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.

Bring out their creative best

Bricklayer

- 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."
 

One day, a pedestrian stopped to admire the skill of two men who were laying bricks. She asked the first bricklayer, “What are you making?” In a somewhat gruff voice, the bricklayer responded, “About $20.00 an hour.” At a loss for words, the pedestrian stepped over to the next bricklayer and asked, “Say, what are you making?” The second bricklayer happily replied, “I’m making the greatest cathedral in the world!”1 Same activity, same question, two totally different responses. A positive attitude will change one’s total perspective of something, and a good leader chooses to see problems as opportunities to do great things versus mere labor. 

Leadership is a daily process, not a destination. Before you can effectively lead others, you must first lead yourself. In other words, a strong leader leads by example and knows their personal character will set the tone for everyone else. You must "walk the talk" and consistently display the character traits required by everyone to ensure success. Dependability, patience, self-discipline, integrity, confidence and a strong work ethic become daily expectations of you. Others cannot be expected to do what you are unwilling to do, and a good leader knows a consistent, high level of character is critical, whether one “feels” like it every day or not. Character can’t be faked. One’s character is reflected when no one is watching, and others will see through insincerity.

Not only should effective leaders set the bar of expectation, they should try to do “a little bit more” and consistently exceed expectations each and every time. Most people tend to value how others make them feel and will attempt to acquire the feelings they desire by associating themselves with those who exhibit them. We like to be around others who make us feel better about ourselves. By accepting a leadership role, you commit to a higher standard, one that not only requires a strong character but also demands a positive attitude.

If you have ever ridden a roller coaster, you know a wide variety of attitudes are exhibited on any given ride. Some close their eyes, hold on for dear life, and can’t wait for the ride to be over, while others ride with eyes wide open, arms outstretched, and love every second. Same ride, two entirely different emotional responses, but those in the latter group typically take the lead by sitting up front.

Attitude is a game changer. It often reflects the tone of leadership and dictates the response to failure. Babe Ruth had to strike out 1,330 times in order to hit 714 home runs (both once records in professional baseball) and lead the Yankees to multiple championships;2 Walt Disney was fired from his newspaper job for a lack of creative ideas;3 Thomas Edison was pulled out of school as a child after his schoolmaster called him “addle-minded” and “slow;”4 Michael Jordan missed over 9,000 shots in his career, lost 300 games, and missed 26 final game-winning shots on his way leading the Bulls to six NBA championships;5 and Lee Iacocca, having been fired from Ford after 32 years of service, went on to lead Chrysler back to success after the company was on the brink of bankruptcy.6

Attitude is an outward expression of the heart. If you truly want others to be successful, maintaining a consistent positive attitude is paramount. People can easily become discouraged by any one of a large number of aspects in their lives. A positive attitude by those in charge – as well as the creation of a positive environment – can help them overcome those feelings and develop a renewed sense of energy. Strong leaders strive to exhibit a positive attitude every day to help others exhibit one on most days.

For my next few posts, I will be focusing on leadership and its role in bringing out the creative best in people.

©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. Zabloski, J. (1996). The 25 Most Common Problems in Business (and How Jesus Solved Them). Nashville, TN: Broadman & Holman Publishers.
  1. Babe Ruth. Retrieved December 3, 2010, from the Baseball-Reference website: http://www.baseball-reference.com/players/r/ruthba01.shtml
  1. Rosner, B. (2005, February 25). Working Wounded: Getting Pink Slipped. Retrieved December 3, 2010, from the ABC News website: http://abcnews.go.com/Business/WorkingWounded/story?id=547848
  1. Beals, G. (1999). The Biography of Thomas Edison. Retrieved December 3, 2010, from the Thomas Edison website: http://www.thomasedison.com/biography.html
  1. Michael Jordan Quotes. Retrieved December 3, 2010, from the Brainy Quote website: http://www.brainyquote.com/quotes/quotes/m/michaeljor127660.html
  1. Lee Iacocca. Retrieved December 3, 2010, from the Encyclopedia of World Biography website: http://www.notablebiographies.com/Ho-Jo/Iacocca-Lee.html

 

Avoid the pricing trap

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

What are my products and time worth?

Answering that question may be the hardest decision any businessperson makes.

Unfortunately, it's also the most important decision a businessperson makes. And that goes double for specialty retailers.

Set your prices too low, and, if you don't go broke, you'll run yourself ragged trying to scrape by.

On the other hand, set prices too high, and you just might go broke, too, because customers will find a cheaper option. (At least that's the conventional wisdom.)

Whether you've worked in the same small store since you were in high school or you graduated from the best business school around, pricing decisions are hard because so many factors come into play.

For starters, it seems like the very structure of pricing conspires against us.

Look at any book on the topic, and words and phrases like "discount" "below competition" "bundle" and "high-low" jump off the page. Almost everything pushes us to lower prices.

That's even before we get into the real world of big and small competitors, fixed costs, employee pay and benefits, and rising product costs.

One thing I know for sure: When you compete on price, you and your business fall into a deadly trap.

You're smarter and better than that.

I know I certainly am. Best of all, our customers know it, too.

Why? Because our promise is to deliver a unique experience. Not only do we deliver on that promise, but we never stop looking for ways to deliver more value.

I know my prices aren't going to be the lowest. My customers know that, too, because they're smart enough to recognize and appreciate value.

What's your promise to customers? And, what, if anything, keeps you from delivering on your promise?

When you answer those questions and clear any barriers to delivering on the promises that matter most to your customers, falling into the pricing trap will be the least of your worries.

10 guidelines for improving meeting effectiveness

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

Business-people-planningThe meeting leader has an awesome challenge. This person is responsible for setting the tone of the meeting, keeping the group focused on the meeting purpose, managing (often complex) group dynamics, ensuring everyone is able to contribute to the meeting and managing meeting logistics. 

Sound like a daunting task? Meeting leadership is. And few people are highly skilled at it.

10 Tips for Meeting Leaders

  1. Understand the meeting’s purpose and goals. Why are we together? Distribute an agenda to the group in advance. Provide appropriate information or materials. To prepare people for the meeting and make the best use of your time together, invite participants to come to the meeting having completed a pre-meeting assignment.
  1. Create a safe, nonthreatening environment where all participants feel safe and comfortable and want to engage. Discourage participants from sniping or zinging one another, even in fun. Model an accepting attitude by withholding judgment of ideas and others and by drawing out everyone’s perspectives and feelings.  Encourage contrasting ideas. 
  1. Recognize that while people have different personalities and may or may not actively participate in the discussion, they all want to be listened to, recognized and appreciated as unique individuals. Work toward participation from everyone without insisting on it. Think of various ways people can contribute besides just talking (maybe written responses). Invite the group to help you figure out ways to energize group discussions. Watch for and act on opportunities to tell others that they have done well.
  1. Listen carefully to the person speaking while monitoring nonverbal behavior of the group. Be alert to signs of discomfort from group members. Identify and manage concern or confusion by noting it (e.g., “I sense that this is an area of concern for us ...”). Watch the interactions to monitor and clarify, especially when controversial issues are being discussed. 
  1. Respect the group by starting meetings on time and finishing on time or early. Consider designating a timekeeper for the meeting if you anticipate time management challenges. Only extend discussion times when the group will strongly benefit from that decision.
  1. Seek to reach consensus on issues. Resist the temptation to save time by settling for majority opinion or compromise. Agreement is necessary for lasting and meaningful outcomes.
  1. Handle emotional issues with compassion. Conflict, frustration, anger and sadness all require a great deal of courage to share. Intervene when group members verbally attack one another or when a group member violates meeting protocol. 
  1. Recognize when you are too highly invested in the outcome and ask for someone else to fill the role of meeting leader.
  1. End each meeting with a summary or some type of tying-up activity to provide closure. Clarify roles regarding who will accomplish any follow-up actions agreed to in the meeting. 
  1. Get group feedback on the meeting. Is there anything the group would like to see changed? How are people feeling? What is working? Identify one thing you could do better to make your leadership in the next meeting more effective.

Do you have other meeting techniques that have worked for you that you would be willing to share? Please use the comments section of this blog to tell us about them.

For more professional development content:Rowena_Outside

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Website: www.tero.com

The cost of meetings

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

“If you had to identify, in one word, the reason why the human race has not achieved, and never will achieve, its full potential, that word would be meetings.”

- From Sixteen Things that it Took Me 50 Years to Learn, by Dave Barry

Business-people-meetingWe’ve all been there – captive in a meeting that drags on seemingly forever and nothing is accomplished. What is the underlying cause of the meeting failure, and how can it be solved? 

Many meeting leaders are not equipped with the skills and knowledge to effectively facilitate a meeting. Similarly, many meeting participants contribute to the problem through their own ineffective meeting skills. 

According to the Wharton Center for Applied Research at the University of Pennsylvania, the average senior executive spends 23 hours each week in meetings. Sadly, senior and middle managers report that a mere 56 percent of meetings are productive and that a phone call or email could replace more than 25 percent of meetings. 

When the resources that are involved in meetings each day are considered alongside of the above statistics, the financial drain to organizations alone is devastating.

Nearly everyone in a professional environment finds themselves, at some time, asked to participate or present in meetings. As careers advance, increased meeting participation (and eventually, meeting leadership) inevitably follows. 

At all levels of organizations, individuals employ state-of-the-art process improvement methodologies to streamline activities and accomplish more with less.  Curiously, and somewhat ironically, these same individuals who strive for maximum productivity in their work activities wrestle with frustration and setbacks caused by unproductive meetings.

Why are meetings unproductive?

  1. Lack of Progress: They are not strategically valuable. There is limited or no progress against a goal.
  1. Lack of Performance: They fail to bring out the best in the people who attend or those who are affected. Relationships are damaged or interpersonal friction is created.

Since meetings are a part of most corporate cultures and are simply viewed as part of business, many people don’t consider the cost of meetings. Interestingly, many people don’t even consider meetings to be part of work. Some people will end a meeting by saying, “Let’s get back to work,” implying that the meeting time was not work. Even less frequently is consideration given to the large advantage available to organizations that use meeting time wisely. 

Meeting leadership skills are some of the easiest changes to make in an organization. However, like most change, an investment of time in building new skills, challenging old habits and implementing new processes requires effort. 

In the next blog, we will focus on several strategies to improve the effectiveness of meetings.

For more professional development content:Rowena_Outside

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Website: www.tero.com

Leadership & legacy lessons

- Dr. Christi Hegstad is a Certified Executive & Leadership Coach, author, trainer and book addict. Learn more at MAP Professional Development Inc.

IMG_4729You will not find "When Breath Becomes Air" in the leadership section of your bookstore. But when I finished reading it -- after feeling uplifted while also wiping away tears -- I couldn't help but think of the leadership lessons inherent in this powerful book.

Paul Kalanithi, a neurosurgeon in his mid-30s, wrote this memoir after receiving a terminal diagnosis. Essentially, it's his story of finding meaning, purpose and joy every day, even amid the great difficulties he faced throughout his journey. It's inspiring, heartbreaking, uplifting and thoroughly thought-provoking.

While I won't attempt to summarize this book in a few words, I will share some reminders to draw upon in your leadership:

1. Let compassion prevail.

Regardless of appearance, everyone is fighting a battle or dealing with challenges we know nothing about. That includes your team members, your children, your leaders, the angry customer calling to complain. Continually turn to your kinder, higher self.

2. Clarify your values.

Whenever he'd ask "should I ..." questions, Kalanithi's physician would steer him back to his values. What matters most? How can you best honor that today? This week? Going forward?

3. Reconsider the perfect time.

Don't wait until everything is perfect to pursue a dream, strive for a goal, make a difference. Your work can bring great meaning to your life, and vice versa. What if now is the perfect time?

4. Surround yourself with greatness.

Consciously spend your time with people who challenge you to be your best. Kalanithi's wife, physicians, various co-workers and other connections served as heroes in his story.

5. Live each day to the fullest.

This is so much more than a cliche. Every day is a gift and an opportunity to make a difference in the lives of others. Don't let obstacles prevent you from creating meaningful experiences whenever and wherever you are.

Christi Hegstad MAP Inc HeadshotCOACH CHRISTI'S CHALLENGE:

One of my favorite topics to coach around is what I call your Leadership Legacy. Give this concept some thought this week.

Legacy isn't something to think about only when faced with our own mortality. You essentially choose your legacy by how you live, work, and lead every single day. If you don't have a grasp yet on your "big picture" legacy, consider it in smaller doses:

What would you love for people to say about you when you leave your next meeting?

