Due diligence: A seller’s perspective

- John Mickelson, managing partner Midwest Growth Partners, is IowaBiz's blogger on succession planning. Read more about him here. 

Congratulations!

Years ago you mapped out exactly what you want to happen with your succession plan.

You have worked with your family and a team of professional advisers to execute that succession plan and therefore have put your company in the best possible position for a sale – achieving both the financial and the nonfinancial objectives that are important to you.

You identified the exact right type of buyer for your business and within that group identified the exact right buyer for your business. (Note: All of these subjects above are explored in previous articles.)

A letter of intent (LOI) has been signed by you and your buyer outlining the major pieces of the agreement (sale price, type of transaction, transition period, etc.), and now you and your buyer have 60 days to get the transaction closed – a time period often called “due diligence.”

The hard part is over, right? For a seller who has not previously been through a sell-side sale process or is unprepared for it, oftentimes the answer to this question is NO.

Remember, the business owner has often spent their entire life building up this company, and thus has not sold a company before, so this process is totally new to them.

On the flip side, the buyer has to make an educated risk-reward decision, and so identifying as many potential company surprises before close is important to them before they commit significant capital to buy the business. Many times they cannot “see everything” in a business until they have executed an LOI with the seller.

During diligence, the buyer will often:

  1. Send in third-party accounting experts to conduct an analysis of the company financials and cash management practices. This is often called a “Quality of Earnings.”
  2. With the seller’s permission, reach out directly and/or hire a third party to reach out to key customers and vendors to understand how they feel about their relationship with the company.
  3. Conduct environmental and title review of any company-owned real estate.
  4. Have an attorney draft definitive deal documents (which seem more excessive than necessary and take the terms of the LOI into infinite detail).
  5. Iron out employment agreements with remaining employees.
  6. Hire a third party to conduct personality tests on remaining employees.
  7. Identify the bank they intend to use after the transaction, which will have its own set of questions and requirements (may include a “field exam”).
  8. Identify the property and casualty insurance carrier and employee benefits carrier they intend to use after the transaction, and they will have their own set of questions.
  9. Do an underwriting process for key man life insurance.
  10. Conduct background checks on key personnel.

... Just to name a few.

To the unprepared seller, this will feel like a lot and like they have to answer the same questions over and over again.

To the prepared and organized seller, all this can be done efficiently and with little heartache within the roughly 60-day time period for diligence. After which, thanks to the seller's well-executed succession planning plan, they will be able to move to the next phase of their life under their own terms.

Making the case for community involvement

- Cory W. Sharp is an intern architect at FEH Design in Des Moines and the current president of the Young Professionals Connection. 

Today is the third of three posts on the value of community engagement. In the first post, Sharp let his friend Kim Hanken write about the value of being involved in your community. Yesterday, Sharp gave advice to millennials on how to find companies that share their community interests. Today, he writes about the benefits for companies to have a culture of community engagement. 

Being active in the Young Professionals Connection, I'm surrounded by millennials who are active in our community. But it's important for employers to recognize that it's not just the YPC crowd that wants to be involved in community causes through their work.

Bizrec1

Hard evidence is all around us that millennials want to work for companies with a culture that encourages volunteerism.

From what I've seen, it honestly doesn't take too much explaining to the vast majority of business owners and bosses in the Des Moines metro because they already get it. But promoting that culture is important for employers to consider when thinking about how to encourage productivity, employee retention and healthy workplace morale.

For those few who still aren't convinced, it's easy for employees to make a persuasive case that community involvement is worth the investment. It starts, as I mentioned yesterday, with "building the business reputation, business recognition, networking opportunities, and opportunities to improve the community," according to a 2012 Dun and Bradstreet story, "Community Involvement Helps Generate Capital."

It definitely doesn't stop there. You can also cite a May 2013 study by Cone Communications and Echo Research that 4 of 5  consumers -- 82 percent -- consider corporate social responsibility when deciding what companies they want to do business with, where they shop and what they buy.

And there's more. Like the 2013 article in Entrepreneur, "The Power of Giving Back: How Community Involvement Can Boost Your Bottom Line," that reinforces the case. In it, writer Lindsay Lavine quotes philanthropy consultant Erin Giles as saying, "I've found that customers really want to know how you're making the world a better place."

Having a strong community presence can set a business apart from the competition. And that's smart business.

Lavine contends that community service should be much more than an afterthought; it should be part of the company's business plan. (That makes it pretty important, in my book.) Her suggestion is to consider four things, in particular, when putting a community service plan on paper.

Step one is building relationships in the community by focusing on what groups or issues really need attention. The second step -- getting employees on board with community involvement -- builds a collaborative and inspired team by providing "leadership opportunities for employees, which leads to increased staff performance and fulfillment and, ultimately, increased productivity and sales," Lavine writes, citing Giles' expertise.

Bosses may feel more comfortable committing employees to community projects if they follow Step 3 -- creating a custom volunteer plan in which they weigh employees' strengths and choose activities based on their specific strengths.

And, finally, it seems counterintuitive because we're always told not to brag about our good deeds, but businesses shouldn't hide their community involvement. In fact, Giles recommends that companies put a dollar value on employees' volunteer activities based on the cost of their donated time. Doing that will make it much easier for existing and prospective clients to measure a company's charitable contributions to the community.

So, when you're making the case to your boss that he or she should let you get more involved in community causes through work, don't just take the word of an opinionated millennial like me. Go in to the boss well-armed with all the facts you can put together, and you'll be able to convince even the biggest skeptic that it's in the company's best interest for employees to roll up their sleeves and get involved in community causes.

If they still don't change their mind, it just might be time for you to find a boss who shares the same commitment to our community that you do.

Want a company that respects community involvement? Ask. Just ask.

Bizrec1- Cory W. Sharp is an intern architect at FEH Design in Des Moines and the current president of the Young Professionals Connection

This is the second of three posts on the value of community engagement. In the first post, Sharp lets his friend Kim Hanken write about the value of being involved in your community. Today, Sharp gives advice to millennials on how to find companies that share their community interests. Tomorrow, he writes about the benefits for companies to have a culture of community engagement. 

 

It's the question on a lot of millennials' minds: How do I find the right company that encourages community involvement or convince my current boss that it's worthwhile for our company to let me be more involved?

Don't take my word for it. There's plenty of research to back that up. I don't have room here to share all the details with you but the 2014 Millennial Impact Report, sponsored by the Case Foundation, is a good read on this topic for employees and employees.

But here's the key part: Millennials' preferences in the workplace include "how they engage with their company and what they look for in corporate cause work, with 'cause work' meaning the programs and initiatives companies execute that help people and communities Companies increasingly approach employee culture and corporate responsibility as important assets that inspire retention, productivity and a variety of other organizational benefits. As companies and nonprofits work together more, and more employers include cause work in their values, research is needed to understand the next generation of employees, their attitudes and their preferences for company cause work."

Sounds great. But even if companies are more focused on creating the right culture to attract and retain millennials, how do you find the company that will respect and value the causes you believe in and support?

Ask. Yep, it's that simple. Ask.

Whether it's in a job interview, meeting a company employee at a reception or party, or even picking up the phone and calling the company with specific questions, ask:

  • What's the company policy on volunteering? Is it a new or longstanding policy, and is it likely to change anytime soon?
  • What has the company's experience been with employees who have been involved in the community?
  • What causes does the company support -- or not?
  • How much company time is an employee allowed to devote to cause-related activities? Is it all paid or just time off?
  • Does the company match charitable contributions? If so, which organizations are eligible?

If you work at a company that currently isn't big on community involvement, the case for letting you do it is very persuasive. It starts with "building the business reputation, business recognition, networking opportunities and opportunities to improve the community, according to a 2012 Dun & Bradstreet story, "Community Involvement Helps Generate Capital."

FEH Design, the architectural firm where I'm an associate, has really supported me being involved in areas that have fired my enthusiasm and allowed me to build a network of productive relationships, including the Young Professionals Connection, the DART 2035 Advisory Committee and the Greater Des Moines Partnership's Transit Future Work Group.

In return, my employer has realized benefits, including organizations that want to work with FEH Design because of its commitment to community involvement and emerging leaders. It may seem like a tiny difference to some, but small things can make a big difference in a competitive marketplace.

That's enough ammunition for now.

Tomorrow: I'll cover that topic in detail -- and then you'll have plenty of great arguments ready to make your case.

Ag Technology now, here

- Brent Willett, CEcD, is executive director of Iowa's Cultivation Corridor. 

Central Iowa is a natural hub for one of agriculture’s most innovative sectors, but that's no guarantee

Iowa’s agriculture innovation ecosystem received an important upgrade in May this year when Iowa State University and a group of investors announced the creation Ag_Tech_Financing
of the Ag Startup Engine, a development program for agriculture technology companies. The Startup Engine will serve as a business acceleration resource for startups across the agricultural innovation spectrum, including biotechnology and ag technology (or what we used to call "precision agriculture"). The initiative will “provide mentoring services to agricultural entrepreneurs, as well as infrastructure for developing prototypes and products. It also will provide training in how to finance a business.”

Then, another upgrade. On Aug. 30, the Cultivation Corridor and the Greater Des Moines Partnership announced that John Deere, DuPont Pioneer, Farmers Mutual Hail and Peoples Company will invest in a new ag technology startup accelerator in Central Iowa that will further establish Central Iowa’s reputation as a global leader in cutting-edge agricultural technology. The accelerator is designed to build upon one of the state’s key industries of agriculture and the entrepreneurial activity that can advance technology in the industry. It is expected to welcome its first cohort of startups in Spring 2017 and continues to accept investors.

These two developments taken together represent a decisive announcement to the world that Iowa’s education, economic development and private sector leaders are committed in real monetary and organizational terms to establishing Central Iowa as a premier destination for capital and research in what is perhaps the fastest growing segment of an otherwise distressed ag sector. And it couldn’t have happened at a more important time. 

Work in ag technology, broadly termed to be research and innovation resulting in hardware, software and platform improvements in the agriculture sector, has exploded in the second decade of the 21st century. According to AgFunder, in 2010 the broader agriculture technology sector saw roughly $400 million in venture financing activity. Just five years later, that figure had grown 11-fold to $4.6 billion in 2015. As low commodity prices put more and more pressure on the sector, AgFunder reports $1.8 billion in activity for the first half of 2016. Still, the trend is real and growing -- exceptional volumes of venture and institutional capital are flowing toward the ag technology sector. 

As agriculture’s role increases in addressing the global challenges we all face in the coming decades related to nutrition, energy and environmental sustainability, the Ag_tech_states prominence that rapid technological innovation is taking in today’s agricultural companies is intensifying. Natural to such a cycle is the emergence of a startup class of companies that is growing in sophistication and value. And that’s where Central Iowa comes in.

Iowa has been a home of agricultural innovation for more than a century. Farmers, in addition to being some of America’s longest-standing small business owners, are perhaps our most pure professional innovators. And Iowa boasts more of these farm innovators than anyone else. Humble beginnings for Iowa farm innovators have produced spectacular economic, social and cultural returns for our state for many years -- be they seed breeding on the homestead (Harry Stine), solving equipment challenges on the farm (Gary Vermeer) or building a weed control empire from an Ankeny basement (Dennis Albaugh). 

Despite Iowa’s remarkable farm innovation pedigree, we of course possess no guarantee that the next generation of ag innovators will look to Iowa as a destination for the incubation and acceleration of their ideas. In fact, AgFunder’s data on investment in ag technology companies lists the top 15 states by dollars invested in startups for 2015. Hawaii is on the list. Alabama is on the list. Iowa is not. We cannot take for granted our longstanding reputation as leading agriculture state to presume Iowa will naturally attract investment in perhaps the most important emerging field of agriculture. We cannot, and so we must invest in programming and institutions like the Ag Startup Engine and the Ag Tech Accelerator to enhance our competitiveness as a destination for the next generation of ag technology capital and talent.

Since January, at least three other ag technology accelerators have been announced in the U.S. -- one at Research Triangle Park in North Carolina, one in rural Washington and another in Memphis. Does this suggest that Central Iowa is late to the party and playing catch-up with is recent Ag Technology Accelerator announcement? Not at all; the rapid-fire emergence of accelerators pursuing startups in the ag space, if nothing else, reinforces the argument that the time is now to establish our region as a place of innovation in an industry sector that is growing rapidly. 

None of the people I am working with on the Ag Tech Accelerator would be surprised if four or five more ag-oriented accelerators are announced by year’s end. The market will saturate, but with the announcement of two startup support assets -- supported by major players in agriculture including John Deere, DuPont Pioneer and Summit Group -- to support startups in the space in the first half of 2016, Central Iowa has made clear that it intends to compete at the highest levels globally to attract agriculture startups to our state.

Contact Brent Willett:

Human: 515-360-1732

Digital: bwillett@cultivationcorridor.org / @brent_willett / LinkedIn.com/in/brentwillett

Finding the right pace for growth

- by Michelle DeClerck, CMP

One major challenge of running a small business startup is growing it at the right pace. Many of those who start their own business probably think they will ramp it up slowly and deal with growth-related issues later. I thought the same thing, but I quickly had more work than I could handle. While I would have preferred that the business grow more slowly, I suddenly found myself in a position in which researching how to hire and employ staff members was as much a priority as handling my clients’ requests.

Because employing others can affect many of the reasons you went into business for yourself, it’s important to give it careful consideration before you take that step.

When the time comes to think about adding staff, I recommend being very mindful of how and when you start spreading the word, as your friends will likely be eager to help you find someone — perhaps even before you’re ready to do so. This could result in a hiring decision you may later regret.

Next, ask yourself the following important questions:

• Do I truly understand the ramifications of hiring a friend?

• What will the working arrangement look like? If the business is home-based, how can I discern whether someone is self-motivated and self-directed enough to handle the unique challenges of working from home?

