) and talent management are not. Perhaps C-level executives

reading this story will want to help.

Master the IP rules.Win the innovation game.

Ever since the industrial revolution picked up steam in the 19th century, all great leaps in productivity and wealth have come as a result of great leaps in innovation. The steam engine. The railroad. Electricity and the light bulb. The telephone. Cars and planes. The computer. The internet. To name but a few.

The difference between then and now is sheer volume. The knowledge economy is so defi ned because an unprecedented number of people and companies are doing it, because fi nancial markets are now driven by it, because intellectual property portfolios have secured their place at the center of today’s great leaps and have proliferated those leaps.

Which brings us back to you. What can you innovate? What can your mind create? Who can you hire to think? Can you build your business or a new business (or an acquired business) around innovation and the global sales of your new pipeline of patented, trademarked and copyrighted products?

Learn the rules of intellectual property, and you’re ready to play the innovation game.

The most successful companies in the world today are maintaining their edge with The most successful companies in the world today are maintaining their edge with innovation and collaboration. They create, they patent-trademark-copyright, protect innovation and collaboration. They create, they patent-trademark-copyright, protect their trade secrets, develop the products and services, build a network, sell the new their trade secrets, develop the products and services, build a network, sell the new products, and do it again and again. And again.products, and do it again and again. And again.

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You may want to follow the American Agencies example of non-family business succession

WantWant to ownto own an an institutioninstitution

It took the team of seven new owners, including new President Omir Méndez, several weeks, perhaps months, before they realized it. It grew on them, as it did on the team of two who had recently passed them the torch.

American Agencies had gone from being a company to becoming an institution.

Founded in 1956 by an entrepreneur team led by Jorge Rivera Cardona, the construction supplier based in Rio Piedras achieved a smooth transition of ownership 28 years later, handing over the reins in 1984 to a seven-member management team led by new President Angel Rodríguez.

Twenty-three years after that, in 2007, Rodríguez engineered the same feat, adopting and adapting the succession model Rivera had used and guiding the company through its second seamless transition, the current owners selling the company to a team of managers who had been with the company for years.

It is a model Méndez and his team plan to use yet again when it becomes their turn to move on. The pattern will thus be established. American Agencies will endure, becoming “bigger” than the temporary

L E V E L A B O V E

leaders who know they will only be at the helm for 25 years or so, each succession ensuring the continuity of focus and strategy that enables, in turn, the continuity of success – the company becoming, indeed, a legacy to hand over from generation to generation.

It is the stuff institutions are made of, like many of the big global brands we often read about in The Wall Street Journal and learn about in business schools and books. Companies that become legendary because their leaders know it’s not about them, but rather about the company and the brand.

A winning formula So it is at American Agencies. (The company specializes in structural steel, metal doors, bathroom partitions and architectural hardware.)

“One of the most important objectives we had in mind when we began the process was to select the team that would best continue what Jorge Rivera began in 1956, as well as carry on the work and tradition that our team has followed,” said Rodríguez. “Sure, they will make changes along the way, as did we. That’s what every company must do to adapt to the times and grow. But the continuity of purpose and general strategy is critical.”

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Said Méndez: “This is a formula that has been

proven twice already, and we know it works, so we

plan to do the same.”

Indeed, the basic elements of the formula are broadly followed in

business successions around the world.

It is, in effect, a textbook case consisting of these

six steps:

L E V E L A B O V E

1. As you draw near the moment when you want to hand over the company – for Rodríguez it was around 2002 – begin identifying the members of your management team with the caliber to become the new owners. It’s the pool from where

the new president will be selected. You may want to recruit over the years with succession in mind, hiring folks with the potential to run the company.

Why current management, as opposed to selling the company to outsiders who would then select a new president? “Continuity, intimate knowledge of the company, strong client relationships, deep commitment,” answered Rodríguez. “It’s the path that ensures the highest probability of success. These guys have been part of the team for years. They know everything, and they have proven they’re more than able to do the job.”

2.Determine how the retiring owners will be paid. At American Agencies, the seven managers selected to become the new owners agreed to purchase the shares of the two retiring owners (the other being Guillermo Menéndez), who also

began as seven in 1984 – “some passed away and others retired,” said Rodríguez.

The new owners will make payments over the coming years in what is called estate freezing: common shares of the retiring owners are converted to preferred shares, and new common shares are issued for the succession. Future gains are applied to the new shares in order not to be taxable upon the retiring owners’ death

“We wanted to do everything by the book, including the tax issue,” he said, adding that this method also leaves suffi cient capital in the company’s coffers. “We didn’t do this in 1984, and the new team at the time took over without any capital.”

3.Choose a process to select the new president. As it turned out, all seven new owners in 2007 were capable, but Rodríguez set a rule that only an engineer could be president, reducing the choice to three. How, then, to select?

“Since they were all qualifi ed, the group decided to put it up for a vote,” he explained. The seven voted, and Méndez was elected.

As it turns out, the same happened in the 1984 succession. Rodríguez recalls he was elected for the same reasons Méndez believes he was elected this time around: preparation, personality, ability and youth. Both were in their early-to-mid 30s, ensuring a long tenure and – there’s the C word again – continuity.

“We’re here to take “We’re here to take care of the company care of the company for a while, truly care for a while, truly care for it, make it grow and for it, make it grow and pass it on, just like it pass it on, just like it was passed on to us.”was passed on to us.”

– Omir Méndez, President, American Agencies

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4. Purchase life insurance for the new owners, with the company as the benefi ciary. If one were to die, the policy, in effect, pays for the shares.

“We didn’t do this in 1984, and it became an issue when an owner would pass away,” revealed Rodríguez.

It is capitalism in its purest form: get a good education, join a strong company, It is capitalism in its purest form: get a good education, join a strong company, earn your way up through the ranks, join the management team, accumulate earn your way up through the ranks, join the management team, accumulate capital, and when it comes time for succession, you may become an owner capital, and when it comes time for succession, you may become an owner and perhaps the company’s president.and perhaps the company’s president.

L E V E L A B O V E

Owning a legacy That’s the formula. It is, in many ways, capitalism in its purest form: get a good education, join a strong company, work your way up through the ranks on the strength of your merits, join the management team, accumulate capital, and when it comes time for succession, you may become an owner and perhaps the company’s president.

Others launch their own businesses or are recruited as owner-presidents by a company. For most C-level executives, however, ownership through management succession (in a non-family-owned business) is the smoothest and most likely way to go.

You may want to make sure, though, that the company is of this succession mindset, or that you as a C-level executive can engineer the model at the company. Then you, too, may contribute to the continuity of that which is called a legacy institution.

