bizhall

2016 Northeast Ohio Business Hall of Fame Inductees

This year's class features Marc Byrnes, Cynthia Moore-Hardy, Gary Oatey and Tom and Jeff Heinen. 

Sharing the Strength

Marc Byrnes has imbued the Oswald Cos. with a spirit of collaboration and a focus on the greater good.

Marc Byrnes leads the way into his office on the 15th floor of the Oswald Centre in downtown Cleveland and stops before an arrangement of black-and-white photographs. In one, U.S. Supreme Court Justice Oliver Wendell Holmes Jr. crosses Boston’s Congress Street in the city’s financial district. In others, British Prime Minister Winston Churchill flashes the “victory” sign in Harvard Yard, Lou Gehrig and Babe Ruth chat, legendary boxer Rocky Marciano dances in a locker room, General George Patton makes a speech in Washington D.C. and aviator Charles Lindbergh’s “Spirit of St. Louis” stands ready for takeoff.

The 62-year-old Oswald Cos. chairman explains that he admires Holmes’s perspective and empathy, Churchill’s candor, Gehrig’s humility, Ruth’s charisma, Marciano’s persevering fight, Patton’s bold and determined leadership and Lindbergh’s courage.

“[My wife Viki] had these framed for me,” he says “Each of them, if you think about their heroics or their strengths or their characteristics, has added a different dimension to my life.”

Byrnes has used those qualities to build Oswald Cos. into one of the 50 largest insurance brokers in the United States and one of the 25 biggest privately held entities of its kind in the country. Since he merged his Marc S. Byrnes & Associates insurance agency with the James B. Oswald Co. almost 30 years ago, the company has grown into an institution with almost 355 full-time employees set to exceed $75 million in annual revenues by servicing a mix of public-sector, private, corporate, nonprofit and individual clients, mostly based in Ohio and Michigan. Oswald board member Bill Mulligan, managing partner of Primus Capital with offices in Cleveland and Atlanta, credits his longtime friend with skillfully managing an employee-owned business that continues to grow and profit. Mulligan explains that Byrnes keeps the company in the hands of employees so they have the same opportunity he had to achieve professional success.

Byrnes started life as an orphan, given up as a newborn by his 19-year-old single mother. Attorney Larry Byrnes and his wife Judy adopted him as an infant and raised him as an only child. He graduated from University School, then studied history and economics at Williams College with the intent to teach history and coach football or swimming. But he decided to try selling life insurance in Boston after a road-trip pit stop to visit one of his greatest mentors, the senior vice president of Connecticut Mutual Life Insurance Co., Carter Schneider, a former Cleveland general agent who docked his 42-foot schooner at the Mentor Harbor Yacht Club at the same time the teenage Byrnes was coaching the club swim team and washing boats.

“They gave me a phone book and a rate book, and they said, ‘Go to work’ — that’s it!” he says of his instruction in selling what he still considers “the toughest product line in the world.” 

Over the next five years, the self-driven Byrnes compiled an impressive book of business. In 1979, he embarked on a partnership with a Cleveland insurance agent he met at a Connecticut Mutual event for top-producers. The man was looking to work with someone younger who was familiar with the latest industry trends. “I understood the new wave of life-insurance sales relative to estate planning, buy-sell agreements, charitable planning — the use of insurance as a different tool, technically and financially,” Byrnes says. Two years later, after flying into Cleveland for five days every second or third week, he sold his Boston agency and devoted all his energies to building a counterpart in his hometown, where he branched into retirement planning and employee benefits. In 1983, he bought out his partner. But he wasn’t satisfied with just two employees in a downtown office.

“I liked building teams, integrating with others and working collaboratively with others,” he explains. “I wanted to build a really strong, what I would call a full-service, insurance organization.”

