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— SEPTEMBER 2018 —

THE LIVES AND TIMES THAT DEFINED TCB’S FIRST QUARTER-CENTURY. PLUS, THE COMPANIES AND IDEAS THAT WILL SHAPE THE NEXT ONE.

$5.99 — SEPTEMBER 2018 —

THE LIVES AND TIMES THAT DEFINED TCB’S FIRST QUARTER-CENTURY. PLUS, THE COMPANIES AND IDEAS THAT WILL SHAPE THE NEXT ONE.

$5.99

C1.indd 1 8/7/18 2:59 PM — SEPTEMBER 2018 —

THE LIVES AND TIMES THAT DEFINED TCB’S FIRST QUARTER-CENTURY. PLUS, THE COMPANIES AND IDEAS THAT WILL SHAPE THE NEXT ONE.

$5.99

C1.indd 1 8/7/18 2:59 PM Celebrating a quarter century of vision and leadership

We applaud the 25 Leaders Who Shaped Minnesota Business. With integrity, leadership and dedication, you strengthened our community and paved the way for growth.

C2.indd 1 8/7/18 1:59 PM Celebrating a quarter century of vision and leadership

We applaud the 25 Leaders Who Shaped Minnesota Business. With integrity, leadership and dedication, you strengthened our community and paved the way for growth.

C2.indd 1 8/7/18 1:59 PM Celebrating a quarter century of vision and leadership

We applaud the 25 Leaders Who Shaped Minnesota Business. With integrity, leadership and dedication, you strengthened our community and paved the way for growth.

C2.indd 1 8/7/18 1:59 PM Congratulations, Richard Davis, on being named a Leader Who Shaped Minnesota Business!

Former CEO Richard Davis is highly esteemed at U.S. Bank. His commitment to ethics and dedication to community are now cornerstones of our company culture. We proudly recognize his outstanding leadership in Minnesota. TABLE OF CONTENTS

September2018 ANNIVERSARY ISSUE

6 Editor’s Note Change, with purpose: Looking back to move ahead. By Allison Kaplan

9 All Those Years Ago Memories from the birth of a magazine. By Gary Johnson

10 Key Moments in Minnesota Business Including MOA’s grand opening, Minnesota Wild’s debut, and the Delta- Northwest merger. 14

20 Leaders Who Shaped TCB’s Quarter-Century With essays from John Lindahl, Marilyn Carlson Nelson, Susan Marvin, Lee Lynch, and Richard Anderson. 18 42 Dynamic Changes to Fortune 500s in Minnesota What does it mean, and what does the future hold? By Myles Shaver

44 Trends and Innovations for the Future From AI and drones to podcasting and housing density.

54 Companies to Watch Twenty-five Minnesota businesses that are at key stages, including rapid growth, product launches, and new leadership.

68 Q&A: Arne Carlson The governor during TCB’s inaugural years doesn’t have much good to say about state governance today. By Adam Platt

72 Open Letter 25 years: The continued missing business story. By Vance Opperman

TWIN CITIES BUSINESS, Vol. 26, No. 1 © 2018 MSP Communications. The opinions of columnists are their own. Unsolicited manuscripts or artwork will not be returned unless accompanied by a self- addressed, stamped envelope. Telephone 612-339-7571. Fax 612-339-5806. E-mail: [email protected]. TWIN CITIES BUSINESS (ISSN 1072-673X) is published monthly by MSP Communications, 220 S. Sixth St., Suite 500, Minneapolis, MN 55402-4507. Subscriptions available for $24.95 per year; foreign subscriptions, $169.00 per year. To subscribe or change address, visit tcbmag.com/subscriptions. aspx. Periodicals postage paid at St. Paul, MN, and at additional mailing offices. POSTMASTER: Send all UAA to CFS. (see DMM 507.1.5.2); NON-POSTAL AND MILITARY FACILITIES: send address cor- rections to TWIN CITIES BUSINESS, Subscription Processing, P.O. Box 5846, Harlan, IA 51593.

2 TWIN CITIES BUSINESS | SEPTEMBER 2018 Washburn Center

U of MN Cancer & Cardiovascular Research

Mall of America Expansion

When good things happen “it is the result of the Union Depot efforts of good people working together, united in U.S. Bank Stadium

Minnesota Senate Building Solar Array

Lakefield Wind Project a common purpose.”

MORT MORTENSON, CHAIRMAN EMERITUS TOP 25 LEADERS WHO HAVE SHAPED MINNESOTA BUSINESS | 2018 HONORED BY TWIN CITIES BUSINESS

Westminster Presbyterian Church Hennepin Healthcare Clinic & Specialty Center

Orchestra Hall Renovation

Your thoughtful leadership inspires us. Thank you, from the entire Mortenson team. mortenson.com

Editor in Chief Publisher Allison Kaplan Shelly Elmore [email protected] [email protected]

Executive Editor Adam Platt [email protected] Trending Editor Liz Fedor [email protected] Associate Editor Kate LeRette [email protected] Senior Writer Burl Gilyard [email protected] Online & E-Newsletter Editor Sam Schaust [email protected] Online & E-Newsletter Associate Editor Amanda Ostuni [email protected] Northern Minnesota Correspondent Gene Rebeck [email protected]

Copy Editors Judy Arginteanu [email protected] Jolene Johnson Editorial Intern Sally Samaha [email protected]

Design Director Chris Winn [email protected]

Account Director Traci Auger [email protected], 612-336-9214 Senior Account Managers Rian Heaslip [email protected], 612-336-9215 Andrea Shapiro [email protected], 612-336-9211 Marketing Associate Jessica Scheu [email protected], 612-373-9584 Event Coordinator Sarah Aulik [email protected], 612-336-9288

Contributing Writer Don Jacobson

MSP COMMUNICATIONS

CEO & General Counsel SVP, MSP-C Deborah Hopp Vance K. Opperman VP, Finance & Administration CFO Charles F. Thell John Bienias Running a small business COO Nathaniel Opperman VP, Project Management President Gary Johnson Frank Sisser SVP, Operations Mary Authier VP, Client Strategy Kevin Dunn takes big insights SVP, Owned Media Jayne Haugen Olson

There are a lot of moving parts to running a successful Credit Manager Dave Gschlecht E-Newsletter Developer Office Manager Amy Coulombe Lauri Loveridge small business — optimizing cash flow, increasing Senior Accountant Anne McPhillips Network Administrator Administrative Assistant Steve Swanson efficiency, and growing revenue. You’ll find the Patty Mikres Assistant Network Administrator Production Manager Tim Dallum Josh Krouze strategies and solutions you need to run your Production Supervisor Paul Marihart Audience Development Director Graphic Designer Allison Cook Bea Jaeger business better at wellsfargoworks.com. Digital Prepress Group Fulfillment Coordinator > Steve Mathewson Valerie Asante > Bill Sympson Creative Services Production Assistant J.J. Jaworski > Katie Shaw Let’s get started. Visit your local branch or find a time Senior Web Developer > Janice Hamilton David Waters > Joy Wagner that works for you at wellsfargo.com/appointments. Web Developer Ricky Hannigan > Julie Amble

© 2018 Wells Fargo Bank, N.A. Twin Cities Business is a publication of MSP Communications All rights reserved. IHA-23110 220 S. 6th St., Suite 500, Minneapolis, MN 55402-4507 612-339-7571, fax 612-336-9220

4 TWIN CITIES BUSINESS | SEPTEMBER 2018 Make more better.™

As your financial advocate, I promise we will take your prosperity personally. More than ever, the world is flooded with financial information. Who do you trust to help prioritize what really matters? To keep your emotions at bay, and your plans on schedule? The team that sits on your side of the table, with you. That can design a unique and customized financial services experience for you, around you. The values-driven partners who take the notion of continuous, comprehensive and coordinated wealth management to obsessive, highly personalized new levels. That’s advice driven by advocacy. That’s JNBA.

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Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or investment strategy (including the investments and/or investment strategies recommended and/or undertaken by JNBA Financial Advisors, Inc. (“JNBA”), or any non-investment related services, will be profitable, equal any historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. A copy of our current written disclosure Brochure discussing our advisory services and fees is available upon request. The scope of the services to be provided depends upon the needs of the client and the terms of the engagement. EDITOR’S NOTE

fter binge watching The Office this summer, vise. And we do. We want to reflect the entrepreneurial Change, my 13-year-old son tagged along to the attitude in business today. Ask tough questions. Stand TCB office one day. (“Who is the ‘Dwight’ out. Inspire conversation. With Purpose around here?” he asked, at which point I “It looks kind of old,” was my son’s unsolicited You’ve got to look sent him to the vending machine, hop- opinion of the new logo. It’s true—there is a bit of a back to understand how ing to change the subject.) retro vibe to it, and that’s what we love about it: the best to move ahead. I put him to work sorting stacks opportunity to embrace something new and slightly of magazines that had piled up unexpected while paying homage to our roots. TCB has By Allison Kaplan at TCB over, well, 25 years. He always been a champion of the good that businesses examined a 2002 cover photo can do; it’s interesting how that perspective—novel in of a phone dangling from a media 25 years ago—is even more relevant today. Start- cord as if he’d unearthed up founders are our new rock stars—the people my son a relic from the Stone wants to emulate. Age. He chortled at a 2000 cover that asked: “Can You In the coming months, we plan to introduce you to Fire This Guy?” next to a photo of a man with ’80s more business founders—up-and-coming and estab- metal band hair and a nose piercing—wearing a suit lished—and share both their advice and their struggles. and tie. He astutely observed, as he spread several years’ You can also expect more stories about diversity and worth of magazines on the floor, that there wasn’t a technology, marketing and leadership, across the entire woman featured on the cover in the bunch. TCB ecosystem: magazine, website, social media, news- Much has changed since TCB published its first letters, and events. issue in September 1993. My son thinks success is being We will continue to ask TCB’s all-time favorite a YouTube influencer who turns millions of views into question as the business landscape continues to evolve: millions of dollars in endorsement deals. He watches Why? And the essential follow-up: What does it mean? Shark Tank for fun, and when I cap the screen time, he But you’ll also see executives sharing their favorite and his younger brother pitch their own business ideas books and phone apps and talking about how they and want me to decide which one I’d juggle busy careers with fund. Angel investors weren’t something their personal lives. I’d ever considered when I was his age, Since I’m nearly as new pecking at a word processor, dreaming We want to reflect the to the magazine as the logo about working for The New York Times. is, I worried a little that some Twenty-five years ago, most stu- entrepreneurial attitude of my instincts were too dents—myself included—aspired to in business today. “soft” for TCB. Then I talked work for the big companies and institu- to the magazine’s first editor tions. The successes and challenges of Ask tough questions. and former publisher, Jay those organizations were the foundation Stand out. Novak, who told me his most of this magazine’s coverage. And big popular column ever was businesses continue to be crucial—cre- Inspire conversation. about last-minute Christmas ating jobs and industry, drawing talent shopping advice for men.

ELIESA JOHNSON ELIESA to Minnesota, supporting our cultural Founding publisher Burt organizations and other nonprofits, and Cohen encouraged me to tell punctuating shifting societal norms with more stories about failure. moves like the recent appointment of Beth Ford as We’re all human. It’s important to remember that in Land O’Lakes new CEO and first openly gay woman to these high-stress times, when it’s so easy to view life and lead a Fortune 500 company. business through a filter of unattainable perfection. It’s But even the big guys are thinking more like start- important to acknowledge where we came from and the ups today: Target incubates tech companies; Cargill obstacles we’ve overcome so we can better appreciate invests in ag disruptors. There’s respect and demand for where we’re headed. We learn the most when we’re being constant change and new approaches. open and honest about what it really takes to succeed. So we’re changing, too. Perhaps you noticed our To that end, on behalf of the TCB team, I hope updated logo (the top-notch work of longtime art you’ll join us Sept. 5 at Radisson Blu Minneapolis director Chris Winn). MSP Communications president (tcbmag.com/events) to celebrate the leaders and Gary Johnson, one of TCB’s founders (whose no-holds- companies that have shaped the past quarter-century barred history of the magazine is a must-read on page of Minnesota business, and meet some of the rising 9), is an advocate for intentional change. “Make sure stars—the ones sure to inspire my son and his peers you know why you’re doing it,” he’s been known to ad- over the next 25 years, and beyond. TCB

6 TWIN CITIES BUSINESS | SEPTEMBER 2018 Celebrating 49 YEARS in the Twin Cities

We’re proud to have served the Twin Cities business community for so long by ﬁ nding the right people for the right roles at the right companies—and helping everyone be happier at work.

Minneapolis • Bloomington • St. Paul St. Cloud • Burnsville • Minnetonka 1.800.870.8367 roberthalf.com

PNC is proud to congratulate Twin Cities Business on 25 years of insights and coverage on the Minnesota business community.

©2018 The PNC Financial Services Group, Inc. All rights reserved. PNC Bank, National Association. Member FDIC THE LIVES AND TIMES THAT DEFINED OUR FIRST QUARTER-CENTURY, PLUS THE COMPANIES AND IDEAS THAT WILL SHAPE THE NEXT ONE.

By Liz Fedor, Burl Gilyard, Don Jacobson, Allison Kaplan, Kate LeRette, Amanda Ostuni, Adam Platt, Sam Schaust

ALL THOSE YEARS AGO Memories from the birth of a magazine.

It’s 1993. My part- Letterman’s Late Show debuted. Arne Carlson was positioning that made sense to us. ners, Burt Cohen and governor. Jim McMahon (“I’m too drunk, you got Our towns were loaded with savvy risk- Brian Anderson, and me.”) was the Vikings’ quarterback, Kirby Puckett takers–entrepreneurs, players, and cultural icons I had just bought our was the All-Star Game MVP, and Dave Winfield who wielded tremendous influence (many of company back the year got his 3,000th hit. them profiled in the upcoming pages). Reading prior, after selling it in Oh, and local business news coverage abso- the newspapers and local weeklies, you’d never 1989 to an overextend- lutely sucked. know just how vital and intriguing these folks ed investor. He was Looking back, it all seems so innocent. As were. We decided to join the risk-takers and shoot buying up media prop- my brother, a longtime Republican operative in for becoming the channel to and for this fascinat- erties left and right, Washington, D.C., once said to me, not knowing ing crowd. We jumped out of the box with Twin managing to secure a he was quoting a line from a memoir on lesbian Cities Business Monthly, a high-energy magazine lot of easy cash from history, “Your problem is you don’t have any sporting oversized pages, bold headlines, and big freewheeling, eager problems.” Compared to the zeitgeist we’re all images. We mixed in solid writing, opinionated (L to R) Gary Johnson, lenders who appar- swirling around these days, the same could be said columnists, and expert analysis with an intra- Brian Anderson, and Burt Cohen ently didn’t care if he of the world in 1993. venous line to the creativity, smart moves, and personally guaranteed The Star Tribune basically owned business insights the business community willingly shared the loans or not. It got a little too crazy. We decided news then. There were a couple of local business with us every month. to split the pop stand, buy the company back, and rags–Corporate Report Minnesota, which acted Flash forward 25 years. Not to get all Eccle- get ready for our next publishing adventure. as though small businesses didn’t exist, and the siastes on you, but in many ways there’s nothing Those were the days. The brand-spanking- weekly Minneapolis St. Paul CitiBusiness, which new under the sun. The business community renew Clinton White House was still scandal-free. was mostly irrelevant. Worst of all, business mains a hotbed of talent, skill sets, and characters, The World Wide Web was still only a gleam in writers despised their subject. “Gotcha” mo- with great stories and experiences to share. And geeks’ eyes. Amazon and Google didn’t exist. East- ments were frequent, negative reporting alien- we’re still running after them and reporting back ern Europe was fragmenting after the Soviet col- ated business owners, and readers were yearning to you. lapse. Pre-capitalist China was still struggling with for insights that would make them smarter and So cheers to our next 25! We’re excited, still. its Maoist roots. Sleepless in Seattle and Jurassic more successful. National business magazines like Thank you for being there and here. Park led the box office. Michael Jackson played the Forbes seemed to be getting it right. Indeed they —Gary Johnson, Super Bowl and was accused of child molestation. billed themselves rightly as the “Capitalist Tool,” a President, MSP Communications

SEPTEMBER 2018 | TWIN CITIES BUSINESS 9 KEY MOMENTS IN MINNESOTA BUSINESS

Early 1990s Mall of America Opens

Minnesota sports fans of a certain age may never get 1980s–present over it, but the razing of Bloomington’s Metropolitan University of Minnesota’s Stadium in the 1980s paved the way for the Mall of Transformation America, forever chang- eginning in the 1980s ing the Twin Cities’ retail with U of M president and tourism market. It was Ken Keller’s “commit- the biggest indoor shop- ment to focus” vision, ping mall in the country the university began a when it opened and now transition from a gener- draws more than 40 million

al education institution CRAIG BARES visitors each year. Owners to one driven by selective admission Early 1990s–present Triple Five Group of Edmon- standards. The goal was to retool for ton, Canada, tout an annual a different era and create a better Redevelopment economic impact of $1.9 pipeline for its world-class graduate billion. The formidable local programs. Responding to an era of of the Minneapolis Riverfront competition it provided declining government support for Twenty-five years ago, hopes for revitalizing the long-neglected down- prompted many ripple ef- higher education, the U launched an town Minneapolis riverfront were at a low point, following the devastating fects in the early ’90s, spur- eye-popping $4 billion fundraising 1991 fire that destroyed much of the historic Washburn “A” Mill. But those ring Dayton’s to upgrade campaign in 2011 coinciding with hopes were soon revived when the remaining structure was repurposed as its stores and downtown the start of Eric Kaler’s presidency. the Mill City Museum and the reopening of the Stone Arch Bridge, which Minneapolis stakeholders Called “Driven,” it sought to realign served as a spectacular advertisement for the potential of living, work- to launch the Holidazzle the U’s core research focus toward ing, and playing in the increasingly scenic area. Conversions of historic Mill Parade to draw people back solving the “grand challenges of our District buildings into hotels and apartments followed, and since then, mil- to the city center. time,” while providing “a world-class lions of dollars in new construction have transformed the neighborhood education to Minnesota’s future lead- from a blight to a boon. Insiders credit Minneapolis Mayor Sharon Sayles ers.” The ambitious fundraising effort Belton’s commitment to the effort for essential early advocacy. ranked as one of the largest ever by a U.S. public university.

