The $7 Billion

BEST OF BUSINESS 2017 | UNITED WAY’S FUNDING BIND | OPPERMAN: FIX THE LEGISLATURE

SEPTEMBER2017 tcbmag.com

Target CEO The Brian Cornell $ wagers the retailer 7 Billion will turn around Bet —and lead again.

$5.99 Looking for ways to take control of rising healthcare costs?

By working directly with Summit Orthopedics, employers with self-funded insurance can realize signiﬁcant savings on:

› Advanced Spine Procedures › Total + Partial Joint Surgery

Learn more | summitortho.com/employers or 651-968-5160 File Speci cations Release Date: 7-27-17 Revision Date: 7-19-17 Revision Phase: 6AS Your local McGuf n Job #: BHB4545E Publication: Twin Cities Business IO#: 6660805 Minneapolis Insertion Date: 9-1-17 Material Due Date: 7-25-17 Size: Trim: 10" x 12" commercial Live: 9" x 10.75" Bleed: 10.25" x 12.25" Inks: 4CP Creative Director: KV banking team. Creative Lead(s): JD Account Exec(s): NO Production: JD Notes:

Local expertise to help Minneapolis businesses prosper. BMO Harris Commercial Bank is in the Minneapolis region, with a banking team that has deep local roots and expertise in a range of industries. Combined with our decades working in Minnesota, and supported by strong cross-border capabilities, we’re uniquely positioned to help Minneapolis companies uncover more possibilities here at home and all the places you do business.

Phil Krump 612-904-8960 [email protected] bmoharris.com/commercial

Banking products and services subject to bank and credit approval. BMO Harris Commercial Bank is a trade name used by BMO Harris Bank N.A. Member FDIC | SEPTEMBER 2017 |

28 30 40 Transport Superhighway TCB Q&A: Sarah Caruso Best of Business 2017 The Duluth-Superior port goes beyond boats to gain new With a downturn in donations, we ask the CEO of United Way TCB’s annual survey of executives and companies highlights

FEATURES business—a year-round container service. how the nonprofit’s business model is adapting. the go-to vendors and venues that they would confidently By Gene Rebeck By Liz Fedor recommend to a valued client or colleague.

28 30 40 34

COVER 68 8 6 STORY TCB Forum Highlights | What It Takes to Starters Editor’s Note Build a Major Project in the Twin Cities > The future of the former Ford plant How to grow talent, rather than recruit it 34 Key developers assess the factors driving high- > Death of the health care mascot By Dale Kurschner 7 Billion Dollar Bet

TRENDING profile projects, including Macy’s. > Salaries soar for new college grads Target CEO Brian By Kate LeRette > Hotel occupancy rate falls in downtown Minneapolis 21 Cornell is investing it

COMMENTARY Planting Seeds all in an old concept: 69 DEPARTMENTS 13 Cultivating seeds appropriate to our soil offering something TCB Forum Highlights | Finding and Concierge By Rajiv Tandon unique, valuable and Retaining Tech Talent Retail Road Trips accessible. Industry leaders discuss tech innovations and By Melinda Nelson 22 how they are building a talent base. Performing Philanthropy Cover photo by By Kate LeRette 14 Twitter: It’s not just for presidents Travis Anderson A&E By Sarah Lutman 71 Upbeat blues and a glimpse of 18th-century Europe Health Care | Healthy Partnerships By Tad Simons 24 Can health care collaboration improve quality Explanation of Benefits SPECIAL and cut costs? 16 Overuse of medical services drives up costs REGIONAL

By Burl Gilyard Plugged In By David Burda PLUS SECTION Top networking opportunities 75 By Emily Sweeney 78 Washington County IP Law | Safeguarding Intellectual It’s All Relative Open space and a Property 18 Preparing a succession plan for the unexpected well-educated talent Minnesota businesses can take multiple steps Amped Up By Tom Hubler pool offer plenty of to prevent ex-employees from using and > How residents are building credit through rent opportunities for transferring key company information. > A sound way to reduce snoring 79 companies of all kinds. By Nancy Crotti > Making a splash with homegrown shrimp Front Lines Embracing the rat in the room See page 55. 25 By Ravi Norman Health Beat > Enrollment in high-deductible health plans grows 80 > Entellus unveils its largest acquisition Open Letter > High demand fuels Minnetronix’s fourth expansion How to reform state government at no cost By Vance Opperman

TWIN CITIES BUSINESS, Vol. 25, No. 1 © 2017 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; back issues, $10.00. To subscribe or change address, visit tcbmag.com/subscriptions.aspx. For back issue requests, contact [email protected] or 612-339-7571. Periodicals postage paid at St. Paul, MN, and at additional mailing offices. POSTMASTER: Send all UAA to CFS. (see DMM707.4.12.5); NON-POSTAL AND MILITARY FACILITIES: send address corrections to TWIN CITIES BUSINESS, Subscription Processing, P.O. Box 5846, Harlan, IA 51593.

2 TWIN CITIES BUSINESS tcbmag.com SEPTEMBER 2017 78175_MC_5058_Yasmin_Gen_TCB.indd 1 7/19/17 3:39 PM

© 2017 Mayo Clinic vice 30th Year Twin Cities Business Magazine Staff of Ser Editor in Chief Publisher Dale Kurschner Shelly Elmore Sure Stop Floor Safety [email protected] [email protected] “your fast and dependable solution to any slippery floors and steps” call 763 571-1769 Executive Editor Adam [email protected] We do ceramic lavatory, showers, and Trending Editor Liz Fedor [email protected] bath tubs. Old concrete walkways, Senior Writer Burl Gilyard [email protected] stainless steel bridges, polished Online & E-Newsletter Editor Andre Eggert [email protected] granite and polish marble! Online & E-Newsletter Writer Sam Schaust [email protected] Northern Minnesota Correspondent Gene Rebeck [email protected] www.surestop.com Associate Editor Kate [email protected] Copy Editors Judy Arginteanu [email protected] INDUSTRY EXPERTS Sherri Hildebrandt [email protected] Editorial Intern Emily Sweeney [email protected]

Design Director Chris Winn [email protected]

Account Director Traci Auger [email protected], 612-336-9214 Senior Account Manager Rian Heaslip [email protected], 612-336-9215 Senior Account Manager Andrea Shapiro [email protected], 612-336-9211 Marketing Manager Hailey Johnson [email protected], 612-373-9584 Events Coordinator Grace Famestad [email protected], 612-336-9288

Contributing Writers David Burda > Nancy Crotti> Suzy Frisch > Fran Howard > Tom Hubler > Don Jacobson > Sarah Lutman > Melinda Nelson > Ravi Norman > Tad Simons > Rajiv Tandon

MSP Communications CEO & General Counsel VP, Manufacturing & Delivery Systems Vance K. Opperman Mary K. Authier CFO Charles F. Thell VP, Creative Director Jayne Haugen Olson COO Nathaniel Opperman VP, Finance & Administration John Bienias President Gary Johnson VP, Project Management Frank Sisser VP, Publishing Deborah Hopp VP, Digital Director Kevin Dunn

Credit Manager Dave Gschlecht Assistant Network Administrator Office Manager Amy Coulombe Josh Krouze Senior Accountant Anne McPhillips Audience Development Director The Sign of a Administrative Assistant Patty Mikres Bea Jaeger Production Manager Tim Dallum Audience Intelligence Director Great Conversation? Production Supervisor Paul Marihart Linda Holm Production Associate Allison Cook Fulfillment Coordinator Digital Prepress Group Valerie Asante > Steve Mathewson Audience Development Manager When one cup isn’t enough. > Bill Sympson Carin Russell Production Assistant J.J. Jaworski Audience Development Assistant Senior Web Developer David Waters Anna Buresh Great business relationships are not born overnight. They are Web Developer Ricky Hannigan Creative Marketing Group Mobile Application & E-Newsletter > Katie Shaw built on a level of trust that comes through a mutual understanding Developer Lauri Loveridge > Janice Hamilton of goals and objectives. Your CPA firm should know you and Network Administrator Steve Swanson > Joy Wagner your business, provide year-round attention, and adapt to meet your needs. So how do you find that relationship? Contact Us The conversation starts here. To subscribe > tcbmag.com/subscribe > [email protected] > 612-339-7571 To change an address or renew > tcbmag.com/myaccount 651-255-9327 | [email protected] > [email protected] > 612-339-7571 For back issues or missing issues > [email protected] > 612-339-7571 For reprints, PDFs > [email protected] > 612-373-9584 For permission to copy > [email protected] > 612-336-9299 To make event reservations > [email protected] > 612-373-9584 To advertise > see account executive listings > or contact [email protected] > 612-373-9584 To submit a press release > [email protected] To pitch a story > see editorial staff listings or contact [email protected] > 612-336-9299

55 Fifth Street East, Suite 1400, St. Paul, MN 55101 | www.redpathcpas.com ©2017 Redpath and Company, Ltd. All Rights Reserved. Twin Cities Business is a publication of MSP Communications 220 S. 6th St., Suite 500, Minneapolis, MN 55402-4507 612-339-7571, fax 612-336-9220

4 TWIN CITIES BUSINESS tcbmag.com SEPTEMBER 2017 SPONSORED

“Trade organizations in the Minneapolis–St. Exporting Paul area function as a collaborative team with the services made available to companies like CMD. I’ve worked in Colorado and Tennessee Excellence and I’ve never experienced anything like this before,” says Burdorf. “If a business in Minnesota businesses can grow Minnesota isn’t getting exposed to or taking advantage of the services available, they are and prosper by getting engaged really missing out.” with global trade Assistance includes helping companies identify potential customers, making introductions, The engineers who started Catheter & Medical paving the way to participate at international Design, Inc., (CMD) sought the American trade shows, or providing financial assistance. Steve Burdorf, President at CMD Dream, aiming to design, develop, and Burdorf was introduced to all of these through manufacture medical devices for clients. It GREATER MSP, a public-private partnership Often, exporting happens organically, like it didn’t take long after its 2005 start-up that serving a 16-county region. did for CMD. Former co-workers and clients customers around the world came calling. reached out to company founders to see if The Roseville company jumped at these “If a business in Minnesota CMD could meet their medical device design chances and built on them, revving growth or prototyping needs. This type of entrée to and expanding into new specialties. Making isn’t getting exposed to or exporting can be effective, but vetting is still catheters, braided and coiled reinforced taking advantage of the important to make sure the business serves tubing, and guiding and implement delivery the company’s overall goals and objectives for systems for the cardiovascular, neurological, services available, they are export growth. and other minimally invasive surgery markets, really missing out.” 3) Build a Culture and a Team CMD exports its products to customers in eight countries in Europe, Asia, and South America. For example, it’s often difficult to vet start-ups A strong and engaged team is vital to foster and maintain relationships with international Today CMD has nearly 100 employees and in other countries to make sure they will make customers. That can mean adjusting their a strong roster of clients from start-ups to good on their promises. The Export-Import schedules so they can consult with clients well-established medical device companies. Bank helped CMD with due diligence, and it during European or Asian working hours, It partners with clients around the world to also offers risk insurance or loan guarantees to Burdorf says. develop custom catheters that they, in turn, provide confidence in selling abroad. Recently CMD participated in a shared trade show booth sell to their customers. Exports make up “To work internationally, it’s got be in your in China, coordinated by the U.S. Commercial about 37 percent of CMD’s revenue, fueling company’s DNA to be focused on these Service, whose representatives also helped significant creative design work and product customers and working with their ideas,” he set up meetings. Small businesses often have innovation. adds. “I’ve learned that having a culture of trouble footing the full cost of participating in focus on service, diverse experiences, and Company president Steven Burdorf is proud an international trade show, but group booths team alignment on vision is paramount. It goes of these results, and notes that any other make it tenable, and the Minnesota Trade a long way toward creating comfort with people Minnesota business could grow steadily Office even has a grant program to help small in other countries.” through global sales, too. He offers this advice businesses offset export development costs. to business leaders who are considering CMD has benefitted enormously from launching international sales. 2) Make a Plan exporting. Sales grew faster than anticipated, it branched into new lines of business, and was 1) Take Advantage of Resources It’s important to be strategic when it comes to laddering into global business. Going after exposed to creative thinking and ideas from Minnesota offers businesses a wealth of exporting without a plan often leads to wasted engineers and medical device manufacturers advice, resources, and assistance to help effort. Burdorf suggests developing a strategy around the world. them be smart and successful with exporting. for exporting, essentially writing a business Companies in many other industries—from Organizations at the regional, state or federal plan for approaching international sales. Do machinery to technology to food—also can level, guide companies through the challenges market research to determine what countries thrive by selling their goods and services and opportunities of global trade. Burdorf, who would be receptive to the company’s products, abroad. Achieving export success will be has worked in other states, notes that agencies identify competitors, detail pricing, then staff easier if they make use of the many resources in Minnesota are especially enthusiastic and up with people who can execute this plan. available to assist them. helpful with global trade matters.

® Jennifer Erickson Contact GREATER MSP for a free export Export Development Manager assessment and information on resources 651-287-1360 available to help you grow international sales. [email protected] This initiative is supported by www.greatermsp.org/exports Creating Local Talent We’re working on it in Minnesota, but we can still learn more from other states, and countries.

e hear frequently that the biggest challenge Minnesota is inching down this road. Two years ago, EDITOR’S NOTE facing Minnesota businesses is finding enough the state received a $5 million grant from the U.S. Dept. of By Dale Kurschner qualified talent, and the typical takeaway is Labor to expand registered apprenticeships as a workforce Wthat we have to improve recruitment from other states. development tool in five industries: advanced manufactur- We also hear about the need to improve graduation rates ing, agriculture, health care services, information technology and college readiness, especially in urban districts. Thousands and transportation. The five-year program aims to help of kids in this state are not graduating from high school, and more than 100 employers develop apprenticeships that can those who do often don’t know enough to meet job qualifica- recruit, train and retain 1,000 “21st-century highly skilled” tions or cannot afford to continue their schooling. employees in 30 occupations. Grants of up to $5,000 are Then there’s connecting the two: Improving K-12 educa- awarded to employers to help defray costs associated with tion and access to post-secondary education would produce establishing registered apprenticeship programs. more qualified talent. Rather than recruit, we could grow Then there’s paying for college. Earlier this year, New more talented employees—by the thousands. York became the first state to make public colleges and uni- Progress is being made on this front, but it’s not being versities tuition-free for low- and middle-income students. It tracked because it’s occurring in more than a dozen separate, requires that students remain in the state after college for the small-scale initiatives, ranging from improving middle- same period of time they benefitted from free tuition. If they school readiness among fourth- and fifth- don’t, their free tuition will be converted to college loans. graders to funding two-year college tuition for New York’s decision to cover tuition at all public colleges and low-income high school graduates. universities follows pledges to make community college free There’s also progress being made within in Chicago and San Francisco, and Oregon and Tennessee. Minneapolis Public Schools (MPS). When Minnesota is nowhere near this stage. Scholarships and I last wrote about this subject in 2013, only other funding sources help students here and there, but half of MPS’ 32,263 students were expected not nearly enough to meet demand. There is, however, a to graduate within four years, and only half remarkably innovative concept starting up this fall at the of those, or about 8,000, were expected to be University of St. Thomas. ready to attend a two- or four-year college, About one month ago I had the great pleasure of spend- based on 2012 results. The numbers improved ing time with two high school students taking part in a a little when kids spent six years in high school, summer camp sponsored by ThreeSixty Journalism. It’s a but not by much. nonprofit program at St. Thomas that helps high school kids At that time, I wrote, “From an economic develop strong writing skills, and more importantly, learn perspective, what if we could flip things how to be inquisitive and ask good questions. around, so that at least three-quarters of these Their assignment was to write about what St. Thomas students—roughly 24,000 kids—graduate and are ready is doing, so I learned about this courtesy of their work. for college? In other words, how can we do a better job of The university has developed a two-year associate’s degree cultivating our workforce of tomorrow?” program offered to low-income students. It’s urban in na- Today, about 67 percent of the school system’s 35,717 ture—students will spend time on campus during the day or students are expected to graduate in four years, based on evening, and return to their homes each night—no dorms. 2016 results. That’s 7,000 more high school graduates and All annual expenses, including daytime meals, are paid up to potential workers in jobs that don’t require a college or tech- $1,000 per year, courtesy of a $22 million endowment from school education. For jobs that do, this growth in high school the Dougherty family. Students in this program also will graduation rates could translate to about 4,000 more quali- have access to everything four-year students have, including fied workers once they’re out of post-secondary education. on-campus activities. More work is needed here, but there’s positive movement. This is the best example I’ve seen thus far of a Twin Cit- There’s also the refreshing change in focus toward work- ies business leader (Mike Dougherty) investing money in an place-readiness instead of college-readiness. One way this is initiative that can help reduce our achievement gap between manifesting itself is through an increase in apprenticeships. affluent students and lower-income students, who are often They’ve long been popular in European countries, which people of color. also rank among the best in the world for education. In There are more examples, but I’m out of space. Perhaps Switzerland, about 75 percent of 15- to 17-year-old students in the future, someone will develop a way to connect all of enter three- or four-year apprenticeships. Nearly 40 percent of these programs, or at least list them in one place for business the companies in that country sponsor those apprenticeships, leaders, legislators and parents to better understand what’s while the schools recognize students’ time as applied learn- working, and where Minnesota could still improve. tcbmag ing, and the credits not only help students finish high school, but can also be applied toward an associate’s degree. Students graduate with no debt and starting salaries of nearly $55,000.

6 TWIN CITIES BUSINESS tcbmag.com SEPTEMBER 2017 Concierge-style banking for your personal and business needs. NOW SERVING THE TWIN CITIES.

Call (866) 804-3538 to learn more. cnb.com/TCBusiness

Stuck in Neutral? he city of St. Paul has been planning for the redevelopment of the former Ford plant for Ford site redevelopment nowhere more than a decade. Outgoing Mayor Chris Coleman reckons he has attended “hundreds” near getting started. of meetings over the years about the 122-acre site. The city’s website details 14 different professional studies of the property from 2007 to 2016, analyzing development concepts, transportation, jobs, storm water management and other issues. But even under a best-case scenario, construction of new housing units, commercial buildings and Big green space on the site remains years away. Dearborn, Mich.-based Ford Motor Co. still owns the site; News the factory ceased operation in 2011. According to the city’s timeline, infrastructure development won’t start until 2020 or 2021. The 2017 Sun Country Airlines draft of the Ford Site Zoning and Public Realm Master Plan estimates has replaced its CEO, that it will take 12 to 20 years to build out the entire site. Zarir Erani, with former The master plan draft outlines the project’s vast scope: 2,400 Allegiant Air executive to 4,000 new units of housing, 150,000 to 300,000 square feet of Jude Bricker. Allegiant retail space, and 200,000 to 450,000 square feet of office space. specializes in selling As environmental cleanup of the site winds down, Ford plans vacation packages to to put the property up for sale in 2018, says Dawn Booker, a sunny destinations from spokeswoman for the Ford Land real estate division. small air markets. It will be important to strike a balance between the city’s vision and what the market will support on the site, says Pat Mascia, who led the Twin Cities office of Indianapolis-based Duke Realty Corp. Holiday Stationstores, for 10 years. (Mascia is now an attorney and shareholder with the privately held, Minneapolis-based Briggs and Morgan.) Erickson-family owned Mascia notes that the lack of freeway access at the Ford operator of gas and site may be a concern for potential office and retail tenants. That convenience stores, was could mean it would attract less commercial space than the city sold to Montreal-based currently envisions. Alimentation Couche- As the city inches towards redevelopment, some Highland Park Tard, operator of Circle K residents are raising strong objections. The Neighbors for a Livable convenience stores, and St. Paul group is concerned that the large number of potential new one of North America’s housing units will create a “mini-metropolis,” bring big increases in largest fuel sellers. traffic and hurt livability.

Ford site concept drawings created “The reason we have community processes is so that we can by the city of St. Paul. hear those concerns . . . . We’re never going to satisfy everyone,” says Coleman, who, after three UnitedHealth Group terms as mayor, is running for governor in 2018. “The best development is going to be one that earned $50 billion in Q2 maximizes the site and integrates into the surrounding neighborhood.” —Burl Gilyard revenue, the best quarter in the company’s history.

8 TWIN CITIES BUSINESS tcbmag.com SEPTEMBER 2017 Border Run Nearly three million international visitors is a lot. How does MOA count them?

For many tourists visiting Minnesota, the Mall of America tops the bucket list. It’s long been described by its operators as the most popular destination in the Midwest, responsible for 40 million visitors per year, more than double the number who visit Disneyland, for example. If that stat boggles the mind, consider that the mall says it supports nearly six times the overseas visitation of the state of Minnesota. Huh? According to the U.S. Department of Commerce’s Survey of International Air Travelers, 311,000 international travelers visited the state in 2015 (excluding Canadians). MOA counts 1.8 million overseas visits in 2015, the last year for which data was available. Add in Canada and Mexico and the number is 2.8 million, according to MOA’s Doug Killian. If the federal data is accurate (it is not a hard count, but a survey of outbound air travelers whose data is then extrapolated), and half of Minnesota’s international visitors go to MOA, they would need to visit between 11 and 12 times to reach 1.8 million visits. If all international tourists visit the Mall, they’d need to average nearly six trips per person. Can that even be possible? In context, the numbers make somewhat more sense. MOA’s stats are based on demographic data from credit card sales at five MOA-owned stores, plus info from consumer research firm OgilvyRed. More significantly, the mall counts visits, not visitors, according to its vice-president of communications, Dan Jasper. Confused by the dissonance, TCB turned to an expert. “Counting international visitors at particular sites is difficult to do,” says Bill Gartner, professor of applied economics and a fellow at the University of Minnesota’s International Academy for the Study of Tourism. “What we find is that methods outside of primary data collection (i.e. interviews) can be subject to error. But they sometimes provide site managers with [data about] customer origin.” Gartner stressed he could not comment on MOA’s data without first-hand access to the mall’s process. If MOA’s estimates could be proven reliable, one thing is clear: Don’t be offended when a foreign tourist bumps into you there. Odds are they are exhausted. —Emily Sweeney

SEPTEMBER 2017 tcbmag.com TWIN CITIES BUSINESS 9 STARTERS

Rising Demand, Falling Occupancy After a big influx of hotel rooms in downtown Minneapolis, bookings are up, but many rooms still sit empty.