Byrnes quickly remedied the situation by becoming a solicitor with the James B. Oswald Co. In 1985, the independent brokerage employed 20 people — 16 or 17 in property casualty, the rest in workers’ compensation — and produced a couple of million dollars in annual revenues. At the time, Oswald was led by Jim Pender, John Warfel and Bob Bracci, three men who greatly influenced the rest of Byrnes’ career and how he ran his business. Pender actually created the original Employee Stock Ownership Plan (ESOP) for Oswald. “The company would not be where we are today without the guidance and work of these men. I wouldn’t be where I am today without these guys,” says Byrnes.

Four years later, in 1987, Byrnes merged his agency with Oswald, creating the company’s full-service employee benefits and financial services division. He started as vice-president and director of the life group and employee benefits division. A few years later, he faced his first crisis: The company lost its biggest client, a large manufacturer that represented close to 20 to 25 percent of its business. As recently promoted senior vice president, he motivated his employee-benefits team to make up the shortfall over the next year and convened an executive marketing committee charged with diversifying the company’s commercial client base.

“No one business in any given sector represents more than 2 percent of any of our revenues,” he says.

Byrnes advanced to president in 1996 and chief executive officer in late 1997 before being named chairman and chief executive officer in 2004. He considers hiring the right people his greatest accomplishment — and biggest challenge — of his career. 

“When you build [a] culture of giving back — you’re all working toward the greater good, for the greater number — you actually create kind of a utilitarian mindset,” he explains. 

Byrnes serves as board chair of the United Way of Greater Cleveland, a trustee of both the Rock and Roll Hall of Fame and Museum and University School, and a member of the Cuyahoga County Economic Commission Council. 

“Most of it happens kind of underneath the radar,” observes Marianne Crosley, president and chief executive officer of the Cleveland Leadership Center. “He just puts the people who can make [things] happen together and then inspires, encourages, challenges them to make [them] happen.”

The work is motivated as much by gratitude as a sense of duty. He points out that Bellefaire JCB, which took him in, placed him in foster care and handled his adoption, is an agency funded by United Way and the Jewish Community Federation. 

His charitable endeavors often produce clients, fellow board members who approach him about an insurance issue encountered in their personal or professional lives. “Rainmaking” is part of his job as Oswald chairman, along with servicing 20-plus major accounts, serving as an adviser to top executives and leading the board. He stepped down as chief executive officer in 2013. He kept the title of CEO through 2012 and then transferred CEO responsibilities to Robert J. Klonk on January 1, 2013. Klonk was a part of the executive team Byrnes created consisting of Klonk, David Jacobs, president and COO, and Joe DuBois, chief financial officer, who now lead the company. “It was a very important thing for me to create a succession team that will continue to sustain employee-ownership and perpetuate our independence as a privately held-company.

“I wanted to give the control to those that had helped me build this organization here and now.

“At least for another three years,” he declares, “I’m dedicated to serving as chairman of the Oswald Cos.

“I’m very grateful for my wife Viki and three wonderful sons Matt, Kyle and Gregory as well as my 92-year-old father Larry for all their love and support.”  

Leading Healthy Change

Cynthia Moore-Hardy pushes innovative strategies to improve efficiency, promote well-care and create a complete healing environment at Lake Health. 

“When high winds kick up, willow trees tend to bend over and hunker down — their branches don’t get loose and thrown about,” says Cynthia Moore-Hardy, FACHE, president and CEO, Lake Health. “For me, that means: Stay focused. When the winds go away, straighten up and move forward.”

Moore-Hardy’s father, 93, told her the story of the willow tree years ago. “He is the kind of person that is all about results, and if you can’t get over it then go around it,” she relates.

Her father set a bold example for Moore-Hardy about how to lead. She has navigated through her fair share of storms as head of Lake Health, but her resilience and a strong core have created a positive impact on the community. 

That core is the mission of Lake Health: local access, healing compassion and superior quality. “We are one of the best-kept secrets,” Moore-Hardy says of the community hospital system that has been rooted in Lake County since 1902 and has embraced change by introducing innovative concepts. 

“It’s really different here,” Moore-Hardy says, pointing to the Leapfrog A rating flag at its Concord Township facility, a project completed in 2009 based on healing design principles. 

