Mike Critelli

Mike Critelli,
Retired Executive
Chairman,
Pitney Bowes

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Archive for July, 2007

OBSERVATIONS ABOUT TRANSPORTATION

Tuesday, July 24th, 2007

Like everyone else traveling in the Northeast corridor or in any other big city around the country, I experience unexpected and long delays because of traffic congestion.  We clearly have a crisis in terms of the gap between what we need and what we have.

Recently, I was asked by Governor Jodi Rell to chair an advisory group to make recommendations to improve Connecticut’s Department of Transportation.  I was asked to do so because I have participated in volunteer advisory and advocacy work in transportation for nearly 22 years.

Consistent with my philosophy of taking the road less traveled and seeing a different game, I want to share some observations that you may not see elsewhere as often as you should.

Clearly, we should move more drivers into trains, on to buses, and into van and car pools, but these alternatives have been amply discussed elsewhere, so I will not comment on them here.

If we are going to address the transportation crisis, we have to manage demand on all modes, particularly the roads, as well as supply.  With respect to highway congestion, the demand problem is not primarily a result of overpopulation or a significant increase in the population of automobiles on the road in our region.

There are three root causes to highway congestion: more vehicle trips, more vehicle miles traveled per driver, and more trucks delivering more items, particularly because of a combination of more global sourcing strategies and more remote, long-haul commerce.

This last trend will become more pronounced as we do more shopping over the Internet and we order products from more geographically remote places.  But we can do something about the first two root causes, and, more importantly, the things we can do to reduce congestion are not particularly costly.

First, with technology available today, many more workers should be able to work at home or at satellite offices closer to home or to attend meetings by using video-conferencing technology.  Tele-commuting stumbled in its early days because people trying it may have been too ambitious.  Trying it one or two days a week, instead of every day, might work better, and it will have an immediate effect on rush-hour traffic congestion.  It also is a great morale builder for employees who have personal errands to run near their homes. 

Second, the Internet makes ride-matching much more workable for individuals who want to carpool, but do not know how.  Connecticut has a program through Rideworks, and other parts of the country, like Northern Virginia, have well-developed systems for ride-matching, including areas where passengers can wait safely for their pick-up.

The federal government also provides tax credits for employers to give to employees for using public transportation and ride-sharing.  These are called TransitCheck vouchers.  This is a win-win for employers and employees, since employers also avoid paying Social Security taxes on the amounts employees pay for this alternative transportation, and employees pay with pre-tax dollars.  Too few employers take advantage of this opportunity.

Third, many non-work-related trips that could be eliminated.  Many errands  could be handled over the Internet or via the mail.  Many government transactions done face-to-face today could be done remotely, including the dispensing and payment of traffic tickets, motor vehicle license renewals, and permit and license renewals. 

The most dysfunctional automobile trips in many communities are the ones in which parents take their children to school every day.  In my community, many of us drive children to school for three reasons:  the books are too heavy to carry on foot, the morning start times are keyed to the convenience of the teachers and administrators, not the body clocks of middle and high-school children, and, most importantly, the town does not have sidewalks or bicycle paths convenient and safe for children to get to school. So we miss the opportunity for our increasingly obese population of children to get a chance to walk. 

Safety is a bigger issue in some communities for children to walk to school.  When I was young, I had a short walk to school between 5th and 8th grades, but there were bullies along the way that I had to avoid.  This is an even bigger issue today. 

If automobile trips can’t be eliminated, we should make them more predictable and less stressful. For drivers, the biggest perceived problem, according to many surveys, is not the increasingly long trips, but the increasing unpredictability of trips.  When the train is not a practical option and I am forced to drive from Stamford, Connecticut, to Manhattan or to one of the New York airports during rush hour, I could be looking at a one-hour, two-hour, or even longer trip.  How much time do I allow?  Allowing one hour is too risky, but, more often than not, two hours is too long, and I waste time waiting for the start of a meeting. 

What causes unpredictability?  Waiting times at toll plazas, accidents, construction, stalled cars, fires and building collapses and, in some cities, police blockades are some of the causes.