The hotel building boom in downtown below June 2016. Minneapolis has resulted in falling Occupancy rates vary greatly in Downtown Mpls. Hotel Occupancy hotel occupancies for the first half of this downtown Minneapolis, rising substantially After a major boost in room inventory,hotel occupancy in downtown Minneapolis year. “Supply right now exceeds demand, in the summer months. However, data and the U of M dropped in five of the first six months of 2017.H otel bookings were up even though demand is still growing,” says collected for Meet Minneapolis shows that each month over 2016 but the new inventory pushed occupancy rates down. Kevin Hanstad, director of market research demand is adapting to the new supply as the and public policy for Meet Minneapolis, the number of rooms occupied rises year over city’s convention and visitors association. year each month. For example, total room In just 12 months, 1,142 hotel rooms nights were 203,039 in June compared with were added to the market in downtown 179,173 in June 2016. Minneapolis and the University of Minnesota Hanstad says hotel managers are area, boosting inventory 15 percent to 8,549 concerned about the slide in occupancy, but rooms. “For a while, our occupancy will be “not distressed.” declining as we absorb that new inventory,” Brent Foerster, senior vice president of Hanstad tells TCB. destination sales for Meet Minneapolis, says For January through June, the a pattern has emerged: “[Existing hotels] occupancy rate was 66.1 percent, down 6.5 closer to new hotels and with a primary percentage points from the 2016 period. But target market of business and leisure travel the gap was much smaller in June, when are seeing the largest year-over-year occupancy hit 79 percent or just 2 points occupancy declines.”

Set big goals. We’ll help you achieve them. We blend a full suite of loans, leases and lines of credit with the proven advice of experienced professionals who will be with you every step of the way. Turn your dream into a reality by contacting a banker today at AnchorLink.com.

FINANCING | CASH MANAGEMENT | SBA | MORTGAGE | PRIVATE BANKING

Ad_Print_TCBiz_BigDreams_01_2016.indd 1 1/13/2016 1:16:30 PM

10 TWIN CITIES BUSINESS tcbmag.com SEPTEMBER 2017 Top Cities for College Grad Salaries San Francisco $62,829 Greater competition is affecting what Degree Inflation customers are paying for hotel rooms. For Salaries soar for local college grads. New York $60,190 the January to June period, the average Los Angeles $55,709 daily rate dropped 2.4 percent, to $145.24, Recent college graduates can sleep a little better knowing compared with the previous year. Revenue that their salaries have not only hit an all-time high, but that Chicago $54,515 per available room—which reflects the the average grad salary in the Twin Cities is 6 percent higher than Minneapolis/St. Paul $53,121 lower occupancy rate—had a steeper drop the national average, says a Korn Ferry analysis released in May. Dallas $50,084 of 8.7 percent, to $95.99. And it gets better: “Higher earnings tend to stay with grads during Meet Minneapolis increased its sales their entire careers,” says Alan Benson, an assistant professor at Atlanta $49,038 SOURCE: KORN FERRY staff three years ago to bolster market the University of Minnesota Carlson School of Management. demand for hotel rooms, including targeted On average, 2017 college grads in the metro area will make Cities as well as nationally were STEM careers. The highest-paying marketing for sports and religious events $53,121 annually compared with the national average of $49,785 position was software developer, with an average base salary in and short-term small meetings. Foerster (up 3 percent from 2016), according to the report, which included the Twin Cities of nearly $70,000, followed by engineer ($67,259), says those efforts are paying off, because data from 25 of 145,000 entry-level positions analyzed. actuary ($63,179) and scientist/researcher ($62, 711). demand for guest rooms in the city is up One explanation for the higher-than-average salary is that the Twin Cities salaries also fare well compared to other large 8.1 percent—much higher than the national Twin Cities has a diverse industry mix, which has helped create metro areas. Of the seven major U.S. regions analyzed, Minneapolis- average of 2.5 percent. strong earnings growth and low unemployment rates, plus a St. Paul ranked fifth, beating Dallas and Atlanta. San Francisco, New “Our sales and marketing efforts most number of large corporate headquarters, says Benson, who adds York, Los Angeles and Chicago had the highest average college grad affect the group and leisure markets,” that the Twin Cities “is one of the top 10 metro areas for residents salaries. Foerster says. “They do not have much with bachelor’s degrees.” “The demand for college [grads] is increasing because direct effect on the business travel market, “The need for STEM talent has also gone through the roof,” says companies are realizing this is their new [customer] demographic,” which represents about 40 to 50 percent of Troy Steece, project manager at Korn Ferry Futurestep. “And the says Steece. “Companies want to target younger consumers hotel room nights in the city.” race to attract the best talent is driving up salaries.” Of the 25 jobs because they will be around longer. And who knows how to target —Liz Fedor represented in the snapshot, the four highest-paying jobs in the Twin young consumers? Younger generations.” —Kate LeRette

Be the office hero.

With Marco’s Managed Print Services, you don’t need a cape to save the day. Not with our technolo-geniuses saving you up to 30% in printing costs! Find out how our Managed Print Services can make you an office legend. marconet.com

business IT // managed services // cloud services // copiers & printers

SEPTEMBER 2017 tcbmag.com TWIN CITIES BUSINESS 11 We gave him a new cell phone STARTERS He thought stealing from a construction site would be easy. HE WAS WRONG! Demise of the Health Care Mascot A video-veriﬁ ed alarm is considered a crime in progress. Once detected, a video clip is sent to our monitoring station for dispatch. An offbeat marketing tactic by local health care players is no more. No false alarms, easy installation, free surveys! VIDEO-VERIFIED OUTDOOR SECURITY SOLUTIONS Over the past decade, at is not merely a logo, mascot, campaign least two Minnesota health- idea or cartoon character,” says Danielle

• SECURITY related organizations—Medtronic and Swanson, spokeswoman for the medical SYSTEMS • UL HealthPartners—took an alternative device maker. “Rather, he plays a strategic TM MONITORING TOTAL SECURITY • ACCESS approach to consumer engagement: role in how Medtronic supports the diabetes 9036 Grand Avenue South • Bloomington, MN 55420 CONTROL (952) 881-5625 Metro • (888) 469-5625 Toll Free • CCTV “spokescreatures.” community, especially the 0-12 age group.” ﬂ o ydtotalsecurity.com SYSTEMS • LOCKSMITH First to arrive, in 2008, was Lenny’s highest-profile campaigns involved “LET FLOYD STAND WATCH FOR YOU” SERVICES HealthPartners’ Petey P. Cup, an a smartphone app called Carb Counting, anthropomorphic urine sample, with a with a YouTube video contest about diabetes needle-shaped sidekick, Pokey Syringe. At management and insulin pumps. The 9-17 TCB Floyd.indd 1 8/2/17 2:18 PM parades, Saints baseball games and other winner won a trip to Disneyland. CONNECT WITH US events held by the Bloomington-based Health care mascots apparently did insurance and care provider, “the mascots not have the popularity or staying power FOR YOUR DAILY DOSE OF MINNESOTA BUSINESS NEWS were a hit,” says Vince Rivard, senior of erectile dysfunction meds. Notably, both director of communications. “They were Petey and Pokey were retired within a few unique and fun, which resulted in millions years; Lenny has been inactive for just as FACEBOOK TWITTER of impressions on social and news media, long. “Healthcare marketing is strongly facebook.com/twincitiesbusiness @TCBmag including a mention on the Today show.” evidence based—you sell the clinical The break from traditional evidence much more than the image,” advertising and customer outreach had says Kathleen Motzenbecker, senior vice two goals: to differentiate HealthPartners president of Golden Valley-based Medical brand and, chiefly, to encourage patients Alley Association. “In more consumer- to sign up for online services. driven health care markets, a mascot Medtronic’s mascot, Lenny the Lion, could make sense,” she adds, “but when was spawned in Europe in 2006 and the audience are clinicians, evidence is 10-13 TCB Social Media 1.indd 1 8/28/13 10:33:35 AM made its way to America in 2010. “Lenny what matters.” —Sam Schaust

Meet Petey P. Cup the Mascots n Born: Bloomington, Minn., April 8, 2008 n Enjoys helping with lab tests such as urinalysis and drug testing n Likes listening to Coldplay, “chilling at the clinic” and watching Grey’s Anatomy and ER

Pokey Syringe Reap the n Born: Bloomington, Minn., May 27, 2008 n Enjoys giving immunizations and drawing samples n Hobbies include running, watching House and (re)wards American Idol, and going out to live comedy shows (because “poking fun at people is great!”) of a multigenerationalworkforce Lenny the Lion Maturity. Judgment. Work ethic. This is the n Foreign-born, around 2006 value experienced workers can bring to your n Diagnosed with Type 1 diabetes in 2006 workforce. When younger and older employees n Loves all kinds of foods, work together, everyone is more productive. including vegetables, bread, Learn more at aarp.org/postjobs fruit juice and even cake (but only if he remembers to count his carbs and bolus properly)

12 TWIN CITIES BUSINESS tcbmag.com SEPTEMBER 2017 THE MONTH’S BEST CHOICES FOR VIP GUESTS, NETWORKING AND ENTERTAINMENT

CONCIERGE ong before the word “heritage” became hip and “North” became a brand attribute, retailers like Faribault Woolen Mill, Red Wing Shoes, Nordic Ware and other brands have quietly been putting Minnesota on the retail map for more than a century. While The Wall Street Journal, the New York Times and other publications Retail Road Trips have attempted to capture the quintessence of Minnesota’s distinctive retail On a beautiful autumn day, culture, it can only be truly understood with a pilgrimage to a flagship company store or honest-to- take out-of-town clients goodness factory outlet. Here are some of our favorite Minnesota-made retail destinations that will Minnesota Peak on a memorable trip send your clients home with distinctive gifts and keepsakes. Autum Color to an authentic Minnesota company store. Faribault Woolen Mill North Second-half of Clients who are intrigued by strategic turnaround stories will September enjoy a visit to the Faribault Woolen Mill (faribaultmill.com), FARMERS ALMANAC FARMERS one of the last remaining vertical woolen mills in the U.S. As South you drive south on I-35, you can explain how the 150-year old First-half of mill was rescued from bankruptcy in 2011. When you arrive, October pay homage to the trusty Cannon River, which still powers the mill, and visit the company store, where you’ll find distinctive handwoven blankets, throws, linens and other products.

Red Wing Shoes If your out-of-town clients have never ventured beyond the Twin Cities, head downriver to Red Wing, a picturesque drive an hour from downtown St. Paul. At the Red Wing Shoes flagship store (redwingshoes.com) on Main Street, tour the company museum. Learn how this innovative 110-year-old company now produces 5,000 pairs of handmade boots in Red Wing every day The Bundt pan for distribution in 100 countries around the world. Before you leave, score a pair of urbane was introduced in 1950. Beckman Chukka boots in polished teak or black.

J. W. Hulme Connoisseurs of handcrafted goods will enjoy the J.W. Hulme flagship store (jwhulmeco.com) in St. Paul. Founded in 1905, the company was acquired in 2008, shifted its focus from private label manufacturing and reinvented itself as a purveyor of luxurious branded products. While the merchandise mix has evolved to include rolling suitcases, iPhone and iPad cases, wine totes, and other modern must-haves, Hulme’s talented artisans still use time-honored techniques in the company’s St. Paul workshop.

Nordic Ware With Thanksgiving, St. Lucia’s Day and other seasonal celebrations just around the corner, a visit to the Nordic Ware factory store (nordicware.com) in St. Louis Park is a timely addition to any business trip. Founded in 1946 by an enterprising housewife and her husband, the kitchenware, cookware, and bakeware company, still family owned, became world-famous in 1966 when its signature Bundt pan helped a Texas baker take second place in the Pillsbury Bake-Off with her Tunnel of Fudge cake. Since then, Nordic Ware has sold more than 70 million of the distinctively shaped pans. —Melinda Nelson

SEPTEMBER 2017 tcbmag.com TWIN CITIES BUSINESS 13 BUSINESS LIVING | A&E

Eyewitness Views: Making The Nether News in 18th-century Europe n A hit in London’s West End, playwright n Before photography and video Jennifer Haley’s The Nether plumbs the saturated the news stream, those who murky ethical depths of virtual reality as wanted a visual depiction of current the distinctions between our actual and events had to rely on the skills of electronic worlds disappear. Framed as a so-called “view” artists—painters who sci-fi thriller, the play follows a detective observed and recorded historical events who is investigating a disturbing form of and scenes on canvas. The Minneapolis virtual entertainment involving children Institute of Art’s big fall exhibit features and the basest of human desires, raising 50 works of art from such famous view painters as Canaletto, Bellotto, Panini and Guardi, all kinds of questions about what should many of which are being shown in the U.S. for the first time. and shouldn’t be forbidden in the realm of virtual fantasy. Sept. 10-Dec. 31, Minneapolis Institute of Art, 612-642-2787, artsmia.org Sept. 16-Oct. 15, The Jungle Theater, Mpls., 612-822-7063, jungletheater.org TajMo: The Taj Mahal and Keb’ Mo’ Band Watch on the Rhine n Recently, blues legends Taj Mahal and Keb’ Mo’ joined forces to record an album, TajMo, n Published in 1941, in the middle of World War II, Lillian which they are now supporting with a major tour. If upbeat blues tinged with world music Hellman’s nuanced examination of the responsibilities of and gospel is in your wheelhouse, this concert is not to be missed. The term “TajMo” sums patriotism and the consequences of betrayal has been making up the amazing degree to which these a comeback for its perceived relevance to the increasingly two blues giants complement each other, tenuous politics of disruption unfolding today. Nazism is at the especially with a crackerjack band that center of the action, to be sure, but the genius of her play is includes two of Taj Mahal’s daughters as that it distills a globe full of angst into the small world of an back-up singers. Reviews from early in the average American family. tour called the evening “two solid hours of Sept. 30-Nov. 5., Guthrie Theater, Mpls., 612-377-2224, unmitigated joy.” guthrietheater.org Sept. 6, State Theatre, Mpls., 612-339-7007, —Tad Simons hennepintheatretrust.org

We’re up to speed, so you can go full speed.

SEE CHALLENGES BEFORE THEY’RE CHALLENGING. To make confident decisions about the future, middle market leaders need a different kind of advisor. One who starts by understanding where you want to go and then brings the ideas and insights of an experienced global team to help get you there. Experience the power of being understood. Experience RSM. rsmus.com

RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax and consulting firms. Visit rsmus.com/aboutus for more information regarding RSM US LLP and RSM International.

14 TWIN CITIES BUSINESS tcbmag.com SEPTEMBER 2017 BUSINESS LIVING | BEYOND THESE PAGES

Savings Targeted for ADAM BETTCHER PHOTOGRAPHY ADAM BETTCHER 2017 Manufacturing Forum Join Twin Cities Business on September 26 at the Nicollet Island Pavilion to learn how leaders at four manufacturing companies are handling uncertainties over labor and immigration reform, foreign trade policy and cyber-security threats in their businesses. They will also discuss corporate growth initiatives, R&D goals and smart innovations. Panelists are Eric Gibson, president, Ultra Machining Co.; Tom Schabel, CEO, Alexandria Industries; Joan Schatz, co-president, Park Industries; and Jon Wikstrom, president and CEO, Cool Clean Technologies.

Aim to save with rebates Natural gas equipment rebates help you save with Today’s News better efﬁ ciency and an improved bottom line. Statewide news and perspectives on business-related expansions, shakeups, successes, wrongdoings and more. Rebate savings include: Go online to: tcbmag.com • Boiler systems and boiler system components • Boiler tune-ups • Steam trap repair/replacements • Condensing unit heaters E-newsletters • Forced-air furnaces Catch the latest business news—and explore what it means—every Tuesday and • Infrared heaters Thursday inBriefcase. Our monthly Minnesota small business e-newsletter,Headway , • Energy recovery wheels and plates provides features, tips and insights for small businesses across the state. • Condensing water heaters To sign up, go online to: tcbmag.com/E-Newsletters • Pipe insulation • Foodservice equipment • Industrial process equipment • And more! On the Air Not sure where to start? Have a Natural Gas Energy Tune in to 830 WCCO-AM every Monday at 10:35 a.m. to hear TCB’s take on Analysis completed on your facility. the week’s top business and economic news and trends, and KARE 11 every Wednesday at 5 p.m. and Thursday at 11 a.m. for perspective on the state’s most Visit CenterPointEnergy.com/EnergySavings significant business developments. or call our Business Customer Hotline at Go online to: kare11.tv/2gVzLvo 612-321-4939 (877-809-3803) for complete details.

Social Media Join us as we engage with others through… Twitter: @TCBmag Facebook: facebook.com/twincitiesbusiness LinkedIn: linkedin.com/company/twin-cities-business YouTube: tcbmagvideos ©2017 CenterPoint Energy 174893

SEPTEMBER 2017 tcbmag.com TWIN CITIES BUSINESS 15 BUSINESS LIVING | PLUGGED IN HINKLEY PHOTOGRAPHY

TeamWomenMN Networking Lunch Film Fest Preview Gala Amy Langer, co-founder of Salo, LLC, a professional The Twin Cities Film Fest will unveil the top films and services company, is featured to speak about execu- guests of October’s festival at this year’s annual gala. tive leadership. Langer will address how she juggled Actress Lea Thompson was presented with the lifetime raising her children while growing a business. 11:30 achievement award as part of last year’s celebration. a.m., $25-$40, Golden Valley Country Club, 952-525- There will be a reception, dinner and program.6 p.m., 2236, teamwomenmn.org $40-$150, Metropolitan Ballroom, Golden Valley, 612-615- SEPTEMBER 6 7 8233, twincitiesfilmfest.org/Gala

SHINE BRIGHT FOR KIDS IN SEPTEMBER

As the largest provider of pediatric cancer care in the Twin Cities, Children’s Minnesota invites you to join our local business partners in giving to Cancer Kids Fund throughout the month of September.

1st Choice Pediatric Great Clips Murphy Warehouse Affinity Plus Credit Magenic Prime Therapeutics Union Technologies, Inc. RBC Wealth Agra Culture Kitchen Memorial Blood Management Centers Alerus Mortgage SotaRol Mill City Running Crisp & Green U.S. Bank MSP Construction Delta Air Lines Yogurt Lab

Learn more at childrensMN.org/ShineBrightforKids

16 TWIN CITIES BUSINESS tcbmag.com SEPTEMBER 2017 Richard Anderson Mary Brainerd Richard Davis Twin Cities Business CEO Forum 19Join TCB for a panel discussion spotlighting three well-known CEOs who will discuss their careers, challenges in their industries and the U.S. and Minnesota economies. Panelists are Richard Anderson, president and co-CEO of Amtrak and former CEO of Delta and Northwest airlines; Mary Brainerd, former CEO of HealthPartners, and Richard Davis, former CEO of Women in U.S. Bancorp. Networking and a cocktail reception will follow the discussion. 4 p.m., $60, Networking Breakfast Metropolitan Ballroom, Golden Valley, 612-336-9288, tcbmag.com/CEO17 The breakfast event celebrates the 110th anniversary of the Woman’s Club and the 15th anniversary of Women in Network- Human Resource Essentials ing. Owners of Urban Growler, the first This St. Paul Area Chamber of Com- woman-owned microbrewery in Minne- merce event features attorneys Kathy sota, will speak about the challenges they Harrell-Latham and Veena Iyer and HR 14 faced and steps they took to success. 7:30 professionals Sara Martin and Sara a.m., $34-$59, Woman’s Club of Minneapo- Lebens. They will address financial, legal lis, 612-708-6001, mnwin.org and talent recruitment issues. 7:30 a.m., $20-$30, Radisson Hotel, Roseville, 651- 21 223-5000, saintpaulchamber.com

—Emily Sweeney

Technology doesn’t change the world. People do.

Behind every smart piece of software, powerful processor or clever line of code is an even more brilliant person. Innovation starts with people, and people start with us. Backed by more than 65 years of experience, we’re the stafﬁ ng expert to call for highly skilled technology talent. Innovation starts with people

Minneapolis • Bloomington 855.548.9774

roberthalf.com/minneapolis-st-paul

SEPTEMBER 2017 tcbmag.com TWIN CITIES BUSINESS 17 THE INNOVATIVE, FAST-PACED WORLD OF EMERGING BUSINESSES. | BY KATE LERETTE

No Credit, onsumers have historically used credit cards to build their credit, but for some, Startup News that method has proven more detrimental than helpful. Identifying the need for No Problem an alternative method, Matt Briggs launched RentTrack in 2014, giving residents Minneapolis-based health How one startup is helping residents the option to build their credit history through rent payments. benefit services startup build credit through rent payments. Based in St. Louis Park, RentTrack is an online payment platform that renters Gravie Inc. secured $14.1 can use to securely pay their rent while building their credit history. It’s the first and million in Series C funding, which it will use for marketing only company to report rent payments to all three major credit bureaus (Experian, and product development. TransUnion and Equifax). The idea for the company was developed based on the belief that renters should Maple Grove med-tech receive the same benefit as mortgage holders by getting credit for paying their rent firmAmphora Medical raised $35.5 million in on time. “Rent, which is typically the largest expenditure, has only shown up [on your Series B funding to pay credit report] if you don’t pay it,” says Briggs, co-founder and CEO. “And that just for a study for its Selective doesn’t make sense.” Bladder Denervation System in women with overactive Those interested in using RentTrack’s platform sign up, verify their identity, schedule a bladders. payment and select which bureaus they want their payments reported to. If residents are not interested in having their rent payments reported, they can simply use the platform to Bind, a Minneapolis-based on-demand health insurance just pay rent, which can be paid by debit, credit or directly from their bank account. company, closed on $2.5 “It’s a tremendous benefit for property managers because there is an incentive for million in its latest round of renters to pay rent,” says Briggs. “We’ve seen less late payments across the board, funding. and landlords have seen an increase in electronic payments.” Minneapolis-based data The benefits are twofold. The average credit score has increased by 30 points, management provider according to Briggs, and for those in the credit-challenged category, scores have Atavium Inc. closed on an oversubscribed $8.65 Company: increased by 40-plus points. million Series A funding While there is no fee to sign up for the service, there is a technology fee RentTrack RentTrack round. charges to process each payment. The cost varies based on the payment amount and method. “Our fees are very transparent, so consumers know what the cost is up front,” Minneapolis agtech venture raised Founded: says Briggs. Property managers can also opt to pay those fees for their tenants. Conservis $9.5 million in debt financing. 2014 In addition to processing rental payments, RentTrack can accept rental applications for property managers and landlords, process application, deposit and homeowner Minnesota companies raised $241 million in venture Location: association (HOA) fees, process utility and roommate payments, and screen potential capital in the second quarter St. Louis Park tenants. The company is piloting a service to report utility and HOA fee payments to of 2017. (Source: MHTA) credit bureaus, which Briggs expects to launch later this year. RentTrack has more than 1 million rental units in its system today, and will process Industry: more than $500 million in rent payments this year, with a goal of $1 billion next year. Technology “From May to June we have grown 23 percent month over month,” says Briggs. And earlier this year, RentTrack launched in Canada. To keep up with the growth, Briggs says the company is expecting to double its staff in the Twin Cities in the next year. RentTrack currently has about 20 employees in the metro, and about 10 employees in its Santa Barbara, Calif., office, where it does most of its engineering and development. Despite its recent expansion, Briggs says the company headquarters will remain in the Twin Cities.