Méndez feels the legacy effect most poignantly when founder Jorge Rivera, now aged and frail, stops by the offi ce, unannounced, to see how things are going.

“It’s always a special moment,” says the new young president. “Seeing him and how much he still cares makes all of us in the new team – and every employee, for that matter – stop and refl ect on what we’re here to do. We’re here to take care of the company for a while, truly care for it, make it grow and pass it on, just like it was passed on to us.”

American Agencies, he continues, is not a family business, but “it feels like a family, and that’s part of the legacy we’re here to carry on as well.”

5. Consider keeping the outgoing president as chairman of the board, as did Rodríguez and Rivera before him. Again, continuity.

“It seems the natural thing to do,” said Méndez. “It’s great to have him there when we need him, to offer his advice, to help in the transition with certain clients, and in other ways. Besides, the strategy did not change with the change in management. We all took part in defi ning the strategy over the years, so the fact Angel stayed on as chairman was a seamless process.”

6. Communicate the change prudently. American Agencies only announced the transition to its employees, and only as it was taking place, as well as to clients

and certain suppliers. Why not communicate it in the press or have a high-profi le celebration? Not necessary, they both answered. In fact, most privately-owned companies remain quiet about their successions.

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Don’t give up.”

If any statement summarizes Monica Maldonado’s approach to supplier diversity

(SD), it is this one.

The Colombia-born printing and marketing executive should know. She’s been knocking on Corporate America doors (large U.S. corporations) since joining the family business in 1984, and particularly since taking over the Atlanta-based company from her father eight years ago.

For businesses in Puerto Rico – indeed, for minority- and women-owned businesses anywhere in America –

How much

When it comes to penetrating When it comes to penetrating the U.S. market using a Supplier the U.S. market using a Supplier Diversity strategy, one Diversity strategy, one veteran of many battles says veteran of many battles says it ultimately comes down to it ultimately comes down to persistence and heart.persistence and heart.

the lesson should not be lost. The SD circuit, a natural way for such companies to penetrate the national market, promises huge gains, but only if pursued intelligently.

“There are always opportunities, but it’s a process that takes time. The important thing is to be persistent and not give up. It’s a test of one’s will and endurance,” said Maldonado, adding a simple measure of that test: “How badly do you want it?”

The Maldonados began testing their own will in 1982, when Monica’s parents left their beloved Cartagena to launch a Minuteman Press franchise in Atlanta, while

do you want it?do you want it?

Monica pursued university studies in Gainesville, Florida.

The business ran into a wall, since the franchise was too focused on small orders from retail and walk-in customers and could only grow so much. Five years later, it changed its name and focus.

Interprint Communications, as the company was renamed, began targeting larger commercial accounts, and in the years following Monica’s entry into the business, the diversifi cation broadened further. In addition to printing, the company offered creative design, branding, marketing, advertising, promotions and other solutions, all under the vision of an integrated one-stop shop for clients of any size, small or large. (It uses the domain ok2print.com on the web.)

The fi rst big deal came from Bellsouth (now At&T), and today Interprint boasts relationships with such Atlanta-based corporate giants as The Home Depot,

Cox Communications, The Coca-Cola Company, Delta Community Credit Union, and Comcast among others.

The company recently completed an investment of more than $2 million in new facilities, a six-color press, a new information system, and a prepress plate maker system, all of which expands capacity to a new level. Interprint also launched a new Internet-only printing site, dway2print.com, to target business anywhere. In 2010, Maldonado will launch The IP Store, a chain of outlets that will provide a wide array of business services.

“Our clients will have no excuse not to give us the opportunity,” she said. “We fi ll unique niches with the diversity of our portfolio offerings. We are ready for growth.”

A supplier diversity how-to

Much of that expansion is aimed at Corporate America, a segment Maldonado continues to target intensely through the supplier diversity process.

SD has become a sort of holy grail for the growth of minority- and women-owned business enterprises

(MWBE) in the United States, driven by three factors. First, the expanded role of minorities and women in the economy, with women having long become the nation’s primary consumers and minorities the fastest-growing consumer segment. The logic for large corporations is clear: having more MWBEs in their supply chains helps build brand loyalty among minorities and women in general, which strengthens sales.

Second, MWBE suppliers provide important market insights into consumer patterns, which also ultimately translates into sales. And third, supplier diversity (and diversity in general) has become part of large corporations’ social responsibility. As pressure continues to build on Corporate America to assume a bigger role in social wellbeing, diversity has taken center stage.

For most of the last two decades, the SD process followed a predictable pattern: a company would obtain

certifi cation as a MWBE, submit its credentials to a wide range of corporations, the latter would place them on vendor lists, and both MWBEs and corporations would join and network through any number of minority and women business organizations at both the national and state levels.

Aside from their networking and dealmaking role, many organizations served as pressure groups, taking their SD case directly to CEOs and corporate boards and holding them accountable to performance scorecards and ratings.

As the years rolled on and with every success and horror story told, both sides accumulated signifi cant learnings. SD long-timer Maldonado has lived the entire evolution, and she has done so as both a woman owner and a minority owner, from a leadership position in various organizations and as an outspoken, always passionate advocate of the MWBE cause.

“You can say I have a unique perspective.”

Indeed. As she expressed her views to C-Level during an exclusive phone interview from her Atlanta offi ce, a

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L E V E L A B O V E

Supplier diversity has become a sort of holy grail for the growth of minority- Supplier diversity has become a sort of holy grail for the growth of minority- and women-owned businesses (MWBEs) in the U.S., driven by three factors: and women-owned businesses (MWBEs) in the U.S., driven by three factors: the expanded role of minorities and women in the economy, the important the expanded role of minorities and women in the economy, the important market insights to be had, and the fact that supplier diversity (and diversity in market insights to be had, and the fact that supplier diversity (and diversity in general) has become part of large corporations’ social responsibility.general) has become part of large corporations’ social responsibility.

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sort of SD how-to emerged, a set of do’s and don’ts that any MWBE in Puerto Rico and elsewhere would do well to heed and follow:

• The fi rst step is to fi gure out exactly who you are as a business, what you will offer Corporate America, and why a corporation should choose you instead of another supplier. Offer uniqueness. Develop differentiation. Prepare to make world-class presentations. “The competition is fi erce,” she affi rmed. “No one is going to choose you just because you’re minority- or woman-owned. You have to win on merit. The MWBE status is an important edge, but it’s only an edge.”