Some of these root causes are preventable.

Tolls are probably unavoidable if we want to pay for transportation assets, but governments should eliminate toll booths.  Even if a traveler does not purchase an EZ Pass or similar system as an infrequent traveler, having a system for photographing license plates will eliminate the need for non-EZ Pass travelers to have cash in hand and to wait in a cash-dispensing line.  It’s also not particularly good for the environment to have millions of cars idling as they take long periods of time to get through barrier tolls around the country.

Many governments use EZ Pass systems to raise tolls higher than they would otherwise be raised with a cash-based toll system.  Doing this quietly, rather than openly, does not show government in its best light.  We need governments to be forthright about how much revenue they need for transportation and what it will be used for.  Voters are smarter about these issues than politicians give them credit for.

The frequency of accidents can be significantly reduced.  Given the fact that excess alcohol usage and reckless driving by teenagers is a major cause, we should employ everywhere successful strategies for reducing teenage alcohol usage.  As a parent with three children, a 21-year-old and two teenagers, I have mixed feelings about teenage driving.  It makes our life easier since my wife and I are not chauffeurs as much, but our children do not have the experience to anticipate as many oddball driving challenges as we have learned over a lifetime of driving.  Phased-in drivers licenses will help everywhere.

There are chronically reckless drivers, just as there are hardened criminals.  We all experience them, and they create many accidents.  New Jersey has a great program, by which any motorist can report reckless driver behavior by dialing #77.

Construction barricades and highway signage and design cause accidents.  My mother died in an auto accident in Florida in 1994 partly because of a poorly-designed median strip that blocked visibility of oncoming traffic, and because of a poorly designed construction barricade.

If there is a source of delay, the Internet tools for communicating those delays to others should be more user-friendly and should be updated in real time.  The other day, when there was a steam pipe explosion in New York near Grand Central terminal, the media incorrectly reported that Grand Central had been evacuated and closed.  That was incorrect.  Most entrances were closed and subway service was suspended, but commuters could still get on suburban trains.  Metro North failed to communicate accurate information in real time.  My son ended up unnecessarily taking an Amtrak train back up to Connecticut.

I will take another opportunity to talk about why our supply of transportation capacity is deficient, but this is just one set of ideas about how to reduce demand.

EMPLOYER-BASED HEALTH PLANS

Thursday, July 19th, 2007

I am often asked about how we can be such passionate advocates for employer-based health plans, and, in particular, how we can actually operate in-house clinics with staff physicians.

We have been successful in operating our health plans because we believe healthy employees are a great resource.  We also believe that employees who have health problems can continue to be productive and motivated while they are coping with the devastating effects of chronic, degenerative, or even life-threatening diseases.

By actively investing in health and in helping those with health problems manage their medical conditions  we have been successful in keeping health cost increases well below market averages.

How do our employees feel about our health plans and our clinics?  Our medical program, including our clinics, is one of the most popular benefits we have, with a high degree of employee satisfaction.  Employees relate exceptionally well to our doctors and nurses.

One of the reasons is that we have insisted that our medical practitioners not only be highly competent and trustworthy, but that they have exceptional people skills.  As Malcolm Gladwell pointed out in his fascinating book, Blink, people sue medical professionals, not because they perceive them to be incompetent or because they just want a windfall from a non-meritorious lawsuit, but because they perceive the particular professional to be insensitive and uncaring.

Some outsiders are surprised that employees continue to patronize company-employed medical professionals and share sensitive information with them.  I do not know what these outsiders’ life experience with company medical professionals has been, but our employees trust our medical professionals not only to comply with HIPAA requirements, but to exercise the highest degree of discretion and trust possible. 

The one area where we encounter more privacy concerns is where we ask employees to share health information with their health plans by completing health risk appraisals.  Some employees do not trust any online data server because they believe it can be hacked into by people who have no right to the information.

