« June 2016 | Main | August 2016 »

July 2016

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


- 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

Facebook Twitter Linkedin Youtube

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

Facebook Twitter Linkedin Youtube

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 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.


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. 


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.

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