How would you like someone to describe you to a stranger?

When people think of you, what word would do you want to come to mind for them? How will you live out that word today?

As a leader, you have the profound privilege and responsibility to make a difference in the lives of others through your example, words and actions; something to take seriously while living lightheartedly. Decide, right now, your Leadership Legacy. Then let your days be a beautiful expression of those with every action and interaction.

Dr. Christi Hegstad is a certified and award-winning coach helping people work, live, and lead with meaning and purpose. Learn more at www.meaning-and-purpose.com or on Facebook, Twitter, and Instagram.

When Breath Becomes Air by Paul Kalanithi (Random House, 2016).

 

Brexit and global financial market response

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

“It’s tough to make predictions, especially about the future.” Yogi Berra

A Yogi Berra quote may seem a bit too lighthearted as an opening thought regarding the momentous “Brexit Leave” vote and the immediate reactions, financially and politically, around the world. Though the quote is humorous, the point is an important one for investors to consider. Reliably predicting future events has been hard to impossible in the past, and there is no evidence that it is getting any easier. Just ask the bookmakers in the UK who were offering very favorable odds of a “Remain” vote just 24 hours prior to the actual vote tally.

International stock markets virtually all declined following Thursday’s vote, some more severely than others. However, these declines came on the heels of some significant gains as many traders were predicting the UK would vote “Remain,” even as polling data showed a statistical dead heat between the “Remain” and “Leave” options. On Monday, June 20, the FTSE 100 Index of British Stocks opened at 6126.27. On Friday, June 24 at close (the day after the vote), the same stock market index was at 6138.691. Actually higher than where it began the week before! Other global markets showed heightened volatility for the week, with declines on Friday and Monday reflecting the general uncertainty about “Brexit’s” longer-term effects on markets and economies.

Jason Zweig, writing in his Wall Street Journal column on Friday, reminded investors of the counter-intuitive nature of stock market returns and economic news over time:

“…investors should remember that there is a perverse correlation between economic growth and stock-market returns. Research by Prof. Dimson and his colleagues Paul Marsh and Mike Staunton of London Business School has shown that, in the long run, countries with the fastest economic growth tend to have the lowest stock-market returns, and vice versa.”

That’s because investors overpay for optimism and underpay for the value that pessimism creates.

“Just uttering the words ‘When will this pay off?’ should tell you that it will, and fairly soon,” says William Bernstein, an investment manager at Efficient Frontier Advisors in Eastford, Conn. “You don’t get bargain prices anywhere without the presence of really bad news.”

It’s important to remember, in general, financial markets do not respond positively to uncertainty or surprise. Ben Casselman, the website FiveThirtyEight’s chief economics writer, had this to say (among other things) in his Friday post, “How to Make Sense of the Brexit Turmoil”:

“Ignore the initial market reaction: The initial reaction will tell us next to nothing about the longer-run impact a Brexit will have on markets or the broader economy. Market turmoil was probably inevitable after a decision this momentous, and it will be made worse by the fact that the outcome was a surprise: Despite polls showing a close race, most investors expected the “Remain” side to prevail in the end. … Most ordinary investors are probably best off logging out of their E-Trade accounts and tossing out their 401(k) statements, at least for a couple of weeks.”

As a practical matter, Foster Group continues to advise investors to maintain a clarity of purpose around their overall portfolio. For anyone in retirement, or needing dollars from their portfolio in the next five years, these anticipated cash flows should already be invested in short-term, high-quality bonds (e.g., Short-term US Treasuries and high-grade one- and two-year corporates). These short-term reserves may actually experience some gains in the near-term as global investors, in a “flight to quality”, seek to own more US government bonds and high-quality issues. Friday, June 24 saw the price of the 10-year US Treasury rise by more than 1.5 percent1 on this increased demand.

For the longer-term growth component of portfolios, a broadly diversified allocation to global stocks, bonds, and real estate offers a much higher probability of success (growth well above future rates of inflation) than trying to predict which specific asset classes or regional stock markets may do better or worse in the coming months.

Peter Westaway, Ph.D., chief economist and head of the Investment Strategy Group for Vanguard Asset Management, Limited, Vanguard’s European entity, wrote this following the Brexit outcome:

“Of course, Vanguard discourages market-timing moves, and by now, much of this effect is already priced into asset values…Given that it may take several years for the specifics of Brexit to play out, and markets may be rattled as plans take shape, investors' best protection is to hold a portfolio that is diversified across asset classes and regions.”

It is always disconcerting to watch financial markets and portfolio values fall so quickly. We only need think back to January and February of 2016, as global stock markets declined in many cases more than 10 percent before recovering and moving into positive territory for the year. The often tough thing to do during these events is to remember that careful planning and portfolio building done in calmer days was designed to enable you to weather, and ultimately thrive, despite surprisingly unpredictable events.

  1. Index and return data as published in the Wall Street Journal Online Edition, June 24, 2016

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.

Things to consider before becoming a franchisee

- Bryan and Andrea McGinness are CEO and COO of WineStyles Tasting Station and write quarterly about the world of franchising for IowaBiz.com.

As an entrepreneur considering investing in a franchise, it’s important to ask the right questions before investing in a long-term relationship with a franchiser. As the largest private wine and craft beer retail franchise in the country, we wanted to share some of the most common questions we’ve received from entrepreneurs and some of our current franchisees over the years.

What is franchising?

According to the International Franchise Association, franchising is simply a method for expanding a business and distributing goods and services through a licensing relationship. 

What is a proven system, and why is it so important?

When joining a franchise, a prospective franchisee should look for a brand with a proven business model. What does this mean, exactly? Well, what systems does the company have in place to ensure your franchised location will be profitable? Most companies offer support in areas such as marketing, training, real estate and operations, to name a few. When you sign a franchise agreement, you are buying the rights to replicate a business model. This includes the rights to using the product, signage, logos, uniforms, advertising and marketing. As part of a franchise brand, opportunities for originality are limited, so it’s imperative that the franchise you partner with offers a business plan with adequate training and ongoing support. Successful franchise owners want the opportunity to be in business for themselves, while still being part of a well-established company.

How much will it cost?

Costs of opening a franchise vary greatly by industry segment and can range anywhere from $50,000 to $5 million. Franchise brands require new owners to pay a “franchise fee” — an initial fee when the franchise agreement is signed, which can vary from brand to brand. The fee may cover the cost of training and support, assistance with site selection, etc. Franchisees will also pay an “initial investment” cost, which can vary based on brand and industry. These startup costs typically include construction and build-out, equipment, fixtures, inventory, working capital to open and operate a location, as well as grand opening advertising. Royalties and other fees, like a national marketing fund, should also be considered before establishing a long-term relationship with a franchiser.

Should I speak to current franchisees?

Before committing to one particular business, we suggest doing your homework and vetting current franchisees to learn more about their franchising experience. Consider asking them questions about the initial training and ongoing support they received. You can also ask about their relationship with the franchiser and their expectations for annual revenues when they first signed on. Validation is part of the due diligence process and will give you a greater perception of the business from an owner perspective.

How long is my commitment?

Most franchise agreements come within an initial term between 10 and 20 years. It’s important to make sure that this fits into both your personal and professional long-term goals and you consider the location of your franchise before signing the dotted line.

As you continue researching and evaluating each franchise opportunity on your list, additional questions will arise. The International Franchise Association is a great organization and resource for prospective franchise buyers. To learn more, check out www.franchise.org/franchising-101.

How to respond to negative Google reviews

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

People love to talk. And when it comes to discussing local businesses, there is perhaps no better stage to articulate their recent experience than Google reviews. After all, a recent study shows that 92% of consumers read reviews online. It certainly gives power back to the consumer. It’s their way of getting the last word. That is, if you let them.

So what happens when they say something bad? Like one-star kind of bad. Eek! Fortunately, Google allows business owners to address and even spin negative feedback to their advantage.

When responding to negative feedback, a business shouldn’t appear defensive or combative. Rather, a polite and patient response will have a more positive impact on the client and the public. Additionally, if possible, the disgruntled client should be contacted directly to resolve the issue. More often than not they’ll openly express gratitude for the response. This also shows onlookers that the business takes care of its clients when problems arise.

Ultimately, your goal is to have the client reverse the feedback themselves. Many times if you address the problem directly the client may change their opinion, and add four more stars to their rating.

But there are occasions when the client just won’t budge. It’s still important for you to have the opportunity to tell your side of the story. You want to show all the onlookers that you take client concerns seriously. Your response should be short and sweet, with the following attributes:

Acknowledge their problem. This doesn’t mean you have to agree with it. Many times it’s just a misunderstanding that needs clearing up. Either way, let them know that you recognize their concern. Avoid being dismissive or patronizing. Prospects evaluate how you handle your detractors – your response says a lot about how you approach client relationships.

Address inconsistencies without placing blame. If you believe the review is fake (from a competitor, etc.) or just misrepresents your business, then you should say something publicly. Be polite, but make it clear that you disagree with the review. Also, in cases like this, you can contact Google directly (www.google.com/business and ask to have it removed.

Offer to resolve their issue offline. Responding to a bad review should be brief. No need to get into specifics – but you should offer to continue the dialogue further. Mention that you will contact them directly (if possible) and suggest that they could contact you as well. This avoids getting into the mud publicly – so that future people reading the review won’t become engrossed in the details. After you resolve the issue you could ask that the individual remove their review online, or at least follow up with a positive note.

Snapchat: A platform brands can no longer ignore

- Katie Patterson, CEO and founder, Happy Medium, writes on social media for IowaBiz.com.

With new social media platforms emerging every day, it can be difficult to navigate through and determine which are worth the investment of time and advertising dollars for your brand. When Snapchat first launched, it was largely seen as an app for teens and didn’t need a lot of attention. That, however, is no longer the case.

Recent research shows that on any given day, Snapchat reaches 41 percent of all 18- to 34-year-olds in the United States. More than 100 million people use Snapchat every day to Snap with family, watch Stories from friends, see events from around the world, and explore expertly-curated content from top publishers such as CNN, Mashable, Cosmopolitan, MTV, Buzzfeed and more.

With this growth and attention, it’s hard for brands to ignore the platform altogether. However, if you’re not ready to dive-in fully on a brand account, there is a much easier way to expand awareness that is both cost-effective and engaging: on demand geofilters.

Geofilters

Geofilters are designs that can be layered on top of Snapchat photos or videos in the app while the user is in a set location during an established period of time. Snapchat allows companies or individuals to submit their own designs for approval. These have become a fun way to brand a special event, a significant day for a company, or event individual moments like a wedding.

HM_socialmediaday_snapchatFilter_6 Snapchat Filter Example

Images:  Before and after of Happy Mediums Social Media Day Filter in use. 

Once an individual puts your geofilter on their snap and sends it out to their friends, you receive instant awareness.

We recently assisted Principal Charity Classic with placements for special filters throughout the PGA tournament in Des Moines, and it saw a total of more than 25,000 views by the time the weekend was over. It helped raise awareness for the event overall and acted as an endorsement from those on the course as something their friends and family should attend in the future.

The key to an engaging filter is to have a strong design. If you just throw clip art on, it’s not going to be something that users want to put on top of their captured moments. Having a professional design team work on this for you is worth the cost, as they are well versed in the requirements and guidelines to get the filter approved and can develop a look unique to your organization.

For Principal Charity Classic, we put a branded hat that you’d see players wearing in order to encourage selfies on site and left a blank space below for the user to add copy for who they were cheering for during the event. It proved to be one of our most successful to date.

The design will be the biggest investment for this type of project. The rest of the price is determined based on the square footage of the area you want covered and of course the duration of time it should be up and running.

We recently launched a filter that was in our office for a full work day in honor of Social Media Day (June 30) and then added it to Hessen Haus during a happy hour event we hosted with the Social Media Club of Des Moines. For a total of 12 hours, it cost us less than $25 and we saw more than 4,000 views. That averaged to less than one cent per view, such a cost-effective option to increase our brand awareness.

Winefest filters

Images: Winefest filters saw more than 15,000 views at this year's event alone.

 

Making the most of PIPs

Performance review image July Iowa biz.com- Rita 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.

Do you remember playing the “Chutes and Ladders” board game as a child? Squeals of delight ensued as we moved our pawns ahead the number of squares indicated by the spinner. Bad luck if your game piece landed on a chute; you had to move backward on the game board and lose precious momentum in getting ahead. Good luck was landing on the first step of a ladder. Your game piece was rewarded by automatically advancing to the top of the ladder and getting ahead on the game board. Landing on a ladder meant that you had a good shot at winning. Everyone wanted to land on a ladder. But landing on a chute meant that you most likely would lose the game and walk away from your friends in disgrace. It was a tough and powerful life lesson. And not one that you wanted to repeat.