• Go through the usual SD drill: become certifi ed, join as many vendor lists as you can (primarily those that promise real deals – companies that may or do need your services), and join as many MWBE organizations as time will allow. Maldonado, for one, has been active for years in the Georgia Hispanic Chamber of Commerce and currently serves as chairwoman, as well as the Atlanta Chapter of the National Latina Business Women Association, the Greater Georgia Women Business Council, the Georgia Minority Supplier Development Council, and a host of others.

• Use those memberships wisely. Network, network and network, particularly with the SD directors and other key decision makers in your target companies. Build friendships and relationships. Earn everyone’s respect. When appropriate, assume leadership positions in the organizations, as they allow for greater access, recognition and reputation.

• Recognize that corporations are no longer adding MWBEs to their vendor lists just to score points and show off lots of names. “They’re being far more selective nowadays, consolidating suppliers and keeping a smaller number, so it’s a lot more important to do this right,” advised Maldonado.

• Play the tiers. Large corporations generally have Tier 1, Tier 2 and Tier 3 suppliers. The fi rst are large,

established corporations – what Procter & Gamble is to Walmart, for example, or Oracle to General Electric. Most MWBEs are in the other categories. “The higher the tier, the more profi table the contract,” she explained, “but for that to happen you need to be the right fi t for their strategy and understand your fi t in their supply chain. Smaller companies are perceived as being more vulnerable and questions arise as to their outcome. You must show you’re there for the long haul. So play it very smart and build a lot of trust.”

• In your presentations, relationships and networking, help CEOs and SD directors understand the value and business case of SD for their companies. Don’t

assume it’s self-evident. It needs constant reminding.

• Deliver, deliver, deliver. In the end, “that’s the best way to build trust,” she added. “When you’re contracted for a job, no matter the size, make sure you exceed expectations. It will set you up for the next one with that corporation and with others.”

• Recognize when you won’t be able to deliver and don’t even go for those deals. “Know your limits and capabilities,” she continued.

• Realize that SD is also an avenue to develop business and relationships with other MWBEs. Get into it thinking both channels. In fact, “chances are you’ll generate more deals with other minority businesses than with Corporate America, and that’s great,” she exclaimed. “It’s one of the reasons we should get into this to begin with. Corporate America, you know, is not for everyone, and there are far more opportunities among smaller companies.”

In the end, Maldonado returned to her common theme: “Don’t give up. Be persistent. The deals will be there. It takes time, but in the end it’s more than worth it. Those who want it more will be the winners. That’s just the way it is.”

L E V E L A B O V E

As Maldonado expressed her views to C-Level, a sort of supplier diversity As Maldonado expressed her views to C-Level, a sort of supplier diversity how-to emerged, a set of do’s and don’ts that any MWBE in Puerto Rico and how-to emerged, a set of do’s and don’ts that any MWBE in Puerto Rico and elsewhere would do well to heed and follow.elsewhere would do well to heed and follow.

Monica Maldonado, president of Atlanta-based Interprint Communications, has used her leadership roles in various minority and women business organizations to advocate tirelessly for the advancement of such businesses in the United States.

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For most people who do not work in shipping, a drive down Kennedy Avenue is probably not the most inspiring or

visually pleasant experience. The sight of all those containers, cranes, trucks and ships on the Port of San Juan’s terminals would easily be traded for other vistas of the bay.

Next time you take the drive, however, you may want to fi x your sights on several red, white and blue-colored cranes of a rather particular nature. Cranes are generally fi xed right on the edge of a terminal, towering high and extending their long steel arms and cables out to sea and back, as they load and unload cargo containers to and from ships.

But seven cranes at the port are not fi xed at all. They don’t sit at the same spot waiting for the ships to come to them. Rather, they move around, like robots, on two parallel rows of massive wheels, resembling a truck carrying a gigantic tower.

Not only do they drive up to a waiting ship. They grab containers and drive back into the terminal to unload. And vice-versa.

The fi rst of these mobile cranes at the Port of San Juan was acquired in 1994 by Ponce-based Luis Ayala

Cranes

on wheelsThere is lots of There is lots of

innovation taking innovation taking place these days place these days at the Port of San at the Port of San

Juan, but none Juan, but none more important than more important than

the heavy lifting the heavy lifting machines purchased machines purchased

and operated by and operated by one of the shipping one of the shipping

industry’s leading industry’s leading movers and shakers.movers and shakers.

Colon Sucesores (Ayacol for short), a top local stevedoring contractor and shipping agent company.

One of the company’s major clients had decided to move its port operations from Ponce to San Juan, to be closer to the metro area and save time and money in trucking containers from the Pearl of the South to the island’s main population center.

“We faced a tough decision,” said Hernan Ayala, Ayacol’s president. “We either invested in the facilities in San Juan to enable us to handle the client’s cargo, or he would go with someone else.”

“Facilities” in this case meant a new crane, since Ayacol’s infrastructure at the time did not allow for handling of the Panamax-size ships used by the client. Hernan and the company’s chairman, his brother Luis Ayala, huddled with Ayacol’s top management, did the research, crunched the numbers and invested a heavy sum on the mobile crane.

It’s the sort of innovation not made for the fi ckle or fainthearted. The crane’s maker, Germany’s Gottwald Port Technology, invented the Harbor Mobile Crane in the 1950s and had come out with several models. In 1994, it was due

Hernan and Luis Ayala stand in front of the two cutting-edge mobile cranes they acquired in 2006, raising the Port of San Juan’s infrastructure, and the company’s competitiveness, to another level.

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to come out with the latest version. The fi rst one off the factory fl oor was acquired by Ayacol for the Port of San Juan.

In 2006, the company bought two more mobile cranes of an even later model. The 1994 crane, placed on Terminal C, handles Panamax ships and has a radius reach of 120 feet. The 2006 cranes, on Terminal G, serve the bigger Post-Panamax ships with a reach of 165 feet and a capacity of 100 metric tons, according to Gottwald’s website.

Infrastructure courtesyof the private sector

Other companies have followed suit, and the Port of San Juan now boasts seven mobile cranes in all. These innovative shipping machines represent a signifi cant leap in the island’s port infrastructure, since the mobility offers unique advantages over traditional fi xed cranes and provide Ayacol and other stevedores far greater range and fl exibility.

Such leaps in port infrastructure, it turns out, rest entirely in the hands of the private sector,

explained Luis, who added that the government serves primarily as a landlord providing terminal facilities and that private companies must invest to be able to serve the island’s importers and exporters and compete.

“As an industry, we collaborate with each other and with the government to make sure Puerto Rico remains

competitive as a destination and that we can attract companies and grow the economy,” said the chairman. “As a company, our competitive edge depends on remaining on the cutting edge of innovation, as we did with the cranes.”