We have had a long history of being a leader in secure handling of sensitive data.  We have managed billions of dollars of postage for millions of customers without ever having had our systems compromised.  We manage mail and print centers in which our employees have access to highly-sensitive health and financial data of millions of people, including our own employees, and we face the risk of major liability were we to allow that data to fall into the wrong hands.  Given the value we place on our brand reputation for trustworthiness, we have been pleased with the performance of our systems and processes.

We succeed because we use advanced security techniques and principles in safeguarding information.  One of our fundamental beliefs is that every security system needs to be “crash-tested” before it is deployed and to be tested continuously afterward.  We are vigilant about security breaches.  Those whose sensitive information we touch understand this, and have trusted us for decades.

What this all means is that you can’t look at aggressive employer-based health care in isolation.  A respect for the security concerns of employees goes hand-in-hand with employer-based health care.  At Pitney Bowes, we are willing to invest in secure systems and processes both because of our brand and reputation for trustworthiness, and because we particularly believe that the active management of employee health brings great rewards to our company and our employees.

WHAT CONSUMERS REALLY WANT FROM MARKETING MAIL

Thursday, July 12th, 2007

In a previous posting, I talked about how “Do Not Mail” proposals were misguided from an environmental, privacy, and public policy standpoint. But it’s not enough to oppose initiatives that resonate with many well-educated people who generally understand and agree with the value of mail and who intellectually understand why broad-based “Do Not Mail” registries are bad ideas.

Consumers want choice and control over their lives, and they have much more of it than ever. They have multiple entertainment choices regarding what they watch on a TV, including movies they can acquire through the mail and, increasingly, over the Internet. They can screen out e-mails, phone calls, and face-to-face sales professionals.

Mail has been a bit of an outlier because elected officials have mandated six-day-a-week delivery of everything that is properly mailed, unless recipients go through a fair bit of effort to get removed from mailing lists. Mail is not intrusive like other communications, and it is highly valued, but that does not matter. Consumers want the same ability to screen out unwanted mail that they have with the remote control device and the Tivo system relative to TV.

Unfortunately, mail screening is far more complicated than providing a remote control device. A TV program is not “delivered” until someone turns on the TV at the proper channel. A mailpiece is delivered before the recipient has any ability to know that it has come.

Technology is available to change all of this. If you authorize someone to receive and screen your mail for you, someone could scan the envelope and give you an image that would enable you to decide whether you want it. This gives the recipient the ability to express a desire not to receive something with a single click of a computer button. We offered this service after the anthrax crisis in 2001, but, ultimately, most customers did not want to pay us to screen the mail for them.

Today, there are products that allow those moving to let catalog companies and magazine publishers know what movers want to continue or start receiving. That’s easy to do for people who are moving because they interact with the Postal Service at that time, and, as a provider of fulfillment services, we can ask them some questions online or on an insert in the Move Update kit.
However, trying to reach everyone with a comprehensive list of all of what they could receive is beyond anyone’s capabilities.

I believe that, over time, consumer profiles will need to be built that will help them decide what they want and don’t want, and we will be able to screen out most of what they don’t want, and, like Amazon.com, prompt them to tell us more of what they do want. I firmly believe that these changes should be and will be led by the private sector, and not legislated by Congress and/or State Legislatures. As technology and consumer preferences are changing constantly, the private sector is best equipped to launch these products and adjust them over time to changing needs.

One thing is clear: consumers want us to help them make choices that make their lives easier, not to saturate them with choices that complicate their lives.

On this last point, I would note that there was a period of time when we gave our employees with 401(k) plans over 50 investment options. They found that confusing and unsatisfactory. Today, we offer a much smaller number of choices, and we provide investment packages suitable for people at particular life stages.

What do I conclude from this? Consumers want choices, but they want a manageable number of them. They want a trusted partner that will help them make those choices.

The mailstream has to evolve to create an environment compatible with consumer choice and help for consumers to find what they want in the mailstream.