Sometimes it can feel as if our careers are one big game of chutes and ladders. Except that life is not a game, and being blindsided and sent backward in our careers can have serious economic and social consequences for us.

Moving up the career ladder in a sequential fashion is the stuff that corporate dreams are made of. Career advancement is what every American is taught to strive for. And some even feel entitled to it. Move forward. Get ahead. Be a success and a winner.

What happens if an employee or supervisor is not making the progress, meeting their goals or performing as expected? Enter the PIP. This is not the Gladys Knight kind of crooning PIP. This PIP is a Performance Improvement Plan. These plans are known by several different names: Plan of Assistance, Employee in Need of Improvement Plan, Needs Improvement Plan, etc. This is a serious chute that can derail a career. Recently I have seen an increase in the number of individuals who have been involuntarily placed on a PIP. The message the plans are designed to send to an employee is clear: Improve your performance, or we will sever our relationship with you. Shape up or ship out!

Usually an employee who receives an improvement plan has had a performance review that has been less than stellar. The review would indicate which areas of performance do not meet expectations and need improvement. For an employer, an improvement plan is the natural next step in the “shape up or ship out” program.

Sometimes an employee is caught off guard, blindsided that they are not meeting expectations until the moment the PIP is presented. This employee would naturally feel a flood of emotions: shock, confusion, disbelief, anger, frustration, shame, embarrassment. An important note here from good personnel law is that an employee should never be caught off guard with an improvement plan. A performance review noting deficiencies should have been completed and presented to the employee prior to the design and presentation of an improvement plan. Unfortunately, however, it is not a perfect world.

So, what do you do if you receive a PIP?

  1. Do not share on Facebook or any other form of social media. PIPs are confidential human resource tools that will be placed in your permanent personnel file. Only discuss your PIP with your supervisor and your human resources manager. Keep it confidential.
  2. Clarify if this is the first step of progressive dismissal. You have to know how serious this is and if you are in danger of being fired from your job.
  3. Clarify the PIP goals and how the success of reaching those goals will be measured. What are the specifics of the goals that you are being asked to improve? Will you be required to discuss and provide documentation of your progress toward your PIP goals with your supervisor? How often, and what sort of data does that person want to see? What needs to happen, and what to they need to see to release you from the PIP? These are vital questions. It is hard to make a bulls-eye if your don’t know where the target is.
  4. Clarify the timeline for improvement. Most PIPs are 30, 60 or 90 days in duration. Some may be longer depending upon the complexities of the goals and the number of people or projects you manage. Clarify the frequency of meetings that your supervisor would like you to have with him/her to discuss your PIP progress. Weekly progress meetings are very common.
  5. Is the organization providing you with resources to help you meet your PIP goals? Do you get to attend a seminar or hire a professional coach (like me!) to help you focus and exceed your improvement goals?
  6. Do some soul-searching. This is a golden opportunity to take stock and decide if you and the organization are really a good match. Do you want to continue to work for this organization? Can you honestly do the job you are being expected to do? Do you have the skills needed to do the job? Is it time to polish up your resume and begin a job search? Is it time to resign? Or is it time to put on your winning attitude and make a commitment to not only meet, but to exceed, the improvement goals you have been given? If you are going to “go for it,” then you need to be focused and all in.
  7. It helps to talk about your emotions in a safe and confidential place. If your emotional reactions to being placed on a PIP are severe, such as you are crying all the time or angry at everyone, ask your HR manager for the phone number to see an EAP, or Employee Assistance Program, counselor. This is a benefit offered by most employers for all employees who find themselves facing emotionally difficult situations in both their work and personal lives.

Life lessons and career setbacks are complicated and not easy to navigate when you feel alone. It is important to give a plan to improve your work performance very serious consideration and to take diligent action steps so both you and your company will emerge as winners in the end.

© Rita Perea, 2016

Welcome to the world of franchising

- Bryan and Andrea McGinness are CEO and COO of WineStyles Tasting Station and write quarterly about the world of franchising for IowaBiz.com.

Have you ever considered owning your own business but feel overwhelmed and not sure where to start? If so, you’re not alone and you’ve come to the right place. Hello and welcome to the world of franchising – where you can go into business for yourself, but not by yourself.

My name is Andrea McGinness, and my husband Bryan and I own a franchise concept called WineStyles Tasting Station. We have more than 20 locations in the U.S. and our company is based in West Des Moines, just a few miles away from our house. We are very excited to be new IowaBiz bloggers and look forward to sharing our business experiences and educating readers on the world of franchising.

For our first post, we’d like to focus on the recent 2016 growth report from the International Franchise Association (IFA). The IFA is the oldest and largest group representing franchising worldwide. They work to protect, promote and enhance franchising. We’re very proud to be part of and support such a wonderful organization.

The IFA recently released its 2016 Franchise Business Economic Outlook. The report found that franchise small businesses will once again grow at rates that exceed non-franchise business growth. Here are a few of the key findings:      

  • Franchise businesses will have a 3.1 percent growth in jobs, adding 278,000 direct jobs to the economy this year for a total of 9.1 million.  
  • The number of establishments will grow this year by 13,359, or 1.7 percent, to 795,932.
  • The gross domestic product (GDP) of the franchise sector will increase by 5.6 percent to $552 billion in 2016. To put this impressive growth into perspective: This will exceed the growth of U.S. GDP in nominal dollars, which is projected at 4.4 percent.

Franchising encourages entrepreneurship and allows first-time business owners to tap into their entrepreneurial spirit and become a part of a proven business model. As a franchisor, a strong growth forecast is good news. And let’s not forget that franchise businesses are leading to more jobs in local communities nationwide.

The beauty of franchising is that you can start small with one location. That’s what we did. First we were a WineStyles franchisee before deciding to purchase the enterprise in 2012. We have always been passionate about the company, so we were thrilled when we were presented with the opportunity to own the concept.

There’s nothing better than helping other entrepreneurs turn their passion into a full-time gig. There are over 300 franchise business formats to choose from, whether you love pets, cars or travel. As wine lovers and foodies, you can understand why we chose this path.

Thank you for reading our first blog. We can’t wait to share more stories and industry insights with our fellow Iowans.

Cheers!

What factors are driving succession planning today?

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

Demographic changes are driving succession planning. The Business Record recently hosted a breakfast titled “The Silver Tsunami.” Panelists discussed the large cohort of baby boomers who are currently in the workforce and seeking options for what to do after they leave the traditional workforce. Many of these baby boomers are business owners.

Why is a “Silver Tsunami” an important topic, and what does it have to do with succession planning? Let’s look at some facts:

  • 10,000 people each day turn 65, a figure that will continue for the next 19 years.
  • Estimates are that 65-75% of small businesses will be “for sale” in the next 10 years as owners look to retire, and the amount of value in the aggregate for these businesses is $1 trillion. And yet ...
  • Fewer than 30% of business owners have a succession plan.

Developing a succession plan can be an emotional experience. Business owners develop a connection with their business that is many times similar to that of a child. Like child-raising, there comes a point when you have to let go of total control.

Your job as a business owner is just like that of a parent – take steps to position your child/business to have the best chance to succeed once you are not involved on a day-to-day basis, which will eventually come.

There is no right answer for a succession plan, and it will be very individualized. Your succession plan should involve input from your family – whether they are in the business or not – and legal, accounting and estate planning advisers, just to name a few. There are also professionals who specialize in creating a plan.

The plan may change over time as circumstances change, which is fine, but the important thing is planning before you have to, when outside conditions may drastically limit your options. 

And finally for business owners contemplating their succession plan, it may be comforting to know that with such staggering demographic numbers, you are definitely not alone!

 

French 50-year bonds? Puerto Rican debt? Dangers of reaching for higher yields

- Kent Kramer, CFP, AIF, is chief investment officer/lead adviser at Foster Group.

In mid-May, a quick review of the Wall Street Journal revealed the average yield on a five-year CD was 1.26% and the 10-year U.S. Treasury note was yielding 1.85%.

These low rates can lead investors to seek higher returns in other places. Two especially popular ones are longer-term bonds and high-yield bonds. While there may be a place for these in your portfolio, the age-old warning “caveat emptor,” or buyer beware, bears repeating, and here’s why.

As investors, we all want higher returns, but we also want less risk. How you balance your pursuit of these preferences will go a long way toward achieving your unique definition of a successful investing experience.

If the purpose of bonds in your portfolio is primarily to provide stability and reduce risk, then high-quality, short-term bonds make the most sense. However, as mentioned above, currently these bonds provide small returns. There are other kinds of bonds with higher current interest rates, including very long-term bonds and lower quality, “high-yield” (aka “junk”) bonds. Both are also higher risk in terms of potential price variation prior to maturity.

Bond prices move in the opposite direction of interest rates. So if the Federal Reserve does influence a rise in interest rates (someday!), the price of an investor’s bonds, all other things being equal, will decline. The longer term the bond, the greater the price variation. A graphic in the Wall Street Journal on May 19, 2016, illustrated the potential price declines of high-quality government bonds of differing maturities.

The graphic reveals how a 1% increase in interest rates causes the price of a U.S. 10-year Treasury bond to decline by 9%, while the price of a French 50-year bond would decline by 27%. The effective annual yield of the French 50-year bond is currently under 3.25%. Is an additional 1.25% in current yield worth the increased risk of an 18% price decline (or more if rates rise by more than 1%) in the next 10 to 20 years?

Bond investors also reach for higher yield by purchasing lower quality bonds. Bond buyers set the actual market price and yields on bonds with similar maturity dates according to credit quality (the likelihood the issuer will make interest payments and repay in full on time). The higher the probability of default or late or restructured payments, the higher the interest rate demanded by bond buyers.

While investors may get a higher initial interest payment, the risk of these lower quality bonds, the expected total yield to maturity, is never fully realized. This would be the case if the bond defaults or pays later and/or in lower amounts. Puerto Rican bonds provide a current example of how this can happen.

In 2012, interest rates (yields) on Puerto Rican debt was about two percentage points higher than highly rated municipal bonds of similar maturity. Not only were the yields higher than bonds of similar maturity, but the interest paid by these bonds was, and is, exempt from federal, state and local income taxes, making them very attractive. Bond investors, some of whom thought bonds were inherently “safer” than stocks, took the higher yields offered by the Puerto Rican bonds even though the credit quality was lower.

Since that time, Puerto Rico has defaulted and will likely continue to restructure its payments. This has caused the price of some bonds to fall from par, or face value, of $10,000, to less than $7,000 (a 30% decline). Bonds with longer maturities have seen their prices fall even further.

The lesson for investors is that there really is still no such thing as a free lunch. Investments that offer or advertise higher returns invariably involve higher risk, whether they are stocks or bonds.

As an investor, you need to know what purpose you have for the bonds in your portfolio. If it is stability and the preservation of assets, then shorter term, higher quality bonds, CDs and cash are for you. If you are willing to accept more risk, longer-term, lower quality bonds may be attractive, but our view is as risk increases, a diversified stock portfolio may be the better investment for this portion of your portfolio.

PLEASE NOTE LIMITATIONS: Please see important disclosure information and the limitations of any ranking/recognitions, at www.fostergrp.com/disclosures. A copy of our current written disclosure statement as set forth on Part 2A of Form ADV is available at www.adviserinfo.sec.gov

 

 

Long-term planning can thwart your success

- Michelle DeClerck, founder of Conference Event Management (CEM) and Financial Speakers Bureau, is a frequent contributor to Lift IOWA weekly e-newsletter and now is a contributing writer to IowaBiz.com on the topic of Starting and Growing Your Business. 


Many aspiring entrepreneurs delay starting their own business because they’ve heard they can’t start a business without a three- to five-year plan. I disagree. That kind of thinking would have left many of today’s successful companies in non-existence—including my own.

“A good plan, violently executed now, is better than a perfect plan executed next week.” —General George Patton

Now entering my thirteenth year in business, my team and I operated for the first eight years without an official long-term plan. The lack of such a plan didn’t keep us from moving forward and achieving great success and growth.

My decision to operate without a long-term plan early on may come as a surprise to many, as I’m known for being a planner by nature, but I didn’t create one because I didn’t know specifically what I wanted in terms of the company’s growth.

During those early years, we were exploring, creating and testing different paths so we could decide where we wanted to go. We had doubts about growing in some areas and fears of tackling other unknown areas. The economic downtown in our niche market also meant we were dealing with challenging day-to-day emergencies and reacting to being consistently too busy. During those years, I knew I should and would create a long-term plan—eventually, but relied instead on strategic visioning.