In Ayacol’s 71-year history, innovation has been part of the company’s day-to-day. Most nota–bly, the company pioneered the practice of top loading containers in Puerto Rico in 1970. Prior to that, each container was unloaded from a ship, placed on a wheel chassis and positioned along the terminal by a truck until the time came to deliver it to its destination. As the economy grew, the terminal fi lled with containers, putting a premium on available space.

Ayacol was the fi rst to top load, or stack containers on top of one another on the fl oor instead of on a chassis, using forklifts and cranes along with trucks to move them around the terminal. The innovation was huge; Ayacol saved millions of dollars per year in expenses, freed terminal space for other operations and made the movement of containers far faster and more effi cient.

Later, the company was also the fi rst in Puerto Rico to invest in the equipment that lifted and placed containers across the top of other stacked containers, maximizing the use of terminal space and enhancing effi ciencies even more.

“We faced a “We faced a tough decision,” tough decision,” said Hernan said Hernan Ayala, Ayacol’s Ayala, Ayacol’s

president. “We either president. “We either invested in the facilities invested in the facilities in San Juan to enable in San Juan to enable us to handle the client’s us to handle the client’s cargo, or he would go cargo, or he would go with someone else.”with someone else.”

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it is most advanced are all very large ports in cities that have a signifi cant smog problem. The Port of San Juan is not anywhere near the same league in size and volume of container handling, nor, thankfully, does Puerto Rico suffer from the level of pollution that plague these major industrialized port cities around the world. Therefore, we just don’t have the need or the incentive to invest in the costlier improvements other places are forced to engage in.”

These include so-called shore-side electricity at port to provide power to ships that can then shut down their motors. Large ports are also making signifi cant improvements to make the movement of containers, ships and trucks more eco-friendly. Ship builders, for their part, are reducing the emissions generated by their fl oating products, as are the makers of the various engines used in the equipment used at a port terminal.

One such equipment is the crane. Gottwald, for one, features its Green Range system, which it claims reduces the environmental impact of the mobile cranes purchased by Ayacol.

Homeland innovations

Perhaps more than any other factor besides competitive pressures to better serve clients, the federal government’s continuing push

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“We’re constantly innovating in other ways, too,” said Luis. “This industry is in a constant state of change, and our clients demand the highest level of effi ciency, so we always look to improve our systems, processes, technology, equipment and most of all, our people – all those small improvements that reduce the time and expense of loading and unloading ships and delivering containers to where they have to go.”

The company’s record is validated by insurance giant Fireman’s Fund, which considers Ayacol “a model in the industry given its systems, controls, training and the knowledge it has of the industry,” according to Blanca Del Valle, Vice President at Fulcro Insurance’s Commercial Practice, which brokers Ayacol’s complex insurance coverage.

Green shipping

One cutting-edge innovation followed closely by Ayacol is green shipping, the fast-spreading practice of reducing global-warming emissions and otherwise minimizing the environmental impact of the industry and port facilities around the world.

“That’s a very important trend, and we’re keeping a close eye on it and doing as much as we can to reduce our own environmental impact,” said Hernan. “But the places where

to improve homeland security is driving multiple innovations at port facilities in Puerto Rico and the rest of the United States.

“There is so much going on that it’s hard to keep up with it all,” said Hernan, who added that the Port of San Juan has become the safest place in Puerto Rico.

Ayacol and other companies are integrating new security innovations into their operations as a result,

such as a new access card system (TWIC, or the transportation worker identifi cation card), closed circuit cameras, alarms, state-of-the-art communications systems, new fencing and gates, and the latest system in conjunction with CBP and the Port Authority to detect radioactive materials.

The port is also infl uenced by the U.S. Department of Homeland Security’s (DHS) Container Security Initiative (CSI), under which containers headed for U.S. ports (including San Juan) are inspected before departing their home countries. Once here, processing is faster, since the containers were already inspected and can move more swiftly through the port.

Most containers arriving in San Juan come from U.S. ports and are therefore not subject to CSI, but enough originate in foreign ports to make CSI a locally relevant security

Ayacol’s record is validated by insurance giant Fireman’s Fund, which considers Ayacol’s record is validated by insurance giant Fireman’s Fund, which considers Ayacol “a model in the industry given its systems, controls, training and the Ayacol “a model in the industry given its systems, controls, training and the knowledge it has of the industry,” according to Blanca Del Valle, Vice President knowledge it has of the industry,” according to Blanca Del Valle, Vice President at Fulcro Insurance’s Commercial Practice, which brokers Ayacol’s complex at Fulcro Insurance’s Commercial Practice, which brokers Ayacol’s complex insurance coverage.insurance coverage.

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Part of Ayacol’s team. Left to right, foreground: Luis A. Ayala Bennazar, Vice President of Operations, Ponce; Nelson Riollano, Senior Vice President of Administration; Manuel Guzmán, Vice President of Sales; and Hernan F. Ayala Rubio, Vice President of Operations, San Juan. Left to right, background: Juan E. Ayala Rubio, Terminal Manager & FSO;

Hernan F. Ayala Parsi, President; Luis A. Ayala Parsi, Chairman & CEO; and Miguel Ayala, Senior Vice President, San Juan Area. In the middle is Blanca del Valle, Vice President of the Commercial Risk Practice at Fulcro Insurance.

“We’re constantly innovating in other ways, too,” said Chairman Luis Ayala. “We’re constantly innovating in other ways, too,” said Chairman Luis Ayala. “This industry is in a constant state of change, and our clients demand “This industry is in a constant state of change, and our clients demand the highest level of efficiency, so we always look to improve our systems, the highest level of efficiency, so we always look to improve our systems, processes, technology, equipment and most of all, our people – all those small processes, technology, equipment and most of all, our people – all those small improvements that reduce the time and expense of loading and unloading improvements that reduce the time and expense of loading and unloading ships and delivering containers to where they have to go.”ships and delivering containers to where they have to go.”

innovation. On its website, DHS claims that 86% of all containers arriving from foreign ports are inspected under CSI.

“There’s no question that these

security improvements have reduced vandalism and theft and have otherwise enhanced the business,” concluded Luis Ayala. “The process is a bit of a hassle at times, but it’s worth it.”

It’s a truism that applies to most innovations and investments, like the mobile cranes: they take you out of your zone for a while, only to make the business stronger and clients happier.

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12:23 a.m., October 23, 2009. The San Juan metro area is awakened when

the Gulf refi nery in Bayamón erupts in a massive explosion that shakes buildings and causes damage to homes and businesses for miles out.