18 TWIN CITIES BUSINESS tcbmag.com SEPTEMBER 2017 THE 2017 A Sound Way to Reduce Snoring

digital health startup spun off from MN CUP A University of Minnesota research aims to help users of its smartphone app sleep better, Company: through a series of voice-controlled games Soundly designed to reduce snoring. Co-founded last year by a trio of U GRAND PRIZE researchers, including a sleep health physician, Founded: Soundly is expected to launch this fall. The trio is 2016 calling the app a digital health solution to chronic snoring, a condition that has proven hard to treat WINNER IS... Location: because many sufferers won’t use the current Minneapolis method for treating snoring and sleep apnea, which involves wearing a mask connected to an The 13th annual MN Cup results will Industry: air compressor. “We have shown through clinical research be announced on October 9th and over Technology at the university that we are effective at reducing $450,000 in prize money will be presented snoring, and we’re completely unique in that we’re to the winners! To attend and learn an app—we’re not a device,” says co-founder Brian Krohn. “What we do is treat the root cause more visit us at mncup.org of snoring and help the body reduce it on its own.” Soundly is launching a beta version of the app this summer, making it available to early adopters who sign up on its website. The company is looking for angel investors and intends to roll out the commercial version by this fall. Until then, Krohn is keeping the details of how the app operates under wraps. But the 31-year-old entrepreneur (who is also co-founder of Mighty Axe Hops, a Minnesota hop farm), says the broad idea is to use a video game approach to induce users into an exercise therapy to strengthen and tone the upper airway, which addresses the root cause of snoring and sleep apnea. Krohn characterizes the regimen as “kind of like push-ups for your tongue.” The method is based on research by co-founder Adam Black, a Medtronic biomedical engineer and former U of M Innovation Fellow. Dr. Umesh Goswami, a U of M medical professor, physician and sleep health specialist, is the third Snoring affects Soundly co-founder. This year, Goswami and the approximately U received a $50,000 grant from the National 90 million Science Foundation to develop the app. American adults —Don Jacobson More than #1 18 million American adults have sleep apnea

(SOURCE: NATIONAL SLEEP FOUNDATION) (SOURCE: NATIONAL s s mncup.org @minnesotacup

SEPTEMBER 2017 tcbmag.com TWIN CITIES BUSINESS 19 Homegrown Shrimp

innesota’s next big farming venture may not each of which is dozens for the stacked shrimp tank concept M come from the soil, but salt water. of feet in length. More than from Addison Lawrence, a scientist at Tru Shrimp Co., a spinoff of livestock nutrition 8 million pounds of shrimp Texas A&M, in late 2014. As Tru Shrimp company Ralco, which incorporated in January, are expected to come out of the establishes its first harbor and supporting announced a multi-million dollar plan in June to “harbor” annually. facilities, it hopes food buyers will notice a Company: Tru build three facilities—two production and one for Meanwhile, a vacant plant in Marshall—owned difference in quality between its product and that of Shrimp Co. training—in the southwestern corner of the state by the USDA—will operate as the company’s its foreign competitors, which are raised in ponds. to grow shrimp. shrimp hatchery. The third facility will operate Locally, the construction and opening of Founded: Part of the cost to construct or, in one case, as Tru Shrimp’s training facility, located near three agribusiness facilities is expected to make 2015 renovate a processing facility owned by the U.S. its existing Innovation Center and Laboratory in a big splash. Department of Agriculture, is being covered Balaton, Minn. “It’s a rare opportunity to become the center through two fundraising rounds. So far, 18 “What is happening in Minnesota has not been of a new source of protein production,” Marshall Location: investors have purchased nearly $15.5 million in done anywhere in the world,” Tru Shrimp president Economic Authority Director Cal Brink said in a Balaton, convertible notes from Tru Shrimp, with another and CEO Michael Ziebell said in a statement. “There statement. Pat Baustain, the mayor of Luverne, Minn. $5.5 million to be sold. are 1.6 billion pounds of shrimp consumed annually added that the projects would be “a tremendous In early 2018, the largest of Tru Shrimp’s in the U.S. and 80 percent of it is imported, primarily economic boon” for the area. Industry: three construction projects, a shrimp production from Southeast Asia. The facilities in Marshall and A recent report conducted by the University Agriculture facility in Luverne that’s billed at over $50 million, Luverne will produce the most natural shrimp of Minnesota found construction of the Luverne is set to break ground. Central to the 9-acre facility possible using a sustainable, antibiotic-free, and harbor alone would generate more than $48 will be the company’s unique aquaculture system, environmentally responsible approach.” million in economic activity and support an which stacks tanks (or “tidal basins”) eight high, Parent company Ralco purchased the patent estimated 330 jobs. —Sam Schaust

SPONSORS:

OCTOBER MONTHLY LUNCHEON: INTERNATIONAL TRADE IN A TIME OF NATIONALISM

An update on the state of international trade as the rules of the game change. October 17 • 11:30AM Windows On Minnesota IDS Center • 50th Floor Minneapolis, MN

To register, visit www.acg.org/minnesota For questions, contact [email protected] or 612-590-1041

Attire: Business $35 Members | $75 Non-Members

20 TWIN CITIES BUSINESS tcbmag.com SEPTEMBER 2017 Cultivating Seeds Appropriate to Our Soil Other regions’ entrepreneurial successes may not provide a road map for ours.

he coolest thing about the boiling Indian sum- that ended up changing the world. These include food tech- PLANTING SEEDS mers is a large bucket filled with ice-cold mangoes. nologies, computers, medical devices, health care delivery, by Rajiv Tandon Ecstasy! The yellow dasheri from early season, the educational technologies, retail and now 3-D printing. Tgreen langra during the peak and the whitish safeda with the It is a very broad set of competencies that have been monsoon are ranked among the 30 best in the world. The a source of pride and vitality for the region. This is our pink-yellow alphonso is the acclaimed king. The Americas strength and can provide an ongoing edge. Local expertise have around 500 varieties of mangoes, but with my palate, is available; so are mentors with deep and unique insights admittedly biased, the best of them are more appropriate for to counsel newcomers. Beneficiaries from past successes are making pickles. Similarly, my Latino friends tear up when more likely to be early-stage investors. Seeds planted in this describing their love for guanabana. I had never heard of it. space can start with the local presence and grow well beyond My fruit snobbery has shifted to apples, the most for a global reach. ancient fruit brought to North America from Asia and What we need is a concerted effort to create our special Europe. Relatives now concede that Honey- ecosystem that nurtures seeds in these specific areas and crisp, the Minnesota state fruit, even beats grows them into seedlings. When we do that, we will find the Kashmiri ambri. Washington state’s opportunities/ideas at the intersection/permutation/com- Red Delicious may be the “world’s bination of these technologies that can lead to more radical favorite snack” but, for me, it is a ones. This provides the competitive blueprint to continue source of fiber and nothing more. rejuvenating our economy. Remarkable local names in The soil of a particular area this space include: is a mixture of minerals, organic matter and countless organisms. n Angel Adams, founder and CEO of Catchwind, which is Together with climate, landscape focused on medical device, biotech and health care IT and human practices, it favors par- and incubates in this space. ticular crops and vegetable or fruit varieties that are difficult to duplicate n Sarah Couenhoven, co-founder of GIA Kitchen, which elsewhere. Minnesota spuds may never provides a state-of-the-art commercial kitchen space for rival Idaho’s; our own strengths are in entrepreneurs developing their own food businesses. She corn, the most valuable crop, and soybeans, developed her own business in this space. our top export commodity. Sir Arthur Tansley coined a term a century ago, for this n Donald Smithmier, CEO and cofounder of GoKart Labs. Each place has, and feature in ecology: ecosystem. James Moore, in the 1990s, Success with his own venture in educational technology needs to mobilize, applied this concept of ecosystems to economic activities. prompted him to found this active incubator, a launch- a random collection Biomimicry uses proven examples from nature to show us pad for new ventures in that sector. of elements to solutions for our issues. This concept posits that each place create its own has, and needs to mobilize, a random collection of elements While these three have different business models, they distinctiveness. to create its own distinctiveness. share a focus on developing ventures that are in the realm of Silicon Valley is known for starting and growing certain what I call MNstrengths. types of ventures. Simply copying and labeling us Silicon Al- Our scientists did not stop after developing over 24 vari- ley, Silicon City, etc. will never get close to it or give us much eties of apple that suited Minnesota climate perfectly. They advantage. Over the years, local venture capital firms have now created my new favorite, the SweeTango. have left town for Menlo Park’s Sand Hill Road, Should we not apply the same diligence to our while others have set up local scouting branches new ventures? Mother Nature tells us it is sound to find and move top potentials to California. practice to have many more seeds planted in the Exceptions like Arthur Ventures in Minneapolis technologies of Minnesota’s proven strengths. and Great North Labs in St. Cloud are funded tcbmag from the regional success of respective software companies. The Land of Lakes soil is not likely to be the right Dr. Rajiv Tandon is an advocate for the future of one for the Silicon Valley VC model. entrepreneurship in Minnesota. He facilitates peer groups Minnesota, in its own right, is credited as the birthplace of CEOs and runs programs for propelling ideas into of various leading technologies. Local entrepreneurial firms business ventures: the Rocket Network and 100 Launches. in the past have led to the creation of entirely new industries He can be reached at [email protected].

SEPTEMBER 2017 tcbmag.com TWIN CITIES BUSINESS 21 Twitter: It’s Not Just For Presidents Minnesota nonprofits use Twitter to share news and ideas.

witter can be one of the trickiest social media plat- @NAFund – The Nonprofits Assistance Fund tweets about PERFORMING forms to use. Beginners are sometimes bewildered financial practices for nonprofit organizations and includes PHILANTHROPY by Twitter’s unique language full of # and @ sym- information about upcoming events and webinars. The Tbols. Learning to navigate Twitter means understanding that organization is led by frequent tweeter@KateSBarr . By Sarah Lutman different people and organizations use the platform in very different ways. Super-users are prolific, tweeting their news @PollenMidwest – The local social network tweets job and information, observations, and opinions many times openings, news and information for the civically minded, a day and interacting with hundreds (or thousands) of including corporate and nonprofit news and events. followers. Plenty of others use Twitter in a sort of broadcast mode, making sure that people are aware of key program @SmartGivers – Minnesota’s Charities Review Council tweets developments, job openings, changes in leadership and information about best practices for the nonprofit sector and the other helpful bits of news. training needed to strengthen organizations’ compliance. Since traditional media, on the whole, covers nonprofits less frequently than it does for-profit businesses, the nonprofit @SmartNonprofits – The Minnesota Council of Nonprofits, the sector can have trouble reaching its audiences and interested state’s largest membership organization for the sector, tweets investors, observers and policymakers. Twitter to the rescue! about jobs, programs, conferences, grant alerts and other By selectively following leading nonprofits, it’s possible to information that nonprofits need to know. stay abreast of nonprofit news and updates. And remember, on Twitter you can remain solely a reader, not a contributor. @YNPNTC – The Young Nonprofits Professionals Network, Twin You don’t have to go on your own personal Twitter binge to Cities, organizes meet-ups, information sharing and ideas for the take advantage of other people’s news and posts. next generation of nonprofit leadership. Here are several nonprofits and foundations that you can follow on Twitter to inform yourself on Minnesota nonprofit Minnesota foundations active on Twitter news. This list will get you started; you’ll find that many of @BushFoundation – One of the region’s largest foundations Minnesota’s nonprofits are using Twitter to share ideas and tweets about its work and the activities of grantees, Bush Fellows information. and Bush staff members.

Minnesota nonprofit associations @McKnightFdn – Another of Minnesota’s largest foundations and service organizations has an increasingly active Twitter feed, with news and updates @AALFTwinCities – The African American Leadership Forum from the foundation and its grantees. tweets news, information and event announcements with links to the group’s monthly newsletter. @MNPartnersTweet – Minnesota Philanthropy Partners, home of the St. Paul, Bigelow, and Mardag foundations, tweets about @MNCompass - Minnesota Compass provides links to accurate the Partners’ grantmaking, with news and updates from east and comprehensive demographic data about Minnesotans, which metro nonprofits. can be used to document social and economic trends. @MplsFoundation – The Minneapolis Foundation tweets about @FollowMCF – The Minnesota Council on Foundations its funded programs, information for donors and Minneapolis tweets news and information about the state’s private sector boosterism news. grantmakers. @NWAFound – The Northwest Area Foundation tweets about its @GiveMN – The state’s largest web-based platform for grants and the ideas that inspire its programming. donations, GiveMN also produces the annual Give to The Max Day (#GTMD) in Minnesota, and tweets fund-raising advice and @UnitedWayTC – The Greater Twin Cities United Way has an news. active Twitter feed about giving and volunteering in the region and related public policy issues. @HOTC – HandsOn Twin Cities is the major crossroads for people who are looking for volunteer opportunities and I’m sure to have missed some of your key sources. Please organizations seeking volunteers. HOTC tweets volunteer share your ideas and see you on Twitter @Lutman_Sarah. openings and news. Remember to follow @TCBmag while you’re at it! tcbmag

@MinnesotaRising – Tweeting about the millennial generation Sarah Lutman is a St. Paul-based independent consultant in Minnesota, with news about opportunities, meet-ups and policy and writer for clients in the cultural, media and philanthropic developments. sectors.

22 TWIN CITIES BUSINESS tcbmag.com SEPTEMBER 2017

Overuse of Medical Services Drives Up Costs for Everybody Employers need to steer workers to more discerning hospitals and doctors.

EXPLANATION y primary-care physician is a minimalist. What- and spending were similar, the study said. ever malady prompts me to make an appoint- n A study in JAMA Internal Medicine compared the use of OF BENEFITS ment and see him ends with the same medical low-value services between hospital-based outpatient prac- By David Burda Madvice: Lose weight and stop smoking. When I remind him I tices and community-based office practices, and between don’t smoke, he tells me to lose weight. He is loath to write a hospital-owned and physician-owned community-based of- prescription or order a diagnostic test. So far, he’s been right. fice practices (bit.ly/2tQHaCp). The study defined low-value Whatever was bothering me goes away on its own, and I’m services as antibiotics for upper respiratory infections; CT or still here as I write this. MRI scans for back pain or headaches; X-rays for upper- A spate of recent research suggests that my doctor is in respiratory infections or back pain; and specialist referrals the minority. Your workers are receiving millions of dollars’ for upper-respiratory infections, back pain or headaches. worth of medical care that offers no clinical value. They’re The study found that hospital-based outpatient practices also getting care from high-priced hospitals and doctors that used more low-value services for common conditions than could be provided for less did community-based office practices. WHAT $54.9 MILLION BOUGHT IN 2014 without sacrificing quality n Closer to home, a report released by the Minnesota De- Type and frequency of low-value and safety. partment of Health said 175,306 low-value medical services The next time you’re were provided to state residents in 2014 at a cost of $54.9 health care services provided to Minnesotans spending a few hours in your million (bit.ly/2qBbegv). TYPE OF MEDICAL SERVICE | OCCURRENCES physician’s waiting room Low-value services were one of 18 medical services convinced you have a brain that fell into three buckets: imaging procedures, screening MRI, x-ray, other imaging service | 69,008 tumor, read the following procedures and pre-operative testing. They were defined as studies and reports rather low-value—meaning they were largely unnecessary—by Selected cancer screening | 45,146 than a month-old Sports Il- the Choosing Wisely campaign, the U.S. Preventive Services lustrated: Task Force and the National Institute for Clinical Excellence Carotid artery stenosis screening | 23,598 n A study in the journal in the United Kingdom. The report said commercial plans Health Affairs compared high- paid for the bulk of the low-value services—$29.2 million, CT scan | 22,922 price physician practices with or 53 percent, of the $54.9 million tab. Patients paid about low-price physician practices $9.3 million out of pocket. Pre-operative x-ray | 11,562 using different outcome mea- n “Overuse of medical services is an increasingly recog- sures like patient experience, nized driver of poor-quality care and high cost,” said four Other pre-operative test | 3,070 quality of care and spending doctors who stated the obvious in their article in the Journal

SOURCE: MINNESOTA DEPARTMENT OF HEALTH (bit.ly/2oxnD4d). High-price of Hospital Medicine (bit.ly/2tQaj0M). The medical quartet practices charged an average of $84.45 for an office visit, or published an action plan, or framework, that targets the 36 percent more than low-price practices, which charged underlying causes of too much medicine, including a culture an average of $62.06 for an office visit. On most outcome of health care consumption. measures, there were no statistically significant differences I would recommend that employers and/or their health between high-price and low-price doctors. For example, the plans look at their framework and think about how they can rate of preventive and screening services, hospitalizations apply it to their employees and enrollees to break the cycle of the overuse of unnecessary medical services. They also should get involved in the Choos- I might be right about provider-sponsored health plans working as planned (rwjf.ws/2tUi7y7). Prepared by Allan ing Wisely campaign, a 5-year-old initiative that but for the wrong reason. In our August 2016 column, we Baumgarten, a well-known health insurance analyst based encourages providers and patients to limit medical said employers should be skeptical of health plans owned in Minneapolis, the report said only four of 42 provider- services that meet four criteria (bit.ly/1dtkDI8). by hospitals or health systems that also own physician sponsored health plans launched or acquired since 2010 The services should be: supported by evidence; practices (bit.ly/2uS4Sef). When one corporate entity turned a profit in 2015. not duplicate other tests or procedures previously controls all three pieces of the health care economic One of the 42—Gundersen Health Plan of Minnesota— performed; free from harm; and truly necessary. equation—outpatient care, inpatient care and how both are lost $728,654 on about $5.3 million in revenue that year. So if you get a headache from reading this col- paid for—there’s less competition and more opportunity to “Few new plans have gained enough enrollees to achieve umn, do not go to the ER and have a CT scan. Take manipulate prices. economies of scale in plan administration, to gain ability two aspirin and call my doctor in the morning; Specifically, we said provider-sponsored health to manage risk, or to have an impact on competition and you’ll be fine. And lose some weight. tcbmag plans likely would offer lower premiums to attract more price in their local markets,” the report said. Those losses enrollees who then would use their affiliated hospitals have to be made up somewhere, and the most likely David Burda (twitter.com/@davidrburda, dburda@ and physicians for care. A 30-page report released by somewhere is prices charged for inpatient and outpatient msp-c.com) is editorial director, health care strategies, the Robert Wood Johnson Foundation said things aren’t care. That’s why employers should be wary. for MSP-C, where he serves as the chief health care content strategist and health care subject matter expert.

24 TWIN CITIES BUSINESS tcbmag.com SEPTEMBER 2017 THE LATEST DISCOVERIES FROM PROVIDERS, PRODUCT DEVELOPERS AND PAYERS. | EDITED BY KATE LERETTE

Enrollment he percentage of employees with high-deductible health plans topped one-third for the first time last year, and the continuing shift is creating some unintended consequences for workers, in High-Deductible according to new data released by the National Center for Health Statistics (NCHS). The percentage of adults ages 18 to 64 years old enrolled in an employment-based high- Health Plans Grows Entellus Unveils deductible health plan (HDHP) rose to 34.9 percent in 2016 from 32.1 percent in 2015, according Merger Plan to a NCHS report. That increase continues a steady climb from 2011, when the enrollment rate in with Spirox employment-based HDHPs was 24 percent. The NCHS defines a HDHP as a health plan with a Entellus Medical minimum annual deductible of $1,300 for individual coverage and $2,600 for family coverage. announced the largest Over that same six-year period, the percentage of adults enrolled in traditional employment- acquisition of its 11-year based health plans like PPOs and HMOs continued its downward slide to 54 percent in 2016 from history in July: an $81 67.2 percent in 2011, the NCHS reported. million-plus deal for nasal More employers are shunting workers into HDHPs to reduce their health care expenses, shifting airway obstruction device more of the financial burden to employees. That strategy, though, is coming at a cost to workers. maker Spirox Inc. Some 15.4 percent of employees in HDHPs said their families had problems paying medical Per the agreement, Plymouth-based Entellus bills over the past 12 months compared with just 9 percent for workers in traditional employment- will give Spirox’s equity based health plans, according to the NCHS. Further, 8.5 percent of employees in HDHPs said cost holders $25 million in concerns prompted them to delay or forgo care over the past 12 months compared with 4.1 percent cash and approximately of workers in traditional plans. 3.4 million shares of But moving employees into HDHPs ultimately may increase employers’ health care expenses. Entellus common stock As previously reported by TCB in May 2016, HDHPs may lead to more unpaid hospital and doctor (worth about $56 million). bills. Hospitals and doctors may raise their prices to cover those unpaid bills, which could lead to A cut of the sales from Continue to 26 higher premiums charged to employers for health coverage. In Minnesota, hospitals’ uncompensated-care tab in 2015 was $536 million, compared to $496 million in 2010, according to a report released in March by the Minnesota Hospital Association. —David Burda

FEARLESS IS WITHIN REACH

bluecrossmn.com/medicare2017 Plans available in the service area. Blue Cross® and Blue Shield® of Minnesota and Blue Plus® are nonproﬁ t independent licensees of the Blue Cross and Blue Shield Association.