10 TWIN CITIES BUSINESS | SEPTEMBER 2018 1998 Cenex / Harvest States Merger

The merger between Cenex Early 1990s–present Inc. of Inver Grove Heights and Greater Minnesota’s Economic Evolution Harvest States Cooperative of Falcon Heights was a landmark in U.S. agricultural history, creat- Rural housing and labor shortages ing one of the nation’s largest Employers in Greater Minnesota have been dealing with a workforce shortage for de- farmer-owned co-ops, with cades—companies in southwestern and western Minnesota have been busing workers about $10 billion in annual sales. in from distant population centers for many years, as managerial, creative, and tech Harvest States had 600 local co- jobs have gone unfilled. Meanwhile, there’s not enough housing for the younger work- op members and 2,350 employ- force that’s needed to keep the rural economy afloat; rising construction costs have ees; it was already the biggest priced younger families out of the starter-home market. Even existing properties for cooperative grain marketer in sale are scarce because the lack of assisted-living centers in Greater Minnesota means the United States. Cenex, with seniors don’t want to leave their homes. 1,400 local co-op members and 2,500 employees, specialized Regional centers boom in the sale of fertilizer. Harvest States was one of Cenex’s Regional centers across the state have bulked up as small towns have depopulated. biggest customers at the time Fargo-Moorhead grew by nearly 15,000 residents between 2010 and 2014, a 7 percent of the merger, which saw the increase, which put it near the top of the list of the nation’s fastest-growing metro- marriage of two co-ops, under politan areas. Likewise, St. Cloud and surrounding areas in central Minnesota have the CHS Inc. brand, with little also seen significant growth. Census figures released in 2017 showed that Sherburne operational overlap and many County was Minnesota’s fastest-growing county. Meanwhile, thanks to the influence of members already in common. the Mayo Clinic, both the city of Rochester and Olmsted County have grown quicker than Minnesota as a whole since 1980 and are expected to continue as the Destination Medical Center effort advances. Long-term mining decline At its peak in 1979, the taconite mining industry produced 56 million tons and employed 15,000 workers on the Iron Range, but it has not been the same since. One reason: China’s policy of dumping below-cost steel on U.S. market. Since the disastrous recession year of 2009, when production slumped to 17 million tons, the industry has been tentative and cyclical, highly dependent on outside influences and international politics. Successful efforts by Minnesota’s Congressional delegation to crack down on dumping in 2015 has been credited with stimulating the industry. The vanishing family resort Nothing is as Minnesotan as the culture of summer vacations at small family-owned resorts in lake country. The beloved tradition reached its peak in the 1980s and has been declining ever since. The number of such resorts fell 19 percent from 2004 to 2014, tumbling from 983 to 800; another 50 had disappeared by 2015. Part of the problem is Minnesotans love their lakes too much, which has bid up the valuations of lakeshore property beyond what the mom-and-pop operations are worth. As owners look to retire, they are selling to housing developers for millions of dollars rather than trying to recruit newcomers to run the businesses.

SEPTEMBER 2018 | TWIN CITIES BUSINESS 11 KEY MOMENTS IN MINNESOTA BUSINESS

1999 Honeywell Leaves

Honeywell Inc.’s 1999 sale to New Jersey-based AlliedSignal and the subsequent headquarters relocation from its longtime Minneapolis base was a big blow—the Fortune 500 corporate campus employed 1,500 people. At the time of the merger, Hon- eywell ranked eighth among Minnesota-based companies in

revenue. Just a AP year later, however, Wells Fargo Bank bought the Honeywell property in the wake of its own merger with Norwest Corp. to house its expanded mort- 1998 gage banking business. By 2005, it had roughly doubled the number of workers employed there Wells Fargo, under Honeywell. Norwest Bank Merge

Twin Cities–based Norwest Bank was the nation’s largest mortgage lender and 1998–2014 one of its most profitable banks when it agreed to a The Star Tribune’s $34.4 billion merger with Serial Ownership 2000 California’s Wells Fargo & Co. in 1998. It was part of The rise of the internet, declining readership, MinuteClinic Debuts a flurry of banking mega- and the disappearance of classified adver- The walk-in retail clinic concept was introduced when mergers during those years tising sales were felt at newspapers around QuickMedx Inc., the precursor to MinuteClinic, opened of rapid industry consolida- the country beginning in the late 1990s, and its first centers in the Twin Cities, offering treatment tion. Although the better- the Star Tribune was certainly no exception for common medical conditions such as flu and ear known Wells Fargo brand as it went through five owners in a 16-year infections. Services were cash- inevitably won out, it was period. In 1998, the Cowles family sold the only and positioned as a more Norwest’s executive team paper to McClatchy Co. for $1.2 billion, and affordable alternative to ERs of Richard Kovacevich and in 2006, private equity firm Avista Capital and urgent care centers. John Stumpf that took over Partners bought it from McClatchy for $530 QuickMedx became Minute- the merged entity. At the million. The business declared Chapter 11 Clinic in 2003 and ex- time of its completion, the bankruptcy in 2009, and after emerging, panded quickly when large merger demonstrated the ownership was again transferred, this time employers added its services growing financial clout of to its creditors. Current owner Glen Taylor to their health networks. The the Twin Cities, which had bought the Minneapolis institution in 2014 company launched a relationship produced a pair of “super- for around $100 million. with CVS Health in 2006, opening its first pharmacy- regional” banks in Norwest based clinics in Minneapolis-St. Paul. By 2017 there and U.S. Bank. were more than 1,100 MinuteClinic locations in select CVS pharmacies and Target stores.

12 TWIN CITIES BUSINESS | SEPTEMBER 2018 2001–present Boom/Bust Real Estate Arrives Until the early 2000s, the rate of residential housing construction in Twin Cities 2001 was relatively stable; with ADC Telecom Fails the exception of a brief 2003 slowdown following the Equipment maker ADC Tele- recession of 1990–91, it The St. Paul Cos. communications was a tech- chugged along at a predict- nology high-flyer by the late able pace. Home values Merge with 1990s, using acquisitions and appreciated gradually, but Travelers a soaring stock valuation rarely declined, as they did spurred by market euphoria in more volatile coastal mar- “The St. Paul” was Minne- over internet-related com- kets. That changed when, sota’s oldest corporation, panies to grow quickly. With fueled by subprime mort- founded in 1853 as the St. its shares trading as high as gages, construction in the Paul Fire and Marine Insur- $325, the company even built Twin Cities spiked—peaking ance Co., when it landed a shiny new manufacturing in 2004. It was followed by an ambitious new CEO, Jay 2000 plant in Shakopee. But it all the biggest bust for many Fishman, in 2001. He was a NHL to St. Paul came crashing down with decades, triggered by the protégé of Citigroup’s San- the dot-com bust of 2001, 2008 financial crisis. It took dy Weill, whose numerous Downtown St. Paul was looking for a boost in the taking ADC to the verge of 12 years for the local resi- 1990s acquisitions included late 1990s—it seemed to be in a death spiral with bankruptcy. During that time, dential construction curve Travelers, another gen- the loss of retailers, entertainment and restaurant it eliminated about 18,000 of to once again reach its eral property and casualty venues, and office tenants. Then along came its more than 22,400 jobs. long-term average, which insurer. Fishman’s hiring at billboard magnate Robert Naegele Jr. and a The downsizing allowed it to it finally did in 2017, thanks the St. Paul Companies por- collection of all-star partners including Hubbard survive as an independent mostly to a new wave of tended deal-making, which Broadcasting. The group won a National Hockey entity until it was ultimately apartment development. is just what happened League expansion franchise in 1997 and worked purchased by Tyco Electron- Today the Twin Cities resi- when the Twin Cities firm with St. Paul Mayor Norm Coleman on a state- ics for $1.25 billion in 2010. dential real estate market completed a blockbuster funding deal for the city to construct and own exhibits the same volatility $16.4 billion acquisition a new arena. The Minnesota Wild began play as its nationwide counter- of much-larger Travelers, at the new Xcel Energy Center in 2000, setting part, with spikes and dips creating the nation’s No. 2 the stage for a redevelopment spurt along West driven by national macro- commercial insurer. At the Seventh Street following the Great Recession. economic bubbles. time, the combined St. Paul Travelers had about $26 billion in combined capital.

SEPTEMBER 2018 | TWIN CITIES BUSINESS 13 KEY MOMENTS IN MINNESOTA BUSINESS 2009 The Fall of Tom Petters

Once a feel-good story of a St. Cloud lad who turned a humble overstock- liquidation business into a corporate 2004 empire that included Sun Country Airlines Dayton’s Sells to and Polaroid, Tom Petters had what was May/Federated perhaps the most By the early 2000s, spectacular fall from Target Corp. and CEO grace in Minnesota business history. Bob Ulrich were firmly Already famous for his lavish lifestyle committed to focusing and personal charisma, Petters’ wealth growth on the Target was revealed to have been built on discount chain, leaving 2008–2016 the proceeds of a $3.5 billion Ponzi the fate of its Marshall Target’s Lost Decade scheme, one of the biggest such plans Field department store ever uncovered. The one-time Minneso- division uncertain—until Target Corp.’s formerly unassailable reputation ta golden boy was convicted of federal St. Louis-based May as the smartest and best-run of the nation’s big fraud charges and is serving a 50-year Department Stores an- retailers faltered after its board handed the reins to prison sentence at Leavenworth. nounced it would buy CEO Gregg Steinhafel, whose tenure began just as the group in a $3.24 bil- the Great Recession started. The decade was character- lion transaction. It meant ized by three troubled initiatives: A capital-intensive and that, for the first time, infrastructure-heavy expansion into grocery, a traditionally the iconic downtown low-margin category; a balky website that ill-positioned the Minneapolis store known company for retail’s online revolution; and a disasterous expan- for generations as Day- sion into Canada, which his successor abandoned in 2015 after ton’s would no longer be enormous losses. (The board gave Steinhafel his walking papers in owned by a Minnesota- 2014.) After several difficult years facing his predecessor’s music, suc- based company. Feder- cessor Brian Cornell has effected a strong turnaround, as Target’s 2017 ated Department Stores and 2018 results show. bought May the next year and rebranded it once again, this time as Macy’s. 2008–present The Green Line 2008 Like almost all mass-transit infrastructure projects, the Met- Northwest Air Merges ropolitan Council’s effort to build the $957 million Green Line with Delta Air Lines light rail between the two downtowns was politically charged from the beginning, but GOP Gov. Tim Pawlenty and the DFL- The 2000s were a tumultuous decade for legacy hub controlled Legislature agreed to move it across the finish line carriers such as Northwest Airlines, buffeted by competi- with $70 million in state bonding money. Since its 2014 open- tion from low-cost operators, changing consumer prefer- ing, the Green Line has become an economic development ences favoring direct flights, labor unrest, and rising fuel machine, generating $5.8 billion in private investment along costs. The period saw four major bankruptcies and two big its route, according to the Met Council. That’s not counting mergers among the old guard: Both Northwest and Delta Air the upcoming $200+ million Allianz Field soccer stadium in Lines declared bankruptcy on the same day in 2005. Their St. Paul’s Midway, located near several stations and a pro- merger three years later, engineered by former North- posed massive mixed-use development. west and then-Delta CEO Richard Anderson, proved to be successful, since the two carriers had little overlap in route systems and boasted different strengths. In the process, Minnesota lost an iconic local brand and headquarters.

14 TWIN CITIES BUSINESS | SEPTEMBER 2018

KEY MOMENTS IN MINNESOTA BUSINESS AP 2012–14 Minnesota Orchestra Standoff 2011–present The state’s cultural standing took a hit with a bitter labor dispute Eric Dayton and between the musicians of the Minnesota Orchestra and its management, resulting in a 15-month lockout and the resignation of the North Loop music director Osmo Vänskä. Management, citing a $8.9 million two-year deficit, initially sought a 40 percent pay cut from the The remaking of Minneapo- musicians, whose average salary was $135,000. Ultimately futile lis’s North Loop has been efforts to resolve the standoff included those of high-profile fig- the urban redevelopment ures such as former U.S. Senate Majority Leader George Mitchell story of the past decade. who had helped broker peace in Northern Ireland. The entire Perhaps no one personi- 2012–13 season was canceled before back-channel negotiations fi- fies its transformation into nally resulted in a three-year deal in which the musicians accepted a cultural and economic a 15 percent pay cut. trendsetter better than Eric Dayton, son of Min- nesota Gov. Mark Dayton. In 2011, Eric and his brother, 2011 Andrew, birthed a pair of popular independent busi- The Return of nesses: the Nordic-inspired 2016 Faribault Woolen Mill eatery Bachelor Farmer and the Nordic-inspired Cirrus’ The historic Faribault Woolen Mill had been retailer Askov Finlayson. closed for two years when an astute invest- The idea underlying both Vision Jet ment group led by cousins Paul and Chuck is Eric Dayton’s conviction Takes Flight Mooty saw in it an opportunity to tap growing that the Twin Cities should Over the last 25 years, the city of Duluth has sought to consumer preference for longtime American- celebrate rather than diversify its economy, branching out from its traditional made brands. As one of the last vertically downplay its identity as a natural resources-related industries of taconite mining integrated woolen mills in the country and cold-weather playground; and paper. So it’s probably not surprising that city leaders with a history stretching back to 1865, the in so doing, the North Loop backed the promising start-up Cirrus Aircraft. Duluth pro- maker of wool blankets and throws had plenty became the headquar- vided subsidies for an “aviation incubator” building in 2002 of authenticity but lacked the right marketing ters for the “Cold Is Cool” and an industrial finishing facility in 2015. Those moves strategy. That changed with the Mootys, who movement. were looking good in late 2016 when Cirrus, after a decade quickly lured key executives and retailers and of planning and anticipation, unveiled an innovative new built media buzz around the comeback story. personal aircraft called the Vision Jet. Priced at $1.9 million, By 2015, the mill’s workforce had risen from 35 the single-engine mini-jet debuted with a waiting list of to 80 employees. about 600 customers.

16 TWIN CITIES BUSINESS | SEPTEMBER 2018 Sponsored Content BUSINESS Success Stories

Above: President and CEO Mark G. Mishek, Hazelden Betty Ford Foundation Treating addiction and transforming lives for 70 years At a quiet lakeside retreat near evidence-based practices,” says Hazelden Betty Ford Foundation Betty Ford Foundation as well. Center City, Minnesota, Hazelden president and CEO Mark G. Mishek, story, Mishek emphasizes. Offering both on-campus and Betty Ford Foundation’s earliest who adds that services today are Singularly focused on the problem online master’s degree programs, clinicians developed the addiction delivered with the same patient- of addiction, the organization’s the Hazelden Betty Ford Graduate treatment approach most widely centered focus and compassion reach and efforts have grown School of Addiction Studies is used in the world today, known synonymous with Hazelden Betty over the years to span prevention, educating “the next generation originally as the Minnesota Model. Ford since day one. published resources, professional of addiction counselors,” says Combining medical care with education, research and advocacy. Mishek. At treatment centers in emerging Twelve Step principles Now, with 14 inpatient campuses Minnesota and California, a summer and practices, treatment was and outpatient treatment centers “We recognize that the challenges institute for medical students provided with an abiding respect located throughout the country of addiction extend beyond and professionals-in-residence for the individual patient at a time and contracts with every major providing effective treatment program give future physicians and when addiction wasn’t recognized health insurance provider across solutions,” says Mishek. “That’s why practicing health care providers as a disease and alcoholics were the nation, the nonprofit rehab we take a multi-faceted approach the opportunity to learn side-by- considered weak-willed if not center is positioned to help more to the problem, beginning with side with addiction clinicians and immoral. people than ever reclaim their initiatives aimed at preventing the treatment patients, Mishek adds. lives from addiction. Multiple levels onset of addiction in the first place.” Fast-forward seven decades, to of care are offered at Hazelden “We see a future where no one today. The innovation by Hazelden Betty Ford, from detoxification The organization’s K-12 prevention n e e d s t o s u ff e r o r d i e f r o m a d d i c t ion, Betty Ford Foundation clinicians and medical stabilization to sober efforts include conducting school- a disease that can be successfully continues with development of housing and recovery coaching. based seminars and publishing treated and managed,” says a comprehensive medication- The organization’s post-treatment evidence-based curricula aimed Mishek. In every way possible, the assisted treatment protocol services and resources for patients, at keeping heathy kids healthy. In Hazelden Betty Ford Foundation is targeting opioid dependence—an such as mobile apps and Twelve addition, a specialized program at committed to building that brighter approach now being adopted by Step retreats, along with education three Betty Ford Center locations tomorrow. treatment providers across the and guidance for family members provides counseling care and country in response to the nation’s are designed to encourage and support for children ages 7-12 who opioid epidemic. support lasting recovery. grow up in families with addiction.