• Will the work be consistent enough to ensure I won’t hire someone only to have to terminate them later due to lack of funding? Remember, your staff will be depending on your business to help them pay for things like their kids’ braces and soccer fees.

• Do the numbers really add up? After workers’ compensation insurance, bookkeeping, paperwork, mentoring, managing and everything that goes into a meaningful employment situation, am I really making enough money to cover both the addition of the staff member and the time it will take me away from the core work I was doing? (These things usually take more time than you would think.)

• What’s the real reason I’m adding staff? If it’s to grow the company based on your strategic objectives, you’re probably on the right track. If it’s because you don’t want to turn down business, first make sure it’s really the type of business you want your company to handle. Next, consider whether the client would be OK with your delegating the work to a staff member rather than handling it yourself. Clients often hire small businesses based on the business owners. A candid conversation with the client may be necessary and may help you with your hiring decision.

Lastly, I highly recommend that you discuss all of these considerations with other successful small business owners. Keep an open mind and learn as much as you can from their experiences.

Deciding when and how much to grow is a challenge. However, if you give it the right type of forethought, you can grow at a pace at which you can continue to find the same level of enjoyment and fulfillment you originally sought when you decided to go into business for yourself.

Leadership isn't as easy as it looks

- Ro Crosbie is president of Tero International, a premier interpersonal skills and corporate training company.

Leader-holding-meeting-with-team

Tilt your head back, tucking in your chin until your mouth and esophagus align with your spine.

  • These are instructions for swallowing a sword.

As you take off, shift your weight backward by leaning back. This will make you spin.  

  • These are instructions to do a back flip in downhill skiing.

Be humble, communicate effectively and be emotionally intelligent.

  • These are instructions on becoming a leader.

What do these three sets of instructions have in common? 

They don’t reflect the complexity of the task or communicate the enormous amount of practice required to achieve mastery.

They certainly sound simple enough. In all three cases, it isn’t as easy as it looks.

For more professional development content:Rowena_Outside

Facebook Twitter Linkedin Youtube

Website: www.tero.com

Handling social media harassment and cyberbullies

Katie Patterson

CEO and Founder, Happy Medium

News reports recently alerted us to the cyberbullying that Gabby Douglas faced in Rio through social media. Her mother stated to journalists that the young gymnast felt she couldn’t do anything right and was criticized for everything from her hair to how she cheered on her teammates. The comments turned mean and ugly quite quickly, and Gabby turned away from her social channels as a result.

Brands are no strangers to this kind of backlash via social media channels as well. For some reason, people seem to have an easier time with complaints or negative comments when behind a screen and not face-to-face with an actual representative from your company. As stated in past blogs, social media is an extension of your customer service and no question, complaint or issue should be ignored. But every now and then, you’ll get someone who wants to stir the pot and leave negative comments repeatedly on your company posts. This can be a challenging time because instinct is often to delete the comments, but that can often make people angrier and backfire on the social efforts. A quick search of what to do turns up several recommendations that you never delete Facebook posts, so social media managers are often left wondering which is the lesser of two evils.

Here are some options to help detract the situation:

1. Set page guidelines to your company Facebook page. On your “about” page or through a Facebook note, you can set clear guidelines for commenting/posting on the company page. This oftentimes is as easy as no swearing, no spam, be respectful. It sets the precedent for what is accepted, and if anyone disputes why something was deleted, it’s easy to reference these guidelines as a benchmark for what will be allowed and those comments that are unacceptable.

2. Ask them to send more information privately. Taking the conversation into a private message allows you to get more details on the issue and also moves it to an area where the general public won’t be following along if the discussion gets heated on the customer's end.

3. Hear them out, and offer a solution. If the complaint is legitimate, offer a solution. Let them know you’re speaking with customer service or the employee who was involved in the issue. If it’s something that can easily be fixed, don’t be shy to repair the situation with a good gesture such as a complimentary experience or refund, if applicable.

4. Show appreciation for their feedback if a solution isn’t possible immediately. Oftentimes social media is where customers feel they can make suggestions for problems your team may already be working on but not have an answer to yet. At a minimum, thank them for their input. Most of the time, your fans just want to know their voice is being heard and acknowledged. 

5. Reply to reviews over individual posts to your page. Reviews are the more public-facing comments rather than posts to a page. Other viewers are more likely to look at your company reviews first, so make sure if a complaint is being left in multiple places, your response is focused on the review first. You can comment on other posts to say you have offered a solution on the review so other visitors are aware you didn’t leave the customer hanging with no response.

6. Hide their comments. If the conversation turns to a place where it is no longer productive, you can hide their comments. This allows the discussion to be hidden from your page but to the user who left it, it still appears as normal. This is a solution if you feel that deleting the comment will cause backfire.

7. Delete the comments or ban user if nothing else can be done. Some people simply cannot be reasoned with, and when the conversation turns down the path of no return, use your best judgment in deleting comments or banning the user from the page. Social media should be a place for productive discussion and engagement with your customers, and if the user refuses to be reasoned with or happy with any offering, this is the time when it’s OK to consider limiting future involvement on the page. This should be a last resort, but know that there are instances when this is the best option.

Avoid brain fatigue at your conferences

 

goldfish

- Amy Nebons owns event management company Blink Events LLC.

Did you know the average human attention span is less than that of a goldfish? According to a recent study done by Microsoft Corp. the average attention span for humans is less than eight seconds. Now obviously we are capable of sitting down and absorbing information for semi-lengthy periods of times when we are required.  However, as event planners it is imperative that we are cognizant to this fact and are not overwhelming our attendees.

Here are five tips for planning your conference that will keep your attendees engaged longer and increase the chances of your message being received.

  1. Change up scenery often. In other words, get your attendees out of their seats often! Variety is the spice of life, so take full advantage of that while planning out your event program. Choose a venue that has multiple spaces to choose from and move your attendees around often. Even having your attendees stand up and move across the room will incorporate enough variety to keep them engaged and keep your program interesting and on pace. Avoid long expanses in the same room; this will make your attendees yawn, and yawning is contagious!
  2. Limit your speakers and breakout sessions. Having more than two keynote speakers and three breakout sessions in a single-day conference is a surefire way to wear your attendees out and have them yearning for the end of the day so they can run home to their beds. Choose your speakers wisely and with purpose.  If done right, your message will be fully received without the need for adding superfluous speakers into the mix.
  3. Vary your message delivery. Some are visual learners, some are auditory learners, some are kinesthetic learners -- but the point is, we all learn differently, so be mindful of that. Provide information to your attendees in varied ways. Creating a lineup of three back-to-back speakers is the perfect formula to build attendee irritation. Integrate mini-breakout exercises, videos or interesting interactive elements to vary up your message delivery; your attendees will thank you for the variety.
  4. Give me a break! Rule of thumb: Provide your attendees a break at least every 90 minutes. This offers them the opportunity to get up and get the blood flowing again. It also offers them a nice little mental break to let their brain breathe. In this digital age, we are just itching to check in with our email and make sure nothing pressing is in need of our attention. By providing ample breaks you can give your attendees designated time to take care of any issues during that time and not be tempted to do it during one of your speakers.
  5. Provide a Constant Stream of Brain Food. Providing access to food is a must for keeping the brain engaged. Whole grains, lean proteins and vitamin-rich fruits and veggies will keep your attendees alert longer. Avoid heavy carbs -- just because the pasta bar is cheaper doesn’t mean it’s better. Leave healthy, easy-to-grab-and-consume foods out on the table for consumption during your entire program. Your attendees will become very distracted and angry if hunger begins to creep on them, so avoid this potential problem by building snacks into your budget.

Contact me by phone: 617-840-5073 or email at anebons@blinkevents.net. Find me on LinkedIn , Facebook or at my website www.blinkevents.net.  

Myth Buster: 90% of new restaurants do NOT fail in first year

--Jessica Dunker  is president and CEO of the Iowa Restaurant Association.

Ninety percent of restaurants do not fail in their first year.

If you read no farther, please commit that fact to memory and repeat it often.

As best I can tell, the restaurant industry has been dogged by this myth for more than a decade, thanks to the opening credits of one of the first restaurant “reality” programs called "The Restaurant”.

The show followed the launch of a restaurant in Manhattan called Rocco's on 22nd and each week as part of the opening, viewers would hear the show’s main character Celebrity Chef Rocco DiSpirito proclaim that while "90 percent of new restaurants fail in their first year,” he would “beat those odds.” NBC cancelled the program after one season, but for some reason that opening statistic about restaurant failure rates has lived on in perpetuity.

Perhaps it was our natural inclination to “cheer for the underdog” that made us cling to the 90 percent failure rate figure as fact while we watched this restaurateur face “overwhelming” odds as he chased his dream to open his own restaurant. And while his dreams may have been real, that 90 percent failure rate figure carries about as much truth as the claim that those two dozen hunky men being dropped at the front door of a Hollywood mansion are just “looking for true love” on the show "The Bachelorette".

Anyone in the restaurant industry will be quick to tell you it is a slim-profit, high-risk, time-consuming business with higher than average staff turnover rates and a constantly changing competitive landscape. Still, I’m perplexed that anyone who has gone through eighth grade math would not question such an exaggerated statistic. In my head, this is an algebra test question waiting to be answered: “If 100 new restaurants open every year and 90 percent fail in the first year and 50 percent of those who make it to month 13 fail in the next three years, how long will it take until there are no restaurants at all?”

Given that even in the worst economic times we did not see mass restaurant closings, the numbers never added up. In fact today, Iowa’s restaurant industry, while not setting sales records, is expected to post a relatively healthy 4.2 percent growth in sales this year over last. Not a get-rich-quick scheme by any means — but certainly not a doomsday scenario either.

Exact figures focusing exclusively on new restaurant failures aren’t easy to come by, but the Small Business Administration’s Office of Advocacy has reported that the two-year failure rate for all small businesses is 31 percent.

Researchers at Cornell University and Michigan State University conducted a study of restaurants in three local markets and concluded that after the first year approximately 27 percent of new restaurants failed. An Ohio State University study also found there was no significant difference in the failure rate of restaurant startups and small business startups in general.

So given the evidence we have to work with, the best I can estimate is that about 70 percent of new restaurants will make it past the first year. Asserting that is not likely to land me a reality show of my own anytime soon.

However, the numbers do offer me and restaurant lovers throughout the metro and state some reassurance that our new-to-the-market favorite places are more likely than not going to be here next August.

It also shows that Iowa’s restaurant industry will continue to be an important part of the state’s economy. Given that Iowa's restaurant industry employs one in ten workers in the state and generates about $4.3 billion in sales each year—those are numbers I can live with.

Should public schools care about customer service?

Red-school-blur-door

Tom Vander Well, executive vice president of c wenger group, is a recognized customer service authority in the contact center industry.

It's back-to-school season, and just the other day I met with administrators of my local school district. We've been having discussions over the summer with regard to the administrative assistants who answer phones in the schools' offices and greet visitors.

The superintendent told me that, for some time, he has wanted to find a way to equip these admins with customer service skills and to find a way to deliver a consistent, positive experience for their constituents across the district.

"These individuals are often the first impression of our school district for a parent or community member," he told me. "We want that impression to be a positive one."

As the conversation continued the other administrator added some color commentary.

"When you visit schools in other districts they will often tell you what schools they don't want you to visit," he explained. "It's often about the secretary or administrative assistant who runs the school office. They know that your experience with that person is going to make your visit a less than positive experience."

I'm excited to get to work on a small project with the district's key impression makers.

I walked away from this fascinating conversation with a few key take-aways about customer service:

  • Customer service is not just an issue for retail business. I'm so impressed with school administrators who are thinking strategically about the service experience of their constituents. So often we confine our thinking about customer service to classic retail and service industries. My experience over the years is that investment in service experience has the greatest impact in markets and sectors not traditionally known for caring about good customer service.
  • First impressions matter. I believe it was Dale Carnegie who made popular the phrase, "You never get a second chance to make a first impression." For a new parent moving into a school district, that administrative assistant can make or break the parent's impression of the school district. Training and coaching on a few key service skills can make a huge difference in overall satisfaction with the school and the district.
  • Mission and value statements are useless without expectations and accountability. In my conversation with the district administrators I was informed that two of the three "pillars" that the district had defined were "pursuing excellence" and "building caring relationships." The administrator recognized that our project to define and implement a consistent service experience across the schools was simply acting on the values the district had already set as goals for themselves.

Are you in an industry or profession that isn't known for making customer service a high priority? Is so, you might find that it is the very thing that could set you apart from your competitors and build stronger levels of loyalty and retention from your customers or clients.

Introverts, extroverts, and the power of showing up

Dr. Christi Hegstad is a certified and award-winning coach, author, speaker, and the founder of Spark. Learn more at MAP Professional Development Inc.

Background - Flowers Colorful w websiteQ: Why do extroverts have voicemail?

A: To never miss a call.

Q: Why do introverts have voicemail?

A: To never answer the phone.*

Which response resonates with you?

Whether you consider yourself an introvert, an extrovert, or somewhere in between, one thing is for sure: To be of service, develop others, achieve our goals, and fulfill our purpose, we need to be in connection with people. Even my academic researcher client - whom you might think spends her days in scientific solitude - finds the majority of her workday involving others.

And if you have a message to get out into the world, you do a disservice to us all by keeping it - or yourself - hidden.

That being said, the idea of networking makes many people cringe. We often picture a room filled with people we don't know, everyone seemingly paired up and in gripping conversation, business cards flying, while we stand off to the side and secretly plan our escape.

I vividly remember attending my first conference as a working woman in the "real world." I focused on taking good notes, acting professional (read: grown up), and sneaking up to my hotel room during breaks in order to replenish my energy. I went home with great notes but little else: no sense of camaraderie with my fellow attendees, no new relationships to continue to build.