SEPTEMBER 2017 tcbmag.com TWIN CITIES BUSINESS 25 Continue on from 25 Demand Fuels Minnetronix’s Fourth Expansion Spirox’s flagship device, the Latera Absorb- Minnetronix wrapped up its latest expansion project in July—the med-tech firm’s fourth in 11 years— able Nasal Implant, will also be shared with adding 22,000 square feet to its St. Paul headquarters. certain Spirox affiliates, Entellus said. Jeremy Maniak, who took over as president of Minnetronix in June, says the company expects Although the implant is relatively new more growth in its staff, campus and client list over the next couple of years. “We’ve seen growth of 20 to the market, with FDA approval only in to 25 percent in new customers over the past two years,” he says. “And we expect that to continue.” July 2016, it has racked up $6 million in Founded in 1996, Minnetronix provides design, development and manufacturing services to medium sales over the past 12 months. The device and large medical device companies such as Cardiovascular Systems and Medtronic. The company’s rests along the nasal wall and supports the expertise is in electric and electromechanical devices. upper and lower lateral cartilage in the nose. In late 2013, when the company announced the completion Demand is expected to grow among facial of a 65,000-square-foot addition, roughly doubling the size of its plastic surgeons and other ear, nose and headquarters, Minnetronix had about 160 employees. Today, it throat medical professionals, according to has about 300. “We’re looking to hire 30 to 40 folks a year, every Entellus CEO Robert White. year, for the next few years,” says Maniak. Most of those positions “Nasal airway obstruction impacts as will be in engineering, product development, manufacturing and many as 20 million people in the U.S., with general operations. nearly 1 million people undergoing some type The latest addition to its campus will increase production of surgical procedure each year,” White said capacity by 50 percent, the company said in a release, and in a statement. “Of surgically treated nasal includes a new product commercialization space designed to obstruction patients, over 70 percent may accelerate the time it takes for a product to be market-ready. benefit from later wall interventions.” “This recent expansion really covers us for the next year or Entellus expects the product will two.” says Maniak. “It’s not a five-year play.” tcb mag continue to grow at a compounded rate —Sam Schaust of over 40 percent through 2020. The Jeremy Maniak company’s revenue totaled $75 million in fiscal 2016. —Sam Schaust

Join WomenVenture in celebrating 40 years of helping women create and grow profitable and sustainable businesses. 2017 Nothing Ventured, Nothing Gained Award Winners:

lunch ● Awards ● shopping 11 AM - 3 PM ● The depot minneapolis

Connie Sheehan Taina Burgos Shirley Wikner Hosted by Jearlyn Steele ● Featuring keynote speaker Anne Hed, CEO of Hed Cycling PUSH Avivage Aviation Fitness Massage Charter

Purchase tickets and tables at: WomenVenture.org/TCB or call 612.224.9540

26 TWIN CITIES BUSINESS tcbmag.com SEPTEMBER 2017 Can’t Aﬀ ord the North Loop? We have everything downtown has but with free parking • Only 10 minutes from downtown Minneapolis and • Fitness room with shower, lockers and Cable TV downtown St. Paul • Customized build outs • Less rent, more free parking • Next to Rosedale Mall shops, many restaurants, • Class B Building with a Class A lobby entertainment and services • Fabulous outdoor space • Two-minute access to 35W and Hwy. 280 • Spacious Executive Conference Room with high-speed WIFI, • Oil changes available onsite free for tenant use • Lunch with free delivery to Winsor • Fiber available throughout building • Building Signage Available Up to 10,000 contiguous square feet available Winsor Oﬃ ce Plaza 1935 Country Road B2 West In Handy, Friendly Roseville

Represented by Barb Ankrum / 651-313-5196 / [email protected] THE DULUTH-SUPERIOR PORT GOES BEYOND BOATS TO GAIN NEW BUSINESS: A YEAR-ROUND CONTAINER SERVICE FOR REGIONAL CUSTOMERS.

he Duluth-Superior port’s Unlike most other intermodal first decade of the new millennium. At new line of business has “ramps,” Duluth offers warehousing and the same time, CN added more capacity nothing to do with ships. other ancillary services. “We’re in a posi- between International Falls and Duluth, The Duluth Seaway Port Authority tion to not just handle the box itself, but including double-tracking the line in By introduced an intermodal service this also to handle the contents in and out of Duluth. In 2009, CN acquired the Elgin, year that transfers shipping containers that box,” says Jonathan Lamb, president Joliet & Eastern Railway, whose line en- Gene between trucks and trains. The service, of Lake Superior Warehousing. circles the city of Chicago. This develop- Rebeck which operates under the Duluth Cargo The Duluth Seaway Port Authority ment allowed CN to provide a seamless Connect brand name, is being run by is taking advantage of the Montreal- move from the West Coast around the Lake Superior Warehousing Co. Inc. It based Canadian National Railway Co. crowded Chicago hub to destinations manages and markets the port’s physical (CN) expansion between the British south and east—including to ports on operations for the Port Authority. Columbia port of Prince Rupert and the Atlantic and Gulf of Mexico. This new service offers the port a Chicago, the nation’s busiest rail hub. “They’re the only railroad in our net- business that it can operate all year long. That main line comes down from Inter- work that has the capability to go from Shipping, after all, shuts down during national Falls to Steelton Hill in the far West Coast to East Coast and the Gulf as the winter months. southern reaches of Duluth. one single move,” Coda says of CN. The But is there enough regional business The Port Authority tried to create line from International Falls through to make this new service profitable? an intermodal ramp with another Duluth is a key part of that transport The Port Authority is betting that railroad in the 1990s. But the market superhighway. there is. Duluth Cargo Connect’s shifted, and the opportunity evaporat- Intermodal industry expert Larry intermodal service brings “a whole new ed, Coda says, adding that the market Gross notes that CN has been adding customer to us,” says Vanta Coda II, needed to mature. smaller, secondary ramps across its net- executive director of the Duluth Seaway work for the past few years. “Railroading Port Authority. These customers are Canadian railroad benefit is a network business. It likes volume,” shippers that would normally use trucks Much of that maturity is linked to CN’s says Gross, president of Colorado-based to get their goods to major rail hubs in added capacity. Prince Rupert became Gross Transportation Consulting and a Minneapolis or Chicago. a major international port during the partner in Indiana-based FTR Transpor-

28 TWIN CITIES BUSINESS tcbmag.com SEPTEMBER 2017 THE DULUTH-SUPERIOR PORT GOES BEYOND BOATS TO GAIN NEW BUSINESS: A YEAR-ROUND CONTAINER SERVICE FOR REGIONAL CUSTOMERS.

tation Intelligence. “The more volume modal service. The region’s logging you can add, the more density,” Gross companies and paper mills have faced says. “You can run more trains and challenges for years. “This gives them a

longer trains.” He argues that the only new mode of transport, if you will, to get CARGO CONNECT DULUTH way railroads can grow is to take market their products to market,” Lamb says. share off of the highways. Shipping by A Duluth intermodal ramp also Among the contents those contain- (TOP) This vehicle, sitting on rail from Duluth to Chicago and beyond could open up new markets for regional ers have carried are forest products, a truck scale, carried one of can be cheaper than trucking. agriculture. As customers increasingly machine parts and subassemblies, the first containers that Duluth Because railroads can’t create overall specify non-GMO grains from a single components for door manufacturers, Cargo Connect’s intermodal demand, Gross adds, “they have to be source (called “identity-preserved agricultural commodities and a variety division transloaded this past continually improving the reach of their grains”), shippers don’t want to ship of steel products. Ancillary services spring. intermodal network as one of the ways 10,000 or 20,000 tons at a time in a boat, have been used by customers attached they can grow.” That’s what CN and other Lamb says. “They want to ship smaller to about 80 percent of the container (BOTTOM) Duluth Cargo railroads want to do by adding secondary lots where they can control quality much volume, Lamb says. Most of the contain- Connect uses a Reachstacker, ramps. It’s a strategy that allows the rail- better and control the documentation ers it handled since late March were a type of giant claw that road to add more regionally originated on all of those shipments,” he says. “This destined for or originated overseas. transloads containers from freight to its network. Not only is Duluth gives us an opportunity to serve the With trucks and trains coming in, railcars to trucks. closer for regional shippers, there’s much Asian market.” who needs boats? Coda maintains that less congestion than in Chicago or Min- Following the March 28 commence- the Duluth-Superior port could handle neapolis. “We can turn that truck much ment of its intermodal service, Duluth an average of 10,000 containers annually. faster” than in those major hubs, says Cargo Connect has been handling im- “We have a couple of opportunities that Kate Ferguson, Port Authority director of ports and exports. Though Lamb won’t are in the trial phase that could put us business development. name specific clients, he says that Cargo there,” he says. tcbmag The Port Authority and Lake Connect has been handling containers Superior Warehousing are betting that originating from or destined for North Gene Rebeck is a Duluth-based freelance the region’s commodity suppliers and Dakota, Minnesota, Wisconsin and journalist who writes monthly for Twin manufacturers will choose its inter- Michigan’s Upper Peninsula. Cities Business.

SEPTEMBER 2017 tcbmag.com TWIN CITIES BUSINESS 29 The TCB Q&A

With a downturn in donations, we ask the CEO of United Way how the nonprofit’s business model is adapting and what roles it plays beyond grant-making.

By Liz Fedor

The Greater Twin Cities United Way exists to help people in a nine-county area, but the organization got public criti- cism in April when it cut grant funding to nonprofits serving domestic violence victims. United Way, widely known for soliciting financial support in workplaces, has been making hard funding choices because its revenue has been falling. Annual campaign contributions dropped from $82.4 million in 2014 to $74.9 million in 2016. Meanwhile, total revenue fell from $101.9 million in 2014 to $88 million last year. Sarah Caruso, United Way’s president and CEO, is working with a board composed of many business executives to remake the 102-year-old nonprofit. Caruso took the helm of United Way in late 2009, just as Twin Cities residents were coping with the destruction of the Great Recession. During her tenure, many United Ways across the nation have found it more difficult to annually increase donations from workplaces. In addition, at the Greater Twin Cities United Way, an increasing portion of contributions are now donor-designated. Instead of making general contributions to a United Way pool for multiple agencies, one- third of 2016 contributors identified a specific agency for their contributions. Twin Cities Business interviewed Caruso at United Way offices in Minneapolis to examine the consequences of these shifting contribution patterns and how the United Way’s business model is adapting to new realities. This interview was edited for length and clarity.

30 TWIN CITIES BUSINESS tcbmag.com SEPTEMBER 2017 PHOTOGRAPHY BY CRAIG BARES SEPTEMBER 2017 tcbmag.com TWIN CITIES BUSINESS 3100 This can’t only be a Q How have the cuts affected your Q Some funders focus on meeting year-round workforce? people’s short-term, basic needs, while money game for United Way. Our core employee base went down by other funders target education and nine. We’ve gone from 119 to 110. jobs programs to improve people’s economic standing on a permanent Q The Twin Cities has a large philan- basis. How have you and your board thropic community and an extensive decided to allocate United Way Q What are the factors driving the partner. We want to be part of this group and well-developed nonprofit sector. resources? declines in contributions to the an- of very high-quality programs and agen- In 2017, what is the overarching mis- That question is so foundational to our nual campaign for the Greater Twin cies.” They’ve been like, “Don’t you care sion of the United Way? What is your work. As a large nonprofit and as a pillar Cities United Way? about domestic violence?” Yes, we do niche in the giving community? in the community, we embrace complex- The employee campaign in companies care about domestic violence. It is really Our mission is very clear, which is to unite ity. We understand that there is not one is changing to become more open. So important, and we are funding seven caring people to create pathways out of solution or a one-time fix for an individu- employees are having more choice, and domestic violence agencies in other areas poverty, which help individuals and the al, much less a systemic poverty issue. donor designations are growing. In some of our work. So there has been high community. The real operating principle We understand longevity and the need cases, companies are having fewer dollars emotion and hard, hard decisions on our is pathways out of poverty, so our niche to innovate. Much of this work is not very available for company matches or they part, and we do want the public to know in the community is working with people glamorous and sexy. So if you add all those are spreading them well beyond their these are still great programs. living at 200 percent of poverty or below factors up, the word I often come to is the headquarters communities. One thing with social services and education. “ecosystem.” What is the ecosystem that that all United Ways are doing, including Q What are the two areas where you Our specialty is not only the work we can help build that will help individu- ours, is looking at revenue diversity and eliminated grant funding? we do with people in poverty in the als and perhaps groups of individuals how United Ways are funding specific We eliminated the short-term shelter nine-county area, it is also how we make move to a path of prosperity? That is the work in the community. funding in domestic violence and the those grants and the quest for excellence framework that we think about, and it is How the annual fund is doing really literacy program. Our literacy strategy in impact that we have been charged with complex, and that’s why we do so much is not the proper measure of success for was tutoring, and we still fund other ar- by our donors and our board. We often that people often don’t understand. any local United Way, including ours. We eas of literacy through partners. But the have other foundations come to us for are really trying to move away from the tutoring approach, which we had been advice about how to make grants, what Q How does that thinking translate annual campaign number and the annual quite involved with, especially in the St. research we are tapping into nationally into concrete decisions? campaign focus to reflect much more on Paul and Bloomington schools, we had and how we are measuring impact. It’s why we think about whether there what we are trying to do in the community. to stop funding that area. We have about a dozen staff in our should be more mergers and more How many people are we serving? community impact department, which is a efficiency in the nonprofit sector. For -ex What sort of issues are we taking on? Q What are the two areas targeted for much larger number than most founda- ample, how do we understand women’s This can’t only be a money game for reductions? tions are able to have. Our community health for the Somali community, which United Way. It should always be about Out-of-school-time programming is impact and evaluation team are the real is a very specialized and emerging area of what impact we are making in the com- one. It was historically a very large pot of secret sauce at United Way that differentiate need in our community? So the range of munity. What collective action are we money. We reduced that to make it roughly our ability to choose powerful programs. topics we think about varies. doing across multiple organizations? the size of our other funding strategies. How are we working with the public sec- The other is programming that focuses on tor and private sector to effect change for independence, which covers people with those who need it the most? disabilities and aging populations. REVENUE BASE ERODES AT UNITED WAY Q As United Way donors increased Q Beyond the $6 million in grant The Greater Twin Cities United Way, like many United Ways in the United States, their giving to specific charities, the reductions you made this year, tell has seen multiple years of declining revenues. This pattern has surfaced in campaign amount of discretionary money that me how you handled administrative contributions, and it has had a direct effect on the total amount of grants the you had available for United Way expenses. organization can award. For 2017, GTC United Way has cut positions agency grants dropped. Consequently, We made administrative cuts on top of and frozen executive salaries to reduce its administrative costs. Preliminary you needed to cut $6 million in 2017 the $6 million in grant funding. It was an Unaudited from your agency partners. How did 11 percent administrative cost cut. I felt Revenue (in $millions) 2014 2015 2016 you approach those reductions in very strongly, and had complete support Total Revenue 101.88 98.56 87.98 grant funding? from the board, that we needed to take a All of our programs received some larger cut on a percentage basis from our Funds Raised cut, 5 percent was the minimum. Then operations than we would from those Annual Campaign Contributions 82.44 82.37 74.91 we were asked by the board to look to multiyear grants. Other Grants and Contributions 15.66 13.08 10.42 where there are evidence-based out- Total Funds Raised 98.10 95.45 85.33 comes. We chose to eliminate funding Q Are you allocating $75 million in in two areas and also to reduce funding total grants and direct services in Expenses (in $millions) 2014 2015 2016 in two other areas. 2017, which is down from an earlier Program Expenses It has been heartbreaking to have to projection of $77 million? United Way Grants and Direct Services 59.68 59.09 55.51 make these changes. Some of the really Yes. to the Community strong reaction that we’ve heard is a Donor Designated Grants (gross) 21.62 21.68 24.11 sense of, “We want to be a United Way Subtotal Program Expenses 81.30 80.77 79.62 Administrative and Fundraising Expenses 11.47 12.53 13.07 Total Expenses 92.77 93.30 92.69

32 TWIN CITIES BUSINESS tcbmag.com SEPTEMBER 2017 UNITED WAY GRANT AWARDS DECLINE ergy are things like the and meaningful beyond those who are nonprofit sector. Others will say, “I care Grants to United Way agencies dropped 11 percent between Northside Achieve- receiving the three-year grants. We have about education and that’s all I want 2014 and 2016, but there was an uptick in grant-making to ment Zone and the St. a 100,000-volunteer deployment, and to hear about.” That’s all we’ll tell them organizations designated by individual donors. Paul Promise Neigh- about 500,000 people use our 211 rapid- about, and we can engage them to give, (In Millions $) 2014 2015 2016 borhoods. I get a lot of response line that links them to health to volunteer, to advocate, to show up and energy when I think and human services agencies. celebrate success. United Way Grants $50.13 $48.64 $44.39 about our program We are having impact in our systems Donor Designated Grants $21.62 $21.68 $24.11 called Career Acad- change work. This year there was terrific Q You have a lot of business execu- Total Program Expenses $71.75 $70.32 $68.50 emies. news out of the Legislature on the educa- tives on your board. How have they

SOURCE: GREATER TWIN CITIES UNITED WAY That program tion bill, where $100 million more is go- shaped United Way’s business model addresses what does ing to early education for the biennium. and priorities? We really look at community trends. that young person who has almost made We had a big hand in that. On the model changing, they are pushing So when I came in and we were dealing it to the end of high school need over a The ecosystem we are working in me to go faster and do more. Our board, with the Great Recession, we put more three- or four-year period to get to that is bigger than the agencies we fund as I talk to my peers around the country, is money into food, safety-net and job living-wage job? That is such a great with grants. They are core, they are so progressive and forward-looking. We have training programs. We knew how impor- question because we can solve that. We important to us, but our real impact is to pay for these technology investments. tant it was to have a strong safety net, but know, because we are doing it now with much broader. As we’ve talked about how we are going to also donors were asking us to do so. thousands of high school students. pay for them and what priority they are, Now, in a time where we are all We can guide them to jobs and career Q Workplace campaigns have been the board’s general answer is: “Hell yes, do frustrated with the opportunity gaps not paths they are interested in. Give them the lifeblood of United Way. Does it.” And other United Way boards are much closing, equity is a big focus for us. We college credits before they leave high the fact that the Twin Cities has lost more into micromanaging. They ask, “Is are doing some wonderful work with school. Get them connected to post- some corporate headquarters hurt there an ROI in one year or two?” small, culturally specific organizations, secondary training while they are still United Way? One of the things that we know is that helping them build capacity to deliver in high school, so they don’t fall off that To some extent, yes. I think the real issue the more people volunteer, the more they very high-quality work to populations path the summer between high school is United Way needs to build relation- give and the more deeply they are engaged. that we know are really underserved. and college. ships with individual donors. The And I said I really want to commit to There is a lot of energy behind our company part is a channel that has been achieving 100,000 volunteers a year. It’s job training efforts because we all know Q How do Career Academies work? a really good channel for us. But the going to be good for all of these reasons. a good job is the path towards prosperity. United Way’s role is really helping money is coming, to a large extent, from I can’t tell the board when we are going That is an area that we have a lot of en- high schools that have kids who are the individuals. And how do we keep to be able to monetize that. And they are ergy behind as the economy is improving struggling. We design the high school that relationship, whether a company like, “OK, I understand that.” I use that as and the need for skilled workers of all experience. It is based on a program out gets sold or not? an example to show the partnership and kinds is emerging. of Harvard that is now in 35 states. The We need to maintain a relationship the willingness to push an experiment on We have innovation and flexibility program varies from school district to whether an individual moves from Tar- behalf of engagement with the community. that reflect the period that we are in as a school district, which it should, because get to Medtronic to freelance. We have community. the districts are running it and funding been working with other United Ways to Q You have a Stanford MBA and it going forward. We are funding the build a digital engagement system. We worked for General Mills. What led Q What are the top two challenges transformation. are in year two of getting that effort up you to the philanthropic sector? facing United Way right now? The program finds cohorts of chil- and running, and 70,000 individuals in My oldest son, who is now 28, has very Donor giving changes and the persistent dren, young people—primarily juniors the Greater Twin Cities area are already significant special needs. As a young opportunity gaps in the Twin Cities. and seniors—who might be interested in receiving digital communication directly. mother, as a two-career professional IT or health services or construction. It It is email and then mobile-enabled. family, when Michael was born we were Q Opportunity gaps or racial inequi- then builds generally a half-day curricu- We also are going to sign on to a very thrust into a whole different world. It was ties have been discussed for a very lum for those children that could have significant partnership across the United one of the hardest and one of the best lifelong time, but community leaders math, English and a specialty class that Way network to build a technology plat- changing experiences I think I’ll ever have. seem to have difficulty getting trac- ties to the area of interest, such as a cod- form that will work for corporate foun- Through Michael, I began to think about tion and making major progress on ing, construction or sports medicine class. dations as well as lift up and enhance the world and see the world in a way I this problem. What do you think it Those kids stay in that cohort during what we are doing with individuals. never imagined. That’s part of it. I am a is going to take for investments in the academic day. Some of those classes very fortunate girl from St. Paul, who had education, family supports and other are tied to community colleges, so they Q Are these changes targeted to two amazing parents that did amazing interventions to bring about greater are getting post-secondary enrollment millennials as well as freelancers volunteer work. My mother is an emeriti change? option credits. The data on these young who aren’t attached to a particular trustee at the Science Museum and sat on Where would this community be if the people shows better standardized-test workplace? the board of Planned Parenthood twice. investments United Way and others have scores, higher graduation rates and We have adapted over the years in lots of My dad was on the board of nonprofits made historically weren’t there? How higher entry into a career-training different ways. This is the next big shift in Hallie Q. Brown and Face to Face. I grew much worse off would we be? We are pathway. We are in seven or eight school our model—moving to digital engage- up in St. Paul, which is my primary quali- making a difference even as the gaps are districts now. ment with individuals wherever they fication for this job. I attended Linwood unacceptable. work, however they want to interact with Elementary School and then St. Paul I think we have helped, but not Q What is some of the key work that us on specific causes they care about. Academy. Now I live in Minneapolis. So I enough. The things that give me en- United Way is doing beyond making Some will continue to want to get both sides of the river. tcbmag multiyear grants? support United Way as a pillar of the One of the things we are thinking about community and lift up the whole Liz Fedor is the Trending editor of TCB going forward is how we make sure and has served as a program officer for two we have relationships that are deep Minnesota-based foundations.

SEPTEMBER 2017 tcbmag.com TWIN CITIES BUSINESS 33 000 TWIN CITIES BUSINESS tcbmag.com SEPTEMBER 2017 After a year’s-worth of behind-the-scenes work involving hundreds of thousands of employee-hours and tens of millions of dollars in research, conceptualizing, product development and testing, Target Corp. has quietly begun rolling out its most aggressive merchandising strategy in more than a decade, if not its entire history. It revealed four all-new fashion brands during the Fourth of July weekend through an exclusive story in the Wall Street Journal. The move followed the quiet launch of its Art Class line in January and Cloud Island brand in May, and precedes its planned launches of more than six additional brands by the end of next year (see “Cheap Chic Redux?” next page). The July story came out at an odd time for peak publicity; most investment analysts, fashion writers and business journalists were vacationing. As a result, it received only some copycat attention from other media. It also spurred a few pessimistic headlines. “Target’s New Brands Makeover: Newly Attractive or Lipstick on a Pig?” asked one investment newsletter. “Target: A Case Study in Organizational Stupidity,” said a blog post from Seeking Alpha. Clearly not the kinds of comments Target CEO Brian Cornell likes to see. But also not all that important to the 58-year-old, who’s entering his fourth year on the job. Cornell’s been afforded a rare opportunity among larger publicly traded companies: time—and enough cash flow to repurchase billions of dollars in stock and pay out healthy dividends (estimated this year alone to reach $3 billion and $1.4 billion, respectively) to keep investors happy in the meantime. And he’s out to prove that he can turn Target around by 2020. Target CEO Brian Cornell is investing it all in Earlier this year Target revealed plans to invest $7 billion to update its stores over the next three years, an old concept: offering something unique, further improve its digital infrastructure, develop more of its smaller-format urban stores, improve its supply valuable and accessible. chain and, by the end of next year, roll out more than 12 new brands, all developed in-house and available only at Tar- get. The most unique aspect to all of this, relative to what Target’s competitors are doing, involves those new brands. By Dale Kurschner Like businesses in other industries such as cable television (think Netflix andHouse of Cards or Orange is the New Black), Target understands that distribution and sales channels are only as good as the product that goes through them. And to differentiate in ways that will attract more shoppers, it needs more only-at-Target, highly appealing offerings, rather than those customers can get elsewhere. The question is whether the changes Cornell makes happen soon enough given the pace at which Target’s competitors are advancing. He started at a disadvantage.

PHOTO BY TRAVIS ANDERSON SEPTEMBER 2017 tcbmag.com TWIN CITIES BUSINESS 35 How Target plans to display items more as ‘shops’ within its stores (right); and design the style, more-time-to-shop, entrance inside its new stores (below).