“Our treatment programs integrate Yet, treatment programs and Professional education is a the latest scientific findings and services are just one aspect of the cornerstone of the Hazelden

HazeldenBettyFord.org // 800-257-7800 // 15251 Pleasant Valley Road, Center City, Minnesota 55012 KEY MOMENTS IN MINNESOTA BUSINESS

2016 Wells Fargo Fraud Wells Fargo bank employees opened at least 3.5 million unauthorized credit card and deposit accounts in customers’ names; investigators blamed a corporate culture that demanded relentless 2017 “cross-selling” of banking products, first instituted at Abbott Labs Buys Norwest by CEO Richard Kovacevich and his then- St. Jude Medical deputy John Stumpf, then Chicago-based Abbott Labora- imported into Wells Fargo tories completed a $25 billion when the two banks merged purchase of St. Jude Medical, in 1998. The Norwest man- marking the end of the subur- agement team that ran the ban St. Paul company’s 41-year GETTY combined entity after the run as an independent entity. 2016 merger bore the brunt of With insurers such as Medicare the consequences. Stumpf moving to fee-bundling as part The Death of Prince announced his retirement as of the “value-based care” move- A generation of younger Minnesotans might not have realized the stature of CEO in October 2016 in the ment, device makers had an in- Prince until they witnessed the worldwide outpouring of grief at the death of midst of the scandal’s fallout. centive to consolidate; Abbott’s the Minneapolis-born musical genius. In the decades following his spectacular acquisition of St. Jude created a successes of the 1980s, he had receded into the Minnesota background for consolidated cardiovascular de- those who weren’t around to experience the initial frenzy of his fame. But after vice source, bringing together his untimely end from an opioid overdose, Prince’s legacy as one of the prime St. Jude’s atrial fibrillation and cultural forces of the last 25 years received its due. Included in that reassess- heart failure devices with Ab- ment: Prince was the ultimate businessman, an economic engine who battled bott’s existing line of stents and for years to retain control of the rights to his creative output. mitral repair products. St. Jude, meanwhile, got out from under a burdensome $5.7 billion debt load, which had gotten heavier following its 2015 acquisition of California heart-device firm Thoratec Corp. TCB

18 TWIN CITIES BUSINESS | SEPTEMBER 2018 HAPPINESS LOVES COMPANY JLG Architects, proud to be 100% employee-owned. Design for Life.

At JLG, we have approached the design of our company the same way we approach the design of your buildings — to stand the test of time. By transferring ownership of our organization to our employees, we have made manifest a deep-seated value, that what we do is more than just “a job”. It’s about building a stable and enduring company that will draw and retain really great people who will actively contribute to the long-term success of the communities we serve.

MSN Money’s 50 Most Admired US Companies | Inc. Magazine’s 50 Best Places to Work in America 100% EMPLOYEE-OWNED ESOP jlgarchitects.com LEADERS WHO SHAPED TCB’S QUARTER-CENTURY TRAVIS ANDERSON TRAVIS Richard Davis Richard Copeland Past CEO, U.S. Bank Founder and chairman, Thor Construction

Richard Davis emerged as one of the most influential players in recent When Richard Copeland founded Thor Construction in 1980, he Minnesota business history in his role as CEO of U.S. Bancorp from entered a field with few, if any, black entrepreneurs—especially 2006 until his 2017 retirement. During that crucial stint, he engineered in Minnesota. But that didn’t deter his efforts to grow the North the bank’s growth from a regional player to the nation’s fifth-largest Minneapolis-based firm, which has since expanded to seven other commercial bank. Under his leadership, revenue increased by 49 per- states and been honored as one of the most successful minority- cent, jumping from $13.6 billion to $21.3 billion. He also stepped up as owned businesses in the nation. The company picked up steam in a highly visible and effective civic leader, playing an instrumental role the late ’90s, snagging large contracts through organizations that in building U.S. Bank Stadium and pitching it as the host venue for the support minority business development. Now Thor has almost 200 2018 Super Bowl. employees and a national client list that includes MGM, Target, and the University of Minnesota.

20 TWIN CITIES BUSINESS | SEPTEMBER 2018 Investing in Minnesota by John Lindahl

s a Minnesota investment firm that has been around since 1961, ANorwest Equity Partners (NEP) has seen many changes, specifically over the last 25 years. The mid-1990s presented one of the greatest bull markets in history. During this time, NEP was a very active middle-market buyout investor focused primarily on smaller regionally based manufacturing and industrial businesses. As the firm continued to grow, the size, number, location, and diversifica- tion of industries of our investments continued to evolve. In the early 2000s, larger and more complex deals, along with favorable capital market conditions, presented the opportunity for our firm to broaden our offering. As part of our expansion, we launched Nor- west Mezzanine Partners to serve as a source of capital solutions to provide a valuable tool to augment equity investments. We also emerged as a national player, raised more capital, and invested broadly across industries and geographies, while continuing to invest here in Minnesota. Over the last 25 years, NEP has invested in more than 30 Minnesota-based companies from diverse industries, with about half being founder- and family- owned—helping to generate billions in revenue and thousands of jobs. These businesses continue to grow and contribute positively to the local economy. They include Avtex, Bix Produce, DCM Services, eyebobs, John Lindahl Life Time, Gopher Resource, Bai- Chairman, Norwest Equity Partners liwick, Lindstrom Metric, Marco, Minnesota Rubber & Plastics, As the state’s top private equity provider, Norwest Equity Partners has, Norwesco, PeopleNet, Shock Doctor, over the years, helped launch the likes of the Buca di Beppo restaurant and Wealth Enhancement Group. chain and Life Time Fitness. As chairman, John Lindahl has played a crucial NEP is proud to be part of this rich behind-the-scenes financial role for some of the great Minnesota success local history as well as the growth stories of the last 25 years. His influence also extends to the University of that lies ahead. Minnesota: As a proud U of M alum, Lindahl and his wife, Nancy, chaired the fundraising campaign for the construction of TCF Bank Stadium. They John Lindahl is chairman of Norwest have also donated to establish flexible endowed professorships. Equity Partners. TRAVIS ANDERSON TRAVIS

SEPTEMBER 2018 | TWIN CITIES BUSINESS 21 LEADERS WHO SHAPED TCB’S QUARTER-CENTURY

Mary Brainerd Past president and CEO, HealthPartners

Mary Brainerd’s departure from HealthPartners last year marked the end of a 15-year stint in which she guided the nonprofit medical provider and insurer through a turbulent era of reforms and market consolidation. One of her key efforts in shaping the Twin Cities’ current medical landscape has been the successful 2012 merger with Park Nicollet, made necessary by the need to drive down delivery costs. It also cemented HealthPartners’ position among the leading health systems in the metro area. Bahram Akradi Founder, chairman, and CEO, Life Time

A vision to reimagine what gyms and health clubs could be was a home run for Bahram Akradi, an Iranian immigrant who persuaded the financial powers-that-be in the early 1990s to back his idea of using customer service and a vastly expanded menu of services to reshape the fitness marketplace. By 2015, Life Time had done just that in Minnesota and elsewhere, generating revenue of $1.3 billion and boasting 24,000 employees, before being purchased for $4 billion by its current private equity owners. Akradi is still at the helm of the newly private company, working on ways to integrate health, wellness, nutrition, and physical training into his business model.

22 TWIN CITIES BUSINESS | SEPTEMBER 2018 The Urgency of Rethinking How Business Gives Back by Marilyn Carlson Nelson

s Twin Cities Business celebrates 25 years, our company, Carlson, is celebrating 80 years since our founding. This is an important milestone, as Aonly 13 percent of family businesses make it to the third generation. Our business is being led by the third and is now busily working to integrate the fourth. When my father retired, promoting me to CEO in 1998, this was his advice: “Do not do what I did; seek what I sought.” Sustainability has been our goal since 1938. This could have been the advice of the Twin Cities businessmen who created the Minnesota Keystone Program in 1976, which recognizes companies that donate 2 percent of their pre-tax earnings to the community. Their intent was to “sustain Minnesota’s spirit of generosity and sense of community.” Now, 42 years later, this generosity of spirit has been institutionalized. But it must be continuously nurtured. Nearly 200 companies are members today. Marilyn Carlson Nelson This model of corporate philanthropy is the envy of communities across the nation, and most Past CEO, Carlson Cos. importantly has sustained a quality of life that has earned us top spots on “Best Places to Live” lists for many years. Perhaps the most successful woman in Min- But it is no longer sufficient. Companies need to do more than just reduce any negative impact; nesota business history, Marilyn Carlson Nelson we must reassess how we engage with our community. It is clear that business increasingly is being expanded her influence far beyond the execu- looked at as an agent of change. According to the Trust Barometer, 64 percent of people believe a tive suite of family-owned Carlson Cos., which company can take actions that both increase profits and improve economic and social conditions in she occupied for 10 years starting in 1998. Tak- the communities where they operate. ing over from her father, Curt, Carlson Nelson Do local companies believe this to be true? Ask Brian Cornell, CEO of Target, who is co-chairing the probably would have secured her place in Twin campaign for the Northside Achievement Zone; Ed Bastian and Delta Air Lines for taking a stand on gun Cities business lore by growing the hotel and control; or Carlson Wagonlit for leading the way in the fight against human trafficking. travel company’s sales from $18 billion to $40 This is an important change. According to Weber Shandwick, 47 percent of millennials believe billion. But it was her emergence as a cultural CEOs have a responsibility to speak up about issues that are important to society. When, where, and and civic leader, such as her stewardship of the how to engage is the challenge that businesses face. Minnesota Orchestra and helping land the 2018 These insights about business as a force for good are new to some, but in Minnesota this is not a Super Bowl, that truly cemented her legacy. new idea, but rather an evolution of our definition of corporate citizenship.

Marilyn Carlson Nelson is retired CEO of Carlson Companies.

Chris Policinski Past CEO, Land O’Lakes Inc.

After Chris Policinski doubled the revenue of Land O’Lakes during his 13-year tenure as CEO, the farmer-owned dairy cooperative announced in June that he was taking early retirement at age 58. While that move came as something of a surprise, it also prompted an assessment of his accomplishments as one the Minnesota food industry’s top players. Policinski oversaw spectacular growth: Annual sales are now $14 billion, landing it just outside Fortune’s 200 biggest companies. He also oversaw its biggest-ever merger in the 2015 combination with Iowa-based crop protection, seed, and crop nutrient sales firm United Suppliers.

SEPTEMBER 2018 | TWIN CITIES BUSINESS 23 LEADERS WHO SHAPED TCB’S QUARTER-CENTURY

Ralph Burnet Chairman, Coldwell Banker Burnet Realty

Few Minnesota-based business titans can be said to reflect the state’s cultural and social priorities as well as Ralph Burnet. After pioneering the luxury home sales niche in the 1980s, he built Burnet Realty into one of the nation’s premier residential brokerages. But it’s through his commitment to the arts (his board stewardship at the Walker Art Center, for example) and philanthropy that his cultural cachet has risen even more. He also created two of the region’s most distinctive hotels, the W Foshay and Chambers. Last year he was named to the Hall of Fame of the Shenehon Center for Real Estate at St. Thomas University. Lynn Casey Chair, Padilla

Public relations firm Padilla has long since outgrown Mark Davis its roots as Minneapolis-based Padilla Speer Beardsley, Chairman, Davisco Foods International and it has the quiet but effective “servant leadership” of longtime CEO Lynn Casey to thank for the smooth nature Reference a true Horatio Alger story in Minnesota and of that growth. Her 16 years at the helm have seen the you’re probably talking about Mark Davis, founder and local favorite branch out into a national-level branding and ANDERSON TRAVIS chairman of family-owned Davisco Foods Internation- communications enterprise due to some very significant al—so much so, in fact, that in 2016, Davis was named acquisitions, including the 2013 buy of Virginia-based a member of the Horatio Alger Association of Distin- CRT/tanaka, which in effect doubled the agency’s guished Americans, which honors business leaders who size. Managing that expansion has necessitated have triumphed over adversity. a steady hand, provided by Casey, who also Davis’ story has humble roots serves on the board of the University of as the son of a creamery owner Minnesota Foundation. in St. Peter. He earned a degree at Mankato State University and grew his father’s business into a $1.2 billion enterprise, which now produces 1 million pounds of cheese a day. He retired as CEO of Davisco in 2012.

24 TWIN CITIES BUSINESS | SEPTEMBER 2018 Behind great Minnesota landmarks, you’ll find Briggs.

Let’s raise a glass to an iconic piece of the Twin Cities skyline, shining again for the first time in 20 years. Our law firm helped restore the historic Grain Belt sign on the Mississippi River for our client, August Schell Brewing Company. Just another way we’ve propelled our community forward for more than a century.

DATE: 02/19/18 TRIM: 10" x 12" PAGE: 1 of 1 CR: JOB #: 13363 LIVE: 9.375" x 11.375" ROUND: Keyline PM: CLIENT: Briggs and Morgan BLEED: 10.25" x 12.25" CREATED AT: 100% PR: PROJECT: Full Page with BLEED Ad FOLDS: none FILE: 13363_Brgg_GB_TCB_Fullpg_10x12_KL.indd COLOR: CMYK (match Pantone 2115 and Pantone 2189) LEADERS WHO SHAPED TCB’S QUARTER-CENTURY

The Next Generation: From Options to Experience

by Susan Marvin

y generation had the privilege of leading the Marvin Cos. for much of the last 25 years. The change during that time was tremendous and varied, but in hindsight, centered on two primary Mfactors: demographics and technology. Media choices back then were fairly simple compared to today. TV, radio, newspaper, magazine, billboard, and direct mail. It was the creative use of those options that caused the explosion in advertising activity in Minnesota. When I first joined Marvin Windows and Doors, the baby boomer generation’s needs and desires guided much of what we brought to market. Ambitious, and often guided by a “live to work” mantra, baby boomers sought a proliferation of choices. Design and color options, and the ability to “have it your way” were essential and manifest across products and services, well beyond windows and doors. And suddenly we were able to deliver on those demands because technology enabled us to do so more efficiently and cost- effectively than ever before. Technology has empowered advances across every aspect of the building industry. It has facilitated process improvements, speed, and functionality in production, material management, logistics, human resources, finance, IT, marketing, customer service—the list goes on. Susan Marvin Chair, Marvin Cos. Undoubtedly, the same will be true going forward: Demo- graphics will shape change and technology will advance it. As I In her 20-year tenure as presi- look ahead, the difference will be the magnitude of change and the dent of Marvin Windows and speed at which we experience advances. It will be exponential. Doors, Susan Marvin, a third- Millennials now drive that change—and in a very differ- generation leader of the family ent direction. Often categorized as tech-savvy and open-minded company, helped grow the (and occasionally entitled), millennials are focused on something iconic Warroad manufacturer slightly less tangible than boomers’ goals: the experience. This from a single location with a generation is de-emphasizing size and investing in an experience few hundred employees to 12 in their homes, with features such as walls of glass to bring the plants around the country with CRAIG BARES outdoors in, automation for everything from entertainment to more than 5,500 workers. That security, sensors to monitor performance, and enthusiasm for nailed down her place as one shared solar gardens. Millennials are focused on enhancing the of the most successful female Demographics overall experience in their homes rather than simply the function- leaders in Minnesota business. ality that technology provides. will shape Perhaps her most impressive Minnesota is uniquely well-positioned to embrace the op- feat, however, was guiding Mar- change and portunities presented by shifting demographics and technological vin through the recession with- advancements. Economic diversity in the state helps sustain a strong out resorting to layoffs, despite technology will economy, and our educational system produces the horsepower to the crash in the housing and fuel it. As millennials step away from “living to work” and lean in advance it. construction markets. (Marvin to “working with purpose,” Minnesota’s leaders must advance their instead instituted temporary understanding of generational differences and prepare to rapidly pay cuts.) Meanwhile, Marvin deploy technology that will serve these evolving consumers—and kept rolling out new products lead us forward. so it was well-positioned for the recovery. Susan Marvin is chair of the board of the Marvin Companies.