Within minutes, as the blaze becomes stronger and the thick cloud of smoke meets the sky, authorities seal the perimeter and you are unable to get through and assess the damage infl icted on your business.

The furious fl ames are visible from the checkpoint. You consider taking a side road you’re sure has not been sealed, but decide to wait for clearance.

As you wait, a team of analysts at Universal Insurance is pouring over high-resolution satellite images of a two-mile radius around the explosion. They see their clients’ businesses in the area, print out a list, establish inspection routes, and dispatch a team of agents. When they get there, they’re not allowed through either. A little longer, they’re told.

You’re fi nally allowed access. Your business suffered some damage, but you’re relieved to see it won’t interrupt operations. A Universal agent arrives as well.

“That was fast,” you say. “I haven’t even called you. But I’m so glad you’re here. How do you see the damage?” You discuss the particulars, the claim is fi led immediately, and the damage is repaired within weeks.

GPS to the rescue

It was a scene repeated several times in the days following the CAPECO explosion, as Universal’s new GPS-based rapid response system (called GPS Risk Location) allowed the company to spot and visit its clients immediately.

The system was designed with natural disasters in mind, provoked by the series of damaging hurricanes that hit Florida in 2004 and impacted Universal’s business in the Sunshine State. A year later, when Katrina ruptured the levies around New Orleans, the company knew it was creating something special.

Universal Insurance raises global Universal Insurance raises global eyebrows with a unique innovation eyebrows with a unique innovation that gives new meaning to the that gives new meaning to the company’s name and brings faster company’s name and brings faster relief to clientsrelief to clients

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“In a disaster of that nature, insurance companies generally have no way of knowing with any degree of precision how many clients they have in the impacted area and how much damage they will have to deal with,” said project coordinator Eduardo Miranda.

When an insurer tries to estimate the claims, therefore, the deviation from the actual damage is often way off, he explained, making matters even worse.

“We fi gured if we could quickly identify our clients in the affected area, not only would we be able to estimate the claims with a much smaller deviation, we would also be able to visit them a lot faster, evaluate the actual damage and process claims much more swiftly.”

The process began by taking inventory. The company visited all its clients and entered into the system various damage and claim scenarios for each

one. When a catastrophe occurs, as was the case with the CAPECO explosion, the GPS information tells the company in an instant all the clients it has within a specifi ed radius, complete with the damage scenarios and estimates.

“It allows us to be much more effi cient and to arrive at the client’s business even before receiving a claim,” added Medina. “When we get there, they’re always surprised to see us. We then accelerate the claim and the client is able to recover quickly.”

Reinsurance companies and rating agencies, he said, have told Universal executives that this is a fi rst in the world, which indicates a signifi cant innovation sure to spread and raise the level of soundness and responsiveness across the entire industry… everywhere!

The use of space technology also lends a unique twist to the company’s name.

Reinsurance companies and rating agencies have told Universal executives Reinsurance companies and rating agencies have told Universal executives that this is a first in the world, which indicates a significant innovation sure that this is a first in the world, which indicates a significant innovation sure to spread and raise the level of soundness and responsiveness across the to spread and raise the level of soundness and responsiveness across the entire industry… everywhere!entire industry… everywhere!

ADARTEAGA

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He fell

Most Islamic weapons were hand-crafted and highly ornamental, a sign of how seriously their owners approached the issue of personal security. “It was a very important part of their lives,” said Tirri.

With the Islamic With the Islamic people, Islamic culture, people, Islamic culture, Islamic history, and Islamic history, and wouldn’t you know wouldn’t you know it, Islamic weapons, it, Islamic weapons, turning his fascination turning his fascination with the latter into two with the latter into two books, a historian’s books, a historian’s mind and a massive mind and a massive collection unique in the collection unique in the entire world.entire world.

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madly in love...

F I N E L I V I N G

biggest collection of 17th to 20th century weapons used by those great Islamic warriors – weapons, he proudly assures, that were actually used in the battlefi eld, not made for kings to hang on a wall.

“They fought primarily in the name of their religion,” Tirri said, as he weaved through the expansive collection, grabbing one weapon after the other, explaining the intricate history of each piece – pistols and rifl es and shields and spears and swords – a voluminous history he has chronicled in two highly illustrated, conversation-piece books widely considered to be the leading authorities in the fi eld: the fi rst, Islamic Weapons, published in 2003, and Islamic and Native Weapons of Colonial Africa: 1800-1960, published in 2007.

Tirri shows some of his collection to C-Level Publisher and Fulcro Insurance Chairman Tony Pérez.

Anthony “Tony” Tirri fl ew to Morocco, Syria, Lybia, Algeria, Egypt, Sudan, Jordan, Saudi Arabia, Iraq – the entire Arab and Islamic world, in fact. He was part of the 1973 evacuation of

Beirut. He was there when the Shah of Iran fell in 1979 and a revolution changed the face of the region, and when the ruling families of Liberia were massacred in the country’s 1980 military coup.

Sixteen years he spent fl ying the region as a Panamerican Airlines commercial pilot. PanAm died as an airline, but for Tirri, the impact of those years lives on as a powerful presence in his life.

“I absolutely fell in love with the people and the culture,” the New Jersey native told C-Level during a visit to his Arab-decorated high-rise apartment in Miami, explaining how he became immersed in the region, using his countless trips to tour every place he could, talk to people in all walks of life, understand what makes them tick, how they think, the deep impact history has had on them, particularly the tragic history of colonization.

“We’re talking about a civilization that was the most advanced in the world for most of human history,” he said. That includes more than 4,000 years of Mesopotamian, Egyptian and Persian preeminence before Christ and close to 1,000 years of Ottoman domination in the post-Roman Middle Ages, before the rise of Europe.

“These are people who are profoundly proud of their heritage and the legacy they represent for the world, of all the advances in science and literature they have made. They are extremely smart and very fi rm in their beliefs.”

Weapons as historyThey are also great warriors, affi rmed Tirri, who moved

to Puerto Rico following his time as a pilot and amassed signifi cant wealth in a string of successful ventures on the island, wealth he has used in part to build the world’s

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For all their prowess as warriors, however, Arab and Islamic fi ghters were eventually overwhelmed by superior technology developed by European colonial powers. Tirri picked up a British rifl e as an example.

“British troops were able to load and shoot many times faster and from longer distances using these rifl es than Arabs could using their older models, and that made all the difference. They couldn’t compete and were slaughtered in battle after battle. That’s what led to the rise of European powers and the decline of the Ottomans and other African and Islamic countries.”

