In planning the Monitor’s 35th anniversary edition, it became evident that this issue wouldn’t be complete without input from our publisher, Jerry Parrotto. As is his style, Jerry rose to the challenge and reached back to his early days as an executive recruiter to bring clarity to the somewhat unusual evolution of a recruiting firm into a media company.
My original intent was to write a story about the beginnings and the subsequent evolution of Molloy Associates into a multimedia enterprise — Xander Media Group, Inc. (XMG) — derived from my eight-year-old son’s name, Alexander. In this, our 35th anniversary of the publication of the Monitor, I can’t help but be struck by the sheer magnitude of the financial crisis that has developed over the last year. I never thought I’d see the day when new business imperatives took a back seat to conserving capital, and maintaining liquidity became the top priority. I’d love to give you my take on all of this, but the job at hand is to provide insights into how a well-established recruiting firm — Molloy Associates — became a media company named Xander Media Group.
In the Beginning … There was Molloy
As a brief history, Molloy Associates was founded in the early 1970s when equipment leasing was just emerging as a growth industry and was gaining respect in the financial services sector. Michael Molloy, the founder and namesake of the company, saw an opportunity to participate in the growth that was envisioned for this industry by establishing an executive search firm focused entirely on this vertical. As he explained the first time I met him, Michael believed he could make a difference and be successful by following three simple rules — “to qualify, screen and recommend to his clients the best possible applicants [candidates] to fill a position; to assist and counsel candidates regarding the best position to further their careers; and to ensure and protect the confidentiality of both.” It took me the best part of 20 years to finally get that he was right in believing — even though financially it was a client-driven business — that by maintaining a posture of objectivity through the entire hiring process, what was best for both sides of a hire ensured the long-term viability of the business.
Meeting Michael Molloy
In my particular case, I wasn’t looking to make a change, but as I learned when I joined the company, that’s what made the firm unique. Michael called one day out of the blue to engage me in a conversation about a job opportunity he was working on. He spent most of his time trying to get to know me so he could learn more about what I wanted to do with the rest of my life. His pitch was low key, so when he learned I’d reached a plateau in my career, he suggested a meeting with his client to explore the possibility of pursuing an alternative career opportunity. What I didn’t know at the time was that call was to change my life in ways I could have never imagined 30 years later.
As a result of that call, I ended up spending the next eight years of my career as a line manager with two major players in the leasing industry. So in addition to spending some exciting times in Chicago and Seattle, I started to realize that the process of hiring could be brutal if you didn’t have a recruiting partner that was in the game to make a difference. I learned that absent a truly interested and knowledgeable intermediary, the process could be tiresome and fraught with misconceptions and misunderstandings. As with lending, where a “loan well made is a loan half paid,” the same principles should apply to recruiting. Recruiting turns out to be both an art and a science — you have to get to know the client as a person in addition to understanding the skill set required to get the job done. You have to know what the questions are — but just as important, you need to understand how to interpret the responses.
At the time, I said to myself there must be others who are experiencing the same frustration, so I placed a call to Michael to see if there would be interest in having me try my hand at recruiting for Molloy Associates. When I joined Molloy Associates in late 1985, it was expressly to become an entrepreneur with the goal of becoming the ultimate owner of Molloy Associates, one of the premier search firms in the leasing industry. My reasoning was I would be able to transfer my industry expertise into a value add on the recruiting side. As noted earlier, I learned how important it was to be able to recruit good people for critical positions. And at the time, Michael was actively seeking to exit the business, so timing was crucial. Having the opportunity to return to my roots in Philadelphia also played heavily in the decision to make the leap.
From Recruiting to Publishing — A Natural Progression
The Monitor was launched in 1974 as a tabloid bimonthly newsletter. Its primary purpose was to maintain a connection, as a marketing tool, with an ever increasing larger community of leasing industry professionals who were either looking to make a career change and/or were seeking to hire. The Monitor featured pages dedicated to motivate inquiry from applicants responding to listed job order assignments and/or hiring managers seeking candidates who were actively looking to make a change. As for other editorial content, there wasn’t much of it. A typical bimonthly issue would contain maybe 14 to 18 pages — 50% or more dedicated to promote Molloy Associates and its recruitment business.