26 TWIN CITIES BUSINESS | SEPTEMBER 2018 Gig-speed to more businesses in more places

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35 Voice features and solutions that grow with your business LEADERS WHO SHAPED TCB’S QUARTER-CENTURY

Bill McGuire Past CEO, UnitedHealth Group

Bill McGuire’s legacy as a shaper of the Minnesota business universe could easily have ended in 2006; after spending 15 years building UnitedHealth Group into the nation’s second-largest managed care provider, he retired as CEO amid allegations of a personal enrichment scheme involving backdated stock options. But McGuire didn’t allow that to be the final word on his local business career. He paid a fine and reached a costly settlement, then reinvented himself as the owner of the Minnesota United FC soccer club, engineering its acceptance into Major League Soccer and building a landmark stadium in St. Paul that the team will move into in 2019.

Bob Ulrich Past CEO, Target Corp.

When Bob Ulrich took over as CEO of Dayton Hudson Corp. in 1994, Target stores were just one of its divisions, along with Dayton’s, Hud- son’s, Marshall Field’s, and Mervyn’s. Ten years Virginia “Ginny” Morris later, all except Target had been sold off—indeed, Chair and CEO, Hubbard Radio in 2000, Ulrich changed the parent company’s name to Target Corp. to reflect its complete focus As a member of a legendary broadcasting family, Virginia “Ginny” Morris on building the discount retailer. Ulrich, who could say that she has the media business in her blood. But it took far more worked his way up from Dayton’s merchandiser than being the daughter of Hubbard Broadcasting CEO Stanley S. Hubbard in 1967, is largely responsible for the period of to accomplish what she has done for the family’s radio business. She took Target’s greatest success, turning the retailer into over as station manager of KSTP-AM in 1990 and has since built Hubbard a dynamic and now ubiquitous national brand Radio into a national presence in the terrestrial radio market through a pair that owns the “edgy” and “upscale” end of the of bold acquisitions in 2011 and 2013. Those deals, totaling $590 million, discount retail universe. added 27 stations to Hubbard Radio’s portfolio and expanded its presence into six major U.S. markets.

28 TWIN CITIES BUSINESS | SEPTEMBER 2018 Sponsored Content BUSINESS Success Stories

Above: David Reiling, CEO, Sunrise Banks Growing Alongside our Community Partners

In the past 25 years, we have seen a lot able to thrive. For us, making sure these However, I have to hand it to our employees. of growth and change at Sunrise Banks, communities have the tools they need to The Sunrise family lives and breathes our but also in the Twin Cities as a whole. achieve success and financial wellness is mission day in and day out: serving as our From our beginnings, in the Frogtown our true mission. front line community ambassadors and neighborhood, we have been committed working with our neighbors and partners. to being more of a social enterprise than In working hand-in-hand with our Whether they are volunteering in the a bank, knowing that our success is linked customers, we have found the key to community, or listening with our customers with that of the community. When looking bringing financial wellness is listening to to spark new innovations and products, the back at the impact we have seen in the their needs and meeting them where they Sunrise family members are advocates. people we serve today, our founding are. Ultimately, we can provide all of the mindset stays true. When the community tools and services we want. But if these The employees and customers we work thrives so will we. We thrive not by simply resources are not useful for our customers, with have their own unique narratives. serving our customers, but by partnering they won’t be used. Listening directly to the We’re proud to be a part of those stories with our neighbors. people we serve informs us of their needs. and to help make them possible. Without We build all of our offerings to fit the needs each of those unique stories, our story at We started by serving Hmong business of the growing communities and constantly Sunrise would not be the same. We have a owners in Frogtown. While we have grown adapt based on the feedback we receive. long history filled with ups and downs and our footprint throughout the urban core Over our history, we have used constant many awesome partners. The last 25 years of Minneapolis and St. Paul, our focus feedback and changing technology to have been full of growth and excitement remains the same. We continue to work remain agile to create success. This has and we are definitely looking forward to with many new American businesses and allowed us to innovate and expand our the next 25. neighborhoods that other banks tend to shy services, in a national scale, by looking away from, thinking that these businesses outside the brick and mortar locations to only had small chances to succeed in meet customers where they are and on those areas. This is where we have been their own time.

SunriseBanks.com // 651-265-5600 // 200 University Ave W, St. Paul, MN 55103 // Member FDIC LEADERS WHO SHAPED TCB’S QUARTER-CENTURY Beyond Minnesota Cute

by Lee Lynch

t’s hard for me to delineate 25 years ago from the 35 before that. And sometimes I can’t remember what happened last year. So I looked for a physical clue to 25 years Iago—it was the telephone. I traded in my satellite phone the size of a brick for my first flip-phone. Media choices back then were fairly simple compared to today. TV, radio, newspaper, magazine, billboard, and direct mail. It was the creative use of those options that caused the explosion in advertising activity in Minnesota. They called it “Minnesota cute,” a style of advertising in all media that began sweeping the national advertising award shows. Led by Fallon McElligott Rice, Carmichael Lynch, and Martin Williams, national acclaim turned into national advertising accounts. Porsche, Time Inc., Harley-Davidson, Ikea, and BMW are just a few of the national brands that flocked to the Twin Cities for its engaging and often humor- ous ads and commercials. Over the years, the creative mystique endured, and while mainline “full service” advertising agencies prospered, clients began shifting some tasks to highly niched digital groups, creative boutiques, and public relations firms. Old brand-name agencies like Campbell Mithun had to fight for business with new names like Pocket Hercules, Periscope, Solve, and Mono. Publicly held national and international agencies went on a buying binge and scooped up a number of local agencies, promising media Lee Lynch clout and international connections. Co-founder, past CEO, Carmichael Lynch

The internet and the tools of social ANDERSON TRAVIS marketing have had a profound impact on the If one person could be said to epitomize makeup of agencies. A 200- to 300-employee firm could have 30 to 40 percent of its staff the special place Minneapolis carved out engaged in social marketing. Traditional department titles morphed into “consumer in the advertising industry in the 1970s involvement group,” “content strategy,” “social engagement,” and “UX architect.” My old and ’80s, it is Lee Lynch, co-founder title, “co-founder,” would probably be “co-inseminator.” and longtime CEO of Carmichael Lynch. In addition to advertising brands coming to Minnesota from other markets, we He and Jack Carmichael started a small have been blessed with major national advertisers here in the Twin Cities: Target, advertising agency in 1962, and by the Best Buy, 3M, UnitedHealth, U.S. Bank, and General Mills, to name a few. time of its sale in 2005, they had built it There are more than 2,500 professionals working in Minnesota agencies today, into a $45 million enterprise. Lynch is also along with the thousands of advertising and marketing professionals working in-house emblematic of the Minnesota “creative for clients. This is a huge infrastructure of talent. Minnesota has an abundance of great class”—out front on civic issues, dedicat- homegrown talent, and many more have moved here because of the overall creative ed to bringing vibrancy to the city’s arts climate and quality of life, combined with a low cost of living and recreation options. scene, and politically involved—setting an The future bodes well for the advertising industry. example for a generation of Minneapolis creatives to come. Lee Lynch is co-founder of Carmichael Lynch and author of Amazing MN.

30 TWIN CITIES BUSINESS | SEPTEMBER 2018 Research and Application: Protecting Trust in Today’s Consumer Journey

Explore the concept of trust and how it impacts business through the perspectives of leading business researchers and corporate leaders at the second annual Ignite conference.

Carlson School of Management September 20, 2018 321 19th Avenue South Ω Minneapolis, MN

PRESENTED BY:

PARTNERS: LEADERS WHO SHAPED TCB’S QUARTER-CENTURY

Glen Taylor Sustaining Our Founder and chairman, Taylor Corp. Status as a Hub City

Few Minnesota business lead- by Richard Anderson ers can claim to have had a bigger impact on the state in the last 25 years than Glen Tay- he Minneapolis-St. Paul lor, founder and chairman of International Airport has his family-owned firm based in evolved into one of the Mankato. Under Taylor’s guid- few big, successful hub ance, it grew into one of the Tairports in the U.S. In 1990, prior airline top three graphics communi- deregulation, MSP had far fewer interna- cations firms in North America tional flights and tended to serve a more and one of the most successful limited area of the Upper Midwest. Our corporate growth stories in terminal was dated, and we had far fewer Minnesota history. But it is two flights and destinations. of his other interests that have In the last 25 years, the Metropoli- made a more public impres- tan Airports Commission and the State sion: his purchases of the of Minnesota have made the right stra- Minnesota Timberwolves and tegic decisions to grow and modernize Lynx basketball franchises, and our airport, providing connections to the Star Tribune newspaper, for cities around the world. The 2010 Stra- which he has provided stable tegic Plan was written in the mid-1990s, ownership after its emergence when the Minnesota Legislature decided from a 2009 bankruptcy. not to move the airport to Hastings. The 2010 plan was completed on budget and beat its deadline, and included a John Pellegrene new runway, replacement of all the runways and taxiways, reconstruction Past chief marketing officer, of the Humphrey Terminal, significant Target Corp. expansion of the Lindbergh Terminal, light rail service to the airport, and a From 1988 through his massive modernization of customer retirement in 2000, John amenities. That strategy has made MSP a top JD Power-rated Richard Anderson Pellegrene was frequently airport nationwide. Past CEO, Northwest Airlines/ referred to as Target Stores’ Many U.S. cities no longer have hub airports, so the Twin Delta Air Lines “marketing guru.” If a guru Cities are fortunate to have successfully navigated deregulation is defined as a person who and industry consolidation. But we must continue to wisely Richard Anderson will forever be known shapes and influences those invest and grow service for the metro area and all of Minnesota. as the man behind the Northwest/Delta around him, then indeed it’s The MAC is near completion on a new parking garage merger—the 2008 transaction in which an appropriate term, because and on-site hotel, and should begin planning additional gate the iconic Minnesota company was Pellegrene’s innovations for capacity to support future growth. The Humphrey Terminal merged with Atlanta-based Delta in a bid the discount chain reshaped has been a big success in attracting a significant number of new to rebuild both after bankruptcy. In his 14 the way retailers of all stripes airlines (to MSP) that have expanded options for consum- years at Northwest, including as CEO from connected with audiences. ers. The Lindbergh Terminal requires continued investment 2001 to 2004, Anderson built a reputa- His efforts in tandem with to keep the facility at its top-tier status and to accommodate tion as a shrewd tactician who understood longtime Target CEO Bob growing passenger volumes. his business at both the macro and micro Ulrich burnished Target’s im- The MAC and the state have provided fine leadership, over levels. With NWA in the fold, he earned his age among the buying public many years, to make MSP a top airport in the world. That work place in aviation history, driving Delta from as the bright and hip alterna- must continue unabated with a long-term strategic view and a a stodgy also-ran to the most profitable, tive to stodgy competitors commitment to significant investments in infrastructure. innovative, and operationally efficient Walmart and Kmart—and in carrier in the world. so doing, established the im- Richard Anderson, former CEO of Northwest Airlines and Delta Air portance of the “cool factor” Lines, is now president and CEO of Amtrak. He returns to the for all mass-market retailers. Twin Cities frequently.

32 TWIN CITIES BUSINESS | SEPTEMBER 2018 9-18 TCB Linen Effects.indd 1 8/2/18 12:57 PM LEADERS WHO SHAPED TCB’S QUARTER-CENTURY

M.A. “Mort” Mortenson Jr. Past chairman, M.A. Mortenson Co. Richard Schulze M.A. “Mort” Mortenson Jr. took over his father’s Founder, past CEO and Chairman, Best Buy successful but relatively small construction business in 1969; by the time of his retirement in Richard Schulze’s and Best Buy’s story is the stuff of legend, as he grew it 2015, he had parlayed it into a nearly $4 billion into one of the nation’s most recognized and behemoth with around 3,800 employees. Its successful retailers. Beginning in 1966 with a presence in the Twin Cities market is indelible single Sound of Music store in Roseville, Schulze and the site of some of the firm’s highest-profile parlayed it into what had become by the early projects, such as U.S. Bank Stadium. But Morten- 1990s the second-largest chain of electronics son’s ability to see beyond the up-and-down retailers in the U.S. He served as Best Buy’s CEO cycles of the real estate market also marked his until 2002; his later years as a board member tenure as leader: An example is his move into the were marked by financial struggle and a pro- wind power construction market, where Morten- posed takeover bid that never materialized. But son has quickly become a top player. Best Buy’s reemergence as one of the nation’s few big-box survivors further validates Schulze’s legacy and the sustainability of what he built.

34 TWIN CITIES BUSINESS | SEPTEMBER 2018

LEADERS WHO SHAPED TCB’S QUARTER-CENTURY

Dr. John Noseworthy President and CEO, Mayo Clinic

When Dr. John Noseworthy announced his decision to retire as president and CEO of the Mayo Clinic at the end of 2018, the institution put out a list of his accomplishments during nine years at its helm: A ranking as the top hospital in the nation by U.S. News & World Report; growing revenues from $7.9 billion in 2010 to $12 billion in 2017; increasing the number of patients from 1 million in 2010 to more than 1.3 million in 2016. Equally important for the state’s med-tech and biotech sectors, Noseworthy changed Mayo’s policies to encourage entrepreneurism among its medical researchers. He will be remembered long after his tenure ends. TRAVIS ANDERSON TRAVIS

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36 TWIN CITIES BUSINESS | SEPTEMBER 2018 Doug Baker Jr. Chairman and CEO, Ecolab

Doug Baker Jr.’s impact on Minnesota’s business scene can been measured both in terms of financial achievement and corporate culture. As an astute CEO, he took Ecolab’s revenues from $3.8 billion to $13.2 billion, building it into a major international player employing 48,000 people in more than 170 countries. In the mean- time, he has been tirelessly promoting corporate responsibility, making Ecolab not only successful but also admired for its efforts to increase the number of women in high-ranking positions and to reduce global water consump- tion. Baker also stands as one of the biggest business community boosters of growth in downtown St. Paul. TRAVIS ANDERSON TRAVIS

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SEPTEMBER 2018 | TWIN CITIES BUSINESS 37 CONSTRUCTION ARTIST LEADERS WHO SHAPED TCB’S QUARTER-CENTURY

MEDICAL ACCOUNTANT

MUSICIAN BEE KEEPER

PILOT WELDER

FITNESS INSTRUCTOR TAXI DRIVER

CLOWN SMALL BUSINESS OWNER

MECHANIC CUSTOMER SERVICE Chuck Denny Jr. Past CEO, ADC Telecommunications

Chuck Denny Jr. has left a sizable mark on Minnesota technology, with a long and distinguished career in both business and philanthropy. That career included Here for top leadership roles at Honeywell, where he worked from 1959 to 1970, and ADC Telecommunications, his employer from 1970 until his retirement in 1991. During his leadership of ADC, Denny vaulted the Eden Prairie firm into an international ‘olive’ your telecommunications player, partly by recognizing early the potential of the internet service industry. His business foresight and technological acumen earned him a business well-deserved spot in the Minnesota Science and Technology Hall of Fame in 1997. banking needs. Bill George Past CEO, Medtronic

Bill George firmly put his stamp on Minne- sota’s business history in the late 1990s and early 2000s when, as Medtronic CEO, he responded to a slowdown in the company’s organic growth by pulling off a series of bold acquisitions, making a $13 billion bet it could propel the Fridley medical device company to a new level. Those moves indeed transformed what had once been a much-admired mid-sized firm into one sunrisebanks.com of the world’s leading medical technology companies, expanding its playing field from pacemaker and defibrillators to implantable devices used in spinal surgery, heart surgery, and diabetes treatment. Member FDIC

38 TWIN CITIES BUSINESS | SEPTEMBER 2018 [email protected] 612-624-9831 Photo by Scott Haraldson

Jim Campbell Past chairman and CEO, Wells Fargo Bank Minnesota

After a 38-year career at Wells Fargo Minne- sota and its predecessor, locally based Norwest Bank, Jim Campbell retired from banking in 2002. Since then, he has carved out another kind of lasting imprint on Minnesota business through active corporate governance as a board member. Campbell has provided guidance to Favorite Client Conveniences: such family-run concerns as Marvin Companies, 10 Unique Rooms for Year-end Awards & Holiday Parties Cretex Cos., and Bailey Nurseries, as well as nonprofits such as the University of Minnesota D’Amico Catering On-site Foundation, the Greater Twin Cities United Way, Adjacent Parking Ramp and Abbott Northwestern Hospital. Adjacent Graduate Hotel

SEPTEMBER 2018 | TWIN CITIES BUSINESS 39 OUR BEST TO YOUR BEST. LEADERS WHO SHAPED TCB’S QUARTER-CENTURY Teamwork. Professionalism. Expertise. We know what it takes to persevere. Congratulations on 25 years of great journalism. In Memoriam Pat Fallon Co-founder and CEO, Fallon

Pat Fallon’s initial impact on the Minneapolis advertising scene came with a splash in 1981, when the firm he co-founded, Fallon McElli- gott Rice, hung out its shingle with a provoca- tive full-page ad in the Minneapolis Tribune declaring they would “outsmart” the competition. It was a shot across the bow of the established ad agencies on the coasts, where creativity had taken a back seat to pure spending power. The gambit worked—Fallon’s upstart shop soon was named Ad Age’s “Agency of the Year.” He served as its CEO until 2008 and the following year was inducted into the Advertising Hall of Fame. Fallon died of a stroke in 2015 at age 70.