As many successful companies have proven, long-term business planning may be bypassed when other strategic visioning and goal-setting steps are in place. We certainly had a strategic vision of where we thought we wanted to go, and we diligently worked toward achieving it.

After employing the services of several leading professional business consultants and companies, and combining their advice with my team’s vision, we’ve since created a business plan for the company—a short-term plan. That’s right, we’re still avoiding long-term planning, and I believe most business owners should do so, as well. Why be locked into a plan that can quickly have you losing sales and market share?

Technology and adaptability allow companies that embrace change to stay on the cutting edge. These are the companies that will succeed and grow by being nimble. They can create an immediate solution to a client or industry-wide challenge, or even develop an unforeseen new product line in unprecedented time.

Shorter-term planning also allows more of your employees to have a voice in the company’s goal-setting, and in turn, to be more engaged in achieving them. Perhaps even those goals will be set aside on short notice, and new ones set to achieve even greater success.

Following a traditional three- to five-year long-term business plan nearly guarantees your competition will pass you by. Is what you wanted three years ago still what you want today? Don’t get stuck with a plan that doesn’t allow you to pivot and go in a completely different direction if needed.

You still need to have aspirations and goals—and a process to get there—but you may want to consider setting shorter timeframes for them. I recommend you review and rewrite your business plan a few times per year, and when it isn’t working, or it needs adjusting, change it immediately—not later.

For those of you waiting for just the right time to start your own business, there will probably never be a perfect time. If you have an idea and the passion to get a business off the ground, then that’s the time to get started. Create your vision, solicit feedback from other business owners and then engage business consultants to create a short-term plan that will help you quickly attain your potential while avoiding costly mistakes.

Even if you can’t put forth that much effort, analyze the risk and perhaps you’ll decide you’re willing to start your business with little more than your idea, your passion and your willingness to put in a tremendous amount of work. In that case, a short-term plan, paired with an ultimate strategic vision, can be enough to get your business off the ground and on the road to success—sooner rather than later.

As a contributing editor on the topic of starting and growing your own business, Michelle DeClerck will share her expertise and a successful businesswoman while revisiting the topics she writes about in her own business. She believes it’s essential for business owners to continually review their processes in order to grow. Share feedback with her at Michelle@myCEM.com.

For more information, visit www.myCEMblog.com.

Phone: 515-254-0289 ext. 9.

 

Customer satisfaction in a collections call

Money-1012598_960_720This morning my wife and I received a phone call from what I assume to be an early-stage collections representative of Wells Fargo bank.

My wife and I have been customers of Wells Fargo for many years. We've had different types of loans, mortgages, brokerage accounts, checking accounts, savings accounts, credit cards and lines of credit with the institution. I've never had issues making payments in all my years. I have money in multiple cash accounts, and I have very good credit with them (and good credit in general).

As sometimes happens with human beings, I got busy while paying bills this month and simply overlooked a $26 payment that was due on one of our accounts. It was 10 days past due today, and thus we received the phone call.

The young man on the phone sounded tired and jaded as he went through his spiel. His tone made it sound as if my wife and I were on the brink of serious trouble and this was a matter of utmost urgency. He was short, subtly antagonistic, and pressed us to immediately deal with what he intimated to be our egregious financial error.

When told that we would certainly go online and make the payment immediately, he questioned our commitment and asked for assurances. It left my wife and me feeling harassed, belittled and unappreciated as good, long-term customers.

For many years my company has provided third party Quality Assessment (QA) for number of different financial institutions. I've monitored calls between past-due customers and many different collections teams from early stage to advanced late stage and even into litigation. Most of us take for granted the importance of monitoring and coaching customer service interactions, but the impact of interactions with customers in a collections situation can be even more crucial in their impact of customer satisfaction, loyalty and retention.

Three mistakes our friend from Wells Fargo made when he called us this morning:

  1. He didn't take (or his system didn't grant him) the time to consider the context of the situation. We were 10 days past due on a $26 payment, but a cursory review of our accounts would have told him that we had plenty of money to make the payment, have no history of being late, and have been long-term loyal customers. Rather than assuming we were deadbeats, he should have started out by thanking us for our business and offering that he was simply making a "courtesy" call.
  2. He made the situation out to be far more dire than it really was. Because the collections agent ignored #1, his tone and tactics were more sensational and threatening than they needed to be. He made a much bigger deal of the situation than necessary. He should have simply made a courteous request that we make the payment as soon as possible.
  3. He questioned our integrity. When given a promise to pay, the collections agent questioned the commitment and asked for reassurances. Once again, a loyal customer with no history of payment issues was made to feel accused of deceit. Instead of feeling good about our long-term relationship with Wells Fargo, we were left feeling like helpless victims of an uncaring corporate giant who cares little about us or our business.

Having worked in the world of customer satisfaction and QA for many years, I am well aware that what my wife and I experienced this morning was the (un)luck of the draw. Our number came up on the dialer for this one anonymous cog in a small army of collections agents. He may have been the negative exception to the generally positive rule. He may be one bad egg on a good early-collections team at Wells Fargo. Nevertheless, one interaction can cause irreparable damage to a loyal customer relationship.

Customer service that impacts customer satisfaction, customer loyalty and customer retention isn't just about the customer service team who address problems with a company's service delivery system. Customer service is also about those agents tasked with the critical, necessary interactions with customers who may have dropped the ball in the relationship.

How you handle those interactions can solidify or ruin a lifetime customer relationship.

 

 

Finding your passion

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

Bizrec1

People who know what they want to do with their lives, what really fires them up every day they go to work, are lucky.

People who knew it at an early age are the luckiest of the lucky.

I put myself in that second group -- the luckiest of the lucky -- because I knew from the time I could pick up a crayon that I was going to be an architect.

What do you do if you're not that lucky? What do you do if you're a young professional -- or older -- and you haven't found that career path that sparks a real passion in you? Or, what do you do if you thought you were on the right track but have figured out you don't like where you're headed?

First off, chill out. (Play some Foo Fighters, have a beer, go listen to some live music or Keep Calm and Eat a Taco -- those are a few things I do in these situations.) Don't get down on yourself. Life is about trial and error. Sometimes you have to see for yourself what you don't want to do before you know what you do want to do.

Second, do something. Don’t make excuses. Don't resign yourself to keep doing something you don't love deep down to your core. We all have to do things we don't like sometimes, but don't keep dragging yourself to a job you hate for any reason. I can't think of many things that will kill your passion faster than that.

So how do you find your passion?

Talk to people you know and ask them -- especially those who are really passionate about their work -- why they love doing what they do and what they think you'd be good at. Listening to advice is good; nothing says you have to take it. Especially if you think someone is trying to pressure you to be something you're not or to do something you don't want to do.

Making sure you have off-work passions is another great way to keep you pumped up about your profession. Des Moines has so many awesome recreational opportunities and groups to get involved with that there's bound to be something for everyone.

If you haven't been out of college long, you may not be feel like taking another test, but that might be the smartest thing you can do. You can find your passion by taking any number of aptitude tests that will either reinforce your thinking or point you in a whole new direction.

When it comes time to look for a job, look for someone who has the same values you have -- and the passion you want to have.

Whatever you do, think big, dream big and make something big happen for you. And, start now.

SBA help for repaying business mortgages returns

-Pat Brown-Dixon is the administrator for the Small Business Administration's Region VII and oversees SBA programs and services for the states of Iowa, Kansas, Missouri and Nebraska.

Last month, the U.S. Small Business Administration regained, on a permanent basis, a powerful lending program that will help continue America’s recovery from the great recession of 2008!

The SBA’s 504 Refinance Program was very popular, but it was only a pilot lending tool under the Small Business Jobs Act of 2010. As such, it began in October 2011 and expired in September 2012. Its purpose was to provide extended capital to help small businesses pay off nongovernmental commercial mortgage loans.

I recently met a small business owner who had just been able to get property refinanced under this loan program before it expired in 2012, and who was very happy about it.

The program had a good repayment history and was used for small businesses ready to expand or save jobs but who needed to extend commercial mortgage payments in order to do so. The SBA asked Congress to extend the pilot, and now that they have, and President Obama has signed it into law, it has become a permanent part of our 504 loan program.

The SBA started processing applications on June 24.

One of the requirements of the 504 Loan Program is that the small business borrower must create or retain jobs in the community or meet a community development or public policy goal. Application is made through community Certified Development Companies (CDCs), nonprofits set up to spur community development. A 504 refinancing project has three components:

  • A loan secured with a junior lien from the CDC covering up to 40 percent of the cost, and backed by a 100 percent SBA-guaranteed debenture.
  • A direct commercial loan from the private sector covering the amount covered by the debenture on the project and secured by a senior lien.
  • A contribution of at least 10 percent equity from the borrowing business.

The program offers loans of up to $5 million.

Some rules do apply for borrowers who choose to refinance their existing mortgage with the 504 Loan Refinance program.

1. The commercial mortgage/deed of trust debt to be refinanced must be at least two years old.

2. The loan (or loans – the package could comprise more than one eligible loan) being refinanced must not have any late payments in the previous 12 months, and evidence of that must be presented.

3. The property financed by the original loan must be a minimum 51 percent owner-occupied and meet all other eligibility requirements of the SBA 504 program.

4. The loan program is for refinance-only projects whose maximum LTV (loan to value ratio) is 90 percent.

5. Cash-out refinancing is permitted to cover most eligible business operating expenses.

6. Only conventionally financed commercial mortgages/deeds of trust are eligible. Existing "government backed" loans, such as 504's, 7(a)'s or USDA loans, cannot be refinanced under this new program.

If your small business could benefit and grow from getting out from under a previous mortgage with high interest or short terms, the SBA’s 504 Refinance Program might be just what you need to put that second wind under your small business sail.

For more information, or to get the process started, go to this link and select “Iowa” to find your local Certified Development Company. You can also contact the SBA Branch Office in Cedar Rapids at (319) 362-6405. They can provide assistance and information about our other loan guarantee programs, as well.

A Brexit lesson on restaurant regulation

Jessica Dunker is president and CEO of the Iowa Restaurant Association

Restaurants in Britain may well have been on the forefront of the UK’s recent decision to leave the European Union (EU). Why? Regulatory overreach had reached the point of the absurd.

There was near restaurant revolt when the EU tried to force refillable olive oil bottles off restaurant tables across Europe. Even a protest of 100 top chefs in Britain couldn’t stop the mandate that “mustard” be noted along with 14 other allergens on menus—imagine the nightmare for small chef-driven restaurants that change their menus on a regular basis.

Sadly, we may be headed perilously close to an equally well-intentioned, but onerous regulatory environment on our “side of the pond.”

Not long ago the biggest challenge most restaurateurs faced was finding innovative ways to attract new customers and keep them coming back. They would test marketing tactics, improve ambiance, innovate with food and drink and move price points in an effort to capture that “magic mix” for a successful business.

It’s not that restaurant entrepreneurs no longer ask and seek answers to those business-building questions. They do. But the biggest worry consuming the minds (and energy) for today’s operators is government interference in their business.

In fact, regulatory overreach has displaced the economy, food costs, recruiting employees and even sales volume as the number one challenge cited by restaurant operators, according to an annual survey conducted by the National Restaurant Association.

Of course, there are “big headline” battles between the restaurant industry and all areas of government. New York City led an effort to prohibit the sale of “super-sized” soft drinks in restaurants (apparently the “bigger than my head” drinks offered by convenience stores didn’t hold the same health risks.)

Across the nation, restaurants and bars deal daily with compliance officers on alcohol, food safety, wage and labor, and more. And while wage battles make headlines, the more costly regulatory fights often don’t find their way into the news.

Case in point, grease traps (a plumbing device that’s part of a restaurant wastewater disposal system.) Twenty-years ago one independent restaurateur I know opened a place downtown with a 60 gallon grease trap. He’s never had a problem with it. This past year when he purchased and renovated an existing restaurant location, he was required to put in a 10,000 gallon grease trap—you read that right—a grease trap that was 166 times larger than the one used in his existing location.

Trust me when I say, his new restaurant does not produce 166 times more grease, solid waste, or anything else. Not only is a trap this large unnecessary, it doesn’t exist. He was forced to buy two 5,000 gallon tanks. And because the regulations say a tank cannot be more than 25 percent full before it is cleaned, one tank sits filled with 5,000 gallons of clean water 100 percent of the time.

