Duilio J. Baltodano, W’70: Looking to Nicaragua’s Future
Nicaragua, says Duilio J. Baltodano, president of Comercial Internacional Agricola, S.A., in Managua, has had its share of disasters. “First there was the earthquake in 1972, then the Sandinistas from 1979 to 1990, and just last year Hurricane Mitch. The macro figures were bad before the hurricane and now they are worse. But with international help and our dynamic private sector, we are moving ahead and I am optimistic that we will be competitive again within the next five years.”
Baltodano, like his country, is used to changes in fortune. After graduating from Wharton, he spent most of the next decade working for two of his family’s businesses: coffee exporter Cisa Exportadora and Cisa Agro, an importer of agricultural products ranging from tractors to fertilizers. Then in 1979, after three years of civil war, the Sandinistas seized power, confiscated private property and nationalized private enterprise, most of it owned by Nicaragua’s largest and wealthiest families.
“They took our coffee export business, banking business and family farms. Everything, with the exception of Cisa Agro, was run by the new government,” says Baltodano. “It was a tremendously difficult time. We were considered enemies of the state.”
Although the Baltodano family was allowed to run Cisa Agro during the Sandinista period, Baltodano raised his family while commuting between Managua and Miami over the next 11 years. In 1990, the Sandinistas were ousted and a new conservative democratic government was elected under Violetta Barrios de Chamorro. “We started to rebuild,” Baltodano says.
He and his family established new coffee production operations in the northern part of Nicaragua and successfully jump-started their former cattle and pig farming operations, both of which had fallen into decline under the Sandinista government, Baltodano says. Through partnerships and joint ventures, the family has also moved into banking, insurance and the movie business.
“During the 1980s, the Sandinistas only allowed political movies that had a message. The movies came from places like Cuba and Poland and they were horrible. Pretty soon it was impossible to get things like seats, screens and projectors. We found bats flying around the main theater in Managua. So we started renovating the halls. When Taiwanese investors developed a new shopping mall, we joined forces with them and opened a movie complex. We now have one of the largest movie chains in Managua.”
Four generations of the Baltodano family have attend-ed Penn: Duilio’s grandfather, Moises Baltodano, Penn Med 1893; his father, Duilio I., W’39; and his two brothers, Jose Antonio, W’73, and Alejandro, W’77. Duilio’s oldest son, Duilio, Jr., is a Penn sophomore.
These days, Baltodano is in frequent contact with the current government, led by Nicaraguan president Arnoldo Aleman. “We are helping to encourage private investment, especially for the development of the agricultural sector,” he says.
The Baltodanos are clearly doing their part. In addition to Cisa Agro, with its strong agricultural component, and Cisa Exportadora, which is now Nicaragua’s largest coffee exporter and roaster in Nicaragua, the family owns Café Soluble, Central America’s second largest instant coffee plant, which exports private-label coffees throughout the region and to the U.S. And seven years ago, Baltodano, his father and his brother, Jose Antonio, started New York-based Mercon. Today it is the second largest coffee importer in the U.S.
While coffee is Nicaragua’s biggest export, the agricultural sector is one of its most promising. “We are a small country but we have to be efficient in areas where we compete,” Baltodano says. “Agriculture suffered last year but we see people planting again and trying to recuperate from a bad period. This year, production is on the rise.”
Jay Baker, W’56: The Rewards of Retailing
Jay Baker, director and recently-retired president of Kohl’s Corp., the $3.8 billion Wisconsin-based department store, is unabashedly bullish on his company, his company’s employees and his industry.
First, his company, which by the end of this year will have 300 stores in 23 states: “We are a low-cost producer that offers great value to our consumer,” he says. “Our prices are competitive and we are always in stock on our basic items” (primarily apparel and home products). In addition, “we are convenient. The majority of our stores are built, not in malls, but near where consumers live, like strip centers. And if we are doing our job properly, our customers can get in and out of our stores quickly.”
Second, “but most importantly,” his employees: “We have the best retail people in America,” Baker states. “Employees, both executives and associates, are the key to the success of this company.
“One of the things we do better than most is that once we have made up our minds to take a certain action, we do it,” Baker adds. “A few years ago we decided to offer Dockers [men’s and women’s sportswear]. We sat down with the people at Dockers and [parent] Levi Strauss, came up with a game plan, considered space issues and in a few months were able to roll out Dockers shops in every one of our stores.”
Third, the industry: “For the right people, it’s a terrific place to be,” says Baker, who grew up in Queens, N.Y. “At a very early age you can have a lot of responsibility, like being a buyer or running a store. Your actions can have an immediate impact. In many other industries, you don’t get those kinds of experiences so quickly. It’s a chance to be your own person and feel good about yourself.”