Tools of survivalMuch of human history, he believes, can best be

understood by studying weapons, a study that has given Tirri a historian’s grasp of the wars, conquests and boundary shifts of the time. One reason behind the swift technological transition that gave Europeans their edge, he continued, was deeply cultural and religious.

“To a great degree, Arabs refused to adopt rifl es and pistols until very late, and even then they were slow in incorporating the changes that made weapons faster and more accurate at greater distances because they insisted on remaining loyal to Islam. They felt it would be a breach of faith to use weapons other than the ones prevalent near the time of Mohammad.”

Yet another factor was how tightly-held weapons were as a means of survival. “It was the only security blanket they had. Every family had weapons. They took a weapon on every camel ride. It was a very important part of their lives.”

That helps explain the exquisite carvings and designs on virtually every Islamic weapon Tirri has collected. Weapons were prized possessions, works of great craftsmanship. “They didn’t make these fi ne works only for kings and rulers, as was the case in other cultures. They handcrafted weapons for their own daily use,” said Tirri. “That’s how much they cared for them.”

A collector’s mindThis historian/collector began gathering his bounty in

1995. He identifi ed the categories of weapons used at the time – daggers, swords, shields, pistols and rifl es – and set out to fi nd one of each for each of several leading countries, regions and times.

He ran into two huge obstacles. First, these countries did not keep good records, if any at all. In Europe and America, he explained, weapons were manufactured by companies that patented, registered and marked them for the record. Not so in Islamic countries, where most weapons were made by their owners, and even when made for formal armies, they lacked traceability.

Second, most countries had banned the sale and export of these classic treasures. Result: Tirri found

and bought the bulk of his collection in the European colonial countries that had brought captured weapons up North – mainly France and Great Britain, and primarily at auctions, in antique shops, and from the heirs of old colonists who had died and left the weapons as part of their estates.

Tirri prefers for his own heirs to keep the collection or display at some family-controlled museum-like environment where

interested folks could come and learn from it. He would rather not sell it to a museum, as the weapons would most likely be exhibited for a time and later sold “to who knows who”, he fears, when the museum is forced to make room for a new collection that comes along.

“That’s how it works,” he lamented. “I’d rather have these weapons live on for as long as they can in more trusted hands.”

Tirri is in the process of shipping half of the collection to a new historic home he purchased in France.

“It’s a way of allowing more people to view the collection and learn from it,” he concluded. Translation: a way of spreading his love of all things Islamic.

As a PanAm pilot, Tirri became As a PanAm pilot, Tirri became immersed in the region, using immersed in the region, using his countless trips to tour every his countless trips to tour every place he could, talk to people place he could, talk to people in all walks of life, understand in all walks of life, understand what makes them tick, how what makes them tick, how they think, the deep impact they think, the deep impact history has had on them, history has had on them, particularly the tragic history particularly the tragic history of colonization.of colonization.

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Much of human history, Tony Tirri believes, can best be understood Much of human history, Tony Tirri believes, can best be understood by studying weapons, a study that has given him a historian’s grasp by studying weapons, a study that has given him a historian’s grasp of the wars, conquests and boundary shifts of the time.of the wars, conquests and boundary shifts of the time.

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A lot is riding on your point of view. Most people who cherish a collection for

emotional attachment fail to insure it, while investors never fail. What should you do?

Tony Tirri’s grand collection of Islamic weapons (previous story)

is not insured. “I don’t know,” he said. “Perhaps

I should cover them, but you know, to me these weapons are more an emotional thing than

anything else. I just love to have them around

and to have others learn from them.”

Tirri is not alone. Many (most?) collectors

approach their valuables with the same emotional attachment.

Then there are collectors who are investors at heart. Sure, they become

attached to their gems or wine bottles or works of art, but they never lose sight of how much this property is worth and what part of their balance sheet it represents.

Top-of-mind aware of how much they stand to lose in case of damage or theft, these investor-collectors do

not hesitate. On their way home upon buying their fi rst piece, they have their insurance agent on the phone.

“There are compelling reasons to insure a collection even if you don’t think like an investor, but especially if you do,” said Jania A. Velázquez, partner at Fulcro Insurance’s Private Clients Practice.

For starters, she explained, you protect what may be extremely valuable property against such events as theft, fl oods, fi res or natural disasters. Perhaps the collector doesn’t need the reimbursement money, but the heirs do and would appreciate some thought being given to that.

As it turns out, many collectors in today’s sluggish economy do very much care for the cash.

“A lot of people, including business owners, have seen their wealth decline and are choosing to sell all or part of their collections to make ends meet,” added Velázquez. “These are people who want to have their collections insured to make sure they don’t lose money if something were to happen to that property.”

At a time when so many investments are yielding historically low returns, many collections are appreciating in value. “That makes it even more important to insure them fully,” said Janyra Pérez, Special Projects Coordinator at Fulcro.

How much a collector-investor receives in a claim or sale depends on how much the collectibles are worth, for which an appraisal is conducted.

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“This is actually one of the things that keeps many collectors from insuring,” said Velázquez. “Depending on the size, rarity and complexity of the collection, an appraisal may be perceived as too inconvenient and time-consuming. But it really isn’t, and considering what the collector gains in this process, it’s more than worth it.”

Examples of collections include: gems, jewelry, art work, books, wine, stamps, coins, antiques, musical instruments, sports memorabilia, china and others.

A typical homeowner’s policy provides very limited coverage for such items. “It takes a specialized policy or an endorsement in a homeowner’s policy, ” explained Pérez, adding that the same applies when the collection is displayed in an offi ce setting. “Commercial-property policies generally don’t cover collections either, so a special fl oater policy is used.”

Some collections call for blanket coverage, where all the pieces are insured without the need to list all items. But in Puerto Rico, “scheduled policies are far more common in personal lines.” These are policies that assign a unique value to each piece in the collection, she explained.

Velázquez outlined some of the risk-management issues insurance companies take under consideration when designing a policy:

Where the collection is stored, since that largely determines the vulnerability to hurricanes, fi res and the like.

How well it’s protected. Is there an alarm? Are there security guards in the area? Etc.

Prior insurance experience. Did the owner have a previous collection stolen or vandalized? Was he previously negligent in not protecting it adequately?

Know if the collection is shown in exhibits or moved from locations. “The more it is moved, the higher the risk,” said Velázquez.

Level of loss retention that will be assigned to the insured (deductible).