Cleanup In early 2015, he led the company’s departure from Cornell also promised that Target would become l Once one of the hottest brands in retail, Target began Canada, where it had recently opened 133 stores and three more responsive to its shoppers through increased losing its edge about a decade ago as the number of distribution centers, and hired nearly 18,000 people. “When localization and personalization in stores and online. U.S. retailers surged, product offerings elsewhere copied we looked at it, evaluated the feedback from the Canadian Going forward, it would focus on signature categories Target’s stylish-quality-for-less formula, and Target guests and projected it would take until 2021, under the of style, baby, kids and wellness, and reduce bureaucracy leadership focused too much attention and resources most aggressive set of circumstances, to break even, we and complexity. And he launched LA25, an innovation elsewhere—mainly on expanding into Canada and made the decision to exit that market,” Cornell says. “It was initiative that used 25 Los Angeles-area stores to test 50 of building a substantial grocery presence in an attempt to the most difficult personal or professional decision I’ve ever Target’s top new ideas. lure more customers. made, but it was the right thing for the company.” Two years later, not much has happened—on the During and after the Great Recession, leadership Cornell also determined within his first months on surface—other than last year’s very successful launch of had also chosen to emphasize low prices and offerings the job that more layoffs were needed: 1,700 people were a new kids’ clothing brand, Cat and Jack. In the follow- in essential categories, instead of trendy clothes and let go and another 1,400 open positions were eliminated. ing months, Target said spending on kids’ apparel at its housewares, which led Target to lose its “brand balance,” “We de-layered the organization. We took spans of man- stores increased more than 50 percent. It is now on track as Cornell has described it. agement out so we work more agile and more respon- to generate about $2 billion in annual sales, and replaced When he joined the company as its chairman of sive and are closer to the front line and guests,” he says. two old brands that were generating a total of about $1 the board and CEO in August 2014, Cornell had to first “Those are not easy decisions to make but it provided the billion a year. tackle even bigger challenges—mainly IT protocols fuel for us to reinvest in the business.” But overall sales have flat lined, while Wal-Mart’s and that had allowed a security breach involving 41 million Some of that reinvestment went into further strengthen- Amazon’s have risen. Same-store sales for fourth-quarter customers’ credit card data, the botched and expensive ing Target’s IT security, which Cornell says is now best-in- 2016 fell 1.5 percent; for the year they slipped 0.5 percent. Canada expansion, and an outdated supply chain that class, and bolstering supply chain management; the company The company’s full-year sales fell 5.8 percent to $69.5 couldn’t keep shelves filled, especially in grocery. says it has improved, but would not reveal specific data. billion. The majority of that drop, however, was due to

Cheap Chic Redux? Target Financial Results By the end of 2018, Target plans to launch more than 12 new brands that offer boutique-like, high (Numbers in billions) quality “experiences” for its customers—attractive home goods and apparel, in high-energy displays, in-store and online. To do so, it’s mixing customer insights with designs, materials and colors in unique Year combinations that give customers the satisfaction of buying cool new items at reasonable prices. Sales $73.3 Brand Category Description When Available 2012 EBIT $5.7 “Fashion-forward,” of-the-moment kids apparel and accessories tailored to the 86 million tweens and teens that make up Genera- Art Class Kids January tion Z. They outnumber millennials and by 2020 will comprise 40 $71.3 percent of all U.S. consumers. 2013 $5.2 Cloud Island Baby Baby bedding, bath items, nursery décor. May Women’s brand meant to be mixed and matched, offers “a modern A New Day Style, women September $72.6 take on a classic aesthetic and incredible prints and patterns.” 2014 Luxe-looking home furnishings collection that’s sleek and modern $4.5 Project 62 Home with a rustic edge. Designed for everyday life, the collection September includes decor, tabletop, throw pillows, bedding and furniture. Menswear brand that provides modern takes on clothing and $73.8 2015 Goodfellow & Co. Style, Men accessories; modern-meets-classic line of men’s clothing, acces- September $5.5 sories and shoes. JoyLab Style, women Activewear line that’s “fitness-meets-fashion-and-function.” October * Includes a $3.8 billion $69.5* TBD Home Home décor. November sales drop when Target 2016 sold its pharmacy and $5.0 clinic business to CVS.

36 TWIN CITIES BUSINESS tcbmag.com SEPTEMBER 2017 Target selling its pharmacy and clinics to CVS, which is “We are now up to almost one full year with Cat and own clothes and shoes more often alone, or with a part- now running them in Target stores. Adjusted for that, Jack and we continue to see double-digit [sales com- ner (hence the success of Bonobos). And those buying Target’s full-year sales were down less than 1 percent. parisons year over year], but more importantly what we clothes for men may see a Goodfellow item and buy it on On the one hand, that’s good; many other retailers see is our guests’ basket build, the size of their spending the way to purchase something else. reported worse results, and more than 20 of them are increases and the size of their spend, not just in Cat and “Target is an incredibly powerful brand, a beloved shuttering more than 5,000 stores as a result. Target’s Jack but the surrounding areas,” says Mark Tritton, EVP brand, and we want to shape that as a brand that guests still generating hefty revenues and good earnings (due and chief merchandising officer. “There’s the value that can connect with,” Tritton says. “But what we found in primarily to cost cutting). But Cornell and his executive it’s brought to our guests and there’s how it resonates our movement to our own brand strategy is that, even team are keenly aware that it has to do better. through the store. So it’s not just the idea about this one with our own brands such as Merona and others in Behind the scenes, they have been quietly reconcep- area, it’s the sum of the parts.” men’s and women’s, they were very kind of wide in scale tualizing the notion of innovation. Target has conducted Developing its own brands allows Target to control and scope, so the meaning of that becomes very homog- pilot programs and tests around the country, ranging the quality and costs associated with them. The new enized, whereas our guest insights showed they want from how stores should look to what should be on its Goodfellow & Co. men’s line will replace two other something more definitive and special for them.” shelves, and how things should be delivered to custom- brands (Mossimo and Merona). Fabric selecting and ers’ homes. It has re-engineered its product development sourcing alone cost less than how it was done for the The in-store experience process to produce new brands more quickly while outgoing brands, according to Julie Guggemos, senior l A glimpse of what Target stores of the future will look incorporating more revisions. It also seems to now have a vice president of product design and development. like can be found at its Stinson store in Northeast Minne- continual-learning and improvement loop. With Cat and Target also can tap customer insight during devel- apolis. The display racks are white and moveable, lighting Jack’s rollout, for example, it continued to look for ways opment and after launch to continually tailor products is brighter but still warm-toned, cosmetics and groom- to improve future new-brand development and rollouts. to customer desires. Target’s old policy limited new ing products areas are more expansive and better lit, and Target’s $7 billion investment plan is expected to products to only two or three rounds of updates. Its new cross-merchandising displays now present products as leverage these advancements, with more new brands and brands are less restricted. The washed-poplin button- customers might use them, such as in a small room. a store remodeling campaign that is expected to increase down shirt in the Goodfellow line, for example, went Stinson is Target’s primary test store in Minnesota. But revenue per store by 2 to 4 percent—not only because of through nearly seven rounds. It also comes in two fits it also tests elsewhere, most recently through LA25. The display changes, but because the stores will be more tech- instead of the previous one-fit-only approach. company now plans to “reimagine” 600—one-third—of its nologically enabled. That technology is expected to reach And it came out after some noteworthy rounds of test- stores within three years, starting with 110 this year, using into how inventory is restocked, orders are shipped, and ing. Target analyzes more than a dozen issues, ranging from the responses it receives from shoppers in those tests. product development and marketing departments tweak category performance and emerging trends to materials, fit Other changes include reducing red by as much as what they’re working on next. and what the competition is doing. “We do the right testing 50 percent, according to Mark Schindele, Target SVP “Data analytics have to fuel virtually everything and science to understand what the needs are, but the art is of properties. Shoppers at test stores liked this change, we do right now,” Cornell says. “We’re putting a big pulling the collection together and having the confidence he says. “Brands also stick out better with a neutral- premium on experience, both physically and digitally. that it’s right from a trend perspective, industry perspective colored backdrop.” We’re putting a huge premium on the assortment of and guest perspective,” Guggemos says. While the changes are physical, they’re being made brands, both our own and from great vendor partners. Among all the feedback loops deployed, Target set to improve the experience in a Target store. In fact, We’re obviously making a big bet on the importance up a pop-up store where men from the Twin Cit- everything the company is doing today is geared of fulfillment, and all of that has to be underscored by ies area were asked to try on Goodfellow items “All of this has to come toward making every step of engagement with the feedback we get from our consumers and our guest and provide feedback. together to create a brand its brand so enjoyable that people will want insights, and the data analytics that help us make better “We made changes right there on the that is going to be preferred to return because of it. But this has to be and relevant in today’s retail choices more rapidly. All of this has to come together to spot as we listened to their feedback,” environment.” mixed with ultra-timely offerings. create a brand that is going to be preferred and relevant says Guggemos. “We also use a secondary -- Target Chairman and CEO One of the most significant changes will in today’s retail environment.” method where a proprietary app allows Brian Cornell be swapping out displays rapidly, keeping our designers to talk [in] real time back pace with what’s trending online and within Welcome to the Brand Lab and forth with our guests to get feedback. a particular store’s geography in any given l Retailers offer products made by other well-known You can get some voting and instant feedback on week or, if hugely popular, day. The company has brands. But to differentiate and really spruce up their of- everything from the shape of collar to colors.” About 250 hired visual merchandisers, and its remodels will provide ferings, they can either buy brands or develop their own. individuals from around the country participated in that them with seven spaces throughout stores where they Wal-Mart recently made aggressive moves into apparel feedback loop. can present a cross-merchandised display playing off a with its acquisition of Bonobos, Moosejaw, Shoebuy.com “We have 1,800 stores, so we don’t have to do the hot fashion trend. The same will occur with its endcaps, and Modcloth.com—all more similar to the types of same thing in every store; we can test and iterate,” Tritton including in the grocery area. things the Target of old used to sell. adds. “The idea is to put things out there and continue to Target is only remodeling one-third of its stores Target’s betting that developing its own brands is learn and iterate quickly. It’s bringing agility to the way between now and 2020 because some had recently been the way to go. And it’s amped up its product develop- we’re working and responding.” remodeled, Schindele says. “Primarily, we wanted to ment time. It used to introduce a new product line Goodfellow has five primary looks: sporty, rug- make sure the program we’re launching is successful, once every year or two. Now it’s more than 12 in 18 ged, classic, weekend casual and expressive workwear. guests love it, and as we learn more about it, it allows us months. Its merchants study their region’s needs and curate the to either accelerate or decelerate depending upon results.” “In today’s environment, understanding what the assortment accordingly by store. Montana, for example, Another 435 stores will receive “merchandising guest wants from Target, having those unique products may be more rugged casual, while the East Coast may be enhancements” or department remodels this year, a that differentiate us from the competition and that you more business expressive. spokesperson added. can only find in our stores [or on its website] is really im- Men’s apparel is perhaps the most important new Target also plans to apply to its remodels (including portant,” Cornell says. There will still be limited, one-time brand project on the list. Target isn’t currently thought its downtown Minneapolis location) what it learns after offerings with designer celebrities, “but our own propri- of as a place for men to find fashionable attire—good for opening its first next-generation store in Houston in etary brand portfolio provides lasting benefits to us.” casual clothes and basics such as socks and underwear, mid-October. “It’s our most ambitious undertaking yet One of those lasting benefits is in how each new but not sports jackets and nicer pants. But social and for a new store—full size, roughly 125,000 square feet. It brand is configured to help sell other products. demographic trends show men are now buying their will influence all of our future remodels,” Schindele says.

SEPTEMBER 2017 tcbmag.com TWIN CITIES BUSINESS 37 Declining Market Share Target is energizing displays, increasing No single retailer is absorbing market share from Target. Rather, it’s a wave of online players, from Amazon lighting and using to Wayfair and Hayneedle, and brick-and-mortar stores ranging from small, low-priced boutiques to more neutral behemoths such as H&M and Wal-Mart. background colors. Target’s annual sales represented 4.06 percent of all sales amongst the nation’s 100 largest retailers in Before 2009, according to National Retail Federation data. That made it the nation’s third-largest retailer. By the end of 2014, it had slipped to 3.85 percent, making it the sixth-largest retailer. The percentage of Americans shopping at Target has decreased as well, according to London-based Kantar After Research. “Our latest shopper data shows they’re down to 33 percent penetration in the United States [retail shopping marketplace] today; in 2008, they were at 47 percent,” says Leon Nicholas, chief insights officer for Kantar’s retail division. “We’re in a very different place than the holiday season of 2008, when Target’s penetration was in the low 50 percent range. This year they hit the mid-30s.” Target’s overall store traffic numbers don’t reflect the drop as much, “because the shoppers they have left are shopping them even more,” he says. Meanwhile, “only one-third of Americans shop at Target today; our data shows 37 percent of Americans are members of Amazon Prime.” Amazon overall has a 64 percent household penetration. Target, however, maintains 85 percent of Americans are still shopping its stores.

“The main entrance will be focused on our style busi- chain efforts,” he adds. “We view our efforts as creating a way to the exact point in a store where they can find what nesses and inspiration; the other entrance will be focused smart network of stores that allow our guests to experi- they’re seeking. more on ease and convenience.” ence Target however they want, whether that’s digital first, To make this happen, the company is merging its The latter is meant to serve those who want to “grab store first or a combination of both.” Cartwheel savings app with its Target app, providing and go,” whether it’s food, an order to be picked up or Wal-Mart is also remodeling stores with similar goals customers one place where they can map out their store something they can quickly find and purchase including in mind and at a similar pace (see “Meanwhile, at Wal- trips, learn about deals on in-store purchases, check out offerings from its liquor store. Curbside order pickup also Mart,” below). It also is looking to integrate technology what’s in the store they plan to visit and buy them online will be available. more with its in-store shoppers’ experiences, but not to if preferred. This should be available by the end of 2017. The style entrance “is for trips where you have more the extent that Target will by the coming holiday season. For less mobile-savvy shoppers, Target is rolling out time and want to pick up all that’s on your list,” Schindele Target also is ramping up its small-format store strategy, for internal use “myDevice,” a handheld device for sales says. Among other new elements, it will present shoppers adding 30 such locations this year—nearly double the cur- clerks to help find the color or size of products that are with a large display area as soon as they walk in the door, rent count of 32, which includes the well-received Manhat- currently unavailable in store; they can be ordered and with a special product offering or something seasonal. tan location that opened in New York City in late 2016. shipped to the shopper or the store. “It’s training, in Corners of the stores will be visible and appealing. “Typi- essence, to get our guests to think more digitally,” says cally our corners are very closed off with high wall fixtures. Technology upgrade Schindele. The approach was tested in Target’s Stinson We’re activating the corners, changing the orientation of l Target’s 600 soon-to-be updated stores will receive and Edina stores, expanded to 25 locations by late June fixtures and the presentation, so right when you walk in technology updates (primarily wi-fi technology embed- and is set to be in all locations by the holidays. the door you’re immediately drawn to the back corner. ded in each light fixture) allowing shoppers to use their Meanwhile, there’s supply chain. As of press time, Target “Our goal when we talk about redesigning the in- smart phones to find what they’re looking for and, if it’s had revealed little on its progress. During a February confer- store experience, it’s not just thinking about the physical not in the color or size they want, order and pay for it ence call with analysts, it said that out-of-stocks improved aspects, it’s how our team members interact with the there and then, and have it shipped to their house or to by 40 percent from fourth-quarter 2014 to the same period guests, and how we integrate digital and also our supply that store for pickup. Their phone also will navigate their in 2015, and by another 15 percent in all of 2016. Without

Meanwhile, at Wal-Mart … Target’s new concept store opening in October will come eight months after Wal-Mart unveiled its next generation of stores, also in suburban Houston. Wal-Mart’s “smart store” offers an expanded produce section and new approaches to technology (including its new Scan and Go app), services, products and layout. As Target plans to do, the new Wal-Mart stores have a separate entrance for grocery. And like Target’s partnership with Starbucks, which is located in more than 1,000 of its stores, Wal-Mart’s new stores will house a 2,000-square-foot Chobani Café (Chobani’s second store of this kind opened in Target’s Tribeca location in 2016). Wal-Mart plans to remodel up to 600 stores this year, and is rolling out curbside pickup of online grocery orders to 500 additional How groceries will be presented inside a new Target store’s entrance designed for quick trips. U.S. stores, eyeing busy suburban moms who don’t want to spend time searching for things in a big store. It also plans to create a lounge-like area for shoppers picking up online orders, increase the number of fresh and organic items available (as does Target) and expand several departments—all food, except the baby department—one of Target’s four core categories.

38 TWIN CITIES BUSINESS tcbmag.com SEPTEMBER 2017 more context (including how its out-of-stocks compare “Certainly, the food and beverage space is very com- the sales floor, according to Bloomberg. with those of its peers), it’s difficult to understand the sig- petitive,” Cornell says. “We’re fortunate in that we have That follows Target’s decision during the past year to cut nificance of this change. this multicategory portfolio. We’re not dependent on one innovation projects to focus on core-business needs. Cornell Cornell says Target’s in-stocks are higher than ever, category or one area. We have the benefit of being a key says innovation is still alive and well inside Target, and it will and that guest satisfaction scores continue to rise. Fulfill- player in apparel, in home, with baby and kids and the become more obvious to outsiders in upcoming months. ment is also a different game than five years ago, he adds. role we play with moms, and the sizable share we have in Innovation projects that were terminated were not core to It “may be different for Katy on Monday than on Satur- the toy category. We’re in electronics and office supplies. what the company must focus on today, he says. day. So when I think of fulfillment, it’s fulfillment in-store We have a very strong position in household essentials And he disagrees with those who say Target is moving when you’re shopping and those endcaps are properly and beauty. So the diversity of our portfolio allows us too slowly. presented, the product you’re looking for is in stock, to meet the needs of our guests and be competitive in “We have to re-imagine our stores, move into new and you have a great experience. It’s ordering online and multiple categories.” neighborhoods, bring new brands forward, transition our picking up in-store. It could be bringing back something Groceries are an important part of that mix, he says, supply chain to support our new strategy … but we also you ordered and exchanging it. In the future, it’s likely because Target believes groceries are important have 1,800 stores we have to run tomorrow. We also curbside offering.” to its shoppers. About 20 percent of the have 30 million guests who are going to shop our The strongest sign of improvement with Target’s sup- company’s annual revenue comes from the Fashion and home stores next week. We’ve got to make sure we ply chain comes in its ability to ship directly from stores, category. furnishings are exciting. deliver the right service and experience.” something relatively unheard of five years ago. In 2015, 41 Wal-Mart, on the other hand, derives “A box of cereal is not.” “Would we like to remodel 600 stores percent of all digital orders where shipped from its stores. 60 percent of its revenues from groceries, -- Leon Nicholas, faster? Absolutely. But every one has to be done In 2016, stores fulfilled 68 percent of digital orders. And “so that is really their principal business,” Kantar Research. correctly. We want to make sure we get the there were more items to ship: Online sales increased from Cornell says. “We like and are fostering guests’ feedback, we iterate, we get the right re- 10 percent of total sales to 14 percent in the same period. the diversity of our portfolio. The fact we’re turn for our shareholders, that we create the right Also shipped from stores are goods through Target’s a destination during key holidays, it’s where experience. Twelve brands in 18 months is a really new Restock program this year. Company officials say you come for back to school and back to college. fast pace. But we want to make sure there is enough time it was set up from concept to execution within a matter We’re an important player in apparel, and in beauty. We and breathing room in between each launch and make sure of weeks, not months or years. It was tested in the Twin have a great relationship with the guests when it comes to each one gets its time on stage, that we begin to seed those Cities at first and is now slated to expand into Dallas and toys and great partnerships with Mattel, Disney and Hasbro. brands into the assortment, we get the right recognition Denver later this year. So we’re going to continue to embrace that multi-category from the guests, so we have to pace it out appropriately.” approach.” Time to bag groceries? From a brand perspective, it still makes sense for Hoping for happy holidays l To some, Target’s foray into groceries has been as Target to carry groceries, says Larry Vincent, chief brand- l By the this year’s holiday season, Cornell expects much a mistake as its Canada expansion. The low-margin ing officer of United Talent Agencies in Beverly Hills, the public to notice a new edge to Target—the retailer’s category takes up as much as one-fifth of stores’ square co-founder of its UTA Brand Studio and author of two first full-throttle attempt to differentiate itself since it footage that, observers say, could be put to better use. well-regarded books on branding. surprised the industry with its strategy to partner with “Our shopper data shows very few people say their “The CVS partnership was smart. I don’t think it top-name designers back in 1999. The first signs of last trip to Target was for food, though the goal for them caused any brand dilution. It was additive,” he says about whether Cornell’s grand vision works will show up in the all along has been to drive more trips from existing Target’s move to sell its clinic and pharmacy business to company’s fourth-quarter results early in 2018. shoppers by offering groceries,” says Leon Nicholas, chief CVS, which now runs those operations within Target’s At that point, his quest to reinvent Target also has to insights officer for Kantar Research. “Target confused the stores. “Food is different. I think, if I were their brand resonate with shoppers. This old brand has to feel new shopper in many cases because they started more of the manager, I’d be cautious about letting a grocer own that again, not only to survive, but, even better he says, to pick front page of the circular with food and [devoting] more brand equity with my core customer. However, there are up a significant portion of the newly available estimated square footage of their store to it. It’s confusing to say to probably some ‘designer’ food brands that could be good $60 billion in retail market share, as other retailers have the shopper, ‘Hey, over here, paper towel for a dollar.’ ” for them to feature.” scaled back or closed in recent years. Another problem is that marketing and merchan- In the business world, this would be the feat of the cen- dising consumables is quite different than for home, Moving fast enough? tury, or at least one of them. Retail carnage is everywhere as housewares and apparel. l From an outsider’s perspective, Target can be seen other brands have tried and failed to revitalize themselves. “The latter is rotational and it’s based on excitement. as moving too slowly relative to its competition. A June Yet Cornell and team remain confident they’ll not It changes all the time, you have a markdown schedule, it’s Bloomberg report stated, “By a host of measures—sales, only pull it off, but they can take the time necessary to do seasonal, it’s exciting,” says Nicholas. “A box of cereal is not. share price, even intellectual property— Wal-Mart is it while staying focused on providing good service at its It’s replenishment and it’s kind of boring and it requires besting Target with cleaner stores, lower prices and a 1,800 stores. They base their confidence on Target’s brand you have systems in place to replenish. The problem is a refurbished online strategy.” Moreover, the authors noted recognition and real estate presence, and leadership’s quiet shopper who wants a box of Kellogg’s Corn Flakes is not Target’s recent negative same-store sales “aren’t likely to deployment of new approaches that will leverage those going to say ‘What the heck, I’ll just get a box of Cheerios if improve anytime soon, as the company has forecast a assets in ways that competitors can’t do as well, if at all—at they’re out of stock.’ They don’t want that, they want their low-single digit decline for the full year.” least, not yet. corn flakes. Whereas with apparel, well, if they don’t have Target is also losing ground to Amazon in women’s Company officials frequently tout 75 percent of black socks, I’ll take blue. It’s more interchangeable.” wear, No. 8 to Amazon’s No. 1, according to a survey Americans live within 10 miles of a Target store. Target’s Target would be best served if it acquired a grocery from British trend tracker WGSN. Kantor’s Nicholas success depends on leveraging that statistic with a better chain, similar to Amazon’s bid for Whole Foods, or sub- points to declining market share over the last few years, in-store to online/handheld technology presence, the contract with one or several locally, he says. especially during the holidays. ability to order and easily pick up at a store, and most of “They ended up down this road, ultimately dedicat- Meanwhile, Wal-Mart is also winning the intellectual all, returning to focusing on how customers feel, not only ing a lot of time, energy, floor space, resources, relation- property race. In the past five years, it has taken the lead about what they bought and for how much, but about ships and money toward something that was not natural over Target in patent applications, many focused on web their overall experience with Target. Retail is now more to the core brand promise, and they took their eye off that development and easing shoppers’ journey through the about the journey. tcbmag ball while worrying about bananas and paper towels. And store. The company has even filed a patent for in-store along came H&M and Amazon.” drones that would ferry products from the back room to Dale Kurschner is editor-in-chief of TCB.