612.605.4098 | HALUNENLAW.COM Todd Klingel President and CEO, Minneapolis Regional Chamber of Commerce

Early in his career, Todd Klingel was famil- Sponsored Content BUSINESS Success Stories iar to a generation of local journalists as an exec with the publishing firm MCP Inc., Building Great Leaders where he helped launch the Twin Cities From its start in 1926 as a small insulation company, Minnesota-based APi Group Reader and CityBusiness. But it turned out has grown into a family of over 40 specialty construction, life safety, energy, and his true calling was business advocacy, at which he excelled dur- infrastructure companies. Our enduring purpose is Building Great Leaders™, and ing his 13 years as president and CEO of the Minneapolis Regional we believe that our greatest differentiator, and the key to our long-term success, Chamber of Commerce. On his watch, the chamber emphasized is rooted in leadership development. the “regional” through working partnerships with other metro-area

chambers. Klingel was also known for working with the Minneapolis At APi Group we believe that Everyone is a Leader, and each member of our team should have the opportunity to develop as a leader; to become the best version Public Schools on mentorship efforts. He died in 2016 at age 63, of themselves. Leadership is universal and timeless. It starts with personal months after his retirement. leadership; how each of us shows up every day. We strive to help our employees understand and embrace this foundational leadership concept, because when they show up every day determined to make a positive impact, their lives will David Olson improve, and our success will President, Minnesota Chamber follow. of Commerce

We are 16 years into our leadership The untimely passing of David Olson in development journey. Thanks to a committed owner and leadership 2014 at age 57 interrupted a stellar 23-year team, we will continue to invest run as Minnesota Chamber president. in our employees resolved Praised as a unifying force among the to Building Great Leaders™ state’s various business advocacy voices, Olson was credited for throughout our company and in democratizing the state chamber by listening equally to its big busi- the communities where we live ness players and its smaller grassroots members. Perhaps as a result, and work. the group routinely logged solid member retention rates—leading all state chambers year after year during his tenure. In his work advanc- apigroupinc.com ing business causes at the Minnesota Legislature, Olson counted 651.636.4320 workers’ compensation reform and dedicated transportation funding 1100 Old Highway 8 NW among his top achievements. New Brighton, MN 55112

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Much-admired ad man John Olson was well-known for his charismatic personal- ity, big parties, and talents that included music and poetry. But foremost among his interests was a determination to position his agency as a dominant player in the emerging digital media age. He was successful: By the time of its 2010 acquisition of Denali Market- ing, the Olson shop was logging revenues of $31 million with a client list including Converse, Northwestern Mutual, and Target. Three years later, after Olson’s death from cancer at age 56, his once-small firm had become the largest independent ad agency in Minnesota, achieving annual revenue of about $91 million.

Horst Rechelbacher Founder and CEO, Aveda Corp.

In Horst Rechelbacher, best known simply as “Horst,” the Twin Cities can claim as its own a one-of-a-kind entrepreneur who spotted The Sign of a emerging consumer preferences for natural ingredients very early and built that insight into a worldwide cosmetics empire. He was Great Conversation? born in Austria and ended up in Minnesota by chance, but it was here that he found the inspiration to create Aveda Corp. and nurture it into a beauty industry phenomenon worth a reported $300 million when it When one cup isn’t enough. was sold to Estée Lauder in 1997. Before his death in 2014 at 72, Horst had also established a second health and beauty company, Intelligent Nutrients, also based on natural ingredients. Great business relationships are not born overnight. They are built on a level of trust that comes through a mutual understanding Winston “Win” Wallin of goals and objectives. Your CPA firm should know you and your business, provide year-round attention, and adapt to meet CEO, Medtronic Corp. your needs. So how do you find that relationship? When Winston “Win” Wallin bolted from his executive post at Pillsbury Corp. in 1984 after The conversation starts here. being passed over for CEO, he opted to lead 651-255-9327 | [email protected] the then-struggling medical device maker Medtronic. The rest is Minnesota history. He is credited with stabilizing the company and laying the foundation for its expansion into the world’s biggest med-tech concern under successor Bill George. But by the time of his death in 2010 at age 84, Wallin may have been even better regarded as a philanthropist who raised millions of dollars to send promising Minnesota public school students from low-income families to college, as well as a prodigious fundraiser for 55 Fifth Street East, Suite 1400, St. Paul, MN 55101 | www.redpathcpas.com the University of Minnesota. TCB ©2017 Redpath and Company, Ltd. All Rights Reserved.

SEPTEMBER 2018 | TWIN CITIES BUSINESS 41 FORTUNE, MISFORTUNE

What does it mean? What does tion. Instead, they moved into jobs at other headquartered The stability in the overall the future hold? companies in the metropolitan count reflects the region’s A safe prediction is that many area. This movement of talent continued prominence as a of the companies on this between companies within a headquarters economy. We year’s Fortune 500 list will region is key to sustaining a have one of the highest con- not populate it in 10 or 20 headquarters economy and When it comes n As the infographic on the centrations of large corporate years. This is not a pessimistic regional resilience. to Fortune 500s next page shows, Minnesota’s headquarters in the country assessment of our future. place on Fortune’s list of the in raw numbers, and an Rather, it reflects the reality 3 To what extent do the continu- in Minnesota over 500 largest companies in the especially high concentration that there is turnover of large ing companies on the list evolve? the past 25 years, country has been extremely of headquarters per capita. companies in functioning The companies that remain dynamic. In addition, these headquar- free-market economies. For on the Fortune 500 from 1993 there are reasons This turnover is eye- tered companies compete in a this reason, focusing on the do not look the same as they not much has opening to many, and in diverse set of industries. loss of headquarters is an im- did 25 years ago. Many have some ways it is understated. The turnover in the make- precise and potentially mis- been deliberately reshaping and changed—except for A number of Minnesota up of this list highlights the leading measure of economic growing their businesses. Had almost everything. companies entered and exited dynamism of this headquarters vitality. A more informed these companies not been ac- the 500 over the past 25 years. economy. Almost every time a assessment of our regional tively evolving, and sometimes In other ways, the turnover is headquarters leaves, it generates vitality should consider three reinventing, they would have by Myles Shaver exaggerated because Fortune discourse and anxiety: Can the questions with respect to the ceased to be on the list. Their redefined the 500 in 1995. Be- region sustain its economic roster of large headquarters. continued presence on it some- fore then, companies such as vitality? However, the fact that times hides their dynamism. financial institutions, retailers, the overall count remains fairly 1 To what extent do we replace A healthy economy is and transportation compa- constant means that we have the companies that we will one that is not stagnant. The nies were not considered. added as many large headquar- inevitably lose? turnover in the makeup of When the list changed, many ters as we have lost. And many The roster of the companies the Fortune 500 from our companies joined, and many companies that have left the from the region and the diver- region provides evidence of smaller industrial companies list continue to operate in the sity of their economic footprint our headquarters economy’s left the list. region (see Delta Air Lines)— suggest continued strength. dynamism. It also reinforces Though the list itself some with operations that are the need for this dynamism is significant, its meaning is larger than when they were on 2 When headquarters drop from to continue, if Minnesota more nuanced and worthy of the list. Many regions have not the Fortune 500, what happens companies will continue to exploration. been this fortunate. to the operations and the talent? populate the Fortune 500. In some cases, dropping from the list is more a loss of brag- Myles Shaver is professor of ging rights than a substantive strategic management and en- change. Medtronic’s corporate trepreneurship at the University headquarters moved to Ireland, of Minnesota’s Carlson School but the continued role of its of Management, where he holds operational headquarters in the Pond Family Chair in the Minnesota is a case in point. In Teaching and Advancement of other examples, it is important Free Enterprise Principles. His to assess what happens to the book Headquarters Economy: talent when we lose a Fortune Managers, Mobility, and Mi- 500; for instance, many skilled gration, which documents the employees at Northwest did drivers of Minneapolis-St. Paul’s not move to Atlanta with headquarters economy, will be Delta’s headquarters consolida- released this fall. DAN PAGE DAN

SEPTEMBER 2018 | TWIN CITIES BUSINESS 43 TRENDS AND INNOVATIONS FOR THE FUTURE

Artificial Intelligence Although movies and TV often portray artificial intelligence (AI) as robots with human-like characteristics, AI encompasses anything that has a built-in computer system enabling it to perform tasks often associated with human intelligence such as speech recognition, decision-making, and learning. Health care, marketing, transportation, and finance are among the top sectors with the most potential for AI integration. MN Cup co-founder and serial entrepreneur Scott Litman’s St. Louis Park-based start-up Equals 3 is touting its AI-powered assistant, Lucy, to help marketing teams mine data and segment it, thus improving marketing effective- ness. Equals 3 says the technology can comb through more data in a minute than a marketing team can go through in a year.

Self-Driving Technology Predictions differ on when self-driving cars will become main- stream; it’s the technology behind the wheel that will govern the speed and success of that rollout. With a history in traffic management products, Maplewood-based 3M sees opportunity in high-tech road and car products. The company has already begun developing signs with embedded bar codes that smart vehicles can read. 3M is also exploring enhanced road markings, protective films, and lenses that keep sensors clean, as well as optical films that convert rearview mirrors into rear cameras.

44 TWIN CITIES BUSINESS | SEPTEMBER 2018 Drones With a continuing labor shortage, unmanned aerial vehicles (UAVs), Offboarding also known as drones, have The gig economy become crucial for many busi- has dovetailed with nesses and industries. Goldman an equally significant Sachs predicts businesses and trend: efforts by many governments will spend corporations to sub- $13 billion on drones from 2016 contract or outsource to 2020, with construction and work that had been agriculture industries as top 3-D Printing done by salaried staff. adopters. Richfield-based Often regarded as the next industrial revolution, 3-D printing, riding a wave It has created a gen- Sentera, founded in 2014, sup- of media hype, has not quite fulfilled expectations. Skeptics dismissed it early eration of freelancers plies drones and software to the on for its high cost, slow print times, and no clear path to penetrating the and specialist provid- agriculture, infrastructure, and consumer/retail market. But as practicality concerns continue to be hashed ers while continuing public safety industries, and is out, 3-D printing’s industrial applications are growing. Stratasys, a leading 3-D to narrow traditional one of the leading providers of printer manufacturer with a split headquarters in Eden Prairie and Israel, has full-time employment, ag data collected from drones. had its products used to construct submarines, rockets, and even anatomically overhead, and exper- Sentera’s drones are used in correct, patient-specific models of body organs for surgeons to study at Mayo tise. While Angie’s List applications from crop manage- Clinic. Companies are also using the technology to quickly build houses in once owned the field of ment to building inspections. developing countries, for less than $4,000 a pop. connecting contractors to businesses seeking limited-time help, the recruiting service industry has become increasingly crowded with agencies that specialize in various professional fields. Minneapolis-based Field Nation now ranks among the nation’s top freelancer connec- tors, with a focus on all things IT and one mission in mind: to eliminate the 9-to-5 workday.

Sports Tech No sport at almost every competitive level is safe from the analytics revolution. The most detailed physical data, from collision speeds in football to the heart rate variability of hockey players, is being tracked in real time. And Minneapolis is at the center of it all. Sportradar US, from its U.S. operational headquarters in the city, is among the largest players in the game today, providing exclusive data from three of the four major professional leagues (MLB ex- cluded); while only miles away, NBC-owned SportsEngine continues to bolster its offering of league and player tracking for youth athletes around the country.

SEPTEMBER 2018 | TWIN CITIES BUSINESS 45 TRENDS AND INNOVATIONS FOR THE FUTURE The Graying of Building Trades When is the last time your business hired a plumber, electrician, or HVAC contractor under 40? Odds are it’s been a while, because virtually every construction trade profession is struggling to attract millennials to their ranks. The vast majority of companies responding to a Builder magazine survey reported labor recruitment as their greatest concern. Only 3 percent of 18- to 25-year-old respondents to a National Association of Homebuilders survey expressed an interest in the building trades, even though those jobs offer good wages and easy opportunities for eventual self-employment. Unless this trend changes, it will become tougher and more expensive for businesses and individuals to Water Resources build and fix things. Looking to the future, few issues will be as important as access to fresh water. Numerous forecasts suggest that water shortages will become a critical global issue, and some Minnesota companies are at the forefront of it. Hydroponics/Aeroponics St. Paul-based Ecolab Inc. has a range of tools and Hydroponics, a soil-less growing method, is becoming an increasingly popular way to grow fruits technologies to help customers better manage water use. and vegetables in an environmentally sustainable system. One of the most common types of Pentair PLC—technically based in London, but organiza- hydroponic systems is aeroponics, an indoor gardening practice in which plants’ roots are sus- tionally headquartered in Golden Valley—offers a range pended in air and regularly sprayed with a nutrient-rich solution. The method uses 90 percent less of water filtration, separation, flow and management water and grows plants two times faster than traditional farming practices. For example, products and services for businesses in industries includ- Living Greens Farm, an aeroponic farm in Faribault, produces a head of lettuce in less than 21 ing agribusiness and food service. You’d expect nothing days. Its 45,000-square-foot building makes it one of the largest indoor farms in the world. less from the Land of 10,000 Lakes.

Smart Farming

With finite natural resources shrinking and the global population growing, more farmers are investing in technology to maximize production and reduce waste. Ag-tech companies such as Minneapolis-based Conservis are helping farmers work smarter, thanks to technologies like cloud-based software, robotics, and drones. Today, more than 9,000 fields in 300 countries use Conservis’ enterprise-farm management platform, which streamlines tasks including production, inventory, budgeting, and analytics. Another company attracting farmers’ attention is Minneapolis-based Rowbot. The robotics start-up was selected by Google to showcase its autonomous vehicle, which applies nitrogen fertilizer to corn.

46 TWIN CITIES BUSINESS | SEPTEMBER 2018 Sponsored Content BUSINESS Success Stories

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Four51, Inc. // www.four51.com // 952-294-0451 // [email protected] TRENDS AND INNOVATIONS FOR THE FUTURE The Podcasting Boom Everyone used to have a blog; today they have a podcast. Barriers to entry are relatively low: You can launch one from your kitchen without much more than a microphone and some software. But podcasts aren’t just for hobbyists—some large local media companies are making big investments. St. Paul-based Hubbard Radio is about as old-school as it gets, but in 2015 the company bought a 30 percent interest in Los Angeles-based PodcastOne, a major network. Minnesota Public Radio and parent American Public Media now have more than 40 podcasts, including the award- winning investigative series In the Dark. What’s not yet clear is podcasts’ potential to drive a critical mass of advertising or subscription revenue—but for now, everyone’s in.

Housing Density The Metropolitan Council estimates that the seven-county metro area will reach 3.74 million people by 2040, double the number of 1970. But there’s only so much land. Getting more people in the same amount of space calls for taller buildings, smaller units, and housing on previously non- residential sites. While planners and developers tout density, residents from the core cities to the suburbs often object to projects as too tall, with too many units, and out of scale with the area. As the Twin Cities population grows, fights over density will be a constant, defining battle.

Sponsored Content BUSINESS Success Stories David Olson – a longtime voice of business in Minnesota Few leaders have the vision and ability to build coalitions to solve statewide problems. David Olson was passionate in that belief and delivered results as leader of the Minnesota Chamber of Commerce for 23 years. His optimism and ability to keep things in perspective drove all he worked with – from leading economic policy initiatives at the State Capitol to shaping programs for businesses to be more environmentally sustainable to charting a new course for our state’s colleges and universities.

In all his work, he spearheaded solutions that worked for Minnesota. His smile and jokes were spontaneous and energizing, always reminding us that a solution was just ahead, and, if for some reason we did not get it exactly right, we’d fix it. Keep at it. He truly was one of the greatest champions for Minnesota. He embraced our state. He worked every day to make it better and loved being engaged in anything and everything that would make our economy stronger for the benefit of all Minnesotans.