I know that is a “down in the weeds” example that only those in the restaurant industry truly care about, but it is a $100,000 example—and it was a $100,000 expense that no restaurant patron will ever see the benefits from. It’s “overkill” in every regard.

The biggest worry about all of this is that the restaurant industry is one of the last bastions of entrepreneurialism left in the United States. People can still start as a dishwasher, busser, or server and end up an owner. However, if we continue down the path of EU-style regulatory overreach—we may well regulate future independent restaurateurs away from the American Dream, and out of the marketplace.

And that would be a shame—because a huge attraction to any city is the unique regional flavors delivered by “locally grown-and-owned” independent restaurants.

Enjoying the accents

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

I have an ear for accents, so I enjoy listening to all kinds of them.

When growing up in the melting pot of Toronto, Canada, I learned an easy way to make friends – when I met someone, I liked to guess where they were from based on the accent I heard. I would say, "Oh, are you from Australia?" Many times, my new acquaintance would be thrilled and say: "Wow! You are the only person who guessed I am Australian! People think I am British all the time!"

Such compliments from my new friends and new clients make me beaming with excitement when I see someone new to America. Out of habit, I pay attention to how people speak English. At the right time I surprise them by saying, "You are from Canada!" These easy discoveries help me to bring new clients to my business and to build a new friendship with someone I've just met. 

In today’s business world, it is almost a required skill to be able to connect with business affiliates who speak English with strong accents. If you find yourself uneasy around the thick accents, or struggle to make sense of what they are saying, take a deep breath and let them know. "Excuse me, I love your accent, but can you please speak a little slower so I can understand what you are saying?" 

The worst mistake in communication is automatically nodding your head as if you understood what was said. And both professionals and newcomers do it.

The newcomers often take things very seriously because they have no experiences and everything feels so intense in their environment. This could be his or her first job in America and they just do not think that they can be understood easily because of their accent.

On one hand we need to give them time to get comfortable, and on the other hand we need to overcome our own mental barriers by simply recognizing that accent is part of a culture, not a bad habit. Accent has nothing to do with how smart the person is and should not be used to judge their intellect. It is, however, the mark of someone whos new to America.

If you enjoy being open-minded or want to be at home with folks who are new to the USA, start with listening to and appreciating their unique accents. I do not speak Spanish, but I have many Spanish-speaking clients who speak strongly accented English. I was told many times by these folks that I understand them perfectly. After hearing their accents for so long, I do understand them. And I enjoy the sound of their speaking. It helps connect me to these hardworking people. I look at the people and I think, "They speak a language that I do not, and they are smart for that!"

So enjoy the sound of their accents and see the world through the eyes of these newcomers. Dont let someones accent become a barrier between you and them -- use it instead to come together. 

How to focus in the age of distraction

Dr. Christi Hegstad is a Certified Executive & Leadership Coach, author, trainer and book addict. Learn more at MAP Professional Development Inc.

Deep Work book NewportIf I handed you a project file and a quiet space, how long would you focus on it before you checked your phone or your mind began to wander?

If you're like the vast majority, probably not long. In his latest book, Deep Work, Cal Newport makes the case that our ability to focus on singular pursuits for any length is becoming more rare -- and increasingly valuable. With technological advances, changing workplace structures, and a host of other factors, we must make a conscious effort to create periods of full-concentration, distraction-free focus if we are to perform at our peak and make the contribution we're here to make.

So, who's thinking, "I crave that -- but can you show this research to my employer / co-workers / team, please?"

Among my executive and leadership coaching clients, this lack of focused time is one of their greatest frustrations. They long for quiet time to devote to strategizing, visioning and high-level work, but they often spend their days in meetings and "putting out fires." What to do?

Some changes need to occur at the organizational level, but there is much you can do as an individual, too. I recently shared five tips on my blog (click here to read); in addition, you might:

Corral your email. 

Consider an autoresponder that tells senders you'll reply within 24 hours. Batch email checks to certain times each day. Remove email from your phone, checking it only when you're at your computer instead.

Turn in your Busy-ness Badge.

If your response to "How are you?" is consistently, "Busy!", let it go. Busy-ness is not a badge of honor nor an aspirational state. Choose to be intentional, purposeful and prioritized. 

Schedule deep work.

In The One Thing, authors Keller and Papasan encourage spending four hours per day -- ideally first thing in the morning -- on your most important goal. Every day. My clients who embrace this practice see a marked difference in purposeful productivity for sure, but not everyone can structure their work accordingly. A few shorter pockets of time per week for this same purpose can be nearly as valuable, especially if you currently have about zero such time scheduled. Newport offers four different scheduling techniques to match your personality and workplace reality, too. 

Make a major change.

"Sometimes to go deep, you must first go big." Newport shares how J.K. Rowling, on deadline with her final book in the Harry Potter series, checked into the luxurious 5-star Balmoral Hotel in Edinburgh. Making a grand gesture -- i.e., shelling out $1,000/day for the quiet space to write -- can work wonders for your focus, motivation and productivity.

I had the pleasure of hearing Newport speak at a coaching leadership conference earlier this year. His line that sticks with me the most? "A deep life is a good life." We all have the ability to bring more depth, meaning and purpose into our work and lives, regardless of the distractions surrounding us. 

Christi Hegstad MAP Inc HeadshotCOACH CHRISTI'S CHALLENGE:

What's your biggest distraction? Perhaps social media, poorly run meetings, staying up too late, TV, or any number of things that keep you from devoting focused time to your priorities and joys. 

Pinpoint the greatest one, then take an action to minimize its effect on you. You might choose from those I've offered, or perhaps you know exactly what you need to do -- you just need to do it. Commit to the action for a week and see what changes in your sense of purposeful focus in just a short time!

How do you maintain focus in this distracted world? Share your best practices below!

Deep Work by Cal Newport (Grand Central Publishing, 2016).

Dr. Christi Hegstad is a certified and award-winning executive and leadership coach who helps people work, live and lead with meaning and purpose. Learn more at www.meaning-and-purpose.com or on Facebook, Twitter and Instagram.

 

Sorting an omelet

- Rob Smith is principal architect at CMBA | Smith Metzger

Remember when the truck came down the street and put items from your green recycling tote into the correct compartment on the truck? That’s called “curb sort recycling." And if you had something that was not recyclable they would leave it in your tote with a note. 

THAT’S HOW WE LEARNED WHAT WAS ACCEPTABLE. EVEN WITH A RECYCLE SYMBOL THE ITEM ENDS UP BEING RECYCLED ONLY IF THERE IS A MARKET FOR IT.

IMG_3410Then came “residential single stream,” which means you throw whatever into your recycle container and it gets sorted somewhere else. It’s easier for residents, but we still have to be mindful.

My friend Todd Mendenhall is one of the owners at Mid America Recycling. That’s where all the stuff we put in our containers goes.


Todd says, “Residential single stream recycling is like a truck dumping a pile of thousands

of omelets and picking out the egg, bacon, green pepper, onion and chives and sorting

them into their own pile.”


IMG_3429Mendenhall mentioned residents still need to be conscientious when recycling. 

  • Don’t put plastic bags in your recycle container. First, they are not recyclable. Second, they get all tangled in the sorting machinery and require the line to be shut down to remove the bags. PLASTIC BAGS ARE TRASH.
  • Don’t put trash in your container. On my tour I saw suitcases, hoses and car wheels.
  • While a shovel and chain are made of steel, no recycler wants shovels. Pop cans, glass bottles, plastic bottles and paper are mostly what they want.


THE BEST THING I LEARNED IS I DON’T HAVE TO WASH OUT MY TOMATO PASTE CAN UNTIL IT IS SPOTLESS!!!

Let me know if you have any recycle tips. Email me at rsmith@smithmetzger.com

Groupthink and the public pension industry

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

William Whyte coined the term “groupthink” in a 1952 article in Forbes Magazine(1). Whyte felt the pendulum had swung too far in terms of “rational conformity,” or the idea that group values should trump individualism. Later (in the 1970s), research psychologist Irving Janis expanded the concept and conducted research about how cohesive groups of people make and justify faulty decisions.

Groupthink is a term that has been used to describe such various public policy fiascos as the failure to anticipate Pearl Harbor, the Bay of Pigs invasion, the Challenger shuttle disaster, and more recently the collapse of the housing bubble and the handling of the Penn State child molestation case. In each case, even though individual members were brilliant and ethical, group dynamics led to decisions with devastating consequences.

Are U.S. public pensions going to become the next big public policy groupthink debacle?

Clearly there are beliefs and practices unique to the U.S. public pension industry that appear very questionable to anyone looking in from the outside. Yet they are genuinely held, sincerely defended and “generally accepted” by those on the inside.

These include clinging to an unrealistically high investment return assumption; changing actuarial and modeling methods to get the desired results; and taking on increasing levels of risk without even asking whether such risk is acceptable.

Questions about public pension assumptions and practices have been raised by the Society of Actuaries; credit rating agencies; the former head of the Securities and Exchange Commission; and even by Warren Buffett. Accounting standards for public systems in other countries are drastically more conservative(2). If they’re right and the industry is wrong -- and we keep adding more and more employees to systems that may ultimately implode -- it could become the biggest financial and personal disaster in U.S. history.

The U.S. public pension industry is a tightly defined and powerful industry, controlling $3.7 trillion in assets and supported by millions of members and politicians who want in the worst way to believe what they are being told. It exhibits many of the symptoms that Janis described as indicating groupthink(3). In fact, we can go right down the list and provide examples of each as relate to the public pension industry:

  • An illusion of invulnerability – the government can’t go bankrupt; taxpayers have infinitely deep pockets.
  • Discounting of warnings – the assumed high future annual return assumptions (avg. 7.5 percent) can be justified based on history, so we shouldn’t worry about it.
  • Belief in the rightness of their cause – public employees have tough jobs and deserve a great retirement no matter the cost.
  • Stereotyped views of out-groups – people just don’t understand the public sector is different from the private sector; groups that question public pensions are funded by “shadowy” outfits.
  • Direct pressure on dissenters – an actual blacklist has been published by one national organization that exhorts public pension systems to avoid doing business with many reputable entities that have raised uncomfortable questions(4).
  • Doubts not expressed – national organizations provide only confirming information and studies; insiders who raise questions are distrusted.
  • Illusion of unanimity – 42 large public plan administrators signed a letter of complaint to the Academy of Actuaries objecting to a study being undertaken by that group to probe the causes of public pension underfunding.
  • Protection from information that is contradictory – information about the substantial risks imposed by today’s practices is not shared with plan trustees or others who are making decisions by default.

Is it possible to penetrate a group this heavily insulated?

In an interesting recent article(5), one writer called for a sequel to the movie, “The Big Short,” a film that colorfully documents how groupthink led to the collapse of the housing market. The sequel would depict the implosion of the U.S. public pension industry. Re-watching “The Big Short” is an entertaining way to learn how groupthink works, but maybe it will also make it easier even for insiders to identify the warning signs.

Meanwhile, ordinary people – including members of these plans -- need to keep asking the questions, and not assume that everything is okay just because we are told it is, and because we want it to be.

(1) William H. Whyte, “Groupthink,” Fortune Magazine, 1952. Reprinted in Fortune Magazine July 22, 2012. http://fortune.com/2012/07/22/groupthink-fortune-1952/

(2) Andrew Biggs, “U.S. State and Local Pensions Couldn’t Survive Under Tougher International Accounting Standards,” Forbes Magazine, June 2, 2016. http://www.forbes.com/sites/andrewbiggs/2016/06/01/u-s-state-and-local-pensions-couldnt-survive-under-tougher-international-accounting-standards/#3e00ac0c4fb1

(3) Psychologists for Social Responsibility, “What Is Groupthink?"  http://www.psysr.org/about/pubs_resources/groupthink%20overview.htm

(4) National Conference on Public Employee Retirement Systems, Code of Conduct, Appendix http://www.ncpers.org/content.asp?contentid=616

(5) Ed Ring, “We Need a Sequel to The Big Short to Critique Public Pensions,” Reason.com, April 10, 2016 http://reason.com/archives/2016/04/10/we-need-a-sequel-to-the-big-short-to-cri

Escaping email overload

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

     In these times, we’re all being called upon to do more with less — less time, less money and fewer people. This pressure can create a hamster-on-a-wheel feeling as we scramble to get everything done. Although the rules of business have changed, many people haven’t received updated skills training on how to manage the flow of information into their lives, especially through email.