SEPTEMBER 2017 tcbmag.com TWIN CITIES BUSINESS 39 2017 TWIN CITIES BUSINESS

ecisions made in the workplace have consequences. Whether choosing the right venue for an important meeting or a firm to reconceive a website, there are no do-overs. We may rely on online comments in our personal life, but we want to deploy our com- Dpany resources having done due diligence. Easier said than done. Sourcing the right vendor isn’t simple. After all, who are you going to ask, your competitor? That’s where Best of Business comes in. TCB’s annual subscriber survey exists to crowd- source the kind of business-to-business vendor advice you can’t get from Yelp. In these pages are recommendations from companies with firsthand experience—whether it’s hosting a happy hour or executing a multi-million dollar telecom RFP. In the first half of 2017TCB surveyed our readership asking executives for their picks in the most commonly used business services. Once the results were in, we took note of the awards and honors bestowed by recognized experts. The results include companies big and small, primed to service businesses of all sizes and budgets. Thanks to those of you who shared your knowledge. We look forward to hearing from even more of you in next year’s survey. —Adam Platt, executive editor

TABLE OF CONTENTS

COMMUNICATION...... 41

CONSTRUCTION /DEVELOPMENT...... 41

CREATIVE SERVICES...... 42

DINING/ENTERTAINING ...... 42

EDUCATION ...... 44

EVENTS/MEETINGS ...... 45

FINANCIAL SERVICES ...... 47

HUMAN RESOURCES ...... 50

LEGAL SERVICES ...... 49

LOGISTICAL SERVICES ...... 50

PROPERTY SERVICES ...... 51

RECREATION/WELLNESS ...... 52

TECHNOLOGY SERVICES ...... 53

40 TWIN CITIES BUSINESS tcbmag.com SEPTEMBER 2017 COMMUNICATION CONSTRUCTION / DEVELOPMENT

MOBILE PHONE SERVICE PROVIDER COMMERCIAL GENERAL Verizon Wireless CONTRACTOR People love to complain about their mobile service provider, but Verizon Wireless is making that increasingly Doran Construction hard to do. For its business customers, Verizon not only provides a variety of integrated plans for companies Since 2010, Doran Construction has completed of fewer than 500 people, it also provides a robust array of enterprise, internet, and wireless services for or is currently building 26 multifamily and companies of more than 500. Local, state and federal government agencies also rely on Verizon to keep their mixed-use projects in the Twin Cities. With communications running smoothly. One reason: Verizon uses the latest privacy and data-security technology to 44 employees and more than $120 million in ensure mobile communications are secure, and relies on its vast network to deliver the speed and reliability that sales, the company’s reputation as a general is its hallmark. contractor stems from its proven ability to take on any project—including bridges, Finalists: AT&T | T-Mobile water-treatment plants and other specialized facilities—and execute it on time, within budget Expert Honors: Verizon Wireless was one of LinkedIn’s Top Companies 2017: Where the World and according to plan. In 2016, the Minnesota Wants to Work Now; also named Fastest Mobile Network by PC magazine. AT&T was named one of Construction Association named Doran its Fortune’s 2017 Most Admired Companies. General Contractor of the Year for the second year in a row, citing its “stellar reputation for excellence.” Doran recently expanded into TELECOM AND INTERNET SERVICE PROVIDER the Colorado market, breaking ground on a Comcast Business multifamily apartment project in Westminster, A division of Comcast Cable, Comcast Business provides access to a full range of advanced communications and continues to develop its custom end-to-end options, including internet, voice, video and enterprise solutions. Comcast maintains its competitive advantage design/build service, which has yielded some of by designing and maintaining an independently managed network infrastructure, thus ensuring a stable the most admired building complexes in town. tel-com platform for business. Comcast recently invested $15 million to expand its fiber network to nearly 4,000 more Twin Cities-area businesses. It understands that the workforce is increasingly mobile, and that Finalists: Greiner Construction | businesses need networks with high bandwidth, iron-clad security and extreme flexibility. Kraus-Anderson Construction Co.

Finalists: CenturyLink | Popp Communication

SEPTEMBER 2017 tcbmag.com TWIN CITIES BUSINESS 41 PUBLIC RELATIONS FIRM Olson Engage Cutting through the clutter in the digital age is a formidable challenge, but Olson Engage has distinguished itself as a first-rate clutter-clearer through a potent mix of creativity, humor, intelligence and guts. Piggy-backing on major media events has been a particularly effective strategy. For the tiny CREATIVE SERVICES nation of Belize, the Olson team created a campaign offering NFL kickers who missed a field goal or extra ADVERTISING/MARKETING FIRM point a free vacation to de-stress. As an April Fool’s Fast Horse joke, the firm’s client Jim Beam announced a “Jim Through such creative campaigns as a faux Super Bowl ad for Beam Apple” watch that carries a 1.5-ounce shot Newcastle Ale or a fashionista-centered rollout for Diet Coke, Fast of hooch inside. Clever as they are, Olson Engage’s Horse has established itself as one of the ad industry’s most innovative success is based on results. In early 2017, Adweek and iconoclastic agencies. “Impact per dollar” may be the best included Olson in its first-ever Agencies 3.0 list measure of Fast Horse’s success, as its value proposition to clients is recognizing firms that are “transforming the agency penetrating the modern media fog with smart, savvy messages that business.” bear little resemblance to campaigns of yore. Fast Horse blends a sophisticated understanding of media (legacy, digital, social) with an Finalists: Lola Red PR and Marketing | intuitive grasp of human psychology to create thoughtful, integrated Lola Red’s Alexis Walsko Padilla media strategies that reward clients with impressive results. Expert Honors: Olson Engage was a Finalists: Antenna | Schermer finalist forPR Week’s 2017 Midsize Agency of the Year Expert Honors: Fast Horse came in third on Effie Index’s Most Effective Independent Agencies North America 2015. Schermer was named a 2017 Top B2B Shop by Chief Marketer.

DINING/ENTERTAINING BUSINESS BREAKFAST Good Day Café CATERING COMPANY If you’re getting up at rooster’s crow for D’Amico Catering a breakfast meeting (do people in other Anyone in the Twin Cities who has attended states talk shop before 8 a.m.?), dull the a swanky event with hundreds of people—at pain by ordering the Big Luigi at Good Day a wedding, conference, gala, museum, Café—or, if you need to, just go straight for corporate event or country club—has likely the maple bacon pancakes. This pillar of sampled the culinary alchemy of D’Amico short-order suburban dining does it all from Catering. It’s not only the exclusive caterer scratch, but with such speed that you’re in for some of the area’s most elegant venues the office faster than you want to be. Good (Calhoun Beach Club, Loring Social, the Day makes mornings both delicious and Museum of Russian Art, International interesting; whether you’re in the mood Market Square, etc.), but also has catered for sweet-potato pancakes, a mushroom/ events ranging from 20 to 20,000 people. spinach soufflé omelet, or a homemade Regardless of crowd size, the food itself sticky bun, it’s the place to get your morning is always fresh and imaginative, sourced mojo working, even if your only breakfast and prepared with sustainability in mind. companion is the morning newspaper. In addition to using local food sources, Cru Restaurant & Wine Bar D’Amico reports that it composts and uses Finalists: biodegradable materials for events, and BAR (AND RESTAURANT) The Original Pancake House | offers its customers choices “that align with Cru Restaurant & Wine Bar Keys Cafe their tastes, budget and values.” One of the many pleasures of a trip to the Grand View Lodge in Nisswa is time spent (and ultimately savored) at Cru, the lodge’s restaurant and wine bar. Cru’s décor strikes a balance Finalists: between woodsy charm and effortless class. You’ll find more than 2,000 bottles from all over Chowgirls Killer Catering | the world, and the bar serves up more than 25 by the glass. So, whether you’re up at the lake Mintahoe Catering and Events for business or the outdoors, plan on a serious meal at this Wine Spectator’s 2016 Award of Excellence winner. Come for the chops; stay for the Super Tuscans.

Finalists: Cedar & Stone | The Freehouse

42 TWIN CITIES BUSINESS tcbmag.com SEPTEMBER 2017 THANK YOU TWIN CITIES FOR VOTING US BEST OF BUSINESS!

+1 952 831 1000 cushwakenm.com

IDEAS INTO ACTION

09-17 TCB Cushman.indd 1 8/1/17 11:03 AM BUSINESS LUNCH EDUCATION Ciao Bella Locally farmed produce, vegetarian-fed meat, organic dairy COLLEGE/UNIVERSITY products, hand-rolled egg pasta, and freshly baked bread—all are University of Minnesota terrific ingredients transformed into the kind of culinary alchemy With five campuses and more than 50,000 one expects from a Rick Webb restaurant. And while you may be students in the Twin Cities alone, the University drawn to lunch at Ciao Bella for the ahi tuna or summer linguini, of Minnesota is, of course, the largest educational make sure you take in the surroundings. There’s something institution in the state. But for everyone here, which makes it the ideal spot for parlaying the U of M’s reach goes well BUSINESS DINNER professionals. beyond its students. Minnesota Manny’s Steakhouse businesses benefit from having Both The New York Times and Zagat Survey rave about Manny’s, Finalists: Freehouse | Red Cow one of the most respected so it’s hard to go wrong wooing a client over dinner there. research institutions in the Meat is the main attraction, but oysters Rockefeller is a good RESTAURANT PATIO world in their backyard. In addition to seeding the conversation starter, and if you’re in the mood to show off, you W.A. Frost and Co. area with highly educated employees,cru restuarant partnerships can always order the must-be-seen-to-be-believed (but you If you haven’t dined on the patio at W.A. Frost, then you haven’t between the U of M and local companies such as won’t believe it even when you see it) triple seafood tower. been to St. Paul yet, no matter what your GPS tells you. Located 3M, Medtronic and Cargill help spur innovations Beyond food, Manny’s has perfected an atmosphere conducive in historic Cathedral Hill, the patio is tucked into the trees and in technology, engineering, biomedicine and many to business. The dining room leans feminine, the bar masculine. bordered by the ivy-covered brick walls of the Dacotah Building, other fields. These alliances create jobs, boost the Service, décor and buzz are calibrated to ensure guests have a erected in 1889. The scene is enhanced by a stunning collection economy, and help create a higher standard of consistent experience. of libations, all of which can make a summer evening at Frost living for everyone in the state. In 2017, U.S. News that much more special. But if you want to cool off with a Glacier & World Report ranked the U of M No. 38 in its Best Finalists: Cru Restaurant | Bar LaGrassa or a Le Norseman gimlet, make sure to call ahead: You can’t Global University rankings, and its medical, law and make patio reservations online. business schools regularly crack the top 10. Expert Honors: Manny’s made Men’s Journal’s 10 Best Steakhouses in the World list, was rated top five in the Twin Finalists: Psycho Suzi’s | Redstone American Grill Finalists: Cities by Zagat guide and is a perennial Wine Spectator University of St. Thomas | Award of Excellence winner. Bethel University

Your family. Your career. Your legacy. Financial advice to see you through every stage of life.

Bring your entire ﬁ nancial life together.

Interactive Financial Planning Fiduciary Investment Advice Tax Planning & Coordination Voted the #1 Best Wealth Management Firm Retirement Plan Services by Twin Cities Business Readers in 2017 and 2016 Business Exit Planning As a leading, CPA-based fi nancial advisor, we constantly challenge ourselves to fi nd better solutions for Insurance & Estate Planning our clients — and we’re prepared to tackle the tough questions. Together, we’ll design a powerful fi nancial and investment plan that instills the confi dence you need to achieve your goals, on your own terms. Charitable Giving & Trusts Family Offi ce Services Serving clients throughout Minnesota and across the country. 952.548.3400 | wipfl ihewins.com

Hewins Financial Advisors, LLC d/b/a Wipfl i Hewins Investment Advisors, LLC (“Hewins”) is an investment advisor registered with the U.S. Securities and Exchange Commission (SEC) under the Investment Advisers Act of 1940. Hewins is a proud affi liate of Wipfl i LLP. Information pertaining to Hewins’ advisory operations, services and fees is set forth in Hewins’ current Form ADV Part 2A brochure, copies of which are available upon request at no cost or at www.adviserinfo.sec.gov. Hewins did not pay or apply to be considered for this award. Hewins solicited votes for this award.

44 TWIN CITIES BUSINESS tcbmag.com SEPTEMBER 2017 MBA PROGRAM EXECUTIVE/CONTINUING EVENTS/MEETINGS University of St. Thomas EDUCATION PROGRAM There isn’t just one MBA program at the University of St. Thomas COUNTRY CLUB University of St. Thomas’s Opus College of In support of its goal to serve the Hazeltine National Country Club Business, there are four, each structured community and create lifelong learners, Last September, the world watched as the United States regained the Ryder Cup to meet students where they are in their the University of St. Thomas offers a wide from Europe for the first time since 2008. The extra player in that victory was professional life. In addition to full- and part- variety of continuing education programs Hazeltine National, the crown jewel of local links, and one of only two courses time flex-MBA programs, St. Thomas also designed specifically for professionals who in the country that have hosted the U.S. Open, the U.S. Women’s Open, PGA offers an executive MBA and a health MBA. want to enhance skills and broaden their Championship, U.S. Senior Open, U.S. Amateur Championship and Ryder Cup. The The institution has close ties to the business portfolio. In addition to its acclaimed MBA mission of the club’s founders was to create a course and surrounding facilities community, including many alumni, so these program, the university offers dozens of that could host such high-profile national championships. Members are proud of programs are optimized to develop the specialized programs in virtually every area the club’s reputation, but the daily vibe management and leadership skills Minnesota of business: project management, analytics, is one of casual elegance—unless companies need. St. Thomas has been at digital marketing, Six Sigma and more. The you’re attending a wedding, in which the forefront of the movement to establish university also has extensive continuing case it’s formal elegance at its best. better communication between educational education programs for educators, institutions and the communities they serve. engineers and software developers, as Finalists: Their MBA program is just one example; well as a complete roster of graduate Golden Valley Golf and there are many more. certificate programs. All are designed to Country Club | provide people with the skills to excel in Edina Country Club Finalists: Carlson School– today’s competitive marketplace and meet University of Minnesota | the specific professional needs of local Expert Honors: Hazeltine Edina Country Club Bethel University businesses and companies. National ranked 107 in Golf Digest’s America’s 200 Greatest Golf Courses, Golf Magazine’s Top 100 U.S. Finalist: University of Minnesota Courses in the U.S. 2015, Golfweek’s America’s 100 Best Modern Courses 2017 and was listed at No. 8 on Golf’s Top 45 Courses Since 1959.

Thank you.

Craig Veurink Senior Vice President 952.927.1277 usbank.com

SEPTEMBER 2017 tcbmag.com TWIN CITIES BUSINESS 45 HOTEL FOR BUSINESS groups or large conferences, executives MEETING AND EVENT JW Marriott Mall of America can feel at home here and get their work SPACE (HOTEL) “Approachable luxury” is the motto of done. The hotel has 20,000 square feet of Grand View Lodge Marriott’s upscale JW brand, and its Mall event space, with six event rooms and 12 Nestled on the shores of Gull Lake near of America location embodies that ethos. breakout rooms, and its Diamond Ballroom Brainerd, Grand View Lodge delivers The hotel’s common spaces are a study in can accommodate up to 1,725 people. At the quintessential Minnesota resort clean, understated elegance, and its meeting the JW Marriott, art, music, fine dining, experience. Twin Cities professionals like it and restaurant venues are designed with comfort and service all come together for conferences and retreats because—if a sense of class and professionalism. in a seemingly effortless orchestration they let it—the resort gives them a whole Whether meeting one on one, in small of excellence that reflects on those who new perspective. The conference and choose to stay there. catering facilities are top-notch, and when the business of the day is concluded, there Finalists: are plenty of head-clearing activities to Hilton Minneapolis | enjoy: Two championship golf courses, spa, Minneapolis Marriott compelling restaurants and idyllic scenery. Southwest Finalists: JW Marriott Mall of Expert Honors: JW Marriott America | Madden’s on Gull Lake Mall of America received a Condé Nast Traveler magazine Expert Honors: Grand View 2016 Readers’ Choice Award, Lodge was named a Readers’ Choice 2016 Award of Excellence from Top Midwest Resort by Condé Nast Wine Spectator and AAA’s Four Traveler in 2015 and 2016. Diamond Award. JW Marriott Mall of America Hilton Minneapolis received received a Condé Nast Traveler 2016 AAA’s Four Diamond Award. Readers’ Choice Award and 2016 Award of Excellence fromWine Spectator.

gpmlaw.com | Minneapolis | St. Cloud | Washington, D.C. | Fargo Your partner in business ventures.

GPM is honored to be recognized in 2017’s Best of Business. Thank you to our clients, peers, and friends for your ongoing support and partnership.

46 TWIN CITIES BUSINESS tcbmag.com SEPTEMBER 2017 FINANCIAL SERVICES

ACCOUNTING FIRM BANK (BUSINESS) CliftonLarsonAllen U.S. Bank Aria Though CliftonLarsonAllen (CLA) is a full-service U.S. Bancorp is big—$450 billion in assets, accounting firm with 100-plus locations in the U.S. with 3,091 offices in 25 states—but that MEETING AND EVENT SPACE and more than $850 million in annual revenue, doesn’t stop it from providing its business (NON-HOTEL) its roots—and headquarters—are in Minneapolis. customers with banking solutions that fit their Hazeltine National Golf Club With more than a dozen offices in Minnesota, CLA needs. The size advantage allows U.S. Bank The course gets all the glory, but Hazeltine works closely with the local business community, to provide a comprehensive line of banking, is also a fantastic place to have an off-site providing a wide range of services, from investment, mortgage, trust and payment meeting or event. The facilities are first- specialized business consulting and corporate services to businesses and institutions, rate, and the catering receives regular tax services to individual wealth-management as well as consumers. Fortune magazine accolades from customers, who are often strategies. Governments and nonprofits are includes U.S. Bank on its list of World’s surprised by the quality and care that among CLA’s clients, but entrepreneurs and Most Ethical Companies, and its policies supporting LGBT equality and veterans go into each element of the experience. privately held businesses are the firm’s core have earned the company accolades from several human-rights organizations. Hazeltine may be in Chaska, but it feels like constituents. Helping other businesses succeed is “Building a unified customer experience” is one of U.S. Bank’s primary goals for another world. For business professionals, CLA’s mission, and it accomplishes that through a the future, as is its pledge to become “our customers’ most trusted choice.” the chance to get away without going deep understanding of client businesses and the very far is often the key to a successful larger competitive/regulatory frameworks they Finalists: Klein Financial (KleinBank) | Wells Fargo off-site. They’ll even set up a private golf operate in. tournament for you, in case you and your Expert Honors: colleagues are the types who would rather Finalists: Wipfli| Lurie US Bank was named a Best Bank for Business by Greenwich Associates. do business with a club in your hands. Klein Financial received a 2015 Better Business Bureau International Expert Honor: Lurie received 2016 Torch Award for Ethics. Finalists: Aria | Diversity & Inclusion and Women in Wells Fargo received several 2016 Global Finance honors: Best Developed Nicollet Island Pavilion Leadership awards from the Advisory Markets Bank in the U.S., Best Developed Markets Bank North America, Best Board. Bank North America.

Thank You for voting us best of business for voting us best of business two years in a row! two years in a row!

09-17 TCB Tierney.indd 1 8/1/17 10:55 AM

SEPTEMBER 2017 tcbmag.com TWIN CITIES BUSINESS 47 CREDIT UNION Top Line Federal Credit Union Founded in 1935, Top Line is a full-service financial institution. As a member-owned cooperative, Top Line’s profits are returned to its members, which allows the company to provide competitive loan rates and fewer fees, lowering overall costs and making it easer for members to reach their financial goals. One way Top Line helps customers is through its Sum-It-Up savings program, which automatically rounds every purchase to the nearest dollar and deposits it in a savings account. Since the program started in 2011, members have saved more than $800,000 by putting their spare change into an electronic cookie jar. The company’s robust website takes the mystery out of financial planning and helps members make smart financial decisions at every stage in life. BANK (CONSUMER) Wells Fargo Finalists: Spire Federal Credit Union | Wings Financial Credit Union Despite—and partly because of—its recent troubles, Wells Fargo has redoubled its commitment to consumers by strengthening its dedication to customer satisfaction, loyalty Expert Honors: Top Line Federal Credit Union won a 2016 Diamond Award from and ethics. In addition to providing the banking services customers use most—personal the Credit Union National Association for financial education. banking, loans, insurance, investments—Wells Fargo’s website contains a trove of information to help consumers manage money and make wiser financial decisions. Helping customers INVESTMENT BANK understand and navigate the complexities of modern financial life is one reason it was voted Piper Jaffray and Co. the best consumer bank in our region. Wells Fargo’s LIFT programs also help individuals and Helping companies and investors succeed while building long-term relationships and providing businesses in underserved communities to take control of their financial future. reliable market guidance has been the heart of the Piper Jaffray formula for more than a century. Offering a full suite of products and services, Piper Jaffray advises clients throughout Finalists: U.S. Bank | KleinBank the entire business lifecycle, offering deep expertise in business sectors such as agriculture, energy, health care, technology, finance, manufacturing and more. In 2016, Piper Jaffray Expert Honors: Wells Fargo received several 2016 Global Finance honors, including reported $692 million in net revenue (a 14 percent increase over 2015), citing its advisory Best Bank North America. service business and expansion into energy investment banking as key drivers. U.S. Bank was named one of the World’s Most Ethical Companies in 2015 according to Ethisphere Institute. Finalists: Klein Financial | Wells Fargo

#1 Commercial real estate developer - Twin Cities Business / 2017 Best Of Business

Our employees have developed some wonderful properties and our trust. Seems they’ve developed yours, too For more than 100 years, United Properties has been creating deep roots in the Twin Cities. We’re especially honored for Twin

C2017OMME2OM RERCIALC7IAL Cities Business readers to recognize our REALEA ESTATEE CO. commitment to strengthening this OFO THE YEAREAR community. We share this recognition with our outstanding employees: it’s their deep-rooted commitment that makes us the leader in Twin1 Cities commercial real estate.