There are financial rewards as well. At Kohl’s, all employees at the buyer, store manager level and higher, as well as certain support staff, receive stock options. And since 1992, Kohl’s has had an employee stock ownership plan for all associates who work 1,000 hours or more a year.
Baker himself chose retailing for a number of reasons. He had experience at an early age working in his parents’ millinery store in Flushing, N.Y.; in a career assessment test he took after Wharton, retailing came out as one of the professions most suited to his abilities; and he genuinely enjoys interacting with people.
In addition, he says, “I was fortunate enough to work for some excellent people in the industry,” including Kohl’s, Macy’s, the May Corp. and Saks Fifth Avenue (a subsidiary of BATUS Inc.).
Baker, who will officially retire in December, has been with the company since 1986. That year, Kohl’s was purchased from BATUS in a $75 million LBO led by outside investors along with members of Kohl’s management, including Baker. In 1992, Kohl’s completed a successful IPO, although it wasn’t clear in the beginning how things would turn out. “We went public in May of that year, and it just so happened that March and April were not particularly good months for us,” Baker remembers. “In fact they were two of our worst, just when we were going out to tell the world what a great company we were. But things turned out well, and the two months after the IPO were two of our best.”
Baker, who joined Wharton’s undergraduate advisory board earlier this year, is looking forward to the months ahead. “I’ve never had any time off,” he says. “I’ve worked my whole life. So I plan to do some traveling and work on my golf game. I also think there will be ways that I can continue to be involved in business.”
Shelly L. Boyce, WG’95: New Approach to Medical Management
It’s not hard to match Shelly Boyce with the profile of a typical entrepreneur.
Boyce is founder and CEO of MedRisk, a specialized medical management company focused on the treatment and management of musculoskeletal injuries for workers’ compensation.
The hardest thing about her job is “never being able to let go. You eat this, drink this, wake up at 3 a.m. and feed the baby with it,” says Boyce, who has three children, 4, 3 and two months. “And I tend not to celebrate the successes long enough. As soon as we accomplish something, I’m thinking yes, but what else, what’s next. It’s important to acknowledge achievement with your colleagues. They need to feel rewarded and appreciated for their efforts.”
MedRisk, which began in 1994 with 10 employees and covered two states, now has 60 employees covering 15 states. And while it started as a provider network of physical therapy centers, it has recently evolved to offer more managed care services for musculoskeletal injuries, including medical management, peer view and bill review. Its primary clients are insurance companies and large managed care organizations. This year its physical therapy network includes more than 6,000 providers in more than 2,000 locations.
Much of MedRisk’s success is attributable to Jerry Poole, also WG’95, whom Boyce met while they were both students in Wharton’s executive MBA program. Poole, who is MedRisk’s COO and CIO, oversees day-to-day operations and developed and designed Medrisk’s proprietary software program. This program, which Boyce describes as the company’s “competitive advantage” and a “barrier to entry” for would-be competitors, monitors treatment outcomes and provider results by integrating the clinical and financial aspects of care.
The two graduates appear to complement each other. Boyce, who worked for 10 years for a small entrepreneurial medical company before and during her two years at Wharton, describes herself as someone who “likes to create and innovate, think out of the box, who is easily bored and therefore impatient to move on. Jerry,” she says, “worked for Boeing before coming to Wharton. He is very detailed, analytical, well thought out, the kind of person who will take a concept and create a sustainable operating structure for it.”
MedRisk’s success is based on “a new approach” to the medical management of musculoskeletal injuries, says Boyce. “We looked at how our market segment — musculoskeletal injuries — was managed and reimbursed in workers’ compensation, and we created a new approach that holds the providers accountable for results. Our contractual relationship with our providers establishes a maximum reimbursement by diagnosis to treat each individual. The system is similar to the DRG (Diagnosis Related Group) system for Medicare. It cuts off payment, not coverage.”
MedRisk, based in King of Prussia, Pa., can claim its share of ups and downs. “One of the most difficult things we have faced was the loss of two major clients,” says Boyce, who grew up in Richmond, Va., and graduated from the University of Virginia with a BSN in nursing. “Neither client was lost because of us — we were a subcontractor under another contract. But one client was 50 percent of our business in 1995 and the other was 30 percent a year later. Those weren’t insignificant hurdles for us to overcome, especially because we are a small company and I didn’t want to downsize. We did it but it was challenging. And now we’re in a much more secure position than we were.”