Since then, I've learned to balance my desire for connection with my need for rejuvenating time alone, and I've coached many clients - both introverts and extroverts alike - to make the infamous cocktail party environment meaningful and enjoyable. Here are a few tips you might find helpful:

Remember your WHY.

Part of my purpose is to serve others by inspiring positive action. If I think of networking in terms of what I might get, I'll feel awkward and inauthentic every time. But if I focus on being of service and fulfilling my purpose, I am much more gracious and open. What's your why? Connect with that and your networking experience will transform.

Adopt the role of host.

Ironic though it may seem, public speakers are often introverts; they feel fine if they have a role to fulfill (even speaking in front of thousands of people) but not as fine when left on their own. Even if it's not technically your event, imagine your job is to make others feel welcome and comfortable. Serving as pretend host gives you a role that benefits you as well as other guests.

Transform your vocabulary.

This may sound simplistic, but try replacing the word "networking" with a verb that feels more authentic: connecting, helping, building relationships, making friends, serving, learning. Feel free to adopt my view of networking as a way to fulfill your purpose.

Change your focus.

Let your guiding thought throughout your interaction be, "How might I help this person?" Maybe you can provide a resource, make an introduction, or simply be a good listener - a rare but valuable quality.

Show up. Fully.

"I'm always glad I went," a coaching client recently shared of functions, "it's getting myself to go that's difficult." Creating a mantra like "I joyfully show up," or remembering that honoring your commitments is a sign of integrity, can help. Don't overthink, just show up.

In her excellent book "Quiet", author Susan Cain discusses how many introverts have adapted to our noisy world by learning how to do extroverted things. Doing that, or what some might call "acting as if," doesn't mean being inauthentic; it's perhaps moving beyond your comfort zone to experience as rich a life as possible.

And as we've all probably learned by now, our greatest growth typically occurs beyond our comfort zone!

Christi Hegstad MAP Inc HeadshotCOACH CHRISTI'S CHALLENGE:

First, make sure the events you say yes to support your vision and purpose.

Then, view your next event as an experiment. Choose one of these ideas, or another that comes to mind for you, and notice the difference it makes in your interactions, feelings toward the overall event, and sense of purpose!

Dr. Christi Hegstad helps you bring meaning to work and purpose to life! Find her on Facebook, Twitter, and Instagram, all @ChristiHegstad.

* From Networking for People Who Hate Networking by Devora Zack (Berrett-Koehler, 2010).

Investors should care about fiduciary standard

- Kent Kramer, CFP, AIF, is chief investment officer/lead adviser at Foster Group. He writes about investing for IowaBiz.com

Here’s why we care about a fiduciary standard and why all investors should as well. When receiving financial advice would you rather have a financial advisor guide you in way that is always in your best interest or something less?

The Department of Labor recently published a rule requiring financial professionals and companies who provide investment services to retirement plans to operate according to a fiduciary, or, in common language, a “best interest standard.” Why is this standard important to investors? Here’s an excerpt from the fact sheet issued by the DOL.

A White House Council of Economic Advisers analysis found that (these) conflicts of interest result in annual losses of about 1 percentage point for affected investors—or about $17 billion per year in total. To demonstrate how small differences can add up: A 1 percentage point lower return could reduce your savings by more than a quarter over 35 years. In other words, instead of a $10,000 retirement investment growing to more than $38,000 over that period after adjusting for inflation, it would be just over $27,500.

The point of the rule is to simply require financial advisors to act in the investor’s best interest and to disclose any and all compensation arrangements that may benefit the advisor (rather than the investor) in recommending one investment over another. It does not mean an advisor cannot receive reasonable compensation for their work.

The response to this rule has been varied, with a number of investment providers, lobbying groups and some politicians coming out against it, in its current form. While the implementation of the rule may need some clarification and/or modification, the goal should be embraced by industry and investors alike. All parties, investors, advisors and financial service companies will benefit by making this rule and standard easily understood and implemented.

So how would investors know today if their advisors are already operating according to this fiduciary, or “best interest” standard? Here are three standards provided by the DOL to certify compliance. The financial advisor and/or financial services firm should:

1. State in writing their firm commits to providing advice in the client’s best interest at all times.
2. State in writing their firm has adopted policies and procedures designed to mitigate conflicts of interest.
3. Clearly and prominently disclose any conflicts of interest, like hidden fees, and backdoor payments that might prevent (or provide a disincentive to) the advisor from providing advice in the client’s best interest.

While this rule currently applies to retirement plans only (e.g., Profit-sharing plans, 401(k), 403(b)), investors would be well-served to make certain all their financial advisors are operating according to this fiduciary, or best interest, standard. There will be many reasons offered by those who would rather not operate according to a fiduciary standard. When you hear this, just remember to go back to the main issue; would you rather have an advisor guide you in a way that is in your best interest or something less?

 

PLEASE NOTE LIMITATIONS: Please see Important Disclosure Information and the limitations of any ranking/recognitions, at www.fostergrp.com/disclosures. The above discussion should be viewed in its entirety. The use of any portion thereof without reference to the remainder could result in a loss of context. Foster Group cannot be responsible for any resulting discrepancy. A copy of our current written disclosure statement as set forth on Part 2A of Form ADV is available at www.adviserinfo.sec.gov.

 

 

Think big, execute small

IStock_67143063_LARGE

Dr. Anthony Paustian is the provost for Des Moines Area Community College in West Des Moines and the author of "Imagine" and "Beware the Purple People Eaters."
 

Too often, people have a tendency to view the primary role of creative leadership as having and setting long-term direction, while letting others figure out how to get there. However, effective leaders are not only able to visualize which mountain to climb but also the individual steps necessary to climb it.

In the 1991 comedy What About Bob?, Bill Murray plays Bob Wiley, a character suffering from some serious “issues” (the clinical diagnosis given in the movie was an extreme case of multi-phobic personality characterized by acute separation anxiety).

When Bob’s current psychologist pawns him off on Dr. Leo Marvin, an egotistical psychologist played by Richard Dreyfuss, Bob shows up at Dr. Marvin’s office for an initial interview. As Dr. Marvin is getting ready to leave on vacation for a month, he shoves a copy of his new book, Baby Steps, into Bob’s hands and sends him on his way.

The premise of the book is to help people achieve larger goals by visualizing much smaller, reasonable goals and then take a series of successive baby steps to get there. To the eventual dismay of Dr. Marvin, Bob totally takes the doctor’s words to heart. He is able to visualize and take each necessary, yet very difficult, step towards “sharing” Dr. Marvin’s vacation with his family.

Bob’s actions include walking to the bus terminal, getting on the bus, riding the bus to Camp Winnipesaukee in New Hampshire, finding Dr. Marvin by yelling for him in the middle of town, and then hijacking Dr. Marvin’s book interview with Good Morning America. Bob humorously “baby steps” his way into every aspect of Dr. Marvin’s life and psychotic breakdown.

Although they desire a different outcome, strong leaders are like Bob. They are able to “see” a big leap, some potential great outcome or challenging opportunity, and then visualize and implement each baby step necessary to achieve it. With laser-like focus, they accomplish each required step in sequence while keeping the big picture and ultimate outcome in mind the entire time.

They realize that 20 percent of their effort accounts for 80 percent of their success (Pareto’s Principle) so they don’t allow themselves to be overcome by distractions and irrelevant daily minutia. Able to manage many steps simultaneously while keeping the appropriate priority on each, leaders also recognize forward progress is a process. They are patient; sometimes great things may take considerable time to accomplish. In the Old Testament of the Bible, King Solomon says, “It is better to finish something than to start it. It is better to be patient than to be proud.”2

Strong leaders will assemble great teams of doers who are able to execute. They will find, and nurture, those who can work both individually and collaboratively. They know that individual effort impacts the outcome of the entire group, so leaders are willing to work with doers to improve individual performance. Effective leaders are also willing to reorganize tasks and people to gain maximum output or remove people altogether if necessary.

Imagine a snow globe. As long as each snowflake continues to fall, the desired effect is achieved. Sometimes, however, after the “snow” settles, the globe needs a good shake to reenergize it and keep things moving. Strong leaders are snow globe shakers. Have you shaken yours recently?

©2016  Anthony D. Paustian


PaustianHeadFor more information about Dr. Anthony Paustian, provost for Des Moines Area Community College in West Des Moines, please visit his website at www.adpaustian.com

 

 

 

 

  1. Ziskin, L. (Producer), Williams, B. (Producer), & Oz, F. (Director). (1991). What About Bob? [Motion Picture]. United States: Touchstone Pictures. Used with permission.
  2. Holy Bible, New Century Version. (2003). Nashville, TN: Thomas Nelson, Inc.

I ate a goldfish

- Ying Sa is the founder and principal certified public accountant at Community CPA & Associates Inc. and a co-founder of the Immigrant Entrepreneurs Summit. 
 
 “What? You ate a goldfish?“ I raised my voice and could not believe what I heard! 
 
“Yes, it had a bitter taste and was not good at all,” Wang said matter-of-the-factly in her slow and accented English.
 
When she was in her late 30s, she and her husband came to United State through Governor Ray's refugee settlement program. They settled in Iowa, raised three wonderful children, and all of whom were college educated and employed. On a monthly basis, for decades, Wang would come to visit me for sales tax filing. Today she brought her husband Phung with her too. They both were sitting across the desk from me.
 
Content and happy as always, they had seemed this way to me for as long as I could remember. Business was never hard for them; they always made money. They are not the wealthiest clients I have, but with the little profit they earned, they use it to love the world. From an accountant's point of view, they run a perfect small business; especially if you can add “contentment” into the equity portion of the balance sheet.
 
I was telling these two that I brought my mom three goldfish when I visited her last week. So Wang blurted out her dining experience with the goldfish. They were caught off guard by my explosive reaction, so Phung added, “That was the time when we would eat whatever was moving.” He looked at Wang and she agreed silently.
 
My hand was on the calculator. I was supposed to get their sales tax completed, but at that moment, everything stopped and my mind was wondering about my own reaction and pondering Phung’s words.
 
Why would I be surprised? Of course I knew how life could be for them when they lived in the refugee camps. Life is so good here in United States, that people like me do not always think about folks who were forced to eat anything that could be eaten.
 
Today, it is unthinkable for someone to eat goldfish. They might even be reported to the animal right groups for animal cruelty. My kids would certainly be advocating for animal rights!
 
Material wealth is available to all of us here in this country. Living in this country is like heaven on earth for those who lived in a refugee camp. This is why Wang and Phung are so happy, all the time, no matter what.
 
I am their accountant and I know that they did not make a fortune with their $15.00-per-piece sewing business. But the way they carry themselves makes you think that they are exceedingly successful with their business. They are so content with what they have.
 
When someone has experienced hunger and hardship, they can appreciate what this country offers them. The hardship made Wang and Phung develop a tough mentality. So facing difficulties and challenges in the beautiful state of Iowa becomes nothing more than embracing the wind.
 
Phung continued to explain that when they were in the refugee camp they had to hunt for their food each day for three long years. Life was tough for Wang and Phung back then. So now, neither have had reasons to complain. Nothing could stop them from having a great business and great life. Every win is big win and every penny they made is a bigger penny than the ones before.
 
They wanted to live, so they ate a goldfish.

Appreciating Philip Glass

- Joe Benesh is a senior architect with Shive-Hattery and president and CEO of the Ingenuity Company, a strategic planning, diagramming, framework development and design thinking consulting firm.

At the risk of writing an esoteric entry this month, I would like to explore something I discovered recently while watching a documentary on Netflix. Philip Glass is an American composer, arguably the one who has had the most impact on modern classical music in the later part of the 20th century. Both as a musician and an architect, I had, until recently, struggled with his music. Philipglass120206_560

Glass uses what he calls “repetitive structures” in his music. In fact, his compositions are very easy to identify as a result of this. I found the repetition somewhat unappealing, anticipating a more conventional musical structure to develop - surely there would be a change in melody or tempo – something to add interest or embedded mechanisms or cues to keep the listener engaged. The documentary opened my eyes to something that I had not considered. Glass’s music is meant as an exploration; not simply repetitive constructs and endless arpeggios, but manifestations of his minimalistic style.

I started really thinking about this. Many of the frustrations that organizations experience with strategy consultants resemble my initial frustrations with Mr. Glass. Organizations hire consultants to help with strategic conversations and often get the same results, from very similar processes, and start to get desensitized.

This creates an uphill battle for me as consultant. Inherently, those who have experienced the aforementioned fatigue with a common or standardized strategy process are skeptical of doing planning work at all. They might argue that the sessions are “soft” or “touchy-feely” and resist engaging in the process at all, citing “wasted time” or “useless results”. Much like how I felt about the music of Philip Glass.

I was wrong. I’m not advocating for the common and standardized processes mentioned above, but what I do think has value is being able to make the distinction between a strategy process that will yield implementable results and one that will not.

I have designed and used planning modules that may, at first glance, seem simple. But, like the “repetitive structures” of Philip Glass’s music, there is a lot more there. Data exist, in layers, brought out by the nuance of conversation, exchange of ideas, and a framework for collaborative iteration and aggregation of motivations, objectives, mission, and perspective. It is the job of the facilitator to be able to listen the right way, to the right “notes”, and piece together a composition that reflects a useful, purposeful, and readily accessible and implementable strategy document.

Maxresdefault

As I sit here and type this blog post out, I am still struck by the positive tension that was created by the additional layer of understanding that led to the newfound appreciation I have for Glass’s music. How the evolution of my perception moved from a lack of appreciation for a stylistic approach to one of admiration for the rigor and commitment to a specific art form.

Both as a strategy consultant (and for that matter, as an architect), my job vacillates between art and science. The workshop of ideas that is afforded by respect and adherence to a useful strategic development framework makes success possible where it would otherwise not be. It’s the difference between looking at a page of sheet music and seeing music instead of a collection of notes. You may not notice until someone tries to play them, but, when they do - the distinction will be obvious.