    Recently I conducted a leadership institute with a group of directors from various organizations. During our group sessions and individual coaching meetings, I asked about their biggest source of stress in their jobs. Almost every single person said the amount of email they received and responded to each day topped their list. This overload caused them to develop unhealthy habits surrounding email, including working tremendously long hours and a life without balance.

    Effectively overcoming this time crunch and email overload requires developing new habits. But before you, or anyone else, can change, you need to know exactly what you’re already doing. That’s why I ask clients to do a time audit. During this process, you look at how you use your time over the course of three days. By logging your activities in 15-minute increments from the time you get up in the morning until the time you go to bed at night, you can pinpoint where your time is going and why you feel like you don’t have enough.

    Although many people don’t see it this way, spending time is like spending money. Just like you have a certain amount of money in the bank that you can use to achieve your goals and enjoy life, you have a certain amount of time each day that you can spend on your personal and professional activities. When you overdraw from your banking account, you run into problems. The same is true when you try to take too much out of your time account. It doesn’t work, and you feel stressed. That’s why you need to make sure you’re spending your time effectively and efficiently to accomplish your objectives for the day.

    After you complete your time audit, you can identify where you’re “overspending,” and clearly define the ideal life that you’re trying to create. As you ponder your balanced lifestyle, think about activities such as exercise, vacation or simply getting work projects done on time. Once you’ve envisioned your ideal, you can create a plan for how to build that lifestyle within the constraints of your responsibilities at work and at home.

    At work, one of the biggest keys to achieving this balance involves limiting the octopus-like control of email over your schedule. If you’re spending every spare minute answering messages, when can you move forward on projects?

    Another key to "work flow wow" is limiting the frequency and length of time you spend checking email. Many people feel like they need to respond immediately to all email, even if it’s not a priority. In brief, here’s my solution: Limit yourself to checking email three times a day. Preferably you’ll do this in 30-minute time blocks in the morning after your project time, before you go to lunch, and before you wrap up for the day.

    By breaking the control of email over your schedule, you will not only increase your productivity but also your inner peace. Before you implement the email skimming process described below, consider these keys to success:

  • Turn off any email alerts. Even if you don’t constantly check your email, alerts will create psychological distraction that can cause you to take up to 25 percent longer to complete tasks.
  • Don’t email when you should call. If you’re writing over five lines, picking up the phone can be more efficient than using email.
  • Email doesn’t stand for immediate response. You need to get out of the habit of feeling that you must respond immediately to others or expecting them to do the same for you.

    Now that we’ve covered some of the ground rules, here’s a guide to skimming your inbox. Each time you open up your inbox during your allotted time blocks, ask yourself these questions:

  • Is answering this email going to bring me closer to achieving one of my goals?
  • Can this email wait until tomorrow?
  • Will delaying my response keep someone from accomplishing his or her work?
  • Could I respond to multiple emails in a single email reply?
  • Can I delete or ignore this email without serious repercussions?

    As you begin this process, you’ll find that very few of these messages actually get you closer to your goals and even fewer require immediate responses. I highly encourage you to try out this method and start to experience workflow wow!

© Rita Perea, 2016

The importance of being earnest

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

In 90% of life, being humble is a good thing. In economic development, it can be a death sentence.

“In matters of grave importance, style, not sincerity, is the vital thing.” ― Oscar Wilde, The Importance of Being Earnest

We’re Iowans. We’re nice. How do you do? 

So starts the biggest uphill battle an economic developer can hope to never face. I wrote recently about the increasing role of capacity building in modern economic development — that successful practitioners today are spending less time selling and more time improving their product. But while there is a pronounced trend toward asset building Nice_guy at the expense of traditional cold call/trade show/road warrior selling by local and regional economic developers, transactional acumen remains a critical skill for all of us. What makes the sales-ish process in economic development perhaps a bit unique is the fact that practitioners must rely on the collective will of our community colleagues — including both those who are involved in projects day-to-day (like city staff and real estate developers) and everyday people who are often a great source of leads — to play as big a role in making the sale as any one economic developer. And what makes the sales process uniquely challenging in a state full of humble, nose-to-the-grindstone people, like Iowa, is the fact that we’ve got a potential sales force (everyday citizens) who hate to sell.

Aww shucks.

We generate more power from renewable resources than any state in the country (which is huge for many heavy-power tech projects), but it’s no big deal; just ask an Iowan. 

We produce more corn than any other state and most nations (a huge separator for the growing roster of major-user biomaterial producer projects), but that’s just what we do. Ask an Iowan.

We invented the digital computer in Ames, Iowa! Important? Sure! Brag about it a little? Bad form; ask an Iowan.

It’s not that Iowans aren’t proud of our state and its accomplishments; it’s that we are, owing to our German, Norwegian and Quaker roots, a work-is-a-virtue bunch adhering to a societal construct that deems self-promotion and immodesty as taboo and to be avoided. For more on this and a fascinating glimpse at what makes Midwesterners and 11 other regional American populaces tick, read Colin Woodard’s American Nations. You can find my review of the book here.

In Iowa we’re modest and unassuming by nature, and in nine out of 10 walks of life, that’s a great personal or organizational attribute. But in economic development, if not properly managed and mitigated, it can be a death sentence. Our collective ability to compete for capital, talent and innovation in a global economy churning at a blistering pace relies heavily upon our ability — and willingness — to discover, organize and effectively promote our strengths as a state and region.

CXR to the rescue

While I would argue that the decade-long trend toward an increasingly data-intensive site selection process wherein assets and good ideas trump salesmanship is an encouraging trend for the promotionally challenged (that’s us), it remains that, fundamentally, economic development is an enterprise sales endeavor. To make the point again, one of the things that discern the work of economic development from sales in a traditional sense is the fact that to do it well and be successful, economic development practitioners must rely on the collective will of the constituents in the region to promote themselves. The Cultivation Corridor and any other economic development organization in the region desperately needs for Central Iowans to continue the citizen trend we really started to see emerge with the rollout of Capital Crossroads some years ago: a pride in authorship for the spectacular story of growth and prosperity our region has been writing for a decade.

Power of the people

One of the things I’m asked most is where leads for new projects come from. While it’s true that a significant proportion of leads for economic development groups like the Cultivation Corridor come from traditional sources like consultant relationships and trade show networking, often our most actionable and qualified leads come from within the region. They come from existing companies exploring joint ventures with another company, from individuals who on a business trip read in the regional newspaper that an existing company was being yanked around on permits for an expansion, from a local supply chain logistics consultant who identifies a gaping hole in the middle of the country for a particular 3PL service offering. What translates these scenarios from latency to project action is the willingness of the applicable discoverer of information to ask him- or herself an important question: “Why not Iowa?”

Each of the preceding three scenarios is true, and each translated into a jobs creation project in my career. The power of our local stakeholders (especially you, if you’re actually still reading this 800 words in) to deliver ideas that translate into opportunity for our region and state is enormous — and critical to our collective success. So be nice, but keep a bit of a prideful edge, will you?

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

Work HARD, not SMART

Bootprint

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."

There’s a frequently used acronym related to creating goals––SMART––which stands for Specific, Measurable, Achievable, Realistic (or Relevant) and Time-based. As a college professor, I taught for over 20 years a variety of concepts required to attain a desired goal or future vision. I frequently discussed the importance of creating SMART goals and how they were absolutely critical in order to accomplish this desired end.

Hogwash.

It’s not that SMART goals are necessarily bad, but I now believe they’re flawed if what you are trying to achieve requires a behavioral transformation or major proactive change. Specific, Measurable and Time-based are all fine attributes and should automatically be built into all goals. It’s the Achievable and Realistic (or Relevant) parts I’ve been struggling with for some time now, especially after reading a piece in Forbes discussing how SMART goals can sometimes be dumb.1

In the author’s opinion, both Achievable and Realistic actually act as impediments and don’t really enable genuine movement or progress. I completely agree. Those attributes smack of phrases like “Don’t bite off more than you can chew,” “Stay within your available resources,” “Be careful what you wish for,” “Play it safe,” “Don’t do anything stupid,” and “Keep your eye on the ball.”

Because of the Realistic (or Relevant) attribute, Yahoo decided to pull out of purchasing Facebook during its early years because of an overreaction to a short-term market dip2 (an article in CNN Money now predicts Facebook will at some point have a $1 trillion valuation3 while Yahoo continues to suffer); the company Digital Research passed on partnering with IBM for the creation of an operating system (after Bill Gates sent them there in the first place––the result was Microsoft creating MS-DOS, and Digital Research is now long gone);4 Kodak failed to embrace digital photography because it didn’t require film (and subsequently filed bankruptcy); and the list goes on.

A great many poor decisions have been made by people based on “unrealistic” or “non-relevant” views––views often rooted in how things currently are as compared to where they will or should be because they were unable to imagine something different.

Thankfully, John F. Kennedy didn’t listen to the pundits in 1961, who claimed going to the moon was unachievable. If NASA had used SMART goal thinking in the '60s, we would have never gone to the moon, especially within the “unrealistic” context at the time: less than nine years to complete, over $25 billion cost (about $144 billion in today’s dollars), and less than 20 percent of the necessary technology required to do it. Also, over 50 percent of the country didn’t even want to fund the project, especially since we were involved in the costly Vietnam War. But this project was absolutely necessary and relevant in order to stay ahead of the Russians.5 As part of a 1962 speech given at Rice University, Kennedy proclaimed:

“We choose to go to the moon. We choose to go to the moon in this decade and do the other things, not because they are easy, but because they are hard, because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one that we are willing to accept, one we are unwilling to postpone, and one which we intend to win, and the others, too.” 6

The result was not only one of the greatest achievements of mankind, but also the staggering development of thousands of products and industries (such as microwaves, purified water, polarized, scratch-resistant lenses, lithium batteries, kidney dialysis, NASCAR cool suits, solar panels, etc., and companies like Intel7), not to mention the inspiration of an entire generation and the creation of worldwide optimism during a difficult time in our history.

My point is this: Any goal that requires transformative thinking––thinking required to change deeply entrenched behaviors, habits and modes of thought––isn’t SMART. It’s HARD.

HARD goals require a total change in thinking––a recognition that transformation is difficult and realized through intense focus, effort and tenacity. Our greatest accomplishments in life weren’t easy. Therefore, I believe HARD goals include the following attributes:

  • HONEST: One of the biggest reasons that many goals are never achieved is because people do not honestly, deep down, believe in them. Often, they are the goals of someone else, such as a spouse, parent, physician, supervisor or the organization as a whole. They could also be the goals that have been deemed “good” by a majority of society. Regardless of origin, unless they are your goals––goals you totally believe in, desire above all else, and have built into the very core of your being––they will never be realized.
  • ACTIONABLE: These goals must be something you can begin taking immediate action toward … not someday or at some future point. If these goals require something in addition to or other things to occur first before you can begin working on them, the likelihood of success is diminished. The NASA moon program began the moment Kennedy shared the goal with Congress.
  • RADICAL: Most goals related to change frequently require some form of radical or significant shift in behavior. Typically, a minor or slight change in thinking is inadequate to achieve transformative change. For example, effective weight loss requires a sustainable, permanent change in diet from what you previously considered normal, acceptable eating. Eliminating debt requires a sustainable but substantial shift in your spending patterns, purchasing behavior and saving.
  • DETAILED: HARD goals require a plan of attack. This is where desired action is specifically detailed, time-based and measurable. This plan of attack should be incremental in nature since the power of progress is typically found and achieved through daily activity. Again, NASA had an extremely detailed plan with a series of very specific short-term objectives required to land on the moon in less than nine years.

Research shows that fewer than 2 out of 10 employees strongly agree their goals will help them achieve great things, and even less strongly agree their goals will help them maximize their full potential.8 Goals that truly lead to transformative change, the kind of change that will help you achieve great things and maximize your potential, require a HARD focus. A desired goal must be honest and true to both who you are and where you want to be; it should be immediately actionable and not something you have to wait on if you’re ready to go now; it should be radical in that to get there requires a sharp shift from the behavior that’s obviously not working now; and it should be detailed so it’s extremely clear as to the steps, resources and time required to achieve it.

A HARD goal doesn’t necessarily mean it’s extraordinarily difficult to accomplish. But it does require a higher level of intensity to achieve the desired transformation than a SMART goal. If you truly want to proactively change your behavior, you will need to change your mind––a change in thinking that directly affects your daily behavior.