Through it all, Moore-Hardy is collected. In a room of beeping monitors and demanding decisions, her manner brings a sense of hunker-down-and-focus — with a smile. Because, Moore-Hardy adds, “You’ve got to have a sense of humor.” 

Moore-Hardy was a young nurse when she decided to move directly into one of the most fast-paced areas of a hospital. But she was interested in learning and challenging herself, she says. “You really had to be prepared to respond at any minute to anything,” she relates. She eventually progressed from a staff nurse to director of a critical-care department at St. Luke’s Hospital. Then, she moved into cardiology at Lake Health and continued rising in the ranks. 

Eventually, Moore-Hardy began working on her master’s in business administration (MBA) at Cleveland State University when a senior staff position opened at Lake Health.

“I thought I would make decisions differently because of my clinical background,” Moore-Hardy says, adding that today it’s more common to see hospital leaders with clinical resumes. 

Moore-Hardy’s first initiative at Lake Health was to develop an open-heart surgery program for the system. Patients needing this surgery often left the system to find care. Because open-heart surgery had evolved as a procedure that could successfully happen in a community hospital with the right medical partner, Moore-Hardy pressed to get a program at Lake Health. 

“We strongly believe in local access,” she emphasizes.

In the mid-1990s, Moore-Hardy and her team recognized that the facility they had called home for nearly a century was becoming more difficult to adapt with new technology and an evolving patient care model. The building on 11 acres was virtually landlocked. It had been added to and reconfigured over the years. But administration was hitting a roadblock. 

“Healthcare has changed so much, whether it’s information systems, use of different equipment,” Moore-Hardy says. “If you think about a building, there are infrastructural changes you need for all of this — different floor-to-ceiling height, different spaces. 

“We tried all shapes and configurations of the [Painesville] building. But we couldn’t make it work.” 

 Still, Lake Health was founded in that community. “It was just an agonizing decision because we didn’t want to just leave, but we also knew we needed to grow,” Moore-Hardy says. 

Concord Township officials approached Lake Health about the property it eventually acquired, 40 acres of space off I-90’s state Route 44 exit, with easy access and a lush, wooded lot.   

The brick building feels more hotel than hospital. Every aspect of the hospital’s design — from placement of restrooms to views from patient rooms — was meant to create the ultimate healing environment. 

There’s nothing stark or institutional about the building. “This hospital is digital and healing all at the same time, so the balance is interesting,” Moore-Hardy says, adding that the Concord Township location set a precedent for other facilities in the system, including its Willoughby building and new ambulatory care health center. 

“We’re trying to work toward just being [healthier] and offering programs and services in the community, as well,” she says.  

With healthcare moving toward well-care, expanding services to meet the health needs of the community on its turf is critical, Moore-Hardy says. This is where a community health system like Lake Health can gain a competitive advantage as a close-to-home provider of services that impact everyday life.  

This ability to ask and respond — in these cases, by conducting community needs assessments and then developing programs that address real needs — is a strength of Lake Health, Moore-Hardy says. She takes this same watch, listen, learn approach as a leader, spending time in the physician pavilion and on the hospital floors “where the work is done,” she notes. 

That effort to center her leadership in the bustle of patient care helps her initiate programs that improve the way services are delivered. A constant eye to improve is necessary in today’s healthcare climate, Moore-Hardy says. 

That’s why Lake Health instituted its I-3 program, modeled after the Lean efforts at manufacturers like Toyota. Its Innovative Improvement to Maintain Independence (I-3) includes holding weeklong Rapid Improvement Events, where teams of eight to 10 people from different departments gather to analyze a particular process. They identify waste and ways to improve efficiency. 

For example, waste in a healthcare environment is wait time. Lake Health addressed wait times in the emergency department by removing the check-in reception desk procedure. Instead, patients go right to an evaluation room for triage, reducing the time to see a doctor by 33 percent.  

So far, I-3 initiatives have reduced costs by $10 million and decreased capital spending by $2.5 million. “We reduced the delays for starting an operating room case by 66 percent,” Moore-Hardy adds. 