UPROPERTIES.COM MINNEAPOLIS DENVER

48 TWIN CITIES BUSINESS tcbmag.com SEPTEMBER 2017 MORTGAGE COMPANY LEGAL SERVICES Marketplace Home Mortgage LLC LAW FIRM Law, Franchise Law, Real Estate Litigation and Mass Tort Litigation/ For most homeowners, the process of Gray Plant Mooty Class Action. buying a house is the most complex, Having celebrated its 150th anniversary last year, Gray Plant Winthrop and Weinstine ranked among 2017 Best Law Firms inscrutable—and important—financial Mooty is well poised to go 150 more. These days, the firm of 180- by U.S. News & World Report. transaction of their life. Marketplace plus lawyers is a full-services outfit that operates in more than a Home Mortgage’s business is built around dozen industries and has practice areas in virtually every sphere WEALTH MANAGEMENT FIRM making the process as painless as possible. of business, from corporate, banking and finance law to intellectual Wipfli By getting its arms around the whole property, labor, real estate and emerging technology. Over the Wipfli’s Private Wealth Services cover the gamut of private transaction—processing, underwriting, years the firm has received several awards for its dedication wealth management, from retirement planning and trust services closing and funding—Marketplace exerts a to diversity and equality in the workplace, and has been named to succession planning and charitable giving. Perhaps it’s the greater degree of control over the process countless times in various publications as one of Minnesota’s company’s long history, dating back to 1930, that gives its experts as well as outcome. What distinguishes it best places to work. But the work they do on behalf of clients is the patience and knowledge to stay the course in today’s volatile most, however, is that its employees seem where the firm truly shines. The firm prides itself on providing the markets. Growing and maintaining wealth requires research, plan to genuinely enjoy helping people make personalized service of a small firm, but with the resources and evaluation, performance assessments and portfolio oversight. A their homeownership dreams come true. backing of large one. one-size-fits-all approach won’t work: Every client’s needs are Last year, the company opened offices unique, and for more than 85 years, Wipfli has been providing the in Denver and Sioux Falls, expanding its Finalists: Faegre Baker Daniels | Winthrop & Weinstine kind of personalized service its clients value almost more than reach to six states—a solid growth path for money itself. an organization that has been serving the Expert Honors: Gray Plant Mooty placed 81st on Law360’s Twin Cities market for more than 20 years. 2016 list of 100 Best Law Firms for Female Attorneys;Franchise Finalists: Alerus Wealth Management | Times named 15 attorneys from the firm’s Franchise & Distribution RBC Wealth Management Finalists: Practice group as 2017 Legal Eagles, and U.S. News & World Bell Mortgage (Bell Bank) | Report listed the firm in its 2017 Best Law Firms rankings among Expert Honors: Alerus Wealth Management EY named Wells Fargo national and metropolitan firms. chairman, president and CEO Randy Newman a 2016 Upper Faegre Baker Daniels ranked among 2017 Best Law Firms by Midwest Entrepreneur of the Year. U.S. News & World Report for Commercial Litigation, Corporate

Thank you to everyone who voted us best in the business!

TopLine is honored to be named the 2017 Best Credit Union by Twin Cities Business Magazine.

For more than 80 years, TopLine has been dedicated to building life-long relationships to help our member-owners reach and manage their personal financial goals. 763-391-9494 | www.TopLinecu.com

Federally insured by NCUA

Best of Business FINAL.indd 1 7/19/17 1:29 PM

SEPTEMBER 2017 tcbmag.com TWIN CITIES BUSINESS 49 HUMAN RESOURCES

STAFFING/RECRUITING/EXECUTIVE SEARCH Salo Minneapolis Salo isn’t an ordinary search firm. Specializing in finance, accounting and human resources talent, it calls its people “super connectors.” Driven by curiosity, positive energy and professionalism, its award-winning team, co-located in Minneapolis and Chicago, connects companies with expert consultants who are passionate about solving problems. Salo has a finger on the pulse of the changing job market, and realizes that the contingent work force is no passing fad: it’s projected that in the not-too-distant future 50 percent of the workforce will be made up of independent contractors. Salo recognizes that the best and the brightest are in high demand, and that today’s business challenges require innovative, relationship-based staffing solutions. Matching the right consultant to the right work is equal parts art and science, and Salo does both admirably.

Finalists: CorTalent | Versique Inc.

LOGISTICAL SERVICES

AUTO DEALERSHIP Luther Automotive Rudy Luther started selling cars in 1952, and although Rudy himself died in 1997, his business has grown into a Midwestern institution, with 33 dealerships in four states and an inventory of more than 13,000 cars. Friendly service, fair prices and generous Let’s get solving. customer benefits such as discounts on gasoline and car washes are the building blocks of Luther’s success. Generations of Minnesotans (some from the same family) are loyal to Luther. Luther salespeople work to turn the ordeal of car shopping into a pleasant experience that makes customers feel appreciated and supported at every stage of the ownership cycle. Thank you! Finalists: Walser Automotive Group | Poquet Auto LOGISTICS COMPANY C.H. Robinson Worldwide Salo is honored to be voted the Supply-chain logistics, managing the complicated shuffle between supply and demand Best Staffing/Recruiting/Executive Search is what sets C.H. Robinson apart, which employs 2,000 in Minnesota and more than 14,000 around the world. The company serves small businesses to global brands, company by Twin Cities Business Magazine’s providing a portfolio of logistics solutions that includes supply-chain consulting, and Reader’s Choice Awards. global and local logistics and transportation. “We help companies get their products where they need to go, when they need to be there,” is how it describes its mission. Whether by truck or rail, ship or plane, C.H. Robinson helps move goods efficiently and salollc.com/solving cost-effectively, while providing plenty of tools to manage inventories and scheduling. Heavy loads, oversized equipment and other tricky situations are a particular specialty.

FINANCE | ACCOUNTING HUMAN | RESOURCES Finalists: King Solutions | Logistics Planning Services CHICAGO & MINNEAPOLIS Expert Honors: C.H. Robinson Worldwide was named one of Fortune’s © 2017 Salo World’s Most Admired Companies in 2017.

50 TWIN CITIES BUSINESS tcbmag.com SEPTEMBER 2017 PROPERTY SERVICES CONSISTENTLY THE BEST

COMMERCIAL PROPERTY MANAGEMENT FIRM DEVELOPMENT • CONSTRUCTION • MANAGEMENT Cushman and Wakefield/Northmarq Cushman and Wakefield/Northmarq employs more than 380 people in Minnesota and manages more than 40 million square feet of retail, industrial and office assets. One key to its success in property management is its dedication to specialized expertise in real estate sectors such as retail, industrial, land, office, multifamily and hospitality that require more than just a watchful eye. Though the firm does most of its business in Minnesota, it has the capacity to help institutions and companies around the world through its connection with Cushman and Wakefield’s global platform. The company’s recent merger with DTZ created a new corporate entity that employs 43,000 worldwide and boasts more than $5.5 million in revenue.

Finalists: Doran Companies | CBRE Group

COMMERCIAL PROPERTY BROKERAGE FIRM Cushman and Wakefield/Northmarq Because Cushman and Wakefield/Northmarq has such deep expertise in every area of the commercial real estate market, it is ideally positioned to provide brokerage services on either side of a transaction. The company’s consulting services offer investors and developers the intelligence they need to make wise business decisions, and its corporate-finance arm has broad access to global capital markets, as well as a long history of data and market analysis to draw from. Specialties in health care, hospitality, law, banking and finance set it apart in the Twin Cities.

Finalists: CBRE Group | Jones Lang Lasalle

Expert Honors: CBRE Group was named one of 2015’s Most Ethical Companies by Ethisphere Institute. Jones Lang LaSalle ranked 21 out of 50 on LinkedIn’s 2017 Top Companies Where the World Wants to Work Now. Glassdoor named Colin Dyer one of the Top 50 CEOs in the U.S. Large Company category in 2016.

COMMERCIAL REAL ESTATE DEVELOPER United Properties Twin Citians are waiting to see what will become of the former Macy’s/Dayton’s building in downtown Minneapolis, and whatever happens, United Properties will be at the center of it. A partner with New York developer 601W Cos., United has a long history in the Twin Cities, including its recent emphasis in the North Loop. Health care and senior housing are a focus. United recently moved its headquarters downtown, a decision it says is a reflection of its motto, “Creating deep roots.” HUMBLING,

Finalists: Doran Development | Ryan Companies TO SAY THE LEAST.

TITLE COMPANY Titlesmart If you’ve bought or sold real estate, you know that an experienced, competent title We’re honored to be named a finalist company can make all the difference. Titlesmart guides clients through every step of in the Wealth Management category the process, including title, escrow and closing. Named one of Inc.’s 5,000 Fastest- of Best of Business Readers’ Choice. Growing Private Companies in America for three years running (2014-2016), White From all of us at Alerus, thank you. Bear Lake-based Titlesmart has six Twin Cities offices. Co-owners—and sisters— Cindy Koebele and Angela Shackle opened their doors in 2007, in the midst of the housing crisis. As recently as 2009, the company had nine employees, but now employs 66. A Certified Women’s Business Enterprise, Titlesmart built its reputation through old-fashioned customer satisfaction.

Finalists: Tradition Title | Bankers Title & BANKING :: MORTGAGE :: RETIREMENT :: WEALTH MANAGEMENT :: Closing Services 612.321.0991 ALERUS.COM

SEPTEMBER 2017 tcbmag.com TWIN CITIES BUSINESS 51 We are the... INVESTIGATORS, ANALYSTS, AND COUNSELORS. THE PROTECTORS OF PROPERTY RIGHTS. WE INSPECT TITLES AND ADVOCATE FOR HOMEBUYERS. WE SEEK A HIGH STANDARD OF ACCURACY. WE PROVIDE PEACE OF MIND. RECREATION/WELLNESS WE ARE THE AUTHORITY IN REAL ESTATE TRANSACTIONS. EXECUTIVE HEALTH PROGRAM WE ASSURE THAT LAND TRANSFER IS Mayo Clinic EXPEDITIOUS AND SECURE. Mayo Clinic’s Executive Health Program is designed to help busy executives, business OUR COMMITMENT TO EXCEPTIONAL SERVICE owners and entrepreneurs maintain a healthy lifestyle. It involves a comprehensive STRENGTHENS OUR MISSION. health/lifestyle assessment and medical history review, as well as a one-on-one interview with an executive health physician—but the evaluations themselves are WE REDUCE RISK SO THAT scheduled and executed with maximum efficiency in mind. Those involved in the HOMEBUYERS CAN REST ASSURED. program say its true value lies in the enduring relationship it establishes with the hospital and its network of physicians. Many companies end up sending an entire executive team, in the belief that healthier executives make for a healthier company. We are TitleSmart. Finalist: Allina Health CONTACT US FOR A QUOTE WHITE BEAR LAKE APPLE VALLEY HEALTH INSURER EDINA HealthPartners 651.779.3075 FOREST LAKE MAPLE GROVE These are fraught times for medical providers, but HealthPartners has been diligently [email protected] 6 LOCATIONS WOODBURY TITLE-SMART.COM trying to change the way modern health care is delivered through its “Triple Aim”: improve the health of the population, enhance the patient experience and make health care more affordable. As the largest nonprofit HMO in the country, HealthPartners hopes to wield influence by setting a progressive example. Expanded health and wellness programs, incentive-based disease prevention, greater cost transparency, targeted services for chronic disease, data-based cost analytics, community partnerships—these strategies are part of the HealthPartners effort to deliver high- quality care at lower cost.

Finalists: Blue Cross and Blue Shield of Minnesota | Medica

Expert Honors: HealthPartners won Hospitals and Health Networks Most Wired award for use of Information Technology and was named the top private health plan in Minnesota according to the 2014-2015 NCQA Health Insurance rankings.

HOSPITAL Children’s Minnesota Children’s Minnesota employs more than 5,300 and has established itself as a global leader in pediatric medicine, often pioneering research and procedures that benefit children and families everywhere. Children’s treated more than 133,000 last year in 60 different specialties and is working to make its facilities more accessible to residents throughout the state. The hospital is expanding its critical-care transport program for children who need to be moved from community hospitals. In January, the Children’s/Allina Midwest Fetal Care Center added open fetal surgery to its programs, becoming one of fewer than a dozen centers in the country with capabilities.

Finalists: Park Nicollet Methodist Hospital | Maple Grove Hospital

Expert Honors Children’s Minnesota was named a Best Children’s Hospital in the nation 2016-2017 by U.S. News & World Report.

09-17 TCB Ad Fed.indd52 TWIN 1 CITIES BUSINESS tcbmag.com SEPTEMBER 2017 8/1/17 10:57 AM TECHNOLOGY SERVICES

AUDIO/VISUAL PROVIDER Tierney Brothers As audio-visual technology continues to expand in pervasiveness and complexity, Tierney Brothers keeps up by expanding its services proportionately. Wherever conference rooms, boardrooms, classrooms, and digital signage are found, Tierney technicians keep the screens sharp and the projectors running. Whether working in K-12, higher ed, government or a corporate environment, Tierney Brothers provides comprehensive installation, design and support services tailored to the specific needs of its clients.

Finalists: Marco | EPA Audio Visual

Expert Honors: Tierney Brothers was an InfoComm AV Provider of Excellence company and a Commercial Integrator Top 5 K-12 (education) Market Integrator for 2016. Marco received numerous awards as a best place to work, was named to the CRN Tech Elite 250, received a 2016 CRN Triple Crown Award, an imageSource 2016 Perfect Image Award for Dealer of the Year and an imageSource 2016 Perfect Image Award for Outstanding Leadership in Customer Engagement, among others.

DOCUMENT MANAGEMENT/PRINTERS AND COPIERS Marco The value proposition Marco delivers to its customers is efficient, cost-effective management of business equipment—printers, copiers, A/V systems, IT infrastructure—all of which have become more complicated in the digital age, but no less essential. In addition to keeping business equipment running, Marco provides document-management systems that save time and money by streamlining work processes, automating routine tasks and making it easier to file, manage and share documents across an enterprise. Marco also has several specialty printers—e.g., wide-format and digital—that can handle virtually any job, from customized mailers to full-size posters and banners. Sophisticated software and cloud-based services integrate all of this smart technology, allowing customers to do what they do best: Get back to business.

Finalists: Loffler Companies| Metro Sales OUR CLIENTS’ TRUST SOFTWARE COMPANY Avionté MEANS THE WORLD TO US. In today’s candidate-driven market, it’s essential that staffing software is created by innovative developers and expert staffing specialists. That’s exactly what founding partner and CEO John Long had in mind when he created Avionté. Long saw the need for user-friendly software that works on all levels: opportunity management, recruitment, on-boarding, payroll and billing solutions are supported Thank you for recognizing by comprehensive functionality software that’s intuitive and accessible on mobile devices. Avionté’s cloud-based, fully integrated, end-to-end software ensures a fluid and responsive solution that lets users focus on people and partnerships.

Finalists: Luminfire| Code 42 as a 2017 Best of Business award recipient WEB DEVELOPMENT FIRM Spyder Trap Spyder Trap says it lives at the intersection of code and creativity, an exclusive address for the digitally inspired developers, designers, content strategists, SEO pros and marketers that make Spyder Trap such a remarkable web-development firm. CEO Mike Rynchek founded the company in 2008 as one of the Twin Cities’ first digital-only marketing firms. Since then, the space has exploded to include mobile apps, social media, big data and, increasingly, fluid communication between devices of all kinds. Developing, deploying and managing these digital tools is half of Spyder Trap’s success; the other is the creativity and strategy behind them—the part that makes the user experience enjoyable and the client experience rewarding. tcbmag MANAGED IT • COPY • PRINT • CLOUD Finalists: Rocket 55 | Brandography | Clockwork Active Media Systems www.loffler.com

SEPTEMBER 2017 tcbmag.com TWIN CITIES BUSINESS 53 LEAD THE WAY at the Twin Cities’ newest destination for innovation

4Front is the place for cutting edge innovation, whether you’re a start up or an industry leader. With top-notch amenities and plenty of room for growth, you’ll be positioned to attract and retain quality employees when you make the move to 4Front.

We’ve got everything you need in one convenient location PINE SPRINGS • 4 buildings in a beautiful 122 acre setting • Free parking 36 • 10,000-300,000 square feet available • 2 miles of walking trails NORTH ST. PAUL 694 • 60 acres for expansion • Metro Transit Bus service • Home to Incubology, a world-class • Fully equipped conference facilities high-tech incubator • 20 minutes to MSP airport OAKDALE 14 • Two cafeterias and patio dining • New, local ownership (Slumberland) with • Two fitness centers long-term commitment to the campus

For more information, contact: Erik King - [email protected] Tom Stella – [email protected] Brian Brisky – [email protected] SPECIAL REPORT

St. Croix Crossing

By Gene Rebeck

hances are you’ve spent some quality time in one of its attractive, historic cities, including Afton, Stillwater and Marine on St. Croix. Or perhaps you’ve picked apples at Pine Tree Apple Orchards, drifted down the St. Croix River past Bayport, or met with friends for dinner at one of Wood- bury’s excellent restaurants. And you likely never thought, “Wow—this is Washington County?” Leaders from the county as well as 33 of its cities have come together to change that—particularly when it comes to business leaders, commercial real estate developers, business-site selection firms and others who strive to find the right fit for their businesses and the people they employ. “From a diversity of options perspective, it’s all right here—in more than one way,” says Chris Eng, economic development director of the Washington County Com- munity Development Agency. “When it comes to property, no matter what you’re looking for, we have it. You can’t find large parcels of land this close to the downtowns and the airports anywhere else [in the greater Twin Cities nine- county metro area].” Washington County also has numerous health care businesses, manufacturers, and logistics and transportation companies, plus several craft breweries and apple orchards. There is an intriguing mix of niche businesses, Section sponsored by including a maker of steel horseshoes and two venues offering old-fashioned barn weddings. The county is also remarkably varied in terms of terrain. Its 423 square miles encompass 468 lakes of 10 acres or more. There are farm fields in the north, ski hills

SEPTEMBER 2017 tcbmag.com TWIN CITIES BUSINESS 55 SPECIAL REPORT | WASHINGTON COUNTY

Washington County’s Great Outdoors FOREST LAKE SCANDIA

Histroric Afton State Park Washington County n Located along the St. Croix, the popular metro-area Courthouse located state park provides camping, fishing and challenging MARINE ON in Stillwater. hiking opportunities that wind through remnant oak ST CROIX forests, savanna and prairie. HUGO WITHROW Belwin Conservancy n This nonprofit organization protects and restores DELLWOOD more than 1,400 acres of land in West Lakeland and Afton townships, just south of Interstate 94. It also hosts youth sports and provides nature-based learning MAHTOMEDI opportunities to more than 10,000 students each year. STILLWATER

Big Marine Park Reserve BAYPORT n Just west of Marine on St. Croix is Big Marine Lake, LAKE ELMO one of the county’s largest lakes. The park reserve at Washington County the lake’s southern end provides a large playground, OAKDALE is rated fifth-best swimming beach, picnicking areas, a boat launch and in Minnesota for fishing pier. overall quality of life Public Schools A+ WOODBURY by Pittsburgh-based Cottage Grove Ravine Regional Park n AFTON neighborhood Crime and Safety B Once the current renovations are completed next spring, this 520-acre park will provide paved and soft- ratings website Nightlife A- surface hiking trails through an oak woodland. Niche, with the COTTAGE GROVE Diversity B following scores: Carpenter Nature Center Good for Families A+ n A nonprofit organization protects725 acres of Housing A- wildlife habitat along the St. Croix River and provides hands-on, nature-centered learning to more than 20,000 K-12 youths each year. It’s also home to the Flint Hills Trailside Lodge and Conference Center, which offers space for off-site business meetings.

Gateway and Browns Creek state trails n The18-mile Gateway State Trail follows a former Soo Line Railroad right-of-way from downtown St. Paul to Pine Point Regional Park, north of Stillwater. This popular biking trail connects with the Browns Creek State Trail, which runs nearly 6 miles before terminating in in the south, riverside settings along the businesses employ 20 or fewer people. downtown Stillwater. Both trails offer attractive views blending open space and urban vistas. St. Croix River and the wooded settings Most of the county’s communities of Scandia and May townships. “At 4:30 have their own economic development Lake Elmo Park Reserve n p.m., you can be on the slopes, on the wa- director or city administrator to help The reserve is home to20 miles of rolling trails that wind through 2,200 acres of oak forests, prairie, wetlands and lakes. Other recreational opportunities include camping, swimming, ter, hiking, mountain biking or enjoying businesses settle there and grow. Their playgrounds, boating, fishing and picnicking. some of the best parks in the world. It’s approaches typically reflect their distinc- fantastic for attracting talent,” Eng says. tive character. Woodbury is the county’s William O’Brien State Park Despite its diverse appeal, there’s one bustling suburban center for health care n The state park, located just north of Marine on St. Croix, offers12 miles of hiking and skiing thing that the county hasn’t been good at: and retail. Afton is small and bucolic. trails, camping, swimming and fishing, including the self-guided Riverside Trail along the St. Croix. marketing itself. In June 2016, the Wash- Stillwater has its picturesque downtown ington County Community Development and vigorous retail activity. Newport, St. Square Lake County Park n Located north of Stillwater, this publicly accessible lake is popular for its swimming beach, Agency was launched by the county’s Paul Park, Hugo and Forest Lake have nu- scuba diving, picnicking and fishing. Housing and Redevelopment Authority merous industrial businesses along with a to do just that. The agency hired Eng, who small-town feel. served as executive director of the Duluth “We’ve worked hard to identify com- Economic Development Authority from mon goals while respecting the rights of 2012 to 2015, to take charge. communities to be themselves,” Eng says In July, Eng’s agency rolled out a of the countywide agency. “There’s real program called Open to Business. It’s strength in our diversity, and we’d lose that designed to help entrepreneurs with their if we set out with the goal of creating 33 financials and business plans before they similar communities.” seek financing from banks or investors. In addition, “there’s a shared recogni- The program also can provide direct tion that when one community wins, loans to early-stage businesses. “If we can we all win,” Eng says. “A business that help our 18,000 non-employer busi- chooses to locate in Oakdale might hire nesses add just one job, that’s potentially an employee who buys a house in Lake 18,000 new jobs,” Eng says. And smaller Elmo and does most of their shopping in businesses in particular are flourishing Woodbury. There isn’t one winner and in Washington County: 86 percent of its two losers there. There are three winners.”