©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

 

 

 

1Murphy, Mark. ‘SMART’ Goals Can Sometimes Be Dumb. (Jan. 8, 2015) Retrieved May 25, 2016, from the Forbes website: http://www.forbes.com/sites/markmurphy/2015/01/08/smart-goals-can-sometimes-be-dumb/ - 131ed902142c

2Tynan, Dan. 10 of Tech’s Biggest Missed Opportunities. (Aug. 19, 2009) Retrieved May 25, 2016, from the IT Business website: http://www.itbusiness.ca/news/10-of-techs-biggest-missed-opportunities/13860

3La Monica, Paul R. Why Facebook Could One Day Be Worth $1 Trillion. (April 28, 2016) Retrieved May 25, 2016, from the CNN website: http://money.cnn.com/2016/04/28/investing/facebook-trillion-dollar-market-value

4Tynan, Dan. 10 of Tech’s Biggest Missed Opportunities. (Aug. 19, 2009) Retrieved May 25, 2016, from the IT Business website: http://www.itbusiness.ca/news/10-of-techs-biggest-missed-opportunities/13860

5Wilford, John Noble (1969). We Reach the Moon: The New York Times Story of Man's Greatest Adventure. New York: Bantam Paperbacks.

6John F. Kennedy Moon Speech – Rice Stadium. Retrieved June 4, 2016, from the NASA website: http://er.jsc.nasa.gov/seh/ricetalk.htm

7Benefits from Apollo: Giant Leaps in Technology. Retrieved May 25, 2016, from the NASA website: https://www.nasa.gov/sites/default/files/80660main_ApolloFS.pdf

8Leadership IQ Study. Retrieved May 25, 2016, from the LeadershipIQ website: http://www.leadershipiq.com/blogs/leadershipiq/35353793-are-smart-goals-dumb

Communicating client retention

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

If you want your clients to stick around you should be communicating with them regularly. And if you want this communication to have a positive impact it needs to be meaningful, timely, and authentic. Sending bcc’d emails to your client list doesn’t do much to make them feel loved. Likewise, not returning phone calls or emails is equally as detrimental to client retention. For businesses to be great communicators they must be both reactive, and proactive in their approach.

Being reactive in your communication is as simple as getting back to clients in a timely manner. One of the top complaints we found by analyzing the negative feedback of clients of service-based companies was the lack of returned phone calls. There is perhaps no faster way of showing your clients you don’t care much about your relationship.

Communicating proactively with your clients means that you are reaching out to them regularly with meaningful content on your own accord. This communication needs to be personalized, valued by the client, and happen over time. Below are a few examples of how to proactively reach out to your clients as to eliminate perceived indifference, and aid in client retention.

Testimonials

In addition to providing social proof, collecting written testimonials is a very effective way of increasing client retention. After a customer makes the commitment to promote you to others it becomes a part of their self-image. In our experience, we’ve found that customers who’ve put a stake in the ground and said “This business is great and here’s why” are far less likely to leave and buy from another company.

The nerdy, psychological term for this is cognitive dissonance: the mental stress a person feels when they are confronted by new information that conflicts with existing beliefs, ideas, or values. In other words, it’s easier when a customer has said “I like this company” to stick with it through thick and thin.

Newsletters

Newsletters can be an effective tool to increase client retention, if they’re implemented correctly. Essentially, a newsletter is intended to provide your clients with valuable information regarding your business, industry, and community. This is an excellent opportunity to both humanize your company while also establishing yourself as an authority within your industry.

However, many companies implement newsletters incorrectly, and they backfire by making the clients feel more disconnected than before. This happens when companies include content that is either unoriginal, irrelevant, or both. We call this the copy and paste syndrome. Curating information across the internet and passing it along to your clients is one thing. But if you didn’t write it, don’t make it look as if you did. Your clients will be able to easily spot this ruse and lose some trust in the process.

There are several services available that can help you put together templates to work off of. We recommend MailChimp, as it’s quick, easy, and affordable. Be sure to include content about your business, your community, and information that your clients will find helpful. Be sure to keep regular intervals between each newsletter. We recommend sending a newsletter once a month, to keep your business top of mind, but not to annoy.

Follow ups

Regular communication with clients, simply for the purpose of following up, goes a long way to avoid turnover. This can include emails, phone calls, text messages, handwritten cards, or any combination of the bunch. Ideally you’ll want to vary the mediums you use to communicate with your clients (to keep it fresh), or stick with their preferred method.

It’s important to keep your follow-up communication personalized to the client. Unlike newsletters, you want your client to feel like you are reaching out directly to them, and only them. This can be as simple as addressing email or card to the client and including personalized and relevant content.
Accomplish this by implementing a system that can automate personalized communication based on predetermined intervals and/or triggers. For example, insurance agents benefit by reaching out to clients prior to their renewal date. This communication will have an even greater impact on client retention if it appears to be highly personalized and unexpected. That’s why we at Rocket Referrals recommend handwritten cards to be sent at unpredictable intervals, in order to enhance their authenticity.

The possible dream of fixing Iowa's business taxes

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

There's a lot about Iowa for businesses to like. We have a highly-educated workforce, good schools, attractive employment laws, short commutes, good infrastructure, and reasonable housing prices.

Our business tax system, in contrast, is nothing to brag about. Iowa's business tax climate has been consistently ranked near the bottom in the Tax Foundation's Business Tax Climate Index. Iowa has the highest corporation tax rate in the country. Because the U.S. has the highest federal corporation tax rate in the Organization for Economic Cooperation and Development (OECD), that means the combined federal and state corporate tax rate is the highest in the developed world. 2016 corporate tax map

The high rates have motivated industries to carve out their own special breaks, meaning the tax falls on those unlucky businesses without pull or lobbyists -- that is, most of them. Those businesses grow more slowly because they have competitors with lower tax costs. They move to more tax-friendly states, or they never move to Iowa in the first place.

It doesn't have to be this way. The Tax Foundation recently released Iowa Tax Reform Options: Building a Tax System for the 21st Century. As the title implies, it offers a menu of tax reforms to make Iowa's tax system much more fair and business-friendly while still generating the same revenue as the current system.

The report offers ideas for sales tax, property tax, and inheritance taxes, but the income tax provisions are especially exciting. The most ambitious revenue-neutral plans would replace Iowa's current nine bracket individual income structure, with its top rate of 8.98 percent, with a flat 5.15 percent tax. It would replace Iowa's 12 percent corporation tax with a 6.5 percent top rate. It would do so by dumping Iowa's archaic deduction for federal taxes and by repealing the dozens of special interest business tax credits.

There will be opposition. For example, in 2015 just 8 businesses claimed 61.6% of the Research Activities Credit, the largest single business credit, to the tune of $35 million. They will be highly motivated to keep that money.

The report shows just how expensive these breaks are for the rest of us. It shows that if a repeal of special interest tax credits is combined with the end of the corporation 50 percent deduction for federal income taxes, the corporate tax can be a flat 6.5 percent. If the special interest credits are retained,  the revenue-neutral rate can only come down to 9 percent. That's a 38 percent rate increase on everyone to provide special favors for a few.

Iowa Tax Reform Options shows that we can reduce rates and greatly simplify Iowa's business taxes while retaining popular features of the current system. These include the full federal Section 179 deduction for asset purchases, single-factor apportionment of multistate income for C corporation, and Iowa's unique apportionment tax credit for S corporations.

Iowa's tax system can be much better while raising the same amount of revenue. They would improve Iowa's business tax climate from one of the worst to the 10th best. Iowa Tax Reform Options should be the basis for the tax debate in the next General Assembly.

The buyer journey and your website: Consideration

- 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. Then, on Wednesday, I talked about stage one: discovery. If you didn’t catch those two posts, I recommend heading over to the “Web Strategy” page and catching up a bit.

All right, let’s talk stage two: consideration!

At this stage in the buyer journey, buyers know they have a solvable need, and they likely know about several companies that can address that need for them in different ways. In essence, the client has clearly defined the problem and is now in full-on research mode for the best solution. Your goal? To get them to consider YOU!

Buyer consideration and your website

If you recall, the last phase we talked about was “discovery,” or how we get potential customers to your website. To follow up on this, what we really need to talk about is what those customers are doing once they’re on your website.

Did you know that the average human has an attention span of eight seconds? That’s shorter than a goldfish (although only by one second). Think about your website -- what are you doing on your home page to keep individuals focused on your content?

This isn’t an issue we’re going to fix for you by the end of this blog. But it’s certainly a point to think about. For a casual test, I would recommend inviting a friend who’s not familiar with your website to sit down with you for coffee. Pull up your website -- for maybe 15-30 seconds, depending on how brave you are -- and take it away. Ask them what they remember. More than likely, what they remember is what attracted their attention first. Now think about it: Is their answer what you want it to be?

Attracting the attention of website visitors

I can’t emphasize this enough: PLEASE keep in mind that “attract attention” does not mean “make a button flash and change colors.” What we’re trying to address here is the question of whether your website visitors are indeed receiving the message you’re trying to send when they get to your home page.

In essence, you should be thinking about the user’s experience on your site first and foremost. Yes, you want to capture them as a lead, but if you cater to them and make their experience a good one, good things will follow.

I’ll close with one of my No. 1 pieces of advice that I give to those starting to think about website content. Granted, it’s based on personal experience, but it’s not inaccurate.

Think about the last time your boss came to you and asked you to find a new product to solve an issue occurring in your department. Maybe it’s 4:30 on a Friday, and you’re ready to head out for the week. Knowing this, they say it’s OK for you to give them a few quick options that they can review more in depth the following week.

You fire up Google, hit some search terms, and find a few websites. If you can’t find the “what we can do for you” statement within a couple of minutes of looking at the website, what will you do?

You might disregard the company completely.

Obviously this is (hopefully) a rare example. My point, of course, is that you shouldn’t try to make your visitors hunt for what they need when they’re in the consideration phase. Yes, you’ve got a lot of great content. But think about what needs to really be on that home page to pull the visitor’s interest. Then, when they come back for more, you’ll get your opportunity to really shine.

Join me for my next blog to learn how to address “decision,” and be sure to leave any questions in the comments below.

Alex-Karei_YPFinalist2016

Alex is the marketing 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

Iowa marketing smarts!

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


I know it may seem weird that I am promoting another Iowa agency's work but I'm a firm believer in the idea that there are plenty of fish in the sea and when one of us does something noteworthy -- it raises the reputation of all of us.

That's why I am excited to tell you about two big deals coming out of Brand Driven Digital in Iowa City.  Agency owner Nick Westergaard just released his first book, Get Scrappy, Smarter Digital Marketing for Businesses Big and Small.  It's a pragmatic, fast read filled with ideas you can implement immediately.

It was just released May 16, 2016, so grab a copy before your competitor does.

Brand Driven Digital is also the host of one of the best digital marketing conferences around, Social Brand Forum. Nick and his team have created an event that is big on ideas and networking with very little fluff or ego.  It's really a not-to-be-missed event.

It's September 22-23 and the speaker list includes big names like Jay Baer (Convince and Convert), Joe Pulizzi (Content Marketing Institute) & Gina Dietrich (Arment Dietrich) to name a few.

You can view the schedule here. You can register here. Use promo code MMG to get $100 off either a full or VIP ticket.

The biggest mistake a marketer can make in today's environment is to get behind. Get Scrappy and Social Brand Forum are two ways to make sure that doesn't happen.

Courtesy of your fellow Iowans.  How cool is that?

The buyer journey and your website: Discovery

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

Last month, 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. If you missed that, you might want to jump over to that blog and catch up before following along here.

Ready to go? Good - let’s get started on the first stage I outlined: discovery!

At this stage in the buyer journey, your potential buyer doesn’t know you exist. They may not even know they have a need you can address as a company. Typically, they’re experiencing symptoms of a problem at this stage, and are beginning research to address this problem.

Through my work with websites - both at Webspec and outside of it - I’ve found that many organizations suffer with issues related to discovery. There’s often an attitude of “if I build it, they will come!” Unfortunately, real life isn’t like Field of Dreams, and there’s a little more work to be done than hoping that users will stumble upon your website by accident.

Discovery for your website can be approached a couple of different ways. One approach relates to an overall integrated marketing strategy, while the other relates to your digital strategy, particularly, your SEO.

Active Website Promotion

When you have a website, it’s important to take the time and promote it. If people don’t know that it’s there, they may not ever go on their own! This is especially important if your company or web presence is brand new to the world. Here are a couple simple ways to do this:

  1. Include Your URL. It’s easy to forget that your URL can be a small and simple detail in any type of marketing material you produce, from flyers to T-shirts. As you create marketing collateral or agree to any type of sponsorship or advertising, make sure your URL can be - if not front and center - at least easily seen by new audiences.
  2. Claim Your Business Online. Between social media accounts, review websites, and your Google My Business page, take the time to “claim” your business profile anywhere you can. This ensures that no matter what platform they’re on, users can find you. A case could be made for not claiming every social media platform (every channel isn’t right for everyone) but that’s a discussion for another day.