The ideas fueling I-3 Lean efforts come directly from the health system’s floor. “The folks making the changes are those who do the work — the nurses, respiratory therapists, physicians. They are in the best position to reduce waste, and they know that their opinions count.”

 Moore-Hardy’s passion for delivering wellness comes from her experience on the hospital floor, conversations with staff and a focus on her own wellness. Moore-Hardy loves to cycle, and she plans annual tours with girlfriends in different states. They meet, travel and bike together.  

Moore-Hardy is determined to let out the “secret” about Lake Health. She wants residents in the county to know there’s a different way to do healthcare. Together, she believes, they can thrive in that atmosphere of constant change — hunkering down, being flexible, then standing tall like a willow tree.

Moving Forward

Jeff and Tom Heinen have been partners in progress throughout their lives — and Cleveland has been the beneficiary.

A century ago, perhaps nothing illustrated the economic vibrancy of downtown Cleveland more than the ornate structures housing its powerful banks. Most striking of all was the Cleveland Trust Company Building, with its magnificent glass-enclosed rotunda, built in 1907 at the corner of East Ninth Street and Euclid Avenue. How fitting, then, that the structure stands today as a symbol of yet another century’s downtown progress.

While financial institutions remain beacons of strength, in the 21st century nothing tells the story of a downtown’s vitality more than the presence of people who not only work but live and are entertained there. Where there are people, there is food, glorious food. In Cleveland, they find it in generous supply under the rotunda at downtown Cleveland Heinen’s Grocery Store, the same location where many of us opened our first checking accounts a generation ago.

Gourmet or everyday, the food at Heinen’s Grocery Store attracts workers, residents and visitors who enjoy their selections onsite in the cafe, outside or taken home. The store is a testament to the forward thinking and community pride of brothers and co-owners Jeff and Tom Heinen, who in a sense have been partners since birth. The 61-year-old fraternal twins often use the pronoun “we” instead of “I” to answer questions about individual experiences, a result of spending so much time together as children growing up in Shaker Heights and Pepper Pike.

“We grew up playing all the same sports, we were on all the same teams,” Tom remembers. “We did everything
together.”

In fact, the first time they spent any real time apart was when 15-year-old Tom tired of waiting for caddying gigs at The Country Club — a job their father Jack had them doing at age 12 — and spent the summer off from University School bagging and loading groceries into customers’ cars at Heinen’s Pepper Pike location. By that point the business had seven stores, along with two Warrensville Heights warehouses totaling 330,000 square feet. Jeff reluctantly left the club to work in the Pepper Pike produce department a year later.

“My father believed in structure,” Jeff says, then chuckles. “I think he thought caddying, at a certain point, was not structured enough. You could go or not go.”

The next year Tom was put to work in the meat department while Jeff bagged groceries. He spent the next couple of summers cutting meat and making ham, bacon and cold cuts while Jeff worked in the grocery warehouse. Their father never pressured his two sons or their older sister Barbara to follow him full time into the supermarket chain. But both brothers went to work for their grandfather and father in 1978, a year after Jeff graduated from Stanford University with a double major in history and economics and Tom earned a bachelor’s degree in business management from Bucknell University.

As the brothers progressed in the business, they learned best practices from their father but developed new ideas of their own. The opportunity to modernize came in 1989, when their father gave them the responsibility of designing a larger Pepper Pike store to be built on Lander Circle. The resulting 45,000-square-foot location boasted expanded produce, bakery and deli departments, along with a product mix tailored to a more affluent clientele. The interior was finished with a stamped-tin ceiling, carpeting, wood and brass accents — touches that made the store more inviting than the company’s typical sterile spaces.

“One of the reasons Heinen’s has survived for 87 years — and why we’ve survived in the last 20-plus — is that we’ve been willing to reinvest in our stores,” Jeff declares.