 Please contact me for more information:Joe _Benesh_2011

 joe@ingenuitycompany.com

 For updates on strategy and all our latest content, please follow: @ingenuitycmpny

 

Airbnb might get you extra cash, but it won't help your income tax bill.


20150810-2Renting your home out when you're away isn't new. An uncle who was an out-of-state high school track coach for years made an annual pilgrimage to Des Moines for the Drake Relays. He always rented the same house South of Grand, and the owner conveniently went to Florida for Relays Week to spend that rent.


What is new are services like Airbnb and VRBO.com that match up travelers and folks willing to rent their home, or maybe a spare bedroom. They makes it easier to earn a little side money out of the most expensive asset most people have.

Such rentals also mean new tax issues for the hosts.

While the tax law may allow real estate operators to deduct losses attributable to their rental properties under the right circumstances, things are different for taxpayers leasing their homes.

A special code Section, Sec. 280A, strictly limits deductions from a "residence." If you rent out a “residence,” you can’t deduct rental losses beyond the amount of rent you receive.

Worse, you have to allocate the property taxes and mortgage interest that you can deduct anyway to the time the property is rented before you can deduct anything else — say, utilities or depreciation. If the amount of interest and taxes allocated to rental exceeds rental income, you’re done — your other expenses aren’t deductible.

What is a "residence," anyway? One California taxpayer logically noted in Tax Court that if he was renting out the whole house while he was away, he certainly was not "residing" there that particular moment, so he wasn't subject to the Sec. 280A limits on residential losses. Nice try, that.

Section 280A(d) has a specific definition of "residence":


(1) In general For purposes of this section, a taxpayer uses a dwelling unit during the taxable year as a residence if he uses such unit (or portion thereof) for personal purposes for a number of days which exceeds the greater of—

(A) 14 days, or

(B) 10 percent of the number of days during such year for which such unit is rented at a fair rental.

For purposes of subparagraph (B), a unit shall not be treated as rented at a fair rental for any day for which it is used for personal purposes. 

So the computation is based on the use for the whole year. If you live in the house at least 10 percent of the number of days you rent it out during the year, or for at least 14 days if that's more than 10 percent of the rental days, it’s your residence, as far as the tax law is concerned. That means it applies to a lot of taxpayers with vacation homes.

Section 280A isn’t all bad news for taxpayers. It also provides that if you rent out a house for less than 15 days during the year, you don’t get to deduct any rental expenses, but you don’t have to include any rent you receive in income either.

Of course, the tax law isn't the only complication for would-be Airbnb hosts. West Des Moines strictly limits the ability of its residents to have paid house guests, and Waukee is considering similarly restrictions. That's too bad, as such restrictions needlessly interfere with the ability of homeowners to defray their ownership costs with rent-paying housesitters.

Is Pokemon Go just a poke in your eye?

IMG_8154 (1) - Drew McLellan is the Top Dog at McLellan Marketing Group

In July of this year -- the world experienced a phenomenon that we are still trying to process. Pokemon Go. The game is already (in less than 2 months) the most downloaded app in iTunes history and the owners (Niantic and Nintendo) are enjoying about a $1.6 million dollar take every single day.

But what does any of this mean to the average business?  We've all read the stories of players falling off cliffs, playing during a funeral and even hunting pokemons at the Holocaust Museum

Is it ridiculous? Is it inappropriate? Sure. I'm not going to make excuses for stupid or insensitive. But it is clear that the game is breaking new ground and has already captured a significant portion of the globe's population. Don't believe me? Go down to the Sculpture Park any time of night or day and you will be amazed at the numbers of people there, all walking the park and capturing pokemons on their smart phones.

In terms of what Pokemon means to businesses and marketing -- there are two distinct camps. Those who do not want people hunting pokemon near their location and those who very much do want that. There are perfectly valid reasons 

I have some advice for both.

If you do not want people playing Pokemon Go on your property/store/location: The question is how do you do this without looking like a curmudgeon who hates fun?  

  • Be nonjudgmental in how you communicate your request that they play somewhere else.
  • Give them suggestions on where else nearby to play/catch pokemons.
  • Provide context as to why you'd rather they not play in your space.

On the flip side, if you'd like to use Pokemon Go to attract people to your business:

  • Create specials. (Show us your pokedex for a discount, discounts for players at a certain level or with a specific Pokemon in the pokedex.)
  • Buy/launch lures at pokestops near your location.
  • Watch for the opportunity to create special events/stops down the road. (The company says they are coming.)
  • Post signs if you're a site that spawns a rare Pokemon or if that is happening nearby.
  • Play along -- join in the conversation and connect with your customers at a different level.

On the one hand, this seems silly, doesn't it? Seriously -- we're planning our communications messages around a game? Maybe it will blow over. (W.when was the last time you heard an Angry Birds mention?) But for now, it's a cultural trend/reality.

Our businesses don't exist in a vacuum and the smartest marketers know to pay attention to what has captured their audience's attention. It's hard to deny that this might matter, at least in the short run.

 

 

 

What is the goal of a minimum wage hike?

- Gretchen Tegeler is president of the Taxpayers Association of Central Iowa.

The Polk County Supervisors appear poised to follow the lead of Linn and Johnson counties in raising the minimum wage from $7.25 per hour. The change, to $10.75 per hour, would take effect on Jan. 1, 2019; the idea being the Iowa Legislature would have an opportunity to act first by raising the rate statewide.

But what is the goal of a minimum wage hike? Because the Polk County task force began its work based on the assumption there would be an increase (the only question being how much), there never was a discussion of goals, or whether a minimum wage hike is the best way to accomplish them. It’s a relevant discussion, even if the Polk County Supervisors don’t have the power to implement other options. Certainly if the Iowa Legislature eventually feels compelled to act, the discussion is essential.

So what is the underlying goal of minimum wage discussions, and what does the research indicate?

If the goal is to reduce poverty, or the incidence of families living in poverty, a minimum wage increase is indeed a blunt instrument, and there is a better tool.

According to data cited in a December 2015 paper by the Federal Reserve Bank of San Francisco, “a sizable share of the benefits from raising the minimum wage would not go to poor families. In fact, if wages were simply raised to $10.10 with no changes to number of jobs or hours, only 18 percent of the total increase in incomes would go to poor families, based on 2010-2014 data.” (1)

According to the paper, this is because:

  • Many nonelderly poor families (57 percent) have no workers;
  • Some workers are poor because of low hours, not low wages; for example 36 percent have hourly wages above $12; and
  • Many low-wage workers, such as teens, are not in poor families.

The paper goes on to point out that 49 percent of the benefits would go to families that have incomes below twice the poverty line. Some 32 percent would go to families in the low-income range, but with with incomes at least three times the poverty line. 

Others, including the San Francisco Federal Reserve paper and a Feb. 6, 2016 Des Moines Register guest opinion written by Steve Hensley (2), suggest a better approach for reducing poverty would be to increase the earned income tax credit (EITC).

A full-time minimum wage worker in Iowa with two children already receives checks from the state and federal governments that together raise family income above the poverty level. The EITC could be increased and potentially expanded to include single-individual households. Because our state and federal tax systems are progressive, these costs would be borne by higher income taxpayers. And all of the benefit would go to the target population.

In contrast, many business owners who employ minimum wage workers are operating close to the margin. They are not well positioned to finance an income redistribution program, especially when so little of the benefit is actually reducing poverty and so much is actually going to higher income families.

If the Iowa Legislature does believe that government should do more to move people out of poverty, let’s hope they begin with the end in mind, and fairly evaluate all options.

Correction: An error in the date and the amount of the minimum wage in this blog when it was first published has been corrected. 

Free trade as straw man

- Brent Willett, CEcD, is executive director of Iowa's Cultivation Corridor. He writes on economic development.

It's fashionable this election season to be anti-trade.  That's not just naive. That's dangerous.

In a politico-cultural soup of an election season with an otherwise yawning lack of substance, a raging policy Shutterstock_295357133 debate about the future of free trade has taken a strikingly prominent role. Not since the 1992 election, when the North American Free Trade Agreement [NAFTA] was being publicly litigated -- thanks in large part to Ross Perot’s “giant
 sucking sound
” description of the trade pact -- has trade played so significant a role in public political discourse. 

What distinguishes the Bush 41 – Clinton campaign and 2016, though, is the fact that the two major party candidates in 1992 were firmly pro-trade and today Hillary Clinton and Donald Trump are both -- bewilderingly -- proudly anti-trade. 

This is not a minor phenomenon; the default position for virtually every serious contender for the office of the presidency in the modern era has been one of strong support for trade, and for good reason.  Today the free trade agreements the U.S. has with 20 countries around the world account for nearly half of America’s exports. 

Somehow, dispensing with $1.2 trillion, which is how much of the $2.3 trillion in total export activity the U.S. would lose out annually in export activity if those agreements disappeared today, has become a winner of a position in today’s theater of the absurd presidential contest.

All this candidate trade rancor and empty rhetoric is dangerous to the ability of any American community, region or state to compete for new investment, jobs and research from companies and institutions which are, whether our presidential candidates like it or not, complex and global, and that’s not going to change. 

Econ 101

Take yourself back to your college microeconomics class. What is trade, and what does it do? Trade is, of course, Hesiod-sm the buying and selling of goods and services in a competitive marketplace. Trade permits specialization, which drives down input costs [plumbers plumb; programmers program] and serves as the framework for a competitive marketplace. In a competitive trade scenario, buyers -- and sellers, crucially -- benefit by way of respective surpluses. A ‘buyer surplus’ provides the buyer a net monetary benefit if she was able to purchase a product or service for less than she was prepared to pay, and a ‘seller surplus’ provides the seller a net monetary benefit if she was able to sell the product for more than she requires to continue operating. 

All this is to say trade, at its most fundamental level, improves welfare; it’s a basic economic law. Trade creates wealth, for buyers and for sellers. That’s everyone. Ancient philosopher Hesiod ably put it: "Through work men grow rich in flocks and substance."

Are there real and widening imbalances in wealth in this country?  Absolutely. Is multinational trade the major cause of it? Probably not. On average workers in manufacturing in this country whose jobs depend on exports earn an average of 18 percent more than other workers. 11 million U.S. workers and at least 1 million farmers directly benefit at an earnings level thanks to this premium. In the U.S., multinational companies pay, on average, 25 percent more than the mean and are the source of more than 80 percent of private-sector R&D.

American farmers have increased their exports to free-trade partners to $56 billion, up 130 percent since 2003. Closer to home in Iowa, where one of every three acres of crops planted in our country is for export, $15 billion in Iowa goods were exported in 2014 by more than 3,400 Iowa companies, 81 percent of which were small companies. 108,000 Iowa jobs were supported by exports in 2014.  In our great state, opposing trade simply does not comport with economic growth reality.

A short diversion to monetary policy

Despite how unprecedented it is to have two major party presidential candidates in the anti-trade column, there is at least one benefit to the raising of trade in the national discourse as an issue of concern: it’s placed a spotlight on global currency policy, traditionally an opaque, sleepy area of concern reserved for central bankers and economists.

While currency ‘manipulation’ by China is the fashionable villain in the narrative of a troublesome strong dollar, as Judy Shelton points out in her Aug. 10 Wall Street Journal commentary, currency imbalance today is about more than China.

The "shortcomings of our present international monetary system --volatility, persistent imbalances, currency mismatches -- which testify to its dysfunction. Indeed, today’s hodgepodge of exchange-rate mechanisms is routinely described as a non-system,” she writes.  Shelton argues that in today’s effectively lawless international monetary arena, nations are incentivized to establish isolationist exchange-rate policy, which contributes to a winner-take-all monetary infrastructure in which central banks play an outsized role, playing whack-a-mole in addressing rolling economic crises the world over.

“It is one thing to lose sales to a foreign competitor whose product delivers the best quality for the money,” Shelton writes. “[I]t’s another to lose sales as a consequence of an unforeseen exchange-rate slide that distorts the comparative prices of competing goods.” 

Fair point.

Back to trade.

So what happened? How have we become a country in which our two major-party leaders can safely criticize free trade and the treaties and agreements which undergird it as ‘a mistake’ [Clinton, in 2008, on NAFTA] and ‘horrible’ [Trump, 2015, on the Trans Pacific Partnership deal]? 

What’s happened, I guess, is Americans who are busy living their lives have begun, amidst so much political noise, to resignedly accept irresponsible trade-bashing rhetoric from political leaders as an accurate reflection of the cause of a general lack of net global economic growth in real income terms for many years. The reality, though, is that were it not for the free trade pacts which help orchestrate literally trillions of dollars of export income for U.S. companies, we would be in a much deeper, almost difficult to comprehend place of economic malaise today. Economic developers like me would have much less to do.

The good news

There is good news. Americans, by and large, don’t agree with the irresponsible anti-trade positions of the two major party candidates.  A July NBC News/Wall Street Journal poll found that 55 percent of voters think free trade is good for America. Thirty-eight percent consider it damaging. An October 2015 poll by Gallup found that only 18 percent of Americans would support leaving NAFTA.

Aggregate polling on TPP suggests that more than three Americans support the deal for every one who opposes it. It is quite possible that on the other side of this election we'll see the prominence of trade bashing become more marginalized in the public discourse, creating bandwidth to debate the real issues contributing to doggedly weak national growth. Economic development efforts across the country, including right here in the Cultivation Corridor, would only see benefit from such a pivot.

Brent Willett, CEcD, is executive director of Iowa's Cultivation Corridor.  Contact him:

Human: 515-360-1732

Digital: bwillett@cultivationcorridor.org / @brent_willett / LinkedIn.com/in/brentwillett

Pokemon Go - cybersecurity threat?

Pokemon_go_logo- Dave Nelson, CISSP, is president and CEO at Integrity.

It seems harmless right? Just a way to burn off a little steam.  Simply download this little app and go capture some Pokemon.  Whew…don’t you feel better now? Great, glad to hear it. By the way, all of your company’s servers have just been compromised and your email system was hacked.