“With collections, there are always two potential losses: the emotional loss and the fi nancial loss,” concluded Velázquez. “With insurance, you at least cover the fi nancial. We can’t help you with the emotional, except the extent to which recovering the fi nancial side makes the emotional loss more manageable.”

Which should make the investment vs. attachment decision a bit easier.

“With collections, there are always two potential losses: “With collections, there are always two potential losses: the emotional loss and the financial loss. We can’t help the emotional loss and the financial loss. We can’t help you with the emotional, except the extent to which you with the emotional, except the extent to which recovering the financial side makes the emotional loss recovering the financial side makes the emotional loss more manageable.”more manageable.” Jania A. Velázquez, Partner Private Clients Practice Fulcro Insurance

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As he approaches the fi nal 400 meters, with only a handful of racers ahead of him, his legs weary from the grueling climbs and roads just traveled, Luis Soto hones in on what it’s all

about. He peeks quickly over his shoulders to gauge the fi eld behind him and veers slightly to the left to avoid the wheel right in front.

At 35 miles per hour on two delicate wheels, the margin for error is zero. The fi nish line is now in sight. The pace quickens. The adrenaline peaks. It’s the rush he lives for – the raw force of will, the fearless weaving inside the pack, that mad fi nal sprint.

At 42, Soto doesn’t win as many races as he used to, at least not against racers younger or with more time to train. Today, it’s far more about ranking and competing than winning. But to rank and compete, he must give it as much sweat and toil as ever.

In his case, ever is a long time. Soto fell in love with cycling at 15 among the mountains of Cayey. After

breaking away from the sport during his college days – “it’s tough to train and study engineering at the same time,” he now says – he reconnected with his passion upon graduating and has not looked back since.

The weak economy of late has put an added strain on an already demanding training schedule. Soto runs Mentor Technical Group, a Caguas-based company that provides a wide range of services to blue-chip clients around the island, solutions such as environmental, health and safety (EHS), facilities management, validation, calibration, regulatory compliance consulting, and more.

But while the additional hours he has devoted to the business have put a dent on his cycling time, Soto is there every other day, on his racing bike, in full gear, two and a half hours on weekdays, three to four hours Saturdays and Sundays.

“There’s no other way to do it,” he says. “Any time off sets you back, and then it’s that much tougher to remain at top level.”

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you may purchase insurance that covers any accident for a period of 24 hours, or ask the event’s organizer if the event has an insurance policy that covers all participants. For any accident there or anywhere, you may always turn to your health plan. If you’re hit by a motor vehicle on the road, you may be covered by the driver’s insurance or by ACAA. But perhaps the important advice here is to consult with your insurance broker!

Insurance or not, choosing the right roads at the right times, Soto continued, may be the biggest protection of all, a matter of avoiding peak traffi c routes and hours.

F U N L I V I N G

Managing cycling risksAll that training, he adds, gives him the edge he needs

to avoid disaster. High-speed competitive cycling is risky business. Never one to leave his head gear, gloves and night lights at home, Soto manages the risk of cycling by taking every precaution when he’s on the road.

Riding in a group is top on the list. “I avoid riding alone. Puerto Rico doesn’t have a cycling culture, and many drivers don’t really care. They don’t think the road belongs to cars and bikes alike. And so the larger the group, the better. That’s when drivers behave best.”

He doesn’t cover the risk of an accident with an insurance policy, but admits it’s something he and every cyclist should consider. “It’s important to fi gure out whether one’s existing personal insurance covers the health and accident risks inherent in biking, and then to go ahead and cover any gaps.”

There are, in fact, several ways of going about this. In the case of an event like a tournament or a competition,

“We have fantastic routes “We have fantastic routes in Puerto Rico that I know in Puerto Rico that I know cyclists from all over the cyclists from all over the world would love to ride on.”world would love to ride on.”

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and others from Puerto Rico have participated in some of the biggest races in the world: the Tour de France, La Vuelta de España, and the Gira d’Italia.

“We haven’t raced the whole thing, mind you. We join and run certain segments. But these experiences have given us an understanding of what it takes to race competitively at a global level.” And of what Puerto Rico and Puerto Ricans must do to compete as well, he adds.

His conclusion: “We have what it takes. We have the talent. We have plenty of cyclists with the passion and the drive. We just need the commitment by the people who can make it happen.”

And not just to compete in the Tour de France. “The commitment must be to develop cycling in Puerto Rico for everyone. The passion is the same for (cycling champion) Lance Armstrong as it is for anyone who loves to hop on a bike and ride. It’s the same feeling of exhilaration, the same excitement when riding down the street, when feeling the force of the wind and

spending time with family and friends. Absolutely no difference. We need to get more people to

discover that passion and get going. The bike doesn’t have to be expensive. The training doesn’t have to be as rigorous as ours. They simply need to start.”

It is the spread of that passion and that love, the growth of the sport, that has become

a life mission for Soto and other club members. It is, indeed, a different kind of fi nish line, admittedly one with a long road ahead, where winning is defi ned by another set of rules. But a race that stirs the adrenaline and creates as much driving passion as does the sprint down those fi nal 400 meters.

“It is the rush we live for.”

F U N L I V I N G

Luis Soto runs a successful engineering fi rm, but his second passion is to run the fi nal 400 meters of any bicycle race he can join, along with other members of the Criollo Cycling Club.

The ClubIt also helps to join a club, Soto advises, since club

members generally know when and where to ride, and they go out in groups. Soto is a founding member of the Criollo Cycling Club in Caguas, which has quickly become one of the island’s 15-or-so leading clubs.

Most cycling clubs in Puerto Rico, he explains, are built to compete, focused primarily on training members for the various races during the year.

“Not us,” assures Soto. “Our club is one of perhaps three or four on the island that promotes recreational riding as much as competitive cycling. Most people who ride do so for fi tness and pleasure, not to compete, and we’re committed to the growth of that activity. In fact, it’s the only way to grow the sport in Puerto Rico and anywhere. For us, it’s become a mission.”

A mission that needs lots of help to fl ourish, he says. Unlike running, basketball, soccer and other such sports, cycling requires an investment, which rises in amount as one rises in rank. Competitive bikes can cost thousands of dollars, not to mention the bike’s maintenance and the specialized shoes, shorts, shirts, gloves, timers and gadgets.

“We need companies to step up and help,” mainly, he pleads, by sponsoring clubs, tournaments and cyclists. Soto and others are weighing several options, including persuading the Puerto Rico Tourism Company to promote the growth of cycling tourism, hoping that will serve as a catalyst to spur the growth of cycling on the island.

“We have fantastic routes in Puerto Rico that I know cyclists from all over the world would love to ride on.”