Jack Heinen died in 1994, leaving the brothers to make the biggest business decisions alone. Work life, however, changed very little — Tom and Jeff had been shouldering day-to-day operating responsibilities for approximately five years. The Heinen brothers embarked on a mission to expand and remodel each of their dozen stores and hired a consultant to lead classes for employees, right down to the part-time high-schooler, in developing customer-service and leadership skills. 

The brothers also began focusing on sourcing, a facet of the industry that has become increasingly important as more shoppers demand information on the origins of their food. At the same time, the chain diversified its product lines to include everything from exotic fruits to health foods and supplements — items often reviewed by a doctor serving as “chief medical officer” — to organics, a focus of the Heinen’s and Two Brothers private-label brands.

“One of our strategic prongs is clearly to have an emphasis on local,” Tom says. “That isn’t just local produce and local meat.”

That local emphasis extends to their community involvement. Even with time being devoted to expansions into the Chicago market, begun in 2012, they remain active in their hometown, where Tom sits on the board of the Boys and Girls Clubs of Cleveland. President Ron Soeder credits him with helping craft a strategic plan for “Save Our Kids,” a $12.5 million operating endowment campaign that increased the number of clubs from 5 to 16 and moved the majority from nonprofit-owned buildings to Cleveland city schools. He also has “prepped” a number of supporters now involved with the clubs.

“He’s got the mission on his heart and his mind,” Soeder says.

Jeff, meanwhile, sits on the board of Ursuline College, where he chairs the buildings and grounds committee. He was intimately involved in the effort to build five new structures, along with tennis courts and athletic fields, over an 18-year period, according to Sister Diana Stano, OSU, the school’s immediate past president.

“He’s very thorough, not afraid to ask questions and not afraid to push,” she says. As an example, she points to raising funds necessary to break ground on the Pilla Student Learning Center. “My job was to ask for money,” she recalls. “[He] was like, ‘Well, keep doing it because we’ve got to keep moving. You can’t stand still. You have to keep moving forward.’”

That same spirit of forward progress has done much to fuel the success of the city where the Heinen brothers’ journey began.

Tradition and Trust

Gary Oatey has led his century-old family business to extraordinary success through a willingness to listen.

Nestled in a business park surrounded by the lush foliage of the Metroparks, the new Oatey headquarters is bustling with activity.

 On this day, about a month before the grand opening, construction equipment is smoothing gravel and prepping concrete for the new parking lot. Landscaping beds are marked off around the quarter-mile walking trail, part of the 7.6-acre property. Electricians, flooring contractors, furniture installers and others dart in and out of every room to put the finishing touches on the 48,000-square-foot, LEED-certified building, just off Grayton Road near the airport.

Amid the hubbub, Gary Oatey walks from room to room alongside Ron Compiseno, vice president, taking it all in. It’s a new chapter for the company started by Oatey’s grandfather, L.R. Oatey, 100 years ago and of which Gary served as third-generation CEO for 25 years.

How does he feel to be standing in such a space that represents a century of Oatey growth?

“Wow. I don’t even know how to respond,” he says. “It’s beyond fabulous.”

Oatey, 68, is now retired from the day-to-day operations of the company, holding the position of executive chairman, but this manufacturer of commercial and residential plumbing products is still very much a family affair. His brother-in-law John McMillan serves as CEO, his brother Bill Oatey is recently retired and running the family’s foundation, and three fourth-generation family members work in the business — nephews Mason and Blake, and his son, Chris.

They’re just a small part of the nearly 900 employed at Oatey’s headquarters and in production facilities in Cleveland, Omaha and Minneapolis. About 400 of its employees are based in Northeast Ohio, and the new headquarters consolidates 130 of them previously scattered among three locations

It’s these employees — family and non-family — that Oatey is always quick to credit for the company’s success and longevity, deflecting praise from himself.

“Believing in our people has been the hallmark of the business,” Oatey says. “I certainly don’t have all the answers ... Finding the right people and letting them take the reins has been essential for our growth over the years.”

Humility is a hallmark of Oatey’s leadership, says McMillan: “He does not crave the spotlight. He’s a good listener, very insightful. He won’t tell you what you should do, he’ll discuss it with you and help you reach a conclusion.”