Under David’s leadership, the Minnesota Chamber became the state’s largest and most influential business advocacy organization. He crisscrossed the state regularly, connecting with businesses of all sizes and types. He was as comfortable talking with a Main Street business owner as he was addressing directors of a Fortune 500 company. He was known for his ability to build strategic alliances across political lines.

The Minnesota Chamber is proud to carry on the legacy of David, who passed away in 2014, working every day to help our state’s economy change and grow for the benefit of employers and employees alike.

David Olson www.mnchamber.com / [email protected] / (651) 292-4650 500 Robert St. North, Suite 1500, St. Paul 55101

48 TWIN CITIES BUSINESS | SEPTEMBER 2018 Protolabs Prototype Revolution From start-ups to Fortune 100 companies, businesses of all sizes have turned to Protolabs to bring a new product to market faster. With facilities across America, Europe, and Japan, the Maple Plain company, founded in 1999, is leading the next industrial revolution with 3-D printing, injection molding, and CNC machining. Where it once would have taken weeks, if not months, to build a prototype, Protolabs has trimmed turnaround time to days, while trimming the total cost and allowing companies to innovate at a faster pace.

Craft Alcohol The craft alcohol boom is ongoing and multifaceted. Along with the development of new beverages—sour The Rise of Biotech beer, organic and gluten-free liquors—is an explosion of As the operational headquarters of med-tech giant Medtronic, breweries and distilleries, which have become popular the Twin Cities has always had a strong spin-off market for new recreation spots and are driving the hospitality industry’s and emerging medical device companies. While devices remain current growth. From 2012 to 2017, the number of brew- the dominant category for health care start-ups, biotech is an eries statewide has risen from 134 to 318, and micro- emerging local growth sector. In 2017, biotech and pharmacy distilleries have grown from 0 to 27. Trends include retail companies in Minnesota raised $66.8 million in financing according to Golden taprooms, lighter beers, collaborations with neighboring Valley-based trade group Medical Alley Association, up a robust 865 percent restaurants, beer by the ounce so people can cheaply since 2013. Another sign of the sector’s growth is Minneapolis-based Bio-Techne try new beers, and new entrants looking to rural areas to Corp., which produces proteins for research and clinical diagnostics. The com- corner untouched markets. pany posted revenue of $563 million in its fiscal 2017, up 55 percent since 2013.

Cheers! Congratulations to Twin Cities Business for hitting the bullseye in local business coverage for the past 25 years!

SEPTEMBER 2018 | TWIN CITIES BUSINESS 49 TRENDS AND INNOVATIONS FOR THE FUTURE Ethanol Higher Education It was a bumper year for corn- Demographics and market dynamics are forcing Minnesota’s colleges and universities to based fuel in Minnesota. Last evolve. The number of Minnesota high school graduates has been declining, enrollment year, Minnesota ranked fourth in in the Minnesota State University system has dropped, and employers are demanding ethanol production, and consump- academic programs that align better with their workforce needs. Simultaneously, digi- tion of E15 (gasoline blended with tal disruption is prompting the University of Minnesota and Minnesota State systems to 15 percent ethanol) zoomed to increase their online offerings. They face competition from Minneapolis-based Capella 19 million gallons, a 230 percent University and others with online programs. Going forward, there are big questions increase over 2016. E85 sales hovering over higher education as students and parents question high price tags and were up almost 18 percent, to 14.8 the value of some degrees. Historically, change has come slowly to campuses, but million gallons. Ethanol has its colleges now are being pushed by state legislators and employers to accelerate opponents—petroleum producers, their evolution to educate the next generation of the workforce. some environmental and consumer groups, members of the Trump administration (though not, it appears, Trump himself). Researchers Big-Time Sports and Cord-Cutting also are looking to Virtually every pro sport and NCAA Division 1 has been basking in record revenues, but a look at the balance sheets reveals extract ethanol from those increasing cash flows have mostly been coming from broadcast contracts. As millennials cut cords, depriving cable sys- sources like waste tems and regional sports networks of subscriber fees, sports franchises will feel the pain when their broadcast contracts renew. paper and sawdust In many sports, broadcast revenue now exceeds game-day revenue, and unless teams and leagues can find ways to enroll cord- that would require cutters in subscription schemes, the gravy train of ever-growing top- and bottom lines could be coming to an end. less water and fertilizer than corn.

Nonpro t Event Calendar September

22 | Saturday | Minnesota Adult & Teen Challenge Freedom 5K Run / Walk & Family Fun Day Gather your super iends and join the ght against drug and alcohol abuse. Join us at Harriet Island Regional Park as we walk and run to transform lives. Do you know a family that has fallen on hard times through givehope.mntc.org/ eedom5K no fault of their own this year? Local nonprofit, Best 29 | Saturday | Children’s Cancer Research Fund Christmas Ever (BCE) is partnering with local businesses Time to Fly and community leaders to bless 200 families with a surprise Join an inspiring community a ected by childhood cancer at Best Christmas Ever this year! Taking what likely would have our 5k community walk! Honor Childhood Cancer Awareness been their worst Christmas ever, and instead making it the Month by fundraising with your iends and family to support groundbreaking research. Best Christmas Ever! TimetoFly.ChildrensCancer.org All Month | Pinky Swear Pinky Swear Celebrates 15 Years Give the gift of the Best Christmas Ever to e Pinky Swear Foundation will be celebrating their 15 year a family in your community this year! anniversary all September long with a variety of online storytelling and fundraising opportunities to help kids with Apply now to captain a BCE team at cancer and their families around the country. www.BCEmovement.org pinkyswear.org/fundraise

50 TWIN CITIES BUSINESS | SEPTEMBER 2018 Rochester’s Destination Medical Center Eight years ago, the state Legislature approved $585 million in infrastructure funding to create the DMC. When completed about 15 years from now, the project— the largest public-private economic initiative in Minnesota history—will mean a much larger Mayo Clinic. It’s also providing Rochester with an opportunity to reshape the city, with new construction (commercial and residential) and public amenities. In addition, DMC advocates say, it will help make Mayo research and innovations more readily available to locally based startups—and Co-Working inspire Rochester entrepreneurs launch- Is everybody co-working? Not yet, but co-working has emerged as a major trend in alterna- ing companies not rooted in Mayo tive office space for freelance contractors or start-up entrepreneurs. In the gig economy, technology. not everyone wants to work out of Starbucks; co-working’s sell is that it offers collaborative, creative environments. Users sign up for memberships and pay monthly fees based on how frequently they use the space. CoCo—now Fueled Collective—introduced the trend locally and remains a key player. By mid-2018, there were more than two dozen operators in the Twin Cities, including global players like WeWork, offering about 850,000 square feet of co-working space across the metro. Co-working evangelists say that’s only the beginning.

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SEPTEMBER 2018 | TWIN CITIES BUSINESS 51 TRENDS AND INNOVATIONS FOR THE FUTURE

Wells Fargo presents 1stTuesday DINE, NETWORK, AND LEARN WITH RENOWNED BUSINESS AND COMMUNITY LEADERS.

SEPTEMBER 4 • 2018 Learn why so many large companies make Minnesota their headquarters CRAIG BARES A New Restaurant Model MYLES SHAVER Restaurants and food businesses have proven almost recession- Professor proof over the last three decades, as more and more Americans eat Strategic Management and Entrepreneurship at least one meal out every day. But what has stressed the business model is labor shortages and the adoption of the $15 minimum Pond Family Chair in the Teaching and Advancement wage (by 2022). This and the millennial predilection for fast service of Free Enterprise Principles and home delivery are driving new restaurants to abandon the Carlson School of Management, University of Minnesota traditional waiter-service model for so-called quick-serve, where 11:30 a.m. – 1:00 p.m. customers order at a counter and often serve themselves beverages; labor costs drop and tables turn faster, necessitating less real estate. McNamara Alumni Center, See Michelle Gayer’s Salty Tart restaurant or Tim Niver’s Meyvn for a University of Minnesota taste of where restaurants are going. For more information and to register visit: z.umn.edu/FirstTuesday Renewable Energy Minnesota-based companies are getting into renewable power in a The 1st Tuesday Speaker Series convenes Twin Cities’ professionals big way, with economic impacts within the state and outside it. Xcel to address hot topics in business, management, and leadership. A Energy is establishing the country’s largest wind farm to South Da- Carlson School tradition since 1992, the monthly event is one of the kota, a $1 billion investment. Minnesota Power sister company Allete largest gatherings of corporate and community leaders in the area. Clean Energy has seven wind projects in four states, with about 535 megawatts worth of wind capacity. Edina-based Geronimo Energy Presented by is developing solar sites across the state, while the University of Minnesota’s Energy Transition Lab is working to advance battery storage capabilities. After coal, renewable energy is now the state’s second-largest electricity source—but perhaps not second for long.

52 TWIN CITIES BUSINESS | SEPTEMBER 2018 The Diversifying of Rural Minnesota Minnesota’s popula- Leadership tion grew by about 600,000 residents between 2000 and Matters 2016; of that number, 500,000 were people of color. In a 20-county region of southern Minnesota, the overall population increased by 7.7 percent in this period, to 735,706, while persons of color rose by 104.4 percent, to Congratulations to the companies who have created Minnesota’s 93,134. Worthington, located in the state’s southwestern corner, had thriving business community over the past 25 years. For nearly a population of 13,036 in 2016, nearly 60 percent of whom were 40 years, MDA Leadership has had the honor of serving as a trusted advisor to many leaders in the community by developing people of color. JBS, a pork processing concern that employs more Better Leaders NowTM and designing a competitive Talent Strategy than 2,000 people in Worthington, employs many Latino workers. for the Long RunTM. We look forward to teaming up with you to make our state a leading talent powerhouse for the next 25+ years!

+1 (612) 332-8182 www.mdaleadership.com

Data Mining With corporations eager to use data analytics to make better decisions, Ravi Bapna is en- meshed in the digital revolution from his perch at the University of Minnesota’s Carlson School of Manage- CONGRATULATIONS ment. As a professor of business analytics and information systems, he’s encouraging graduate students with 25 YEARS STEM backgrounds to earn an M.S. in business analytics, We congratulate Twin Cities Business for 25 years so they can bridge the knowledge and communication of successfully serving our community. gap between business executives and IT practitioners. He also directs Carlson’s Analytics Lab and serves as an associate dean and is probing the effects of social media and big data on behavior. Bapna has presented his research at Face- book, Google, and in international forums.

Deliver Everything Once upon a time, the only thing you could get delivered promptly to your home was the daily newspaper, pizza, and Chinese food. Today, Amazon wants to deliver everything to your door, in less than two hours for its Prime members. Minneapolis-based Bite Squad is an emerging national player in the increasingly competitive business of delivering restaurant meals. Bite Squad, founded in 2012, started ahead of the curve and is now in about 40 U.S. markets. Meanwhile, retailers like Minneapolis-based Target Corp. are ramping up efforts to ship items directly from stores to customers. In 2017, Target announced its acquisition of Shipt Inc., a same-day delivery company. © 2018 Fredrikson & Byron P.A. All Rights Reserved.

SEPTEMBER 2018 | TWIN CITIES BUSINESS 53 COMPANIES TO WATCH Target After a decade of struggle, Target Corp. has finally begun to find traction in its efforts to rejuvenate its in-store shopping experience, while engaging customers looking for a fundamen- tally digital buying experience. CEO Brian Cornell and his leadership team continue to refine a low-margin grocery business and inconsistent supply chain, and build out a digital shopping experience that leverages Target’s stores as distribution centers. Surging digital sales and stabilizing brick-and-mortar business indicate that after years of trial and error, the company may have settled on the right mix of trend and technology to secure its future.

Calyxt New Brighton-based Calyxt Inc. has a company name that no one can pronounce, and it lost $26 million on revenue of only $508,000 in 2017 (yes, you read that right). But it’s still a Minnesota company worth watching closely. Its vision—and potential market—is big. CEO Federico Tripodi is a veteran of ag-industry giant Monsanto. The company’s gene-editing technology is designed to create healthier foods such as high-oleic soybean oil, high-fiber wheat, and canola oil with lower saturated fat. Market response has already been strong. Calyxt raised $64.4 million in its 2017 IPO and brought in an additional $60.9 million in a follow-on offering in May. Calyxt could be a key player in the push for healthier foods.

General Mills Jeff Harmening succeeded Ken Powell as CEO in June 2017, and he is aiming to grow revenue following a restructuring and several years of uninspiring business trends. Long known for its packaged convenience fare and sweetened yogurt, GM has expanded its product line to meet the millennial demand for healthier foods with fewer additives. Its “portfolio reshaping” strategy has been built on acquisitions, such as natural packaged food maker Annie’s, artisanal meat purveyor EPIC, and even natural pet food maker Blue Buffalo, its most recent addition.

54 TWIN CITIES BUSINESS | SEPTEMBER 2018 Cardiovascular American Public Media Systems Inc. When patients’ arteries are Group/Minnesota clogged with calcium build- Public Radio up, surgeons are commonly turning to the devices made Traditional public radio listeners are by Cardiovascular Systems a graying population. To find its next Inc. After 28 years in the generation of listeners, St. Paul-based red, the New Brighton- American Public Media Group, parent based company turned its of Minnesota Public Radio, is taking first quarterly profit in early steps that don’t follow the standard 2017, and sales have contin- playbook. Take podcasts, for example. ued to rise. Over 300,000 (Sure, that’s an easy one.) But APM patients at more than 2,000 has also launched the Glen Nelson health care facilities have Center to invest in new media-con- used its flagship catheter- nected companies. Its Lunar Startups based products to shave space is meant to be an incubator for down calcified plaque, emerging businesses. They are also not only in the heart, but launching five-year content “initia- also in arteries in the leg, tives,” including expanded reporting ankle, foot, wrist, and groin. and events on public policy topics Recent success has justified such as water supply and mental an expansion to Japan, health. The future is uncertain, but it’s and the company says it is tough to bet against MPR, which has currently evaluating options built itself into the nation’s second- for additional international

largest public radio network. MPR markets.

Best Buy Keep your enemies close. When Best Buy CEO Hubert Joly and Amazon CEO Jeff Bezos announced a partner- ship in April, it sent a strong—albeit surprising—mes- sage that the Richfield-based electronics retailer is not about to become the next Whole Foods. Instead of getting gobbled up by the online behemoth, Best Buy became Amazon’s exclusive brick-and-mortar partner for a line of TVs equipped with Amazon’s Fire TV streaming video capabilities and Alexa voice-assistant technology. At a time when Best Buy is beating performance expectations and hooking customers by offering the human tech service Amazon can’t (yet) provide, it’s a strong sign that the hometown retailer intends to continue proving its relevance.

SEPTEMBER 2018 | TWIN CITIES BUSINESS 55 COMPANIES TO WATCH

Star Tribune Over the last decade, the Star Tribune exited bankruptcy and found a savvy publisher in Mike Klingensmith and a committed owner (Glen Taylor) with modest expectations. It’s the right recipe for a primarily print media company in this day and age, and the paper has responded, if not with dramatic growth, then without substantial atrophy. The challenge for the coming years is to find substantial digital advertising revenue to replace falling print subscriptions and advertising. If there is a regional American newspaper/media company positioned for this kind of innovation,

it is as likely to be the Strib as any paper. TRIBUNE STAR

Anytime Fitness

Anytime Fitness CEO Chuck Runyon and president/cofounder Dave Mortensen rang in the opening of their 4,000th gym in March and already have their 5,000th mapped out two years from now. At a Cargill pace of nearly two gyms launched each day, all of which operate Cargill is massive, with employees in 24/7 with limited human supervision, the Woodbury-based com- 70 countries and $110 billion in revenue in pany has become not only the fastest-growing fitness franchiser 2017. Yet it needs to be agile as it operates its on Earth, but the second-fastest-growing franchise company after four lines of business—food, agriculture, finan- Subway. Next up, Runyon wants to go where no other business has cial, and industrial products. In recent years, Cargill gone before: all seven continents. Among the reasons, he says, “Our simplified its leadership structure to increase account- franchisees get excited when we do epic things.” ability and pace of decision-making so it can enter and exit businesses rapidly. It’s adapting to new consumer trends, including sustainable and ethical food production. Government policy changes could have a big effect on Cargill’s future, so CEO Dave MacLennan is speaking out on proposals affecting free trade and immigration.

Cirrus Aircraft

In 2018, its 16th year of business, the world’s top seller of general aviation piston aircrafts landed the 7,000th delivery of one of its SR series planes—by far its most popular aircraft, which counts former Walmart CEO William Simon and actress Angelina Jolie among its owners. Soaring sky-high with strong demand, the company recently expanded its hometown operations in Duluth and launched a new training center in Knoxville, Tenn., to fuel its growth. But what may arguably drive more deep-pocketed pilots to Cirrus is something it has exclusively: the one and only FAA-certified single-engine personal jet.