Yes, it is just that simple. Mobile apps are a real threat to the information security of every organization. According to Verizon’s 2016 Data Breach Investigation Report, data breaches from mobile devices such as smartphones were not a significant threat last year. However, there are known exploit packs available and as smartphones increasingly take on daily computing functions, it is only a matter of time until a major data breach occurs due to a smartphone hack.

There are three areas of concern when using mobile apps. First is the proliferation of fake apps. Because apps are often restricted by device type, operating system version, country of origin, etc., there are many fake apps in the app stores. These applications are often filled with malware and malicious tools. Users who are not paying attention or have problems downloading the original app can end up welcoming this malware into their mobile phone.

A second problem is how users authenticate to the application. When the app allows users to use their Apple ID, Google ID or Microsoft ID, the manner in which the permissions for those logins requires close inspection. For instance, when released, the Pokemon Go app allowed users to login using their Google ID.  The app requested far more permissions than needed, which gave the creators of Pokemon Go full access to your Google Mail, Drive, Calendar, Docs and other site features. Wow…talk about an invasion of privacy and huge security breach. If your company uses Google products for any of its confidential data, you effectively gave the folks at Pokemon Go full access to your confidential information.

The last concern I want to cover is the permission level of the mobile app itself. Does it have the ability to access protected storage? Can it access stored credentials on the device? Can it record keystrokes, voice commands, search strings, etc. All of these could send confidential data back to an application developer and give them full access, not just to the device itself, but potentially to your internal network or virtual private network (VPN) used for remote access. Whoops again…

As you can see, there are real dangers from mobile apps. To date, there have not been many reports of data breaches from this threat angle, however, it’s simply a matter of time. Organizations need to remain vigilant in restricting access for Bring Your Own Device (BYOD) programs and implementing strong controls for mobile devices such as smartphones and tablets. Don’t let the Pokemon capture you or your company.

Email: dave.nelson@integritysrc.com Dave-Nelson-2015

Twitter: @integritySRC | @integrityCEO

Website: https://integritysrc.com

Find your energy vampires

Stand by button 2- Rob Smith is principal architect at CMBA | Smith Metzger. He writes about sustainable construction and design.

Vampires suck the life out of a person, but by day look harmless.  Much like energy vampires.

Energy vampires are all those devices in your home that are never truly off.  You can tell by the glow of the green light.  In fact I don’t need night lights in my house because of the glowing green light from the TVs, receiver, radio, and more.

Why do we have devices with standby power?  Anything waiting for a click of a remote or a continuous display like the “ON” button.  Sometimes you cannot even tell.

Chart on stand by powerThe worse of the devices are digital cable boxes with DVR which in “OFF” mode could use 350 KWH and cost about $30 per year.  Doesn’t seem like a lot but my home energy bill is relatively small.  If you add up all the devices it could be 5-10 percent of my total bill.

What can you do?

  • Use a plug strip at locations where many devices are located.  All my stereo equipment is now hooked into my flat screen so I get to turn off power to TV, amplifier, CD player, and Blu-ray player with one switch.
  • Unplug the device if it is not used much like the CD player and TV in the guest bedroom.
  • Buy a little device that measures exactly how many watts your electronics consume while “OFF”.
  • Buy ENERGY STAR products that might reduce the standby power consumption to 1 watt instead of 10-20 watts.

Let me know if you have any great ways to stomp out energy vampires.  Email me at rsmith@smithmetzger.com

Speak with — not at — clients

- Carl Maerz is a co-founder of Rocket Referrals.

It’s Monday morning. I arrive at the office — coffee in tow — sidle up to my standing desk, and flip open the MacBook only to be greeted by a gaggle of junk mail littering my inbox. Each one of them staring back at me with a defiant grin, knowing full well that I didn’t sign up for that newsletter.

As a business owner I’d rather not be viewed in the same light as these big-box retailers or marketing bots that force-feed me emails every day.

I sure don’t want to be “that guy” contributing to the disheveled-inbox epidemic plaguing the nation. Well, it turns out that many business owners share my opinion. Some even take it as far as contracting “communication paralysis” by refusing to reach out to their clients altogether.

This strategy isn’t just unimaginative, it’s also costly. Research shows that regular and meaningful communication is the most effective way of maintaining relationships, increasing retention and capturing word-of-mouth referrals. So switching off the voice box isn’t a good idea. Rather than reducing the frequency of touch-points, focus on increasing their quality.

If you’ve ever taken a road trip with children, you've surely experienced voices emanating from the backseat: “Are we there yet? Are we there yet?” The knee-jerk reaction is to plead for silence, but consider for a moment, what if the incessant chants were replaced with reciprocal dialogue. You’d likely find value in a meaningful conversation if the kids produced something other than noise.

Similarly, the key to communicating successfully with your clients is encouraging two-way conversation. Make them feel like you are speaking with them, not at them. Clients are smart enough to differentiate an obligatory email blast from something more personal and genuine. If you don’t bark at them from the proverbial backseat, they’ll be happy to hear from you.

The Net Promoter Score (NPS)

Perhaps the most effective way of opening a dialogue with clients is by utilizing the Net Promoter Score (NPS), a single-question inquiry used to gauge the loyalty for individual clients. The NPS asks clients to rate an agency from 0 to 10 by asking “How likely is it that you would recommend (x business) to a friend or colleague?” Respondents are grouped into three categories based on their score: Promoters (9-10), Passives (7-8), Detractors (0-6).

The NPS was developed in 2003 by business strategist Fred Reichheld as a metric to determine the overall loyalty of a company’s client base. Fred found that — unlike client sentiment measured by traditional satisfaction surveys — client loyalty was directly linked to referrals, retention and repeat business.

Because of its simplicity, the NPS survey yields a higher-than-average response rate. At Rocket Referrals, for example, 40% of surveyed clients give a score rating — with the majority expounding on their response with additional feedback.

Furthermore, segmenting clients based on their loyalty allows for more personalized and purpose-driven communication. Detractors, for example, should be given a phone call to resolve any issues before they defect. The NPS can be used as a vehicle to directly drive favorable behavior from your clients. We call this the “NPS Process,” which is essentially the method of leveraging the high response rate of the NPS to influence additional action, including the collection of positive testimonials, referrals and online reviews.

How to communicate

Routine touch-points throughout the year will dramatically increase the chances that your clients not only stick with you, but also refer you when the time is right. Every touch-point you deliver plays a huge role in reinforcing your brand and the perception of your business. The idea here is to keep you “top of mind.” Remind them that you’re working behind the scenes and providing an ongoing service.

When implementing this strategy, I’m not suggesting that you ignore your detractors and neutral clients — rather, that you communicate with them differently. For example, the last thing you want to do is speak to disgruntled customers as if they think highly of you (it’s impersonal, even condescending, and it shows you didn’t pay attention to their feedback). Tailor your communication based on each client’s NPS response. Begin with your best promoters (the 10s) and work your way down from there. This strategy will get you the best bang for your buck when reaching out to your clients. It’ll allow you to remain cost-effective, while sending quality, personalized communication.

Business 'divorce' and discounts

Matthew McKinney is an attorney at BrownWinick Attorneys at Law. PGP_1038

 

Ownership in a business (whether a limited liability company or a corporation) is often shared among many individuals.

As a result, in businesses across Iowa most owners do not control and do not own more than half of the business. In other words, they are noncontrolling owners, bound by the "vows" they've accepted in the business's governing documents.

In the eyes of a court, such owners are often referred to as "minority owners." Unfortunately, in the same manner that some married couples seek a divorce before a court, so too do business owners appear before a court seeking divorce from their fellow owners.

In a business divorce, however, a court is not calculating alimony or child custody; rather, it is often valuing ownership in the business. During this valuation process, majority owners frequently seek to impose a minority or "lack-of-control" discount on the value of the minority owners' interest.

Consequently, a familiar question frequently arises both in and out of court: Should minority discounts apply in such circumstances?

Iowa's appellate courts have repeatedly found minority or "lack-of-control" discounts do not apply when valuing a minority owner's interest in such cases. In fact, in July the Iowa Court of Appeals reiterated this important point when it clearly stated "the fair value of (the minority shareholder's) shares should not include a minority discount." Baur v. Baur Farms, Inc., No. 14-1412, 2016 WL 4036105, at *4 (Iowa Ct. App. July 27, 2016) (emphasis added).

In reaching its decision, the Iowa Court of Appeals relied upon the Iowa Supreme Court and its prior holdings, which provide in relevant part: "(O)ur legislature made a policy decision when it adopted the current definition of “fair value.” By not allowing a discount for lack of marketability or minority status ..."  Nw. Inv. Corp. v. Wallace, 741 N.W.2d 782, 787–88 (Iowa 2007); "Such a discount in effect would let the majority force the minority out without paying it its fair share of the value of the corporation." Sec. State Bank, Hartley, Iowa v. Ziegeldorf, 554 N.W.2d 884, 889 (Iowa 1996).

In sum, before divorcing your business partner and selling your shares in an Iowa business at a discount, you should consider contacting a licensed attorney.  

Give your project the time it deserves

- Alex Karei, marketing director for Webspec Design, blogs about web strategy.

Pokemon_GoYou’d have to be living under a rock to not have heard the phrase “Pokémon Go” in the past few weeks. Even if you don’t own a smartphone, it’s hard to miss the crowds of teens (and adults) wandering around the Pappajohn Sculpture Park at all hours of the day.

Whether you love it or not—most people have a pretty strong opinion on this issue—there’s no denying that the app’s popularity has exploded beyond what many might have imagined.

As this popularity has continued to expand, it’s easy to compare the seemingly overnight success of the app with what your brand might be doing in its marketing. After all, Pokémon, while popular in the '90s, has maintained a somewhat lower, albeit steady, awareness level in recent years. Then suddenly they release an app that quickly amasses +100 million downloads out of nowhere. What?

However, like anything else, there’s more to the story behind the app than most people know.

For instance, did you know that much of the data that went into building the game’s Pokestop and gym locations was built up by a previous game, launched back in 2011? Five years ago, Niantic (the creators of Pokémon Go) released a beta of Ingress, an augmented-reality multiplayer game with some similar gameplay to Pokémon Go. Additional data beyond this then helped Pokémon Go with one of the most fun aspects of the game: sorting out which Pokemon appeared where.

There’s more to the story, which I’d encourage you to Google, but my point is this: Niantic didn’t wake up one day, magically have the idea for Pokemon Go, and knock out the entire app in six months. At a minimum, without data from five years ago, the game wouldn’t have been able to exist in its current form.

It’s not uncommon for a client to come to Webspec with an idea that they’d love to become viral quickly. Obviously, we’d all love that for you as well! But great work isn’t quite that easy. You’ve probably all seen this concept, but it can be looked over quickly when pushed to meet a deadline.

Good-fast-cheap

Next time you’ve decided to take on a new website, application or digital project, I’d encourage you to keep this in mind, and if needed, share the example of Pokémon Go. You don’t always need five years to make your idea stellar, but you’d be surprised how many marketing managers I speak with who are given unrealistic deadlines for their projects.

Good work takes time, and it often isn’t cheap. Give your grand ideas the time and attention they’re worth, and you’ll reap the benefits. I’m not promising millions of downloads, but even one-tenth of that success wouldn’t be too shabby now, would it?

Logo property of The Pokémon Company International.

 

Alex-Karei_YPFinalist2016Alex is the marketing & communications director for Webspec Design, a website design and development and digital marketing agency in Urbandale.

Connect with her via:

Email: alex@webspecdesign.com

Twitter: www.twitter.com/alex_karei

Instagram: www.instagram.com/alex_karei

LinkedIn: www.linkedin.com/in/alexandriakarei

Reaching higher

- Ying Sa is the founder and principal certified public accountant at Community CPA & Associates Inc. and a co-founder of the Immigrant Entrepreneurs Summit. 

When Juan urgently showed up at my office with his son in tow, I knew they came to discuss an important decision.

Juan sat down heavily into my office chair, sighed, and said, "I have to close my store. Junior does not want it."

Juan is 69 and has been running a local grocery store for the last 25 years. Business has always been good, and his only son, Junior, practically grew up in the store. Junior has always been the most reliable helper for Juan.

Now Junior is a handsome 18-year-old high school student with an academic record that can easily ship him to the East Coast. Junior helped with translation whenever Juan came to the office to see me. I noticed that Junior has always dressed professionally to come to my office. He carries himself and speaks like a professional. Recently Junior had called me a couple of times about his college applications.

Today Junior wore a white and blue Tommy Hilfiger T-shirt and a pair of black frame Miu Miu glasses. Behind those glasses, I saw worry in his eyes.

Junior said, “Sorry Ying, we have to come to talk to you because I think you know what is going on. You know, I do not want to be like my Dad, and I want to go to school. I really appreciate what my mom and dad gave me, but I do not want to just work in the store. I have better and bigger things to do and to learn."

“OK,” I said. Looking at Juan, I saw that he was looking away. I understood why, but in my heart I was happy for Junior. There was a moment of silence between us.

“Well, that is really OK!” I finally broke the awkward silence. “Juan, we will look for a buyer, and I am sure Junior will help while we transfer the ownership.”

Junior nodded sincerely and turned to his dad. “Dad, I will help you to sell it. Do not keep the store for me, because I have my own plans. You can call it dream, my own dream,” Junior continued.

“I will do well in college, and I will try to support myself. Please let me go to college, and I will not trouble you and Mom financially. Just let me do my own thing.”

I looked at Juan and saw tears in his eyes. He seemed older than he was a moment ago. “It is not easy to build a retail business like this. So hard to let it go,” Juan whispered as if he was talking to himself, and his chin muscle tightened as he held back tears.