Joining the family business was never in Oatey’s long-term plans when he graduated from Wittenberg University in 1970.

“I thought there was no chance [I would work in the family business],” Oatey says. “My uncle and father and two cousins were in the business, and it was a very small company” — he estimates about 5 percent of its current size — “so I felt it was served adequately by the existing leaders.”

Instead, he started his career at Procter & Gamble, leading a sales territory based in Cleveland, served in the U.S. Army, then settled in Colorado to work for a real-estate investment firm and was planning to make that his career.

“As most young entrepreneurial-thinking people do, I wanted to create something myself,” he says. 

But in the summer of 1974, Oatey’s uncle, then CEO, died suddenly of a heart attack at 56 years old.

“My father said, ‘Either we will have to sell the business, or you will have to come back and learn it and run it,’” Oatey recalls. “I agreed that it was an opportunity to keep the business going.”

He returned in 1977 and worked his way up to CEO about 10 years later. Around that time, the family agreed upon the ground rules for hiring family — they must have earned a college degree, have worked elsewhere for at least five years and be invited into the company.

“I’d learned so much working elsewhere that I knew it had considerable value,” Oatey says. “When that’s all you know, you have your blinders on and lack the ability to see what’s possible outside the family business.”

Oatey’s calm, measured approach to leadership was put to the test in 2008, when the recession virtually halted new home starts, the market factor upon which the company most depends. Oatey and his leadership team made the difficult decision to downsize.

“It required quick action but had to be done thoughtfully and sensitively,” says McMillan. “He was calm, measured and empathetic.”

Oatey considers it a turning point in his career: “When things are going well, everyone looks pretty smart. When you have a downturn and have to provide leadership, you really find out what you’re made of.”

Molded Fiber Glass Cos. CEO Richard Morrison was so impressed by Oatey after meeting him 30 years ago that when he wanted to add an outside person to the company’s board, that’s where he turned first. While the board consists of some outside senior advisors, Oatey is still Molded Fiber Glass’s only full outside board person.

“Businesses need to have someone they can go to that they respect when they get stuck,” says Morrison. “He’s just a good person who everyone has trust in.”

Oatey also holds a board position at the J.M. Smucker Co., and leads the governance committee that oversaw the recent transition into the fifth generation of Smucker leadership with the promotion of Mark T. Smucker to president and CEO.

“He’s understanding of people and how they work together, and has been helpful in coaching and mentoring some of our young leaders,” says Richard Smucker, Mark’s predecessor and now the company’s executive chairman. “He’s very humble, and that’s what makes him truly unique. We need more leaders like him.”

Thirty-four years after his uncle’s early death brought him back into the business, Oatey himself experienced a health scare. Luckily, he had already been training McMillan to take over the reins. 

“It taught me a lesson: You never know in a business when your succession plan needs to be implemented,” he says. “I felt I would have been derelict in my duty if I had not implemented the plan.”

He can still be found in his Oatey office about one-third of the time, and focuses his attention there on pursuing potential acquisition targets and participating in strategy sessions. He and wife, Rosanne, travel frequently, especially to California and Colorado, where two of his three children live. He remains an active board member at Molded Fiber Glass and the J.M. Smucker Co., but Oatey has stepped back from much of the civic work in which he participated before his retirement, with previous positions on the boards of MetroHealth System, the Rock and Roll Hall of Fame and Museum, the Great Lakes Science Center and others.

Back at Oatey’s new headquarters, which opened officially Oct. 11, the importance the company places on employee satisfaction is evident in the design — a cafe area and office spaces flooded with natural light, outdoor balconies overlooking the Metroparks, a fitness center and sit-to-stand desks. Every office is the same size, consistent with the company’s anti-hierarchy philosophy.

It’s a thrilling turning point for Oatey. But, true to character, he’s thinking not of himself but of his employees at this milestone: “It’s important for people to have a place to work that they can be proud of.”

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