ALZHEIMER’S DISEASE

Tuesday, July 3rd, 2007

Consistent with my philosophy of finding the “road less traveled,” one major area of interest for me is Alzheimer’s disease, which actually is the third-highest cost medical condition in our U.S. healthcare system, far more than HIV/AIDS and many other conditions that get more publicity and funding.

I should confess that I have a personal interest in Alzheimer’s.  I have had family members that either had Alzheimer’s or some other form of dementia.  I do not know whether my loved ones had Alzheimer’s because autopsies were not done, and, as I understand it, an autopsy is the only definitive way to determine whether a person has had Alzheimer’s.  Fairly definite diagnoses can be made through memory assessment, and the earlier memory assessment and diagnosis can be done, the more can be done for an Alzheimer’s patient.

I help advise the Boston University (BU) Alzheimer’s Disease Center, one of the slightly more than two dozen centers designated as a center of excellence by the National Institutes of Health in a highly-competitive process.  On June 20, I attended an advisory group meeting at BU Medical School.  I also visited a few university mail centers on this trip, and spent some time with one of our top sales professionals who has sold products to many colleges and universities. 

Several conclusions jumped out at me:

  • While we want world-class research in trying to find breakthroughs for diseases like Alzheimer’s and we get it at institutions like BU, our government and other donors put ridiculous bureaucratic obstacles in the way of focusing on research and clinical care.  For example, as one college director of operations told me, universities and other research centers have to account for individual pieces of mail and other low-ticket items because of the government’s obsession with making sure that no dollar is “wasted.”  At the same time, no one in government thinks about the waste or opportunity cost of high-skilled researchers or physicians worrying about the cost of single letter or photocopy and charging it to the right account.
  • Donors of all kinds congratulate themselves on restricted funding that is targeted only on research and not on “overhead” costs like administrative support, equipment, supplies, and facilities.  Yet, no institution can survive without some amount of overhead.  I have talked to many CEOs and Chairmen of non-profits who have seen the same thing I have.  Many worthy organizations hit a wall on their ability to accept restricted grants and perform on them because their funding for the necessary, but mundane, administrative tasks does not keep pace.
  • Government funding for breakthrough medical research and clinical care is declining in relative and absolute terms, even when it would produce significant and measurable payback in future years.  Governments at all levels are so fixated on current-year budget-balancing activity that they routinely mortgage the future.  Medicare, in particular, ludicrously controls the payouts for individual clinical interventions for Alzheimer’s, and, I am sure, other conditions, to reduce today’s costs, but ignores opportunities for investments in health that will save on future costs.  By the way, this is one of the reasons I am strongly opposed to any “single-payer” health system in the United States.  Given our approach to democratic government, I have no confidence that politicians, who tightly control and micromanage Medicare and its clinical processes, would think beyond the current fiscal year in how they manage medicine.  If there were a single-payer, the whole medical system would make these dysfunctional trade-offs, instead of just the part controlled by Medicare.
  • To a greater degree than many other centers of excellence, BU focuses on the less-glamorous activity related to bringing down the cost and devastating burdens of Alzheimer’s.  It focuses on genetic risk assessment, actions that might prevent Alzheimer’s, memory assessment programs to facilitate early diagnosis and treatment, and approaches that would slow down the progression of Alzheimer’s, as well as the needs of caregivers.  As a society, we are conditioned to have researchers look for “cures” for diseases.  I always think about the telethons for various diseases which use some variant of the phrase “there is no cure, but there is hope.”  I am glad that we care passionately about finding cures, but the more practical and better investment of resources has to be targeted at prevention and the infrastructure for early diagnosis and treatment
  • The other concept presented to us was the notion that some of the capacity challenges for Alzheimer’s victims may not be memory-related, but may be perception-related.  For example, an Alzheimer’s victim may not have forgotten where he or she put the car keys.  That person may not be able to see the keys where they were placed.  That insight suggests that we can help Alzheimer’s victims to function by improving their perceptual capability with various kinds of tools.

I am confident that significant progress will be made in the next 10 years to slow down disease progression, and maybe even stabilize patient situations.  I would hope that we will see a time that the progression of this disease can actually be reversed.

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