Junior put one of his hands on his Dad’s and added: “Dad, isn’t this what you want? You want me to be successful, and you and Mom want me to have all the opportunities that the American kids have. I have them, and you gave that to me. I am an American; I want to do better and greater things, Dad.

"Your store is great, but that is for you and Mom. I appreciate what you two have done, but I want something different and I dream differently than you two.” Junior gently rocked his dad’s arm and continued, "Dad, I cannot help you with your store. Sell it if you cannot run it without me. I promise to make you and Mom proud.”

It was hard to convince Juan to let the business go, but he eventually agreed and he finally said, “Junior, I am too old to handle this store without you. We will sell it. Mom and Dad will save the money for your college."

Finally we called a business broker, and now the store is officially for sale. They left, but I was given a bittersweet reminder of a situation that many immigrant families I know face.

For the first generation of immigrants, like Juan, choosing what they love to do might not be possible. But what they can do is make the dream more attainable for the next generation, so they can reach higher in the sky. Juan and Junior are not so different from several other immigrant families.

By standing on Juan’s shoulders, Junior can move farther toward his dream.

 

Double dividend ... and more

- Cory W. Sharp is an intern architect at FEH Design in Des Moines and the current president of the Young Professionals Connection

Kim Hanken, a friend of mine from Ankeny, was sharing some thoughts about the benefits of community involvement for young professionals. Since I couldn't have said them any better, I thought I'd go ahead and share them straight from her.

Headshot

"What I’ve learned most about my community involvement is how much it has made me grow not only as an individual but as a professional," said Kim, who serves on the boards of directors for Ankeny Young Professionals, Art for Ankeny and YP Iowa.

Right off the bat, that's a powerful double dividend for young professionals.

She said the relationships she's created and maintained through the various community activities she's been involved in "have helped me succeed in a career that requires the 'who you know' element."

"It has also built a strong sense of loyalty within me to my city. By creating personal buy-in to the success and growth of my community, I’ve discovered how important I am to the future of the city we call home," she explained. "Many of my strengths that I use at work were discovered -- and continue to be discovered and tuned -- through giving my time to my community."

In the process, her love for networking, connecting and collaborating has helped her learn how to work with people who have a wide variety of personalities, backgrounds and priorities.

She believes that employers also receive big dividends when they encourage young professionals to be involved in community activities. (This topic of community involvement is so important for young people that I plan on writing about it for the next month or two, beginning with one of the biggest questions: How do I find the right company that encourages community involvement or convince my current boss that it's worthwhile for our company to let me be more involved?)

"Oftentimes we get caught up in the return on investment of community involvement and we forget that ROI doesn’t have to mean dollar signs. ROI can be skills and traits. It can be friendships, mentors or even a life lesson in who you don’t want to be," she said. "The nice thing for your employer is that by sending employees out into the community you are empowering them to care, to be passionate, and enriching their lives without spending an extra cent."

Kim also makes the point that you don't have to spend years and years … and years before reaping those dividends. She has said that she really didn't get involved in her community in a big way before 2013. In 2014, she was named the Ankeny Young Professional of the Year. A year later, she was recognized as the Ambassador of the Year by the Ankeny Chamber of Commerce. 

Bizrec1

One more thing about Kim -- she's a mom to four children. 

If she can become involved in her community in such a big way with her commitment-packed schedule, what could possibly hold the rest of us back from doing the same thing? 

 

Email Cory at:

corys@fehdesign.com

president@ypcdsm.com 

The power of listening well

Fotolia_115165574_SRita Perea is president and CEO of Rita Perea Leadership Coaching and Consulting, specializing in working with senior leaders to successfully engage employees, lead teams, manage change and balance work and life.

Successful verbal communication is a two-way street: speaking and listening. We all know people who are boastful big bags of hot air ... they talk a good game but they are poor listeners. This can shipwreck dialogue and two-way communication, which, in turn, causes stress, tension and misunderstandings. Have you ever been involved in a communication mishap that could have been avoided with the use of better listening skills? Have you walked away from a conversation feeling disappointed that your important message was not heard? You are not alone. What can we do about it?

You’ve heard the adage, “Be interested rather than interesting.” Research shows us that people who have high emotional intelligence are able to adapt their behaviors to enhance interpersonal relationships with others - this includes being an active listener.

Listening is complicated! Active listeners are listening both with an emphasis on enhancing the interpersonal relationship and to gather information. People have natural listening styles or ways that they process what they’ve heard. A Comprehensive listener will listen to gather information and put it together to create the big picture. An Evaluative listener is automatically judging the information they are listening to. Discerning listeners have a natural style that sifts and sorts fact from fiction. An Empathic listening style helps the listener tap into the feelings of the person they are listening to. Listeners who have an Appreciative listening style listen for the entertainment and enjoyment of listening, not necessarily to gather information. Understanding our own personal listening strengths and our opportunities for growth is tapping into the power of listening.

What do we do if we want to tap into the powerful habits of listening well? Practice the behaviors of outstanding listeners. Here are a few tips to help:

  1. Create a safety net. Complex and sensitive dialogue can occur when the listener creates a safe environment for the speaker to share their information.
  2. Clear barriers and obstacles. The listener lets the speaker know that they are fully present and attentive by putting away phones, laptops and any possible distractors that may interrupt and disrupt the dialogue.
  3. Seek first to understand. Author Stephen Covey said it best: “Seek first to understand and second to be understood.” The listener is gathering information for the purpose of comprehending what the speaker is trying to deliver. The listener asks clarifying questions to understand more fully and paraphrases what has been heard to measure the accuracy of the listening experience.
  4. Nonverbals speak loudly. It is estimated that 80% of our communication is delivered not through the spoken word, but through nonverbal cues. The goal is to listen with your eyes as well as your ears. Outstanding listeners pay attention to eye contact, facial expressions, gestures and postures to gain additional information.
  5. Employ empathy and offer support. The listener can identify with and acknowledge the feelings and emotions of the person delivering the information. The listener can validate those feelings in a neutral, nonjudgmental way.
  6. Ask probing questions for critical thinking. Powerful listeners do not take over a conversation so their topics become the topics of discussion. Instead, they explore the dialogue fully by inviting more information through the use of gently probing questions. By asking clarifying questions to understand the assumptions of the other person, the listener helps them see these ideas in a new way.

Enhanced listening skills can help employees avoid stress, tension and miscommunications in the workplace. With self-reflection, focus and practice, we can all harness and elevate the power of listening well.

© Rita Perea, 2016

Become the leader of your day

- Dr. Christi Hegstad is a certified and award-winning coach, author, trainer and the founder of Spark. Learn more at MAP Professional Development Inc.

SunriseIf you've been with me for a while, you likely know two of my beliefs:

  1. Leaders set the tone.
  2. Mornings rock.

And when you set the tone of your morning, you lead your day.

I've often written about the power of a morning routine (see here, for example). But what about how you start your workday?

Surveys repeatedly show that most of us have the highest energy and clarity in the morning. Yet how do we start our workdays? For most, in reactive mode: flipping on email or social media - ultimately letting others decide what's important and setting up our days accordingly.

But what if you tweaked just one or two aspects of your morning? What kind of difference might that make?

Consider adopting one of these five ways to become the leader of your workday:

1. Power down to power up. Commit to keeping email, voicemail and social media off for your first 15 minutes. Start the day proactively instead.

2. Review your goals. I scan my vision, purpose statement and goals each morning to remind me why I'm about to do what I'm about to do.

3. Set your Daily Top 3. Choose the three priorities that must be completed even if the rest of the day goes haywire. Separate them from the rest of your to-do list.

4. Dive deep - even briefly. What if you dedicated even just 15 minutes in the morning - focused, uninterrupted, results-oriented time - to your No. 1 goal? How would that make the rest of your day feel?

5. Give a compliment or a thank-you. Nothing starts a day - yours or your recipient's - quite like gratitude!

Great resources exist to help you make the most of your day - personally, I love Stephen Covey's First Things First and Hal Elrod's The Miracle Morning. While everyone's strategy differs, all seem to have one denominator: purpose. Know your why, and you're much more likely to be the leader of your day, work and life.

Christi Hegstad MAP Inc HeadshotCOACH CHRISTI'S CHALLENGE:

Make one small adjustment to your morning routine. Which of the above ideas will bring more meaning and purpose to your days? Which will make a difference for those with whom you interact? Remember, one small change can lead to significant results!

Dr. Christi Hegstad is a certified and award-winning coach helping positive people make purposeful change. Learn more at www.meaning-and-purpose.com or on Facebook, Twitter, and Instagram.

 

The marketing landscape is changing

Chart - Drew McLellan is the Top Dog at McLellan Marketing Group

The Economist recently published their report The path to 2020: Marketers seize the customer experience, which tells an interesting tale of changing tides. The survey results identify the top priorities of these chief marketing officers, and while you'd expect to see new customer acquisition (because you always see that one), what is a little more surprising is how prevalent the idea of protecting and strengthening current customer relationships has become.

The report/insights are based on a global survey of almost 500 CMOs and senior marketing executives. Not only did they survey them, they also conducted some in-depth interviews to identify which technologies and customer trends are likely to change marketing organizations in the next year or two.

When all of the data was crunched and analyzed, there were two clear preferred strategies for 2016, which were focusing on customer loyalty and relationships, and also targeting customer acquisition.

Digging a little deeper into the data, we can see that the concept of personalizing the customer experience is gaining ground. In the past, it's been given lip service but it's been awkward to execute, and most organizations don't have the resources or bandwidth to manage it. But with automation software's growth, this has gotten to be much more elegant and easier to pull off, within a reasonable budget.

The 20-page report is free to download and has insights worth considering. 

 

Valuation lessons from Pokémon Go

John Mickelson, managing partner at Midwest Growth Partners, is IowaBiz's blogger on succession planning. Read more about him here. MGP intern Anthony Yang, a junior at the University of Iowa, also contributed to this article.

Like music written after the Napster era, Facebook, and skinny jeans, I am apparently being woefully left out of a new cultural phenomenon: Pokémon Go. As I have read in newspapers (yes, I still read the hard versions), this craze is infecting the nation and has whipsawed the valuations of its parent companies. 

But underneath the appalling stories of car accidents and trespassing lawsuits, there is actually a pertinent message about your business valuation as you consider succession planning strategies: ASSUMPTIONS MATTER!

Earlier we talked about key factors that impact valuation, but we did not discuss the intricacies of determining the valuation itself. Valuation is driven by a set of assumptions that business owners should realistically consider as they contemplate what their business is worth. One tiny change can make a big difference among the investor community.

So what does this have to do with our battling cartoon monsters? Well, let’s take a look at what happened to Nintendo, an owner of the Pokémon Go app. When the app was first released, 80 million people downloaded it within days of its launch and Nintendo’s market value shot up $7.5 billion. Mr. Market said: "80 million people! Think of the advertising! Imagine the data collected! A way to engage millennials!"  

But once Nintendo announced that they would not profit from the app as much as anticipated regardless of how many players they had, their value dropped by a hefty $6.7 billion. Ouch. A small change in investor assumptions had a huge valuation effect for Nintendo.

Of course, your business will not have nearly as dramatic of fluctuations, but the story serves as a good reminder about how finicky valuations can be. Simply assuming that your valuation will always stay constant, or steadily increase, rather than constantly validating the drivers of the underlying assumptions can get you into trouble when it is time to sell.

Is your biggest customer always going to stay with the company, or could they look for other alternatives?

Is your best salesperson planning to stay forever?

Is your technological advantage IP protectable and relevant for the foreseeable future?

So what can you do to ensure that you get the best valuation possible? Business growth and adherence to the factors mentioned previously will both yield a higher valuation, and you should also constantly challenge the underlying assumptions of your business -- because your buyer definitely will!

 

Stop searching for your Google AdWords

- By Katie Patterson

Google AdWords is a great, flexible advertising tool that allows businesses to display ads on Google and throughout its network by setting a budget and only paying when people click on those ads. It’s largely focused on keywords, and it has proven to be a very effective avenue.

When we set up a new campaign for clients, it is common for them to want to see those ads running or to play around with Google search terms to see if/when their ads pop up. Although there is a natural curiosity to see your ad in real time, this can actually hurt your advertising performance.

Google bids using either automatic or manual bidding. When you set a daily budget and select automatic, Google uses your daily budget to determine your maximum cost per click to get you the most clicks. You also have the option to set the maximum cost per click bid for your ads on your own.

Google bidding works like an auction. When a user searches, Google automatically finds all the advertiser keywords that fit the search in the geographic area; it then determines each ad’s quality score (a combination of bid, ad quality and other factors) to decide which ads to ultimately show with that search. Just because your ad doesn’t “win” the auction and turn up in search results one time, it doesn’t mean it isn’t winning the auction other times.

Your auction bid is dependent on your budget and quality score. Your quality score is determined by things like your current click-through rate, your ad's relevance and the landing page you’ve set for those clicking on your ad. A lower Quality Score means you will be paying more to serve your ad and it will appear lower in the search results page. Searching for your own ad can can cause the Quality Score to lower in two different ways:

  • If your ad comes up and you do not click it, that is an impression that did not get a click, so it will drop that ad's relevancy score, it will drop the click-through rate and therefore it will lower your quality score.
  • If you do click the ad, not only you are being charged for a click but if you leave the page immediately, Google will note this as the ad not being relevant to the search query it populated for and again lower the overall quality score.

Your search also skews search terms data as it will show up in the keyword search terms results page in AdWords. We analyze the search term data that leads to clicks for our clients. If we see multiple similar search terms, we think potential customers are the ones using those queries and use this information to help edit current efforts as well as build future campaigns. There is no way for the media buyer to know those are coming directly from our client’s own searches and could throw off how data is optimized.

Ads may also stop showing for your account or IP address altogether if you are repeatedly searching. When you don’t click, Google marks the ads as irrelevant to you. If you frequently click, Google could mark you as someone intentionally making invalid clicks on specific ads to drive up costs.