When I arrived in 1985, the newsletter was still being used primarily as a marketing tool for the recruiting business, but as the leasing industry grew we started to get calls from service providers that were interested in reaching our huge audience of readers in the leasing industry. I had no concept that these could be advertisers that would be willing to pay for space in the Monitor to reach our audience. To put this in perspective, when I finally made the deal to acquire Michael’s remaining share in the business in 1988, the Monitor was literally thrown in as “gesture of good will” on Michael’s part. I was buying Molloy Associates and its brand as an executive search firm.
As an executive recruiter with a newsletter publishing “sideline,” I began to explore the possibility of taking the Monitor to another level. In these early years, I’m struck with how little we, in fact, knew about the publishing business. But when you have the wind at your back (most of the time) and have a faithful audience of readers, it compensates for a lot of the knowledge gaps.
Gaining Traction — The MONITOR 100
After we got over the recession of 1991, and launched our first MONITOR 100 in 1992, we started to gain some traction. The model of using industry pros to provide valuable reader content to replace our emphasis on recruiting seemed to be working. At the time we had competition — there was the Equipment Finance Journal, owned by a former Molloy associate, and the ELA’s magazine — in the same space. But it was our resident expertise in the leasing industry that seemed to make a difference, (i.e., our sense of what readers wanted and needed to help them improve performance was a differentiating factor). Speaking with hiring managers and candidates every day on the recruiting side provided the insights we needed so our editorial content could be tailored to the informational needs of our audience of faithful readers.
As an example, one of most popular issues became our yearly Funding Source issue because we had a sense of how important it was to provide a connection between smaller independents and funding sources. The MONITOR 100 grew and became more popular because readers wanted to know more about the industry they were actively involved in and, more importantly, where their organizations stood in the overall scheme of things.
We can say unequivocally that the MONITOR 100, presented annually in June, has become the hallmark of our publication. It has served to sustain our reputation as a leader in the industry for so long. In one memorable example, we realized we had achieved a certain level of stature when a major leasing company declined to participate only to change their mind when they were made to realize they would be conspicuous by their absence.
For an interesting perspective on MONITOR 100 “turnover” during the past decade and a half, see the exhibit on the opposite page, entitled: MONITOR 100 — 16 Years Later.
Launching Into Cyberspace
In 1996, when we became aware of the opportunity to bring real-time information to our constituents via the Internet, we launched monitordaily.com. We made the judgment that our print readers would have an interest in a daily news imperative — the bankers had the American Banker daily, so why couldn’t leasing people have the same benefit with a real-time delivery system. But again, referring back to the recruiting side, we weren’t really speculating about this, we knew with a high degree of certainty that readers wanted to know what was going on — on a daily basis.
The event that perhaps proved the point best is when Newcourt was being courted by CIT in 1999. We saw it as another “Nightline” moment similar to the nightly news that was created to keep us all riveted to our TV screens for the latest on our hostages being held by Iran. The Newcourt/CIT saga was like that. Over the course of many months, as Al Gamper and Steve Hudson “negotiated,” we made it a priority to keep our website visitors informed as the events surrounding this contentious acquisition unfolded. I firmly believe to this day that it put monitordaily.com on the map and cemented the notion that we’re the go-to news source for the industry. But, unlike Nightline, which fell off in the ensuing years (it’s not the same without Ted Koppel), monitordaily.com continues to break weekly traffic records on a consistent basis. To ensure we reach our targeted audience, we expanded our electronic offerings by launching a daily e-news broadcast in 1998.
New Arrivals… ABF Journal & abfjournal.com
When the 2001 recession hit, we started to think about how we could make our business less vulnerable to economic downturns. Remember, we had the experience ten years earlier, so we set about a research initiative to investigate another underserved vertical that could be made to work with a model similar to the Monitor (i.e., industry pros sharing their insights on timely topics in print complemented by daily industry news delivered online). Asset-based lending, we reasoned, tended to be counter-cyclical and it was connected to leasing as another specialty finance business, often times under the same hierarchical head. When we looked further, we also noticed this market was only being served by one publication — The Secured Lender published by the Commercial Finance Association. Additionally, the association’s website did not offer the daily news features that we envisioned for a companion site. So, in 2002, we decided to launch ABF Journal and, one year later, abfjournal.com. Then we added an e-news broadcast component to bring the news to our constituents on a daily basis in 2003.
monitordaily.com Launches Classified Employment Advertising
To maintain the integrity of the recruiting business and leverage the resident expertise we enjoyed on the recruiting side, we made the decision in 2004 to transfer responsibility for this real-time service to Molloy Associates. At the time, many in our own organization were baffled by the decision, (i.e., classified advertising is part of the publishing business, right?). And, just as significant, was the impact that some thought it would have on the recruiting business. The justification on the publishing side was we were in the unique position to add value to this process by having recruitment specialists participate in the process. The notion of maintaining our integrity was to prove that we really believed our job was to “recruit” the best candidate for the job, not just the best available. Both of these strategies proved correct over the ensuing three years as both businesses flourished under the restructure.