56 TWIN CITIES BUSINESS | SEPTEMBER 2018 09-18 TCB MPR.indd 1 8/2/18 1:23 PM COMPANIES TO WATCH

Bind

Following the on-demand services trend, serial entrepreneur Tony Miller founded Minneapolis- based Bind in 2016. Labeling it on-demand, employer-sponsored health insurance, Bind allows members to pay for what they need when they need it, resulting in lower premiums. Sub- scribers pay for a core health plan, which covers basic services such as preventative and primary care, urgent and emergency care, and pharmacy needs. There are no deductibles, and when specific procedures arise, members can add coverage as they need it. In February, Bind raised $70 million in a round of funding to expand outside the Minnesota and Wisconsin markets. (Miller’s previous venture, Definity Health, was acquired by UnitedHealth Group in 2004 for $300 million and UHG has partnered with Bind to facilitate its expansion.)

MartinPatrick 3 Minnesota United FC While still enjoying the waves of tourist traffic When Major due to recent accolades in League Soccer national publications, Mar- extended an tinPatrick 3—the high-end offer to Min- menswear and home fur- nesota in 2015 nishings retailer that largely to lift its minor inspired the North Loop league team to shopping district—continues the pro circuit, Tru Shrimp to prove itself the antidote team owner The average American eats around 4 to Amazon. An expansion, Bill McGuire, pounds of shrimp in a given year. With scheduled for completion former CEO of over 80 percent imported, largely from this summer, brings the bou- UnitedHealth Asia, a business based in Marshall be- tique department store to Group, jumped lieves there’s an opportunity to reduce 20,000 square feet—the en- on the invitation that margin. Backed by door-to-door tire first floor of the historic without a finalized stadium plan. After Minne- food deliverer Schwan’s, also in Marshall, Colonial Warehouse. The lat- apolis turned down the opportunity, McGuire and Tru has constructed a unique aquacul- est additions include event partners Glen Taylor, Wendy Nelson, and Bob and ture system of stacked tanks, which space, a second lounge, Jim Pohlad turned to St. Paul. Come 2019, the it calls “tidal basins,” dozens of feet in expanded barber shop, and Loons will move out of their temporary home at length. In a year’s time, the company a shop-within-a-shop for TCF Bank Stadium (where they sold out the 2017 expects to produce more than 8 million 133-year-old Nicollet Mall season) and into the natural grass, open-roof pounds of shrimp, which it claims will be jeweler JB Hudson, punctu- Allianz Field, where the team will gain control of more environmentally responsible than ating the shifting epicenter its ancillary revenue. What remains to be seen is Asian shrimp, and antibiotic-free. of downtown retail. whether the new stadium will spur creation of a “modern live-work-play destination” in the surrounding Midway neighborhood, as promised by McGuire.

58 TWIN CITIES BUSINESS | SEPTEMBER 2018 mncup.org @minnesotacup

The 2018 MN Cup Gand Pize Winner I...

Join us on October 8th to hear from pitches from Minnesota’s 18 most promising startups!

To register and learn more visit mncup.org COMPANIES TO WATCH Land O’Lakes The food and agribusiness cooperative entered a new era when Beth Ford was named CEO in July. She is the first woman to hold the job, succeeding Chris Po- licinski, who doubled the size of the company since 2005. Recent- ly, Land O’Lakes has combined its seed and crop-protection businesses with those of Iowa-based United Suppliers, making it the largest merger in the company’s history. It continues to pursue an expansion strategy through acquisitions, which has included buying Vermont Creamery in 2017 and turning it into a subsidiary that makes goat cheeses and cultured butter. Beyond domestic deals, look to Land O’Lakes to become an even bigger global player, evident in its joint ventures in South Africa and Kenya.

Mall of America It’s taken the Ghermezian family, who owns Mall of America, years to come to terms with what locals have long lamented: Luxury retail doesn’t play in Minnesota. And so, three years after completing a $325 million, JW Marriott-anchored upmarket addition, the family is morphing the space into a fast-fashion wing with a 40,000-square-foot H&M opening this fall across from rival affordable-trend retailer Zara. But the mall would rather focus on its latest first-to-market attractions like Matrix Technology, a 5D virtual reality experience, and CMX Cinemas, the new movie theater featuring a food hall that serves burgers, shakes, and made-from-scratch pizzas. CEO Don Ghermezian believes people will continue to get off the couch for engaging shopping experiences, but future relevance hinges on evolving MOA’s market image into that of an entertainment destination.

Digi-Key Electronics In 2017, its 45th year of business, online electronics retailer Digi-Key Electron- ics hit a milestone that few companies ever reach: $2 billion in annual sales. President Dave Doherty celebrated the occasion, saying, “It took us 38 years to reach $1 billion in annual sales and only seven short years to reach the second billion.” The Thief River Falls- based company’s growth has been colossal, to say the least, but its home region is struggling to keep pace. A lack of housing and available workers has stunted Digi-Key’s growth, leading local officials to work overtime in 2017 to persuade the company to keep its planned $200 million, 1,000-worker expansion in the area.

60 TWIN CITIES BUSINESS | SEPTEMBER 2018 The 23rd Annual WomenVenture Award Luncheon & Entrepreneur Marketplace

OCTOBER 12, 2018 • 11 AM – 3 PM MINNEAPOLIS CONVENTION CENTER

PRESENTING PLATINUM GOLD MARKETPLACE SILVER BRONZE PARTNER PARTNERS PARTNERS PARTNER PARTNERS PARTNERS

DESSERT PARTNER

Helping women create and sustainable businesses for over 40 years COMPANIES TO WATCH MicroOptx Named the 2017 MN Cup grand prize winner, Maple Grove- based MicroOptx makes an optical implant designed to halt the progression of glaucoma, an eye condition that causes blind- UnitedHealth Group ness and affects more than 70 Inspire Medical Systems UHG broke through the $200 million people globally. Founded The Medtronic spin-off, which for two years billion revenue milestone in in 2014, the start-up’s Brown ranked as Minnesota’s fastest-growing 2017, when revenue grew 9 Glaucoma Implant reduces private company by revenue, has already percent to hit $201 billion. pressure on the optic nerve to seen its sales nearly double in its last three Based on its size, United is a prevent vision loss. About the quarters ending March 31. And growth isn’t big player whenever health policy reform is debated. Beyond be- thickness of a human hair, the expected to slow, as it continues to capital- ing a major health insurer, UHG provides health data and technol- implant is inserted in the eye ize on its position as the only company with ogy services to employers, health providers, and other companies using a minimally invasive pro- an FDA-approved neurostimulation device through its Optum business. It employs about 285,000 people cedure that can be completed to treat moderate and severe obstructive companywide. Now No. 5 on the Fortune 500, UHG is growing in less than a minute. The device sleep apnea. Much of the $112 million that its existing businesses, expanding through acquisitions such as is undergoing clinical trials; the company raised during its IPO at the urgent care provider MedExpress, and building a customer base CEO Chris Pulling expects the start of May will go to developing its next internationally, including in South America. Locally, its presence is implant to be market-ready by generation of implantable sleep apnea de- increasing: It will begin selling employer-sponsored health insur- early 2021. vices, as well as push its expansion into new ance in the state in late 2018. markets such as Japan and Europe.

35TH ANNUAL Thank You

SIGNATURE SPONSORS

of AwardsSeptember 27 • 4 pmExcellence • Nicollet Island Pavilion For tickets or sponsorship information: 952.928.4647 | naiopmn.org | [email protected]

2018 Awards of Excellence Nominees MEDIA PARTNER 610 Commerce Center II • Allina Hastings Clinic • Baker Center • Calyxt Office and Laboratory Courtyard Minneapolis West • Distribution Alternatives • ECMC • Engler Health Center • Fisk Building • Gateway South 2101 • Gemini Medical • Grove Circle Medical Building • HealthEast Clinic & Specialty Center • Kraus-Anderson Headquarters • Luther Automotive Group Support Center • Minnesota Eye Consultants • Mystic Lake Hotel and Convention Center • Northern Stacks IV • NorthPark Business Center II Onyx Edina • PrairieCare Outpatient Clinic at 610 Medical Center • Raceway - Phase I • Ray • Rihm Kenworth Headquarters • Seven Hills Preparatory Academy • Shorewood Landing • Sunrise Banks Office • Target Downtown Minneapolis Store Remodel • TCO Performance Center • The Gardner School • The Loden • The M on Hennepin • The Moline • Treasure Island Center • TRIA Orthopaedic Center Woodbury • Twin Cities Orthopedics - Woodbury • Variant Apartments • Vicksburg Business Center • West End Center Renovation

62 TWIN CITIES BUSINESS | SEPTEMBER 2018 3M Inge Thulin passed the CEO baton to Mike Roman, a 30- year 3M veteran, on July 1. He now leads a global company with 91,000 employees that increased sales in 2017 by 5.1 percent, to $31.7 billion. This year also was pivotal for marking the end of 3M’s longstand- ing litigation over groundwa- ter contamination in the east metro. (It settled with the state of Minnesota for $850 million.) Priority growth areas include advanced wound care, air quality, electric car development, and personal wellness. While U.S. trade and tariff policies are a global concern, 3M has a huge advantage in the big China market, since it operates a wholly

owned business there. 3M

FIVE STAR WEALTH MANAGERS Who will be named? 2019

Find out in a special section of the January issue Share your opinion — go to fivestarprofessional.com/wmconsumerfeedback

SEPTEMBER 2018 | TWIN CITIES BUSINESS 63 COMPANIES TO WATCH

Join us as we honor outside directors for their dedication and exceptional work in the course of their board service.

Wednesday, October 10th 5:30 , McNamara Alumni Center Patterson Cos. Founded in 1878, Mendota Heights-based Patterson VIP table packages and tickets available: Cos. Inc. has long been one tcbmag.com/ODA18 of the country’s biggest suppliers of dental equipment. At the turn of this century, 2018 Honorees it branched out into the Robert Baumgartner veterinary market, as well as for Board Service at rehabilitation products for Bio-Techne people, such as wheelchairs and braces. During the Great Recession, Patterson made Kathleen Blatz dozens of acquisitions in Lifetime Achievement the U.S. and overseas. It’s been a quietly prosperous business—until recently; Don Lewis Amazon, that great disrupt- for Board Service at er, wants to take a bite out HealthPartners of the dental supply market. Meanwhile, Patterson and other suppliers are facing Wendy Schoppert federal action over alleged for Board Service at price collusion. A company Nina Hale and Bremer Bank that has kept its mouth shut suddenly has earned Todd Urness unwanted attention that has for Board Service at clouded its future. Bridgewater Bank

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64 TWIN CITIES BUSINESS | SEPTEMBER 2018 Join us as we celebrate these outstanding family businesses.

November 1, 2018 • Hilton Minneapolis

VIP Table Packages and Tickets Available tcbmag.com/MFBA18

HONOREES

Border Foods Fagen, Inc. Industrial & Environmental Concepts Apogee Enterprises R.F. Moeller Jeweler The company started with a single auto glass shop, Harmon omas Services Company Glass, in downtown Minneapolis in 1949. It’s a little bigger today. Bloomington-based Apogee Enterprises reported record revenue of $1.3 billion for fiscal 2018, up 19 percent from the TOP FINALISTS previous year and up 72 percent since 2014. More than 90 percent of its revenue is drawn from its architectural glass, Brenny Transportation metal, and installation businesses. (It exited auto glass in Cox Insurance Associates 2004.) While no one was paying much attention, Apogee has quietly become a major force in its industry and Minnesota Discount Steel business. It has been growing internationally through acquisi- Evolve Systems tions of glass companies in Canada and Brazil, and plans to Ideal Printers continue expanding to new markets.

PRESENTED BY:

MN Home Outlet After his company outgrew its 1,600 square-foot Burnsville GOLD SPONSORS: home improvement store within seven months of opening, founder Jimmy Vosika knew he was on to something. Founded in 2014, MN Home Outlet partners with big-box and online retailers including Home Depot and Amazon to acquire their overstock and returned inventory, then resells the items at discounted prices. The outlet sells everything from appliances and furniture to kitchenware and home RECEPTION SPONSOR: décor. Its original Burnsville store is now more than 57,000 square feet. Vosika’s next openings were in Woodbury and Coon Rapids. Revenue for 2017 was about $11 million.

SEPTEMBER 2018 | TWIN CITIES BUSINESS 65 COMPANIES TO WATCH YOU’RE THEr ROCK ppleTHAT CREATES THE 3 FOR THE ROAD Kudos to the 25 Leaders Who Shaped Minnesota Business, Bright Health Three Minnesota including current and former trustees of the University of companies to watch St. Thomas, along with alumni who have inspired a culture The idea sounds crazy—create a brand- whose ownership or of excellence all for the common good. new health insurance headquarters status is in TRUSTEES plan with the goal of transition or no longer Ginny Morris building a national based in Minnesota. Richard Schulze company. But that’s exactly what the Robert Ulrich founders of Minne- apolis-based Bright ALUMNI Health are doing. Mary Brainerd Investors are bullish: Lynn Casey The company raised a head-spinning $240 million in its first two rounds of financing. The company’s three founders bring deep industry experience to the table. Bright Health partners with a single provider group Medtronic in each market; it Medtronic has a long history started in Colorado here, but its headquarters tech- last year and is adding nically moved to Ireland after its other states. Bright $50 billion Covidien acquisition 1993-2018 is off to a solid start, in 2015. However, Minnesota with $45 million in rev- remains the operational base enue in 2017, its first for the world’s largest medical TCB 25th ANNIVERSARY GATHERING year of operations. device company. Medtronic Company leaders reported revenue of $30 billion see a wide opening and a net profit of $3.1 billion September 5, 2018 | Register Today | tcbmag.com/25th in a business where in fiscal 2018. Despite its size, customers and provid- Medtronic is not standing still, ers alike crave new driving growth through therapy GOLD SPONSORS: options. innovations and strategic acquisitions of companies with new technologies. While cardiovascular products remain its biggest line, its financials point to areas of future growth: For 2018, Q4 revenue in its diabetes group was up 26 percent, brain therapies were up 14.9 percent, SILVER SPONSOR: and pain therapies were up 12.9 percent.

66 TWIN CITIES BUSINESS | SEPTEMBER 2018 FALL SOCIAL

September 6 • 4:30 pm - 7:30 pm SEVEN Sushi Ultra Lounge Rooftop Bar 700 Hennepin Ave S, Minneapolis, MN 55403 Sun Country Airlines For more information and to register, visit With new owners (Apollo Global Management) and manage- www.acg.org/minnesota/events/fall-social ment (CEO Jude Bricker) and a new business model, the coming years will tell Sun Country’s future. Though the previous Davis family ownership stabilized and even brought modest UPCOMING EVENTS: September 12 Women's Leadership Series - Elizabeth Lilly, Crocus Hill profitability, Sun Country struggled to generate sufficient September 18 Monthly Luncheon - Growth by Acquisition profits and was squeezed by full-service network carriers like September 25 Private Equity 2018 Delta Air Lines and deep discounters like Spirit and Frontier October 11 Owners Forum Air. Sun Country’s evolution from a carrier more like Delta to October 11 Sponsorship Kickoff one more like Spirit is rooted in a conviction that its customers October 16 Monthly Luncheon - Obtain and Retain Top Talent have made it clear that price is the decisive factor in buying an airline ticket. Sun Country must grow if its venture fund owners SPONSORS: are to find an exit strategy. Whether it can find that growth in MSP is one of many questions facing the airline.

Buffalo Wild Wings

Golden Valley-based Buf- falo Wild Wings has been through the wringer of late. After activist investor Mick McGuire attempted to remake the company’s business model in 2016, the company rolled out a quick-serve offshoot, and CEO Sally Smith announced retirement. Just when it looked like McGuire had prevailed, Smith engineered the company’s sale to Arby’s owner Inspire Brands, which acquired BWW in a $2.9 billion deal with more of a stay-the-course agenda. This March, 132 employees at BWW’s headquar- Sponsored by ters were let go as part of the Inspire consolidation. For As the largest provider of pediatric cancer care in the Twin Cities, now, the headquarters Children’s Minnesota invites you to join our local business partners in appears secure, but giving to the Cancer Kids Fund throughout the month of September. change is the watch- Alakef (City Girl) Roaster Cox Insurance olliePop Design word going forward Alamo Drafthouse Cinema Crayola Experience Sloane’s Beauty Bar for the leading Andros MedSpa Day of the Dozers Sota Clothing hospitality concept to Bay Equity Mortgage Engel & Volkers SPACES emerge in TCB’s first Beef ‘O’ Brady’s Family GoGo squeeZ The Suburban quarter-century. TCB Sports Pub Hammermade Tim Hortons Belu Photography JonnyPops

Learn more at childrensMN.org/ShineBrightforKids

09-18 TCB Childrens.indd 1 SEPTEMBER 2018 | TWIN CITIES BUSINESS 678/2/18 1:28 PM Republican Arne Carlson was governor of Minnesota at TCB’s birth. He was by Adam Platt elected in 1990 following the scandal-ridden implosion of the campaign of Jon Grunseth, the GOP-endorsed candidate, and was decisively re-elected in 1994 without the endorsement of his party. A fiscal hawk with moderate social values, the Bronx-born Carlson became known for straight talk, an impatient demeanor, and a surprisingly nonpartisan approach to governance. He ran the state exclusively alongside DFL legislatures, yet his tenure was known not for gridlock, but for substantial legislative achievement, including tax, health care, education, and workplace reform. He succeeded Gov. Rudy Perpich, who served two highly consequential terms, and he was succeeded by Jesse Ventura, whose election heralded the beginning of an era of voter disaffection and legislative gridlock. Carlson, who turns 84 this month, was born in New York City and came to Minnesota to attend graduate school at the University of Minnesota. He served on the Minneapolis City Council, in the Minnesota House, and as Minnesota State Auditor before his time in the Governor’s Residence. He blogs regularly at https://govarnecarlson.blogspot.com.