You may panic if you don’t see your ad, but this is normal and your searches may just be further preventing it from being served. AdWords works on a daily budget and, using default settings, that budget will be spread out as evenly as possible throughout the day. If you are spending $20 per day and get two clicks at 8 a.m. for $2.52 each, you now only have $14.96 left to spend for the day. This means AdWords will stop bidding with your ads for a few hours in order to spread out the remaining $14.96 throughout the day and your ad won’t pop up when you search for it.

Don’t worry, just because you can’t organically search for your ads, it doesn’t mean you can’t still see them. When you create an ad in AdWords, a sample of what your ad will look like appears.

Additionally, there is an Ad Preview and Diagnostics tool that brings up a sample Google search page interface. You can manually set your location, language and device, and type in any search terms you would like, as often as you want. If your ad is showing up for the term you enter, it will show up on the page in the exact position it would show up in organically, as will the paid and organic search results surrounding it. If it isn’t showing up, Google will provide you with a reason as to why your ad isn’t currently running.

Avoiding an identity crisis: Re-branding tips

- Strategic America Media Relations Director Ben Handfelt submits this guest blog.

When I was a baseball-obsessed kid, I told my mom that I wanted to Ben Handfelt-1change my name to Julio in honor of All-Star second baseman Julio Franco, whose inimitable batting stance had captured my imagination. There were a couple of other Bens in my school, but no Julios, so I would be unique. Memorable. Plus, you’ve got to admit, Julio Handfelt just kind of rolls off the tongue and is fun to say.

Thankfully (or regrettably?) my mother saw this as another impulsive whim of her 7-year-old, right up there with declaring that I was going on an all biscuits and gravy diet or that I wanted to learn how to play the saxophone so I could play the solo from “Power of Love.” My personal re-brand was devoid of strategic thinking, and without that I would have surely moved on to another re-brand by age 8.

Thankfully, in the business world the decision to re-brand is not one that any company takes lightly. To abandon, or at the very least, re-shape your identity -- one that employees, customers, vendors and the public have lived with and known for years -- is a big, intimidating step. There is a certain level of comfort in the known and the safe. To take the step of re-branding, no matter how many focus groups you’ve conducted, is a leap of faith.

But with proper planning (and lots of it), it doesn’t have to be a leap into the unknown, but instead can be an exhilarating (and logical) leap forward into the future, where that sense of safety and familiarity still exists thanks to careful, strategic planning.

To that end, here are three tips to keep in mind when launching a new brand.

The brand isn’t your logo. It’s your identity

A re-brand goes well beyond changing your name (I’m looking at you, Julio), designing a fancy new logo and trying to come up with a tag line that would make Phil Knight envious. Sure, that’s part of it, but a re-brand is about reshaping the very core of your company.

After all, a re-brand is typically done when a company decides that the path it’s currently on isn’t working. So staying on that same path with a new name is just going lead to the same results. A re-brand requires an entirely new mindset, as if it were an entirely different company. Since most people are creatures of habit, this task is more easily said than done. But ask yourself, “Where do we want to be, and how do we get there?” Answering that question (and yes, it’s complicated) goes a long way in figuring out what the essence of the new brand will be.

Get buy-in, or no one will buy it

The new name has been settled on. The logo really pops on all types of cardstock. Despite your best instincts, you want to go to networking events just to be able to show off your new business cards. You even have your elevator speech memorized about the essence of the brand.

And yet, no matter how excited the marketing geek in you is about the whole thing, you’re just one cog in the machinery. For the brand to truly be successful, it needs buy-in from all parties. That starts internally, and should begin at the top and work its way down. It needs to be explained and communicated to everyone from sales to accounting.

When you involve people from the beginning, they feel like they are truly part of the process, not just witnesses to it. With that comes a sense of pride and ownership that will help inform all of the external communications with clients, vendors, prospects and the public at large. When you involve more people in the creation of the story, it helps for the telling of that story down the road. And for all intents and purposes, there won’t be a more important chapter to tell than that first one.

Tell a compelling story

Sure, launching a new name and brand is technically news, but unless you’re Apple, you need a compelling story to go along with it if you want coverage that amounts to more than an empty press release. You’ve lived with this story for months, maybe years now. How do you articulate it so that it’s clear, compelling and aligns with all of your messaging, from internal and external communications to your website and social media presence?

Early on, you should define the voice and messaging of the new brand, and everything should permeate from that. I treat message maps like the Holy Grail and use them to help inform nearly everything that I write.

Identify the news angle and think like a reporter, or better yet, a customer. OK, that logo looks great, but why should I care? Why does it matter to me? How is this different from what you were doing before, or what your competition is doing? Think about how to answer these questions and answer them honestly and clearly, being careful to avoid too much fluff and marketing speak.

Storytelling is about being emotive and forming connections, and the best way to get there is through honesty, clarity and maybe a good turn of phrase or two.

Ben Handfelt is responsible for advancing the image and reputation of Strategic America and its clients by communicating to targeted audiences via local, state and national media relations efforts. He also provides media relations training and other key competencies to benefit clients and SA. Ben joined the agency with over 10 years of experience as a public relations professional in Chicago. His background includes work for a global market research firm and over nine years working for an entertainment PR agency, representing several of Hollywood’s biggest studios and brands.

After a data breach, talk is cheap

- Dave Nelson, CISSP, is president and CEO at Integrity.


Breach-supportI had lunch with a friend today who was affected by a recent data breach at a restaurant his wife and kids frequent. I will not name the company, but it is publicly traded with restaurants in 35 states. So, this isn’t a mom and pop shop.  It’s a large enterprise. My friend had concerns about the data breach, and emailed the company to see what support it was going to provide as a result of the breach.

To his amazement the company offered no support, other than to say he should be careful and watch his bank account closely. I haven’t seen the actual correspondence yet, but he promised to share it with me. Given my relationship with this friend, I have no doubt about the accuracy of his description.

This got me thinking about my own experience with one of the top five fast-food chains from about a year ago. Some of you may follow me on Twitter and remember me calling out Wendy’s about a payment card concern I had after visiting one of their stores in the Des Moines metro. A VP of operations for the local franchise group told me to investigate the issue myself and they were not concerned. He then ignored every email I sent after that requesting additional information and support.

Lo and behold, about a year later, Wendy’s announced a major credit card data breach. In fact, last month Wendy’s admitted that the cybersecurity incident was worse than it originally thought.

This brings me to my point. If you have a data breach, respond to your customers. You might not like what they have to say, and some of it might get nasty.  However, not responding, not owning the problem and appearing to be unconcerned or aloof will only make it worse. 

During and after a cybersecurity incident or data breach there are many things that are out of your control. You have to accept this. However, the things that are in your control should be made a high priority for your team. Have a pre-defined response that doesn’t contain the emotion of the hour. As a CEO or business owner, one of the hardest things to swallow is the loss of reputation. It’s difficult to put a dollar amount on this. Don’t you want to do everything possible to assure your customers that you care about them during your darkest hour? How much goodwill can be bought by timely and polite communications? There really is no cheaper insurance against losing a long-term customer than valuing the relationship. 

One last word of advice: If you deal with any sort of personally identifiable information (PII) such as financial account numbers, health care information, Social Security numbers, etc., you need to buy data breach notification insurance that includes credit monitoring. Even if some studies show the monitoring is ineffective, you are buying back some of your clients' trust in your brand. In the end, talk is cheap, trust is not.

Dave Nelson 2015 IowaBiz Blog

Email: dave.nelson@integritysrc.com

Twitter: @integritySRC | @integrityCEO

Website: https://integritysrc.com

The buyer journey and your website: Decision

Alex Karei, marketing director for Webspec Design, blogs about web strategy.

In April, I started a series on this blog about the buyer journey and how it impacts your website. I introduced, at a high level, what a buyer journey may look like in regards to making a purchasing decision, and outlined an example. In June, I talked about stage one: discovery, and stage two: consideration.

If you didn’t catch those two posts, I’d recommend heading over to the “Web Strategy” page and catching up a bit.

Now … decision. The end of the buyer journey. You could argue that it’s the most important piece of the puzzle, or the natural culmination of all the work conducted so far. Regardless, without decision none of us would have clients and we wouldn’t be here today.

By the time a client gets to the decision point, you’ve helped them find your website online and delivered content that they’ll find interesting. The key at this point is fairly simple - convince them that you’re worth their money.

This portion of the process is different for everyone. Some of you may have shopping carts, some may need a client to call and complete a purchase, and some of you may even need to schedule an in-person meeting. Regardless of what needs to happen, I firmly believe one thing is true when you hit this part of the process: The devil is in the details.

What do I mean by that? It’s the small things you can include on your website at this point that will stand out and push a potential client to act. What are you doing to help them? 

Help make visitors' purchase decision easier

  1. Ensure the purchase process is obvious to visitors. Like I said, every company is different, and many people have different ways that the process can be completed. Don’t make people guess at what they need to do. A good test for this is to grab a friend, sit them in front of your website, and ask them to make a purchase (don’t help them). You’ll quickly see how easy your process really is.
  2. Share customer testimonials - but make sure they MEAN something. How many of you have read a testimonial that said, “It was great working with X and X"? Did that help you make a purchasing decision? Probably not - it doesn’t mean much. For testimonials, we want something more along the lines of, “I enjoyed working with X because of his/her careful attention to my account details. He/she was always very prompt with getting back to me - I knew I could count on him/her!”
  3. Show them you’re more than a website. Have you ever been to a website where it seemed like if you had any questions, you were out of luck? That can detract quickly from helping someone make a decision. Include details that make you accessible, such as a phone number, support email, or even a live-chat feature. You don’t want a short question to lose you a large sale, do you? Didn’t think so.

Wow! What an adventure we’ve had walking through the buyer’s journey. I hope that through the last few blogs I’ve written you’ve gained some insights into what your buyer journey might look like. It’s different for everyone, and the most important thing at the end of the day is that you’ve considered it.

Have you made any adjustments to your website through this series of blogs? Are you planning to?

Alex-Karei_YPFinalist2016Alex is the marketing & communications director for Webspec Design, a website design and development and digital marketing agency in Urbandale. Connect with her via:

Email: alex@webspecdesign.com

Twitter: www.twitter.com/alex_karei

Instagram: www.instagram.com/alex_karei

LinkedIn: www.linkedin.com/in/alexandriakarei

Brainstorming ... the McKinsey way

- Joe Benesh is a senior architect with Shive-Hattery and president and CEO of the Ingenuity Company, a strategic planning, diagramming, framework development and design thinking consulting firm.

One book I enjoy reading when preparing for an engagement is called “The McKinsey Way,” by Ethan M. Rasiel. Mr. Rasiel was a consultant at McKinsey from 1989, and contributed to what is now called the McKinsey trilogy. In the book, Mr. Rasiel describes some key points critical for brainstorming:

  1. There are no bad ideas.
  2. There are no dumb questions.
  3. Be prepared to kill your babies.
  4. Know when to say when.
  5. Get it down on paper.

         (Rasiel, pp. 97-99)

Although you and I might both have a disagreement with bullet point No. 1 – there are actually some very bad ideas out there – the spirit of the five bullets provides a good framework for any brainstorming session. In organizations that I work with, there are challenges to each one of these with individuals or groups that impede the free exchange of ideas. Impediments to these must be overcome in order to ensure that your session is not a waste of time or material effort.

Accept for a moment that there are indeed no bad ideas. You can now focus your energy on accepting different points of view, free from the filter of having to sort ideas into “good” and “bad.” This step frees you up for point No. 2; if there are no dumb ideas, then it stands to reason you should be able to ask questions to get additional perspective on the idea free from the burden of feeling like others will judge you as ignorant, misinformed or off topic. That fear is a recurring problem with groups. No one likes to feel silly or off base. So create an environment where they do not.

49915119_47670f570e_o-1

No. 3 is also very difficult to overcome. It is natural to want to protect something you came up with or spent time on, but if it does not end up being mission-critical or relevant to the objective, you should discard it in favor of a clearly defined direction with only those contributing factors that contribute to the success of that direction.

There is a rule designers use when working within a brainstorming session. When brainstorming, the ideas eventually run out. Once it starts to get quiet, generally someone will offer something off topic or absurd, and then the ideas start to flow again. During this second “peak” of brainstorming, evidence has demonstrated that the best ideas are shared. There is then a decline, and once that decline begins, it is time to stop. Ideas shared after this second decline begins are generally not creative or relevant in a meaningful way. But pushing through to this second peak yields good results for balancing creativity and relevance.

Recording these ideas is also a necessity. Brainstorming is an opportunity to not be constrained by the typical confines of the work ecosystem. However, these sessions are still expected to yield results. This means that producing an accurate record of the session with decisions, direction, strategies, or whatever defined direction of the session was determined. In short: Keep those flip chart pages and record the data as soon as you are able to after the session to preserve the integrity of your work.

Brainstorming is the part of the strategic planning process where you get to really explore the opportunities available to you as an organization. But effective brainstorming must be conducted within a framework. They are not free-for-all sessions, nor are they a soft session meant to not have any serious outcomes. Adapted from the graphic designer Michael Bierut, these sessions are meant to define “how to … sell things, explain things, make things look better, make people laugh, make people cry, and (every once in a while) change the world.”

 For more information:Joe _Benesh_2011

 Contact: joe@ingenuitycompany.com

 Please follow: @ingenuitycmpny

 

Innovative sustainable products

- Rob Smith is principal architect at CMBA | Smith Metzger

The REALLY BIG movement for sustainable design started in the early 2000s. Innovation, however, was mostly about reinventing existing products into more sustainable products. 

Now, many years later, innovation is more holistic. How can basic paradigms be shifted to solve an issue in a totally new way? Here are four products that create a new solution.

  1. PERSONAL CONDITIONING SYSTEM (PCS) Pcs
    Mechanical systems typically maintain the temperature between 72 and 75 degrees. A narrow band of temperatures means the system cycles on and off. What if the band could be increased between 68 and 77 degrees?