A Transformation: Monitor Changes Its Look
In 2005, we redesigned the Monitor into a unique magazine replacing the old tabloid format, which has been well received by both our readers and advertising partners. As an aside, I initially had reservations about introducing such an abrupt new look. But as I look at the difference today, I can’t believe I perpetuated such an old, tired, “ink-on-your-fingers” publication for so long. And just recently, we launched our new digital version — Monitor Digital, not because we think print is passé, but because a sufficient number of readers told us they wanted the option of having a more timely and environmentally friendly option.
Xander Media Group, Inc. — Bringing It All Together
Once we made the decision to go to a more functional organizational structure and realized, in many ways, we had morphed into a publishing company, with a national franchise in the recruiting business, we decided it was time to eliminate the confusion surrounding the Molloy Associates brand. As a result, Xander Media Group, Inc., was formed in 2006 as a holding company for its wholly owned affiliates in print publishing (Monitor & ABF Journal), website publishing (monitordaily.com & abfjournal.com) and executive search (Molloy Associates).
Some Thoughts as to ‘What’s Next?’
As we look back over the past two decades, we have seen the equipment finance and leasing industry grow at an annual rate of almost 20%. The very first MONITOR 100 showed total assets at the YE/91 of about $140 billion, which rose to $575 billion at YE/07. These results were achieved despite the recessions of 91-92 and 01-02 when companies turned to leasing as a welcome alternative to other forms of financing to get through the tough times. At the same time, leasing companies became more technologically savvy and found new, more efficient ways to improve productivity.
As we look forward to the challenges that lie ahead we can already see how the current financial crisis will impact our 2009 MONITOR 100. Marquee names like CitiCapital and Wachovia Equipment Finance will be conspicuous by their absence. Yet, if the past is any indication of the future, their portfolios will survive, but under a different name — and new arrivals will take their place. The simple truth is businesses of all kinds will continue to need equipment to remain competitive. We understand that the business models and funding strategies from the past no longer work. Yet we’re counting on how this industry has adapted to change in the past to get us through to the other side. Our role will be to continue to provide the information you need.
Behind the Scenes…‘Inside’ XMG
In the 35 years the Monitor has been in existence, it has only thrived because of the hardworking and tireless group of people that work behind the scenes every day to bring you the industry’s most respected source for news. But the staff that works diligently to bring you the news today, 35 years ago was made up of three recruiters who, as a secondary job, put together the content of the Monitor.
How 35 years have changed everything! Xander Media Group now publishes and provides executive search in two industries. Not only has the content expanded over the years, but so has the staff. In the past ten years alone, we have added to the recruiting and publishing teams.
Over the years, we’ve launched two websites, a new publication, redesigned the Monitor twice and launched a digital edition. And, our talented and creative design/production team is not done yet — check out our 2009 January/February issue to see how we’ve improved our focus to bring you, our readers, the latest and greatest in the industry once again. To continue to bring you informative content and industry resources, we have an expanded editorial staff and a comprehensive advertising/sales and marketing department. We have also grown the staff by adding a circulation team to cover our rapidly increasing reader base.
But we couldn’t get there without one other group of people: you, our readers. Without you, there would be substantially less content — as many industry insiders write the stories that grace our pages in every issue. Without you, our e-news daily broadcast wouldn’t be as informative, because many of the stories of note each day are contributed by our readers and advertisers. So as we acknowledge 35 years, we ask you to come along for the ride, as we always do. We thank you, our readers, for celebrating this milestone with us, and promise to continue in our goal of providing you the most timely and informative news, features and columns relating to the equipment leasing and financing industry. Amanda L. Gutshall
Gerald F. Parrotto is the owner, publisher and executive editor of Xander Media Group, Inc. Before joining Molloy Associates in 1985, Parrotto was senior vice president, director and head of sales & marketing with MetLife Capital in Seattle. Before joining MetLife, he was with Citicorp Industrial Credit as vice president and Midwest regional manager headquartered in Chicago. Prior to joining Citicorp in 1977, Parrotto spent 17 years with Industrial Valley Bank in Philadelphia, lastly as head of its equipment finance division.
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