68 TWIN CITIES BUSINESS | SEPTEMBER 2018 Photography by Travis Anderson SEPTEMBER 2018 | TWIN CITIES BUSINESS 69 TCB When you took office, what was your sense the first states to get to an AAA bond rating, but now I find it the ultimate in boredom. I’ve just been watch- of the governor’s job, versus the reality? there’s an indifference. When was the last time you ing the series The Crown and, oh my golly, would I be a Arne Carlson: I think there’s a public expectation that heard an elected official take responsibility? It’s always failure at [royalty]. if you have experience, things will come easy to you. somebody else’s fault. I found it transformative. It was a challenge, and you Q Did it hinder you? just have to grow into it. Q So what has endured from your tenure? It did, but you surround yourself with people who We did a lot of environmental reforms around sus- are better at it. My wife is great at meeting people and Q What’s the hardest to prepare for? tainable development, and that lasted and hopefully loves the social aspect of it, so she’s a good partner. The enormous amount of pressure. You’re the focal will continue, though I’m petrified at the prospect of point of every dispute, every issue, every concern. It all copper mining in northern Minnesota. I think Lake Q MinnCare seems to be one of the most forward- leads to you because that’s where the media focuses. Superior could be in considerable jeopardy, as well as looking of your legacies. What made it a priority the BWCA. for you? Q You describe your time in office as being the tail- On the education front, we introduced competi- I’ll tell you a personal story. When my little brother was end of a revolution in Minnesota’s evolution. Can you tion and choice. We supported charter schools, and 4, he was taken with appendicitis. We were poor. He explain it? that has lasted because the public supports it. Min- was rushed to Fordham Hospital. It gave free care to I’ll explain it this way: When you look at Minnesota from nesota Care was very durable and very successful be- the indigent. A doctor told my mother he would not the 1950s to the 1990s, you had some coalitions at work cause, one, it was bipartisan, and two, it was focused. operate until we came up with some money. Totally that built a magnificent state. One was the business com- It was very well planned. We put into effect sweeping unethical. Totally illegal. Totally vile. munity as a whole. They provided the leadership, frankly. civil rights legislation for the gay community. Op- We didn’t have a telephone. She went down to And there was labor. They all worked with the Citizens portunities for the poor. Welfare reform. League, which was a remarkable organization. And the I think we reduced welfare by almost 40 Star Tribune, with John Cowles Jr., provided a platform. percent, particularly by helping single The idea was, “How do we build our community?” mothers get on the employment rolls. From that question came [things like] environmental We reformed workers’ compensa- If a legislative session is a failure, protection and metropolitan governance. We effectively tion. That came the first year of our that’s a governor’s fault. The got both political parties to understand that it was their term. The state had been threatened by obligation to give us their best and brightest. I would a number of smaller companies that felt governor is the key leader and argue those were the glory years. they would need to move, and we got the When Wendell Anderson had his picture on changes through on a bipartisan basis, he’s got extraordinary powers to Time, it was not a partisan celebration, it was a Min- which is kind of incredible, considering impose discipline, get things done, nesota celebration because it meant we had arrived. today’s environment. The premiums were When Wheelock Whitney secured pro sports, it was reduced by 50 percent. and build coalitions to ensure it. celebrated as a win for all of Minnesota. The political system reflected that philosophy. [The political Q What skill sets did you lack as establishment’s] agenda was focused on “How do we governor? create an opportunity society that allows everyone to It’s very important for any governor to succeed?” We didn’t sit around bashing. make an assessment of their own skills. None of us the church and tried to beg and borrow. It was now 7 Some of it lasted; some of it, frankly, didn’t. I’m are born perfect. I tend to be impatient. I don’t like p.m., and Lars’ appendix broke. The poison spread all disappointed that we’ve had so much [subsequent] long negotiations. I get a little sharp-tongued. So I over his body. My mother told the doc, “If my son dies, leadership that focused on their personal well-being. delegated a lot of that to staff. I relied heavily on tal- you’re going to die.” I don’t know how any society can I really wish the governorship could be a dead-end ented staff. There were certain things I was stronger in: deny health care to anybody. So this was a very personal job. So many have used it for national attention rather setting a vision, ethical standards for staff (no political issue with me. than a Minnesota agenda. We’ve had way too much fundraising), and fiscal discipline. It gets tiring being told that because you’re Republi- of that. can you have no regard for the well-being of others. The Q I hear you are a bit of an introvert. How did political lesson is that out of harshness and disagreement Q What initiatives did not have a long life? you end up in politics? you can build political solutions. What really drove the The one that disappoints me the most is financial That’s a fair question. [As a kid] I was very bashful, stut- bipartisan [legislative] team was a search for excellence. planning. Governors have a tendency to find that tered something awful. I was blessed with some good inconvenient. The game is to balance today’s budget speech coaching in high school and adored politics. We Q Is there national applicability here? and then be surprised by tomorrow’s deficit. [Laughs.] were born poor in the Bronx and I just loved Fiorello Absolutely. Both parties badly [botched] it. When It’s dreadful. I can’t think of a single company that LaGuardia, the mayor, and how he used the instru- Tommy Thompson, who was a very successful would allow a CFO to do the same. Businesses have ments of government to help people. governor of Wisconsin, left the Bush administration, the vision of the long-term because they want stabil- he supported universal health care. Obama should ity. Too many of our elected officials only want to get Q Was the glad-handing difficult? have immediately called in Tommy and brought in through the next election cycle. How can you be in the I loved it with the public. I am very poor at cocktail the Republican governors who have instituted state planning business and be surprised? We were one of parties and structured events. I am terrible at small talk. plans, and come up with national guidelines. Have

70 TWIN CITIES BUSINESS | SEPTEMBER 2018 the Democrats do the same, then weld them together. sophomore side be at regional institutions. Because Instead, Obama went the partisan route. Never gave when you define excellence, you’re really talking about Q What’s at the root of all this dissonance? any ownership to Republicans, and the rest is history. graduate education. And it will always be. We’re going to be debating that question for years to I don’t think public policy should be partisan in But most importantly, we’re not discussing it. come. We’re becoming a society that doesn’t want to deal nature. That’s where we have failed. The other side You’re the first person to discuss this issue with me in with tomorrow, we want to talk about yesterday. Con- always has talent and vision. God did not exclusively years. And I think it belongs on the table. trary to our wishes, we’re allowing ourselves to become give wisdom to one political party. both hateful and divisive. We’re appealing to our worst Q Do you accept the premise that, despite our instincts. We have to expect our institutional leader- Q You governed during a period of complete DFL evolved 21st-century economy, the U remains a key ship—media, business, not just political—to talk about control of the Legislature. One of your former driver of state prosperity? tomorrow and guide controversy in an instructive way. aides said it worked to your advantage because At the moment, yes. But I see it resting on past laurels. The Star Tribune editorials come from a village you had enough votes to sustain your vetoes, but I don’t see it building an exciting agenda for tomor- called Blandsville. They are designed to offend no- not enough to have to take the GOP caucus’s other row. I don’t see us planning our future the way we body and lead us nowhere. The business community initiatives seriously. should. The university has the talent and resources to is quiet. The academic community has nothing to say. That’s correct. [Laughs.] The truth is, you can always do it, but it doesn’t have the administrative willpower And God knows, the political system has less to offer. work with the other majority if you understand what to get it done. Who is leading us in the thought process? they want. That’s the joy of politics. It’s a trade-off. Our evolution as a state was led by the business Q I hear water is a topic you care deeply about. community and the Star Tribune, not the political Q The U is one of your passions. Have we lost the The western U.S. is drying up. Minnesota is getting state. I would love it if the business community came consensus on the U? Was there ever really one? wetter; we are rich in water resources. Should we back as leaders and said, “What can we do to create I think there was one. In 1957, when I came here to not be having a larger conversation about how a 10-year plan for the state of Minnesota?” Because go to grad school, I think there was a consensus on water is managed, and even how it is leveraged for they have interest in the environment, taxation, health seeking excellence. our long-term benefit? care, transportation. Long-term our biggest asset is not institutional, it’s Q Yet there’s this endless tug-of-war between natural resources, and water is it. You’ve got states Q OK, but the business community suggests the access and excellence at the U. Why? like Colorado or Arizona right now that would like a GOP is not listening to them on a state level. I think the overall management system at the U is pipeline to Lake Superior. And if we poison our water, The Republican Party has decided to go the route of totally inadequate and has sapped people’s confidence we can’t even supply Duluth. And we’re placing that social issues and Trump. Why not reach out to moder- in it. I’d like to see the next president not be confined in jeopardy for what, with these mining initiatives? ate Democrats, like Margaret [Anderson] Kelliher in to an academic background. The faculty will not like And then, by the way, a few years from now, we’ll be the 5th District, for example? that because they want ownership of that office. “just stunned” when there is a negative outcome. Q More than anything, I’m struck by the sense of Q Why is there no strategic thinking permanent political stalemate in the state. Is there about water? a different type of person going into politics today? Because Gov. Pawlenty eliminated What has flipped the dynamic from outcomes to I am terrible at small talk. the state planning agency. Every state posturing? I find it the ultimate in boredom. needs to analyze its assets and develop a I am stunned by the amount of legislative indiffer- strategic plan. We don’t even consider it ence. They don’t want to take risks. I’ve just been watching the series a state role. Q Why? It that such a great a job, being a The Crown and, oh my golly, Q You’re one of the last people to hold legislator, to go there and basically do nothing? would I be a failure high public office in this state who I That’s the irony. You’re exactly right, but to them it regard as a pragmatist rather than an must be. Can you imagine a board of directors at a cor- at [royalty]. ideologue. Is that fair? poration saying, “Our job is to protect the status quo”? Sure, but I don’t know how you can be a successful pragmatist without a vision. Q One of the things that intrigues me about As Lewis Carroll said, “If you don’t know native Minnesotans is this sense of exceptionalism: where you’re going, any road will get you “It’s the best place, it will always be, because The Board of Regents should not be selected by there.” Unfortunately, that’s where I think Minnesota we have the recipe.” Is this state intrinsically the Legislature, which inherently drives it to a lowest is at right now. We don’t want to discuss the future positioned to thrive? common denominator. And it’s a non-goal-oriented because it’s too controversial. We’ve bought into You mean that there’s an invisible hand that guides administration. So where are we going? We don’t know. slogans as opposed to critical thought. We’re losing us and not Wisconsin? The reason Minnesota thrives But the fact that there’s a philosophical divide between our capacity for critical thought. How can candidates today is we’re living off the fat of yesterday, and it’s a access and excellence doesn’t mean you can’t do both. focus on substance when there’s an indifference? very dangerous place to be. TCB What I would like to see long-term is the U be a junior-senior-graduate institution and the freshmen- Adam Platt is TCB’s executive editor.

SEPTEMBER 2018 | TWIN CITIES BUSINESS 71 OPEN LETTER

25 Years: The Continued Missing Business Story

To: Jeff Bezos CEO Amazon H.Q. Seattle, Wash.

Dear Mr. Bezos: tional Computing Consortium. for the kind of tech dominance that very Amazon did not choose the Twin Cities By the time the Gopher browser likely will come out of Minnesota. It will as the site of its second headquarters, was being developed, every Minnesota not be retail applications (like Uber), nor but the original one should have been public school had an average of three will it be personal devices (like Apple), in the Twin Cities 25 years ago. At that to four computers and MECC offered nor fintech (like PayPal). point, the Twin Cities, and more gener- computer training to teachers and The next 25 years will build strong- ally the state of Minnesota, was the administrators throughout the state. ly on the last 25. Minnesota’s strong computer center of North America. The MECC’s software licenses were sold innovative retail culture, exemplified by area had a long history of producing countrywide. Many of the programs companies like Dayton’s, B. Dalton, Best the world’s most powerful computers it developed—including The Oregon Buy, Target, SuperValu, Carlson Cos., at companies like Control Data Corp., Trail, The Secret Island of Dr. Quanda- and UnitedHealth, will combine with Engineering Research Associates, UNI- ry, The Yukon Trail, The Amazon Trail, our preeminent position in the delivery VAC, Honeywell, and IBM (at its re- and DinoPark Tycoon—became well- of high-quality medical services. It is too search campus in Rochester). Business known to generations of American bad the Mayo brothers did not have a Vance Opperman historians trace 17 major spin-offs from students. After becoming a for-profit mathematician in the family, but Min- Honeywell, while the most famous to corporation, MECC floated an IPO in nesota does. come out of CDC was Cray Research. March 1994 and was acquired in 1995 Minnesota missed its window These computer behemoths created an by SoftKey for $370 million in stock. of opportunity in the change from infrastructure of engineers, program- Other internet IPOs followed. mainframe computing to the PC and mers, and software architects—many of Steve Snyder, with a U of M doctor- internet. There is no such deficit in whose innovations are in use today. Yes, ate, was an early pioneer. Along with the delivery of medical services, with Twenty-five Amazon should have started browsing his university colleagues, he realized institutions such as Mayo, United, years ago, here 25 years ago. the commercial potential of col- and the strong technical infrastruc- a small band of Twenty-five years ago, a small laborative filtering, which led to the tures provided by the more than 700 programmers from band of programmers from the founding of a company called Net medical device companies in the Twin the University of University of Minnesota ruled the in- Perceptions. Its successful IPO was Cities area including 3M, Stryker, Pat- Minnesota ruled ternet with their browser. It was called one of the first for an internet-based terson, Medtronic, Boston Scientific, the internet with Gopher. For a period of time, Gopher concern. The first retailer to em- Zimmer, and others. We have the nec- their browser. was the more widely used method ploy collaborative filtering to make essary ingredients for another highly of searching internet files. It is not upselling suggestions to customers successful and innovative 25 years. surprising that the internet’s first was—you guessed it—Amazon. We are smart, healthy digerati, successful browser, Gopher, would Twenty-five years of history show and the next 25 years will see increased have arisen from this rich computer- that most of the anticipated internet de- success. It’s not too late for Amazon industrial complex. Computer-based velopment did not continue here, mostly to put its second headquarters in the learning at all levels of education due to the replacement of the mainframe middle of this network of innova- came first in Minnesota. with PC and the relative lack of venture tion—but regardless, you can always Bill Norris, CEO and founder of capital to nurture the industry’s ongoing get your executive physical here. Control Data Corp., had a number presence. Companies like Facebook, of dreams—one of which was to en- Google, Netflix, Microsoft, Uber, Airbnb, Sincerely yours, able online learning through the use Priceline, PayPal, Salesforce, and literally Vance K. Opperman of CDC computers and a program dozens of others did not start here. And, For healthy innovation known as PLATO. Several educational of course, 25 years ago, Amazon started institutions, including the University in Seattle. Vance K. Opperman of Minnesota and Minnesota State Thus, the headline we never got to ([email protected]) Mankato, started online learning read: “Minnesota Digital Valley Contin- is owner and CEO of MSP programs. These programs led to the ues to Dominate the Tech World.” But Communications, which publishes founding of the Minnesota Educa- we will not have to wait another 25 years Twin Cities Business.

72 TWIN CITIES BUSINESS | SEPTEMBER 2018 Embracing the Future The past 25 years have been an exciting time for business in the Twin Cities and a period of dramatic change within Larkin Hoffman’s 60-year history. We have outgrown our original offices and today overlook Normandale Lake. We have the pleasure of serving leading-edge clients both regionally and across the country and we are excited to embrace the future.

We pride ourselves on meeting our clients’ expectations while fostering an environment that inspires our attorneys to be creative and productive. We are blessed to have an extraordinarily talented group of young lawyers and we are honored to have respected peers regularly join the firm. From boardroom to courthouse, our growing team is prepared to protect your business today and long into the future.

—Paul R. Smith, President

(952) 835-3800 / larkinhoffman.com / Minneapolis / Rochester Best Lawyers® defines the Minneapolis region to include Minneapolis, St. Paul, St. Cloud, Rochester, and surrounding communities.