The MissionSoto should know. He

It is the spread of that passion and that love, the growth of the It is the spread of that passion and that love, the growth of the sport, that has become a life mission for Luis Soto and other club sport, that has become a life mission for Luis Soto and other club members. “It is the rush we live for.”members. “It is the rush we live for.”

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Celebration at ChartisThe waiting is over. Chartis Insurance

Company of Puerto Rico recently introduced its new brand image at a well assisted event held at the San Juan Marriott Resort and Stellaris Casino in Condado. President Francisco Díaz delivered a moving speech where he thanked everyone for their collaboration and anticipated a great future for the company.

ACE launches new eco policyResponding to growing awareness and

concern over environmental matters in business, ACE Insurance Company has introduced an environmental insurance policy in Puerto Rico. As the image of the company’s ad indicates, the innovative product covers clean-up costs as well as bodily injury and property damage resulting from a related event, with coverage of up to $30 million.

As part of the policy, the company offers risk management solutions, local claims, legal and consulting services. The policy is particularly apt for manufacturers, recycling companies, shopping centers, gasoline stations, contractors, marines, refi neries, distilleries and real estate projects and properties, among others. For more information, you may call Juan Costa, Maricarmen Otero or José Roque at 724-4700.

Present at the activity were (left to right) Augstín Montalvo, Senior Vice President and Chief Operating Offi cer; Maria Juliana Cantini, Senior Vice President, Chief Financial Offi cer and Controller/Treasurer; Manuel Rodríguez, Chairman of the Board; and Francisco Díaz, President.

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GA Hispanic Chamber turns 25The Georgia Hispanic Chamber

of Commerce (GHCC) recently celebrated its 25-year anniversary at the organization’s Annual Awards Gala, with the participation of hundreds of successful business leaders, domestic and international dignitaries, and founders and creators of the GHCC. This year’s keynote address was delivered by 2008 Hispanic Business Entrepreneur of the Year David H. Segura. Mr. Segura is the CEO and founder of Vision IT and has collaborated with the GHCC to obtain business opportunities in the Atlanta area.

Present (left to right) were: Jose F. Londoño of The Latin Box; Yovanny Jerez of AT&T; Vivian Vaupel and Rodolfo Vaupel of Fulcro Insurance of Georgia; and Mr. and Mrs. Guy Debbaudt of the Chubb Insurance Group.

“Compadres” gather in Atlanta

The Hispanic Contractors Association of Georgia (HCAG)

recently held its Compadres de la Construcción Annual Awards Banquet in Atlanta to honor quality work, business growth and both the personal and professional achievement of

Among those who participated were (seated left to right): Mr. and Mrs. Raúl Betancourt, President of Bayside Contractors; Mr. and Mrs. Jose Lee, Construction Risk Practice Partner at Fulcro Insurance; and Mrs. Janet Blanco de Pérez. Standing (left to right): Rodolfo Vaupel, Senior Vice President at Fulcro Insurance of Georgia; Tony Perez, Chairman of the Board of Fulcro Insurance; René Hernandez, President of HR Group; and Mr. Jorge Vendrell and Mr. Omir Méndez of American Agencies Co.

the organization’s members and partners. The word “compadre” is used to symbolize the sense of friendship and brotherhood that unites HCAG’s members. The theme of the event this year was green construction.

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If you’re among those who still doubt the severity of climate change (global warming) and the huge risks it poses on all businesses in Puerto Rico and around the world, we know of some fairly infl uential

insurance executives who would like to offer some stern counsel.

Companies such as Munich RE, Swiss RE, Lloyd’s of London, Allianz and AXA – among the world’s largest insurers and reinsurers – have gone on the offensive.

Which should not be a major surprise, since insurance companies are among the biggest victims of the damage global warming is already infl icting and stand to lose big as temperatures rise further, as projected by scientists for the coming years and decades. The hikes are expected to cause far more destructive natural disasters, create unprecedented food and water scarcity, provoke massive fl ooding from rising sea levels, spark widespread health epidemics… well, you get the message.

Global insurers certainly do. Lloyd’s CEO Richard Ward, for one, is concerned that climate change will “force some of the world’s nations into a struggle over advantage and in some cases even survival,” while a report recently released by the company declares it will “never again be business as usual” for businesses and governments. Higher risk, it adds, “is here to stay.”

Munich RE’s website declares climate change “the biggest market failure in history,” adding that it creates “completely new risks” the insurance industry is only beginning to come to grips with. Risks considered exotic, the company fi nds, will soon become mainstream.

Allianz says natural disasters, mostly attributable to global warming, already account for 40% of all commercial claims, an increase of more than 15-fold in the last 30 years, and projects an even faster acceleration. “The only wise thing to do is prepare, and prepare well,” says the company’s site.

Swiss Re has created a Sustainability and Emerging

Global insurance and reinsurance companies go on the offensive with big Global insurance and reinsurance companies go on the offensive with big steps in response to climate change, warning countries and companies against steps in response to climate change, warning countries and companies against the dire consequences of not doing enough… FAST!!the dire consequences of not doing enough… FAST!!

Risk Management Department to guide the company’s response and advise clients and governments using an innovative methodology to steer companies and countries into what it calls “climate resilience”.

“If even conservative projections come to fruition, the effects across the globe will be considerable,” states a Swiss Re report. “The ability to adapt to climate change will be a key marker of a society’s ability to reduce and manage their risk profi les. As an industry that manages risk, we must all become important players in encouraging greater climate adaptability.”

These aren’t your typical climate alarmists or activists. They’re the leading global companies that insure against damage and catastrophe, as if collectively bringing their hands to their mouths and screaming: “Hey world, wake up!”

They’re not only warning; they’re acting. The strategy is the same for all: become green companies themselves; develop the insurance policies needed for the new risks; spread the risk with such fi nancial tools as Catastrophe Bonds (if the catastrophe occurs, the bond is used to cover claims); use their role as institutional investors to pump capital into companies commercializing adaptation technologies (renewable energy, sea barriers, green buildings, soil management, more); and become far more active in research and advocacy.

Allianz’s new Global EcoTrends unit has invested $2 billion in renewable energy companies, while the also new Alliance Climate Solutions develops new policies and the Allianz Climate Change Center conducts research. Fireman’s Fund created a policy for green buildings. As many as 81% of AXA’s suppliers comply with strict environmental screens. Swiss Re developed the Total Climate Risk tool to do modeling and manage claims.

The list goes on. Insurance companies are stepping up around the world. None too soon.

Global Warming. Global Warning.

F U LC R U M

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