    The Hyperchair allows individuals to control heating and cooling right at their seat. A lithium battery charges off-hours and is good for two days of operation. Studies show a one-degree increase in the temperature band can save 5 to 15 percent in energy.

  2. SOLAR ENERGY STORAGE Solar panels
    An issue with residential solar energy has been what to do with excess generation during the day.

    Elon Musk is leveraging new battery technology to store excess generation of solar energy. PowerWall efficiently stores electricity for use during hours of non-sunshine.

  3. VENTLESS DRYERS
    Gas or electric dryers heat air to high temperatures and then exhaust all that heat.

    Whirlpool
    has invented a dryer using heat pump technology that recirculates hot air while removing moisture from clothes. As a result, no venting is required.

  4. POWER OVER ETHERNET (POE) Peo
    LED lighting is efficient and long-lasting but requires a transformer that reduces 110 volts to 24 volts. The transformer makes the LED fixture not as efficient.

    POE uses computers to provide low-voltage power to LED fixtures without a transformer. The wiring is a simple Ethernet cable anyone can install.

Does Iowa's deduction for federal taxes prevent tax increases?

-Joe Kristan is a founding member of Roth & Company P.C.

Iowa could lower its high income tax rates significantly with no revenue loss if it traded lower rates for elimination of Iowa's unusual deduction for federal taxes paid. Such a trade-off plays a big part in the recently released Iowa Tax Reform Options prepared by the Tax Foundation for the Iowa Taxpayers Association.


While policy geeks generally favor this trade-off, many taxpayers have doubts. 
A common argument against the trade-off goes something like this: "If we give up the deduction in exchange for lower rates, they'll turn around and raise the rates on us." They see the deduction as a sort of brake against higher rates.

The history of Iowa's income tax tells a different story. In fact, the deduction for federal taxes has allowed Iowa to raise its real tax rates.

The deduction for federal taxes paid obscures the real top tax rate. The deduction for federal taxes lowers the effective Iowa rate, and vice versa. Tax practitioners call the resulting actual rates the "crossed" rates. The current effective crossed Iowa tax rate on each additional dollar earned by a top-bracket taxpayer is about 5.184 percent.

Let's go back to 1975, when Gov. Robert Ray signed an increase in Iowa's top tax rate from 7 percent to 13 percent. At that time the top federal tax rate was 70 percent. When you make the circular crossing computation, taking deductions into account, the top Iowa rate for top federal bracket taxpayers before this increase was 2.208 percent. Afterward, the effective rate went up to 4.29 percent. That's a 94 percent increase in the top tax rate. If the deduction for federal taxes can't brake a near-doubling of the top effective tax rate, it's not a very good brake.

 

Crossed iowa rates 1971-2016

Chart by the author.

The first round of Reagan tax cuts took the top federal rate down to 50 percent. This made the Iowa deduction for federal taxes worth that much less, so the top effective Iowa rate soared to 6.952 percent. The state government cheerfully pocketed the windfall.

The 1986 federal tax reforms lowered the top federal rate to 28%. At that point, Iowa decided to give its taxpayers some of the windfall back, lowering the top stated rate to 9.98 percent. The real Iowa top marginal rate, though, actually went up to 7.39 percent when the 1986 federal tax reforms took full effect in 1988.

In 1990, the feds started backsliding on the Reagan tax reforms, and the subsequent federal rate increases, combined with the cut in the Iowa top rate to 8.98 percent, has brought the top crossed Iowa rate down to 5.184 percent. While better than its peak 7.39 percent rate, that's still a 284 percent increase over the 1974 effective rate, and a 20 percent increase over the 1975 top rate.

The deduction for federal taxes hasn't prevented increases in the top Iowa effective rate. It just has camouflaged them.

The world is on fire. What’s a board to do?

-Brent Willett, CEcD, is executive director of Iowa's Cultivation Corridor. He writes on economic development.

The roiling world economy is shaking up traditional ED board roles

As the long grind out of the economic malaise of 2008 continues for countries, regions and communities around the Board_room world, economic development practitioners and institutions find themselves faced with a burgeoning set of new on-the-ground normals.

Forces of economic good -- for example, the blistering pace of innovation in western countries creating new industries in months instead of decades (see Uber and Jet.com) -- are meeting those of prospective bad, such as stagnant wage growth in many bellwether global economies, which is causing unprecedented levels of political instability with wide-ranging effects on global business (see Brexit and the recent chartering of the Asia Infrastructure Investment Bank).

The simultaneous convergence of unprecedented economic opportunity and the weakening of U.S.-led, postwar institutions (per Brexit: the weakening of the EU; per Asia II Bank: the marginalization of the World Bank) means that the picture of what job and economic growth will look like in the future for communities and regions everywhere is more opaque than ever. This creates spectacular challenges for strategic planning and the assembly of accurate and reliable individual and organizational performance measures for economic developers everywhere.

Enter the new board of directors. For decades, boards of directors of local and regional economic development GoogleTrendsEconDev organizations for the most part served a handful of functions: offer credibility in the community for the organization; provide fiscal, legal and other organizational oversight; and hire and fire the chief executive. For a nice list of typical nonprofit1 board roles and responsibilities, click here.

The role of a board member on an economic development board differed in substance and responsibility not much from a board seat on any number of local or regional nonprofit boards. Hospital boards, library boards, tourism boards, etc. -- all generally, in years past, called on a similar set of skills in their board members. Content differed, but the role didn’t.

No longer. As nonprofits diversify their income streams and become increasingly organizationally sophisticated to take on more and more of the work once reserved for or led by government as public finances are squeezed (with mixed results), the complexity and breadth of mission has exploded for organizations in a number of nonprofit sectors, including social services, health care -- and economic development. 

For some industries, the expansion of services by nonprofits has been driven by demographics and the economy -- health care activity has been and is projected to continue to tick upward as America’s population gets grayer faster, and many social service organizations have expanded to serve a growing needy population in the wake of the recession. This expansion of revenues and programmatic offerings places fresh demands on the boards that oversee nonprofits in growth sectors -- in most cases creating demand for more experienced and capable board members.

 

Trickle-down challenges; from global headline to the ED board room

While the nonprofit economic development sector does not appear to be measurably growing nationwide (the industry has an identity crisis on its hands, but that’s another blog), the job of a board member on any local or regional economic development organization of any complexity has become immeasurably more challenging -- and important. 

We noted earlier that as the world’s economic order roils in a period of unprecedented resetting, the faraway challenges and opportunities we’ve become accustomed to reading about in The Wall Street Journal or The Economist are all of a sudden before us, locally and regionally. Consider:

  • The unprecedented pace of merger and acquisition activity in the marketplace. Driven by ready access to capital, rock-bottom interest rates and an increasingly impatient investor class starved for yield following a near decade of middling market returns, 2015 was the biggest year for M&A in history, with more than $4.3 trillion in activity in the sector. Due in part to a federal clampdown on corporate inversions, it is likely that 2016 M&A activity will not outpace 2015, but it still likely will end up as another of the strongest years ever.
  • The most uncertain trade environment in at least a generation. The U.S. alone faces a frightening roster of problems on the trade front today -- a stubbornly strong dollar; political and economic near-chaos in the Eurozone, a historic trade partner that is today historically weak; the very real possibility of Congress failing to act on the Trans-Pacific Partnership trade deal, which might be our last chance to prevent China from rewriting the rules of trade in Southeast Asia for a generation; and presidential nominees from both major political parties who are both proudly anti-trade2.  
  • A completely unworkable immigration policy. Dan Culhane, CEO of the Ames Chamber, crafted a great piece last year on the lunacy of an H1-B immigration policy that helps ensure that virtually all of the 4,800 foreign-born students who graduate from Iowa State University annually -- many with degrees in a STEM field -- will leave the country after graduation. In a state with enormous supply/demand imbalances for jobs in the STEM field, the deadlock in Congress on immigration inflicts more damage every day that goes by.

Now consider how the preceding three major national challenges affect your community’s ability to grow and prosper today in Central Iowa. Each one does. Every day.

 

No such thing as a free lunch

And so, local and regional economic development organizations are turning to their boards of directors not only for legitimacy, oversight and their money. We are increasingly turning to them to contribute a new way of thinking to the most complicated and challenging market road map any economic developer has ever seen.

Successful economic development boards are not just hoarding CEOs around their board tables just for the sake of it, as in years past; they are diversifying their board makeups to include executives in a diversity of industries and specialties -- including executives in marketing, tax, finance, supply chain, public policy and entrepreneurs. The challenges local and regional economies face are diverse, global and more complex than ever; boards must begin to reflect the reality. No longer can a board member of a successful economic development organization expect to show up monthly for the free lunch and nothing else. We're asking members to work.

By asking more diverse boards to actively help interpret the forces that are affecting wealth creation and quality of place in their communities to solve problems and help develop strategic solutions, successful economic development organizations today are acknowledging that the world is not the same place it was in 2008 and never will be again. And neither will their boards.

______________________

1In referencing ‘nonprofit’ organizations, I include both fully privately funded organizations and those that are considered public-private -- organizations that receive some funding from the public sector.

2Read this op-ed by the two co-chairs of the Greater Des Moines Partnership’s International Trade Council for more on what needs to change in our immigration system to benefit states like Iowa.

 

Contact Brent Willett:

Human: 515-360-1732

Digital: bwillett@cultivationcorridor.org / @brent_willett / LinkedIn.com/in/brentwillett

 

Your greatest cyber weakness? People

- Dave Nelson, CISSP, is president and CEO of Integrity.

In past blogs, I’ve talked about the impact end users have on an organization’s information security posture. Users are often the first and last, and sometimes only, line of defense an organization has against hackers. This has never been more true.

Percentage-of-breaches-per-assetAccording to the 2016 Data Breach Investigation Report (DBIR), the top three assets attacked in confirmed data breaches are servers, user devices and people, in that order. The chart to the right from the 2016 DBIR shows the current trends. Of those three, server breaches are on the decline and have been for several years. Attacks through both user devices and people are steadily increasing. 

The uptick in user devices being used in data breaches is commonly attributed to mobile devices such as smartphones. This, however, is false. Mobile phones account for about .01 percent of data breaches. This means that desktops, laptops and point-of-sale devices are the true culprits. 

What is really happening is that IT and security teams are getting better at protecting critical assets like servers.  They are being patched more frequently, they are being isolated from other devices and they are being monitored more closely. Therefore, even if a security incident occurs, it can be detected and addressed before an actual data breach occurs in some cases. 

User devices in most cases are not deemed “critical” and therefore do not have the same controls. They are also susceptible to errors made by their primary user. People. This means that hackers are moving to assets they know they can attack. People and the computers they use daily.

Organizations should begin to consider adding all end-user workstations, desktops and laptops to their security information and event management (SIEM) monitoring systems. This added visibility will help detect the source of internal threats faster and aid in remediation efforts. This saves time and money during incident response activities and breach investigations.

This brings us to people as targets. I’ve written on multiple occasions about social engineering attacks, or those attacks that target humans to gain access to a system or data. In this year’s report, it is the No. 3 attack vector, behind malware and hacking.

As I’ve said before, providing security awareness training for your employees is one of the most beneficial security controls an organization can invest in. Simple 30-minute online learning courses don’t cut it, though. If you really want to see benefits, have your employees attend security sessions in small groups where they have to participate and be engaged. Once employees become not just educated in security awareness but actually invested in preventing attacks, an organization can have some assurance that many of the attacks coming their way will be identified and thwarted by the targets themselves, their own users.

If the 2016 DBIR does nothing else, it shows us that cybercriminals are no different from other types of criminals. They will adapt with changes in their environment and will target the areas they find weakest. The only way to combat them is to fight back with better training and tighter monitoring.

Dave Nelson 2015 IowaBiz Blog

Email: dave.nelson@integritysrc.com

Twitter: @integritySRC | @integrityCEO

Website: https://integritysrc.com

Order requires planning, execution

- Kelly Sharp is the owner of Heart of Iowa Market Place in historic Valley Junction.

This year's RAGBRAI, like those in the past, gave me a chance to think about business from time to time even as I enjoyed the beautiful Iowa countryside.

This year, though, I was thinking about RAGBRAI, retailing and the whole notion of order even before my feet hit the pedals. On the way to Glenwood, the first overnight of the week, images of the crush of people rushing here and there came to mind.

If you've never been on RAGBRAI or in one of its host communities, you'd be justified in assuming that having more than 10,000 bike riders and at least twice as many support people descend on a small Iowa town would be nothing short of bedlam. You'd be wrong.

Although there is a lot of energy and activity, there really is an order to RAGBRAI. A lot of planning by the sponsors, participants and host communities ensures that people get where they're supposed to go, that they have food, bathrooms, entertainment, places to sleep and much more.

And, that's the lesson for specialty retailers.

Whatever you're doing and however much energy you're putting into your business, you have to have order.

That means your inventory selection has to be well thought-out to ensure you have the products your customers want and that you don't have a lot of unwanted products gobbling up space and capital. Your store design and product presentation have to be organized in ways that appeal to and attract customers rather than frustrating them. Your staffing has to be scheduled to best serve your customers while also making sense for your bottom line.

Your handle on business finances -- especially accounts receivable -- must be firm. Your grasp on cyber-security has to be solid.  In short, you as the owner have to have a sharp focus and a commitment to use practical systems for every aspect of your business and constantly improve your own skills.

I marvel at the way the organizers of RAGBRAI can always see, create and maintain order in the midst of apparent chaos. The specialty retailers who succeed are those who can see, create and instill order in their business and its people even when things look anything but orderly.

This site is intended for informational and conversational purposes, not to provide specific legal, investment, or tax advice.  Articles and opinions posted here are those of the author(s). Links to and from other sites are for informational purposes and are not an endorsement by this site’s sponsor.