Optimize Your SEO

SEO (Search Engine Optimization) is a trend that isn’t going away. Luckily, business owners are starting to recognize and appreciate that fact.

What’s this “SEO” thing anyway?

If you haven’t heard the term “optimize your SEO” yet, it’s a simple concept. When you optimize your SEO, you’re working to ensure that your website ends up on page one of search results. When someone Googles your industry, service, business, or product, where do you land in the search results?

Why optimize your SEO?

Although it’s a bigger job than just promoting your website, one could argue the effects of optimizing your SEO can be both more important and longer-lasting. How many times have you Googled something already today? Amit Singhal, former senior vice president of Google Search, stated in October 2015 that Google gets over 100 billion searches a month. When an individual does a Google search, they’re actively looking to solve a problem they have, essentially creating a captive audience. Why wouldn’t you want to make sure you appear in the first page of results this person reviews?

Having worked both as an in-house marketer and in an agency, I understand how difficult and confusing the land of SEO can be. Not everyone is ready to invest in consulting to improve their SEO, however, at the very least you can make sure you’re asking your webmaster the right questions when you begin to build a new website.

“Have you considered how this sitemap will affect my SEO?”

“What kind of keyword research have you conducted to recommend the language we’re using?”

“What kind of SEO plug-in are you installing for me to update post-launch?”

These are all conversations that your firm should be able to have with you. If not, you might want to look a little harder at who you’ve hired.

Whew! That was a lot of information, huh? If you’re feeling overwhelmed, take just 2 or 3 suggestions away from this blog to try and begin to implement and encourage traffic to your own website. Once you’ve gotten those done, pick a couple more. Bit by bit, you will help new users “discover” your website, and then you’ll be ready for our next stage.

Join me for my next blog to learn how to address “consideration,” and be sure to leave any questions in the comments below.

Alex-Karei_YPFinalist2016Alex is the marketing 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

Passion makes the difference

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

No one is ever going to have to guess whether I have a passion for architecture. 

Young CoryFrom the second I could draw, I was drawing. I loved spending time with my dad, who is an architect. I may have thought about a couple different career paths, but nothing was going to stop me once I set out to become an architect.

 

I love everything about the art and science of architecture. I love the first meeting with the client, hearing their dreams and ideas. I love putting those ideas on paper. I love bringing designs to life. And, I love walking around the space when it is finished.

The whole process fascinates me. I have a real passion for architecture.

I honestly believe you get out of something what you put into it. If it’s worth doing, I want to put as much into it as I can to stoke my passion.

You don't have to ask if someone's really passionate about something. It shows.

Passion is heart. Passion is genuine excitement.

Without passion, work is, well, work. It's a daily drudge, a grind that steals your energy instead of energizing you. You're just taking up space and you might as well not be there because you're not only robbing your boss of someone who could do the job better, but you're also robbing yourself.

I'm a walking proof of the old saying that if you love what you're doing you never work a day in your life.

Why would you possibly do something day after day, month after month, year after year that you're not passionate about? Why would you be in a job where you're always watching the clock instead of being lost in something you love?

If you don't love your career -- and you need to think of it as a career instead of just a job -- then don’t waste another minute deciding to do what you're going to do about it. That doesn't mean you quit on the spot. You should create a plan for success.

Just do it sooner than later. Much sooner.

Next month: Finding what makes you happy

Overcoming the safety of familiarity

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

One of the things that I have struggled with in groups is shifting from my role as facilitator to observer/adviser.

A healthy part of the strategic planning process is transitioning slowly and maintaining a passive role in the development of a new board structure or processes in the event that support is needed, so that plan gets traction. This alleviates the fear of removing the support and relative safety of having a facilitator or objective third party in the room as a new structure is put in place, but it also prevents one of the most destructive influences in the strategic planning framework – backsliding.

When I am asked to work as a strategic planning consultant, it is generally to improve, refine, adapt, or create a plan that helps organizations transcend their current operational benchmarks. Generally, this includes discarding some practices that are obsolete or arcane, replacing them with strategies and tactical enhancements designed to optimize efficiency or productivity.

Arthur_Schopenhauer_by_J_Schäfer,_1859b

As I make the transition from facilitator to observer/adviser, there are behaviors that would be easy for organizations to fall back into if I simply departed following my role as the facilitator. Shared stresses brought on by a large workload, deadlines, or trying to generate new clients or workstreams are all triggers for a backslide. Pressure from existing clients or over-commitments are also potential areas of concern.

Cultural changes are hardest to enact, and these stresses make it safe to hide within the confines of the familiar, so all of the new behaviors created to implement the new plan are fragile and must be protected. How organizations do that must reflect a discipline they must be willing to administer with consistency.

In his book, True North, William George captures how one can work to prevent a relapse into past habits, referring to what Steve Jobs did to prevent the same type of backslide:

Jobs had a practice of looking in the mirror each morning and asking himself, “If today were the last day of my life, would I want to do what I am about to do today?” Whenever the answer was no for too many days in a row, he knew he needed a change. He said, “Your time is limited, so don’t waste it living someone else’s life…Have the courage to follow your heart and intuition. (George, p.191)

This is a truth not only from the standpoint of making sure the organization stays forward facing, but also plays into individual efforts in making sure that the new methods or changes wrought by the strategic planning process continue to take shape. The German philosopher Arthur Schopenhauer made popular the belief that humans tend to act in accordance with their drive to satisfy their own motivations, which, in turn, influence the world in different ways.

Drawing back to our original thesis, there is a fragile point in the strategic planning process where the organization begins to adopt new practices and work toward assigning accountability, implementing tactics, and establishing metrics. If every member of the organization takes time to assess what they are doing in the context of how their own motivations and desires for success can support that of the greater whole, the positive influence will be widespread. Not only that, but as motivations and support mechanisms become more clear, the tendency to want to return to familiar practices will be outshined by the success rooted in following a new mission and vision framework.

I have found the most success as a consultant when I see groups that I've worked with start to exhibit confidence in using the plans we have developed together. This allows me to shift from facilitator to observer/adviser and watch the self-actualizing around a new set of systems and processes.

 For more information:Joe _Benesh_2011

 Contact: joe@ingenuitycompany.com

 Please follow: @ingenuitycmpny

 

For specialty retailers, Memorial Day weekend means … Christmas?

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

Memorial Day weekend is the unofficial start of summer for most people. If you're a specialty retailer, it should also signal the official start of your Christmas holiday season.

Don't start unpacking the holiday ornaments and stringing the lights.
Instead, you need to sit down with a pencil and paper -- or, better yet, your computer and spreadsheet -- and put together your flow chart of holiday season tasks and deadlines.

Now is the time to decide what you're going to do differently this year from last. That includes getting rid of promotions and products that didn't work, of course, but it should also include some fresh, new ideas.  Get excited. Think big. Try something that will make your customers say, "Wow" and add to the unique experience that comes when they walk through your front door.

Make sure to cover all the routine bases, too.

I'm reworking the Heart of Iowa Market Place catalog. We've always offered gift baskets during the holiday season, but we've found we need to expand our catalog distribution on a year-round basis and share a broader range of product offering with customers. That approach will give them a better idea of what we're all about well before the holiday rush.

I'll also be taking time to review our operation.

Did we have the right number of people -- and the right people -- at the right times? What's the theme and scope of our marketing effort to welcome our loyal customers back and attract new shoppers?

What products will we definitely need and can we lock them in now at a better price for delivery in November? What new products should we introduce? (Really take some time to make sure something is the right fit before going overboard on purchasing.)

Whether the product line is existing or new, what can be done to add value for the customer without adding costs? As a specialty retailer, your goal isn't to deliver the cheapest product; it's to deliver the best value to customers.

I love it when customers say, "Wow, you made things so easy." Ask yourself what you can do to make things easy for your customers and you'll keep them coming back.

If you get on top of your holiday shopping season preparations now, you'll have plenty of time to unpack those ornaments and string those lights when the time is right. You'll feel less stressed and deliver a better customer experience.

That's a wonderful holiday gift for your customers, staff and yourself -- all because you recognized that the Christmas planning season comes before the first sweet corn of summer ever reaches your table.

Is service at the tap of a finger going to rule the restaurant world?

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

It’s a bird, it’s a plane, it’s my pizza?

A recent study from the National Restaurant Association revealed that more than a quarter of consumers would likely use a drone delivery service if their local restaurant offered the option. Forty percent of consumers ages 18 to 44 would be willing to try such “human-free” delivery while only 9 percent of those over age 65 were warm to the idea.

Seem like an absurd question to study in the first place? Not any more absurd than Uber testing “driverless” cars in Pittsburgh.

Consumer willingness to interact with technology, rather than people, for traditional customer service functions is increasing at a breakneck pace. Combine these changing attitudes with shortages in the labor pool, new wage and labor mandates, and razor thin restaurant industry margins, and suddenly investments in cutting edge tablet, kiosk, and even delivery technology don’t seem terribly far-fetched for many restaurant owners and operators.

As an example, tableside payment stations and devices, once novelties, have steadily gained consumer acceptance with 63 percent of those surveyed saying they would be willing to use such payment tools (up from 48 percent just last year). Similarly four in five consumers now say they would be willing to use self-service kiosks for ordering.

What is happening?

I would argue that as restaurant consumers we have already been “trained” to stand in line, place a food order, carry the meal to the table ourselves, fill and refill our drinks, and separate our trash from the dishes before clearing our places. It’s no great leap to think we’d be willing to key in our order and swipe a card for payment. In fact, a majority of consumers say that customer-facing technology increases convenience, speeds service and increases order accuracy. More than one-third of consumers go so far as to credit technology options as the reason they dine out, as well as order takeout and delivery more often than ever before.

I suddenly feel very old.

I will likely always fall on the side of wanting a real human being on the other side of the counter noting the fact that I "want my dressing on the side." And obviously, I believe strongly that there will always be a place for great full-service restaurants. But I think we all need to brace ourselves for fewer face-to-face, and more finger-to-screen, hospitality interactions than we ever imagined.

How the presidential election could impact your succession plans

John Mickelson, managing partner Midwest Growth Partners, is IowaBiz's blogger on succession planning. Read more about him here. Article also contributed to by MGP intern, Nolan Hellickson, a SE Polk alumni who is currently a wrestler and economics student at Harvard University.

The 2016 presidential election has been one for the ages, from boisterous personalities to outlandish scandals. Overlooked amid the hysteria surrounding the candidates is some of their policy plans, which could significantly affect succession plans for business owners.

For the purposes of this article, we will examine proposals from the two presumptive nominees, Secretary Hillary Clinton and Donald Trump.

Clinton and Trump both propose changes to the capital gains tax rate. The capital gains tax applies to gains from the sale of capital assets, which include proceeds from selling a business.

To simplify the explanation below, we are making an assumption that the business owner is in the top income tax bracket, but this analysis can be scaled to other brackets as well.

The current policy in place is a two-tier system. Short-term capital gains (assets held for less than a year) are taxed at regular income rates, or 39.6 percent plus an additional 3.8 percent surtax from the Affordable Care Act, bringing the total to 43.4 percent. Long-term capital gains (assets held for over a year) are taxed at 23.8 percent, with the surtax included.

Clinton’s proposal lengthens the time period between the short and long-term rates, adds a 4 percent surtax for incomes over $5 million, and keeps the Affordable Care Act surtax of 3.8 percent. Her policy reclassifies short-term capital gains as gains on assets held for less than two years instead of one and taxes those at a total rate of 43.4 percent, with the surtax.

The tax decreases to 39.8 percent for assets held between two and three years, and follows with a decrease of 4 percent annually until after year six, when the rate matches today’s rates (23.8 percent) for incomes less than $5 million, or an additional 4 percent for incomes above.

Trump takes a different approach. His policy eliminates the Affordable Care Act surtax of 3.8 percent and reclassifies the highest income tax bracket to 25 percent. As a result, the short-term capital gains tax rate would be 25 percent and the long-term rate 20 percent. Trump keeps the existing one year designation to determine long-term vs. short-term.

Each candidate has social and economic rationale for why they believe their plan is best. The proposals are, of course, subject to Congressional approval.

Given the differing rates which could amount to significant differences in take-home cash from the sale of a business, it may make sense for business owners to work with their tax professional now and determine if the pending election should hasten their succession planning.

Candidate Capital Gains Tax Graph 

 

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