56 TWIN CITIES BUSINESS tcbmag.com SEPTEMBER 2017 Prime Redevelopment Opportunity on HWY 61 $1.00! Highly Visible, Development-Ready

Property: • 4.3 Acres Central Business (C-1) 4.3 acres • City Owned 8 • Beautiful shoreline on Egg Lake

• Ideal for restaurant or entertainment use 2 Miles from I-35 Location: Egg Lake • Centerpiece of Downtown Redevelopment Area • Highway 61 - Traffic Count 14,200 • Central corridor between Forest Lake and White 61 Bear Lake For Sale for $1 to Eligible Projects!

Unlock Opportunities in Hugo! Do Business in a Vibrant and Growing Community

Rapid residential growth and low tax rates make Hugo an exciting place to invest! Let us help you and your business find a home in one of our thriving industrial parks and commercial areas.

For more information about our business community, tax rates, and available properties in Hugo, visit our web page www.ci.hugo.mn.us/economic_development

Contact Rachel Juba / [email protected] / 651-762-6304 SPECIAL REPORT | WASHINGTON COUNTY

So what makes the east metro fertile asking, ‘What can we do to make business ground for growing business? For one, better?’ ” the county has “a strong, well-educated Still, Washington County has its pool of labor here to help businesses challenges. Approximately 100,000 people grow,” says Marc Cove, founder and pres- commute outside of the county’s bound- ident of Oakdale-based Platinum Bank. aries to work each weekday. While that’s There’s also plenty of space to expand not necessarily a bad thing—one of the and room to park, and it’s easier to work county’s selling points is its quick access to with local government. “You don’t view both Twin Cities downtowns—Eng and the city and the county as an adversary— the communities want to create more em- they’re partners. They’ve done a very ployment opportunities within its borders good job building a regional economic to make life easier for those individuals, framework to allow you access to services, while allowing the county and its various access to space, access to talent,” says cities to generate more tax revenue. Cove. Government officials “want us to Even though the county has plenty of be successful,” he adds. “They’re always highway access to interstates and major

POPULATION CHANGE, 1950-2015

MINNESOTA

WASHINGTON COUNTY 5,489,594 5,303,925

4,919,479 Marine on St. Croix 4,375,099

4,075,970 251,507 highways like Minnesota 36 and U.S. 61 238,136 3,804,971 3,413,864

201,130 and 10, county residents’ biggest concern 2,982,483 is the lack of public transportation. 145,896

113,571 Workers and residents would like to rely 82,948 52,432 less on their own cars to get to and from

34,544 work and to St. Paul and Minneapolis. Washington County has three pro- 1950 1960 1970 1980 1990 2000 2010 2015 posed bus and rail transit corridors: the SOURCE: U.S. CENSUS BUREAU Rush Line Corridor, the Gateway Corridor and the Red Rock Corridor. There’s an opportunity to promote and participate in transit and transportation corridor planning efforts and to advocate for state and PER CAPITA INCOMES federal transportation and transit investments in the east metro, according to Eng. Another challenge the county is facing is maintaining a sense of community MINNESOTA $31,642 for the increasing percentage of people over 65 years of age, while attracting ANOKA CO. $31,474 employers and young talent who will work, live and stay there. Then there’s the CARVER C0. $38,638 struggle of how to keep small-community values, charm and appeal while grow- DAKOTA CO. $35,755 ing their economies. That’s a challenge Eng considers when he provides a point HENNEPIN CO. $38,125 of contact for site selectors and developers. “With one call, a site selector can call RAMSEY CO. $30,076 me, and I can unlock the opportunities that exist within 30 different communi- SCOTT CO. $35,690 ties here,” he says. It’s those types of efforts that has WASHINGTON CO. $37,841 companies giving Washington County a close look. SOURCE: AMERICAN COMMUNITY SURVEY

58 TWIN CITIES BUSINESS tcbmag.com SEPTEMBER 2017 Woodbury

“We’re sort of the economic hub of the n east metro,” says Janelle Schmitz, assistant community development director for the City of Woodbury. It might sound as though she’s bragging. But she can back up her assertion. This year, Woodbury is celebrating the 50th anniversary of its incorporation, and its population already exceeds 70,000 people. It’s not by accident. Early Woodbury leaders saw the potential for a thriving community that included residential, commercial and industrial opportunities. Its commitment to long term and strategic planning has laid the foundation for remarkable business development. As of the first quarter of 2017, Woodbury was home to about 27 percent of the county’s nearly 80,000 jobs. Many of those positions are in the city’s 190- plus health care-related businesses, including clinics and several new orthopedics facilities. HealthEast, anchored by its Woodwinds Health Woodbury Lakes shopping center Campus, has about 900 employees in Wood-

SEPTEMBER 2017 tcbmag.com TWIN CITIES BUSINESS 59 SPECIAL REPORT | WASHINGTON COUNTY

bury, making it the city’s largest private employer. Schmitz believes that the opening of HealthEast’s Making the Move to Woodbury campus in 2000 set the stage for the city’s continued health care growth. Self Esteem Brands LLC, whose best- Nearby Maplewood-based 3M Co. is another known division is the Anytime Fitness large employer, with about 500 employees in its chain, was based in Hastings for Woodbury offices. Harvey Vogel Manufactur- several years before moving to a more ing Co., which produces custom metal assemblies spacious site in Woodbury in 2016. for military, medical and technology customers, Despite its convenient location Chuck Runyon, CEO, Anytime Fitness employs nearly 200. One of Woodbury’s newest at the corner of interstates 94 and businesses is Self Esteem Brands, which owns Any- 494/694, the property had been for time Fitness. The company moved its headquarters sale for at least a decade before the 80,000-square-foot building. It visitors, particularly the franchisees to Woodbury last year, and has big expansion plans company purchased it. That might reflects the company’s brand, which who come to Self Esteem Brands' (see “Making the Move to Woodbury”). have been because the land had only Runyon summarizes as inside headquarters for two-week training That business-sector diversity is just the way 9 buildable acres—the rest is mostly and outside activity. The 40-acre sessions. Trips to and from the airport Woodbury likes it. “We have consistently worked to wetlands. But those wetlands were site provides a 1-mile walking and are quicker, and there are plenty of build and nurture relationships with our business part of the attraction for CEO Chuck jogging path for the more than 200 hotels both near the airport and in community, and the result is the vibrant commu- Runyon and his business partner, employees who work there. Woodbury, as well as restaurants and nity you see today,” says Schmitz. company president Dave Mortensen. “Our ability to attract talent is shopping. Woodbury’s location on interstates 494 and 94 “It was perfect for us, though I don’t much better now,” Runyon says. Today, there are more than has also positioned the city for further growth, al- know how perfect it would be for Drive times to the new HQ from other 3,600 Anytime locations in all 50 lowing it to serve as a conduit between the Twin Cit- other employers,” Runyon says. parts of the metro are far better than states and nearly 30 countries, and ies and Wisconsin. "Our geographic advantage has For Self Esteem, the property they were in Hastings. The Woodbury the company has plans to open 400 contributed to our economic success," says Schmitz. is more than a place to build an location also is more convenient for annually for the next five years.

"We now have 23,000 jobs, and we're still growing." PETE CROUSER

9-17 TCB City Cottage Grove.indd 1 8/1/17 10:39 AM

60 TWIN CITIES BUSINESS tcbmag.com SEPTEMBER 2017 Cottage Grove, Newport and St. Paul Park

In Washington County, it’s called “the Loop”—the n circle of interstates whose eastern edges are 494 and Success in Cottage Grove 694. To be in the Loop, or at least on just the outside, is considered prime corporate real estate. While these three cities Ten years ago, Werner Electric was are a little outside the Loop, they are still home to numerous bursting at the seams of its Minneapolis thriving and distinctive businesses. headquarters. Needing a new location, “There is an advantage to being outside [the Loop]”, says company president Ben Granley Christine Costello, Cottage Grove’s economic development “interviewed” 10 cities. Most turned the director. There’s less congestion, and land prices are generally company down because it has trucks coming in and out all day, starting early in the morning. Cottage Grove was more affordable. different. “Not only did Cottage Grove want us, but they went out of their way to broker the deal to help get us to Cottage Grove is the largest of the three cities, with a come here,” Granley says. population of more than 35,000. Among the city’s large Founded in the 1920s, Werner is a distributor of electrical and energy equipment and components to employers is 3M Co., which has a signage, R&D and manu- electrical contractors and OEMs, among others. In the past seven years, most of its growth has come from facturing facility in the southeastern end of town. Bayport- industrial automation. Over 50 percent of its business is in industrial automation for customers in the packaging, based Andersen Corp. also has a manufacturing facility in food processing, oil and gas, and medical device industries. Cottage Grove. Relatively low land costs made it cost-effective for Werner Electric to build its own building, and the city allowed “We feel we have a strong manufacturing base, and we the company to put up its own wind-power turbine, which doubles as an energy source and a brand identification. want to expand it,” city administrator Charlene Stevens says. The city also provided tax-increment financing and tax-abatement incentives when the company moved. Currently, The city also is working to expand retail—a new Hy-Vee 210 of Werner Electric’s 340 employees work in its 185,000-square-foot headquarters in Cottage Grove. “There supermarket will soon open at 80th Street and Pt. Douglas was a real business value to moving down here,” Granley says. “The tools in [the city’s] toolbox have helped point us Road. in the right direction.” Cottage Grove is also home to a variety of distinctive busi-

Let Chris Eng help unlock opportunity in 33 East Metro communities.

• Commited to your success • Close and connected • Affordable • Untapped and unexpected • Highly educated and available talent pool • Outstanding local K-12 and higher eductaion • Low crime rate and high quality of life • Stunning natural beauty

Christopher Eng Washington County CDA Director of Economic Developement 7645 Currell Boulevard Woodbury, MN 55125 (651) 202-2814 direct [email protected]

9-17 TCB WCCDA 1-2.indd 1 8/1/17 1:41 PM

SEPTEMBER 2017 tcbmag.com TWIN CITIES BUSINESS 61 SPECIAL REPORT | WASHINGTON COUNTY

nesses, including American Business Group, 1902, still stands on her a distributor of livestock feed and pet food company’s grounds as that also supplies logistics and warehousing its headquarters. Of the services. Up North Plastics manufactures company’s roughly 500 trash bags, shrink film and related products full-time employees, in its 400,000-square-foot Cottage Grove about 300 work in Min- plant. Remarkably, the city also is home to nesota. two venues for “barn weddings” and other Several niche busi- festive events. Both the John P. Furber Farm nesses are also well estab- and the Hope Glen Farm “take advantage of lished in Newport. One our natural scenic landscape,” Stevens says. is Newport-St. Paul Cold Still, Stevens and Costello want to Cottage Grove Storage, whose facility attract more companies. Cottage Grove includes 4.45 million recently updated its strategic plan to focus 3 to 50 acres, in its business park. country, notably Oregon and Illinois, to cubic feet of space for storing frozen and more intensely on business retention and Cottage Grove’s smaller neighbors, extend its growing season. While most refrigerated food. expansion. According to Costello, city gov- Newport and St. Paul Park, both hug of its business is in the Midwest, it sells “We deal with both Fortune 500 and ernment wants to help ease the permitting the shores of the Mississippi. Like Cot- plants throughout the country and also privately owned food producers in the re- and approval processes for business. The tage Grove, both emphasize their home- has overseas customers. gion—local food manufacturing compa- city recently partnered with the University town atmosphere. Bailey remains firmly rooted in nies, mostly in Minnesota, Wisconsin and of Minnesota to interview 40 businesses Newport is the home of Bailey Washington County because it continues Iowa,” company president and CEO Drew in Cottage Grove to find out what their Nurseries Inc., one of the country's largest to flourish there, thanks in large part to the Greenberg says. Clients tap Newport needs are and how the city can better work wholesale tree, shrub and flower busi- strong workforce that it can draw from. Cold, founded in 1959, to warehouse their with them. (The report is expected to be nesses. Bailey Nurseries operates growing “We have a lot of connection to this area,” inventory and to export products to their released in the fall.) The city also is working facilities in several counties in the state, says company president Terri McEnaney, customers via truck or rail. Like other to develop shovel-ready sites, ranging from and has sizable operations across the whose family’s original home, built in businesses in the area, Newport Cold uses

the city of forest lake

as good as it sounds Shovel Ready Sites | Strong Workforce | Great Location For more information contact Aaron | 651-209-9750 www.cityofforestlake.com

62 TWIN CITIES BUSINESS tcbmag.com SEPTEMBER 2017 commercial construction projects are to Andeavor, the fifth-largest refiner in proposed or underway. Projects include the U.S. The sale includes the SuperA- an 83,000-square-foot office/warehouse merica fuel and convenience store chain, structure in the southern part of town, which St. Paul Park supplies gasoline to. which is scheduled to be completed Several other longtime businesses by the end of the year, and a 42-unit continue to thrive here, such as Total workforce apartment project that opened Mechanical, a mechanical and HVAC in August. The Red Rock Village project, construction and service company that which would comprise 126 homes, operates in a five-state area. Most of its a supermarket, a restaurant and an client base is in the central to east metro underground parking garage, is in the area, and includes Metropolitan Council- conceptual stage. owned wastewater plants. It also special- Renewal by Andersen's Cottage Grove headquarters Like Newport, St. Paul Park is es- izes in ice-rink construction, a business sentially built out, with little room to that is nationwide. the BNSF and Union Pacific rail lines that izes in packaging for hazardous materials; grow, so most of its opportunities will Five years ago, Total Mechanical operate in Newport and St. Paul Park. Warehouse Shell Sales, founded in 1939, have to come from redevelopment, says added on to its current location, which “We ship out in excess of 360 million which distributes oyster shells used in city administrator Kevin Walsh. now comprises 6,500 square feet. “The pounds a year,” Greenberg says. “And as poultry feed; and Metropolitan Gravel, St. Paul Park’s largest private employ- whole area is thriving right now, and has our customers grow, we have to grow.” a trucking and truck-maintenance com- er is an oil refinery that’s been in the city been for a while,” says Total Mechanical This year, Newport Cold is adding nearly pany that transports aggregates to road since 1939, making it the state’s oldest. president Bruce Pylkas, who is a former 54,000 square feet to its facility. When the builders, as well as moving other heavy El Paso, Texas-based Western Refining, president of the Cottage Grove Area work is completed this month, the facility goods and commodities. which owned the facility, was acquired Chamber of Commerce. Even with the will cover 280,000 square feet. While Newport is fairly built last year by San Antonio-based Tesoro three communities’ historically high oc- Other niche Newport businesses out, according to city administrator Corp. The St. Paul Park refinery will help cupancy rates, he adds, there’s still more include Ten-E Packaging, which special- Deb Hill, several new residential and make Tesoro, which is changing its name developable space available.

Andersen is an international corporation with locations across Make a Difference North America and sales worldwide. at Andersen 10,000+ JOIN OUR TEAM. EMPLOYEES

There’s something meaningfully different about Andersen. Many People in all areas of the people in all parts of the organization find their career home here. organization find their In fact, the average tenure is more than 10 years. career home here. AVERAGE TENURE: A key to our company’s enduring success is our purposeful approach, from hiring employees to acquiring new companies. As a MORE THAN company we pride ourselves on doing the right thing for customers, for employees, for the community and for the environment. 10 YEARS

Andersen is a place of Visit andersencareers.com and discover how you vibrant energy and can build a rewarding career with Andersen. INNOVATION # of U.S. patents across our enterprise: OVER 75

SEPTEMBER 2017 tcbmag.com TWIN CITIES BUSINESS 63 SPECIAL REPORT | WASHINGTON COUNTY

Forest Lake and Hugo

Located on the northern edge lockers and storage for the athletic, n of the county, Forest Lake has military and firefighting markets, prospered in a location that serves as among others. WDI Inc. crafts stylish something of a gateway between the wooden packaging and promotional metro and northern Minnesota. Since items, including humidors, food 2000, its population has boomed, containers and displays. And St. Croix Traditions begin here... from a shade over 14,000 to more Forge Inc. produces steel horseshoes than 20,000 today. for the riding and racing markets. We have been building business relationships What’s helping drive the growth One of the city’s largest pri- for over 105 years. is its close proximity to the junction vate employers is Teamvantage, a of interstates 35E and 35W, which custom manufacturer and injection Commercial Real Estate ▪ Operating Lines ▪ SBA provides easy access to both major molder for the medical and aerospace Construction and Land Development downtowns, as well as to employees industries, among many others. In living both north and south of the 2013, Teamvantage moved into a new city. Plus, Forest Lake has numerous 111,000-square-foot facility that is lakes, nature preserves and trails. “We triple the size of its previous Forest still maintain a small-town feel [with Lake plant. Its sister company is Forest a] traditional downtown area,” says Lake-based Custom Mold & Design.

651.777.8365 Dan Undem, assistant to Forest Lake’s As the city grows, Forest Lake Your Community Bank Since 1911 city administrator. is looking to add more businesses Member FDIC lakeelmobank.com Forest Lake has some of the most to its stable and help facilitate and Stillwater ∙ Lake Elmo ∙ Oakdale distinctive manufacturing businesses streamline the permitting process, in the Twin Cities metro area, with Undem says. companies like Themed Concepts, Like Forest Lake, the city of Hugo is which makes whimsical playground full of natural resources and environ- equipment and glass fiber-reinforced mental amenities, says city adminis- concrete constructions for zoos, trator Bryan Bear, who describes his amusement parks, resorts and other city as “an urbanizing landscape in a LAND FORLAND SALE FORvenues. There’s GearGrid Corp., ruralSALE setting.” Along with manufactur- 6.03 ACRES, SHOVEL READY which manufactures custom steel ing and distribution businesses, there I-494 6.03 ACRES, SHOVEL READY • 262,700 SQ.FTI-494 Outlot A • ZONED MX-3 MIXED USE Red Rock • 262,700 SQ.FT

Crossing US Hwy 61 • LESS THAN 20 MINUTES TO MSP AIRPORT Outlot A • ZONEDBlending MX-3 the Old MIXED With the NewUSE Newport Transit Red Rock CHRISCrossing ENG US Hwy 61 • LESS ManominTHAN Resawn 20 Timbers, MINUTES based help TO during MSP the summer) AIRPORT work in a in Hugo, is a 19-year-old company 28,000-square-foot facility in a Hugo LAND FOR SALE651-202-2814 that reclaims wood from old barns, industrial park, where it has been EconomicNewport Development Transit Director houses and factories—“primarily located for 12 years. “We’re close to 6.03 ACRES, SHOVEL READY barns right now, because that’s the Twin Cities, but far enough away I-494 LAND FOR SALE where the trend is,” Manomin so that the costs of our operations • 262,700 SQ.FT CHRIS ENG 6.03 ACRES, SHOVEL READY owner Sarah Londerville says. are maybe a little less” than they Outlot A I-494 • ZONED MX-3 MIXED USE Manomin mills the old wood, would be in St. Paul or Minneapolis, LAND FORLANDRed Rock SALE FOR SALE • 262,700 SQ.FT LANDCrossing US Hwy 61 FOR SALE removes the nails, treats it to Londerville says. The location also 6.03 ACRES, SHOVEL READY• LESS THAN 20 MINUTES TO MSP AIRPORT 651-202-2814 Outlot A 6.03 ACRES, SHOVEL READY remove any insect infestation, then makes it easy for the several trucks I-494 • ZONEDI-494 MX-3 MIXED USE6.03 ACRES, SHOVEL READY Red• Rock262,700 SQ.FT I-494 • 262,700 SQ.FT converts it into flooring, panelingEconomic that come Development in and out each day. Director Crossing US Hwy 61 • LESS NewportTHAN Transit 20 MINUTES• 262,700 TO MSP SQ.FT AIRPORT and related products that are stylish Manomin’s customers include Outlot A • ZONED MX-3 MIXED USEOutlot A • ZONED MX-3 MIXED USE Red Rock OutlotRed RockA • ZONED MX-3 MIXED USE and full of character. “Right now, homeowners, builders, remodelers

Crossing US Hwy 61 Red Rock US Hwy 61 CHRIS ENG Newport• LESS Transit THAN 20 MINUTESCrossing TO MSP AIRPORT• LESS THAN 20 MINUTES TO MSP AIRPORT reclaimed wood is all the rage,” and restaurants. While most are Crossing US Hwy 61 • LESS THAN 20 MINUTES TO MSP AIRPORT Londerville says, adding that the located in Minnesota and Wisconsin, CHRIS ENG company’s 2016 revenue was 22 it also has significant sales Newport Transit 651-202-2814 Newport Transit Newport Transit Economic Development Director percent over 2015. nationally. Manomin-milled wood CHRIS ENG651-202-2814CHRIS ENG Most of Manomin’s barn wood graces Ralph Lauren’s New York CHRIS ENG comes from the Midwest; the City store, for instance. “The urban Economic Development Director 651-202-2814 Appalachians are another abundant loft look is really hot right now,” 651-202-2814651-202-2814 source. The company’s 20 full- Londerville says. ”Old wood goes Economic Development Director Economic Development Director time employees (it hires additional with that look.” Economic Development Director

9-17 TCB WCCDA64 1-4.indd TWIN CITIES 1 BUSINESS tcbmag.com SEPTEMBER 2017 8/1/17 10:50 AM We Supply, Deliver and Install it All Whether you are a residential or commercial contractor, or seek assistance with an ambitious personal project, JL Schwieters can provide you with everything you need to get the best results—with a 100% price guarantee. ~ Proudly Serving the Twin Cities since 1980. ~

Quality From Start to Finish Schwieters Co. Inc. offers you a finish carpentry, cabinetry, millwork & prefinish solution. Convenient “One Call Delivery & Install” simplifies the process & keeps you on schedule for your residential & commercial needs. Our experienced & professional team, along with state of the art equipment, guarantee a quality experience from start to finish on your project. Moose created by Themed Concepts for North Woods Optics, both located in Forest Lake 13925 Fenway Boulevard N. are several row-crop, dairy and horse primarily for mining equipment, Hugo, MN 55038 farms within the city limits. There also that it ships worldwide. It employs 20 jlschwieters.com | schwieterscompanies.com are hunting preserves and a hunt club, in Hugo and is growing by double- partly or wholly within the city limits. digit percentages. Rick Stewart, the “There are a tremendous number managing member of the partner- of [business] success stories in Hugo,” ship that owns the company, expects Bear says. One of the city’s newest— Loadmaster’s headcount to be close to and oldest—is Glamos Wire Products 35 within a year or two. Loadmaster Co., which makes plant supports, basis now planning to add up to 35,000 ket extensions and landscape staples square feet of space to its current for the lawn and garden industry, 80,000-square-foot facility. as well as custom wire forms for the Much of the company’s optimism american made quality. family owned service. concrete and industrial markets, and is the allocation in the 2017 legislative generations of trusted delivery. bale tires used for bailing recycled session of $1.5 million to repair St. boxes, paper, plastics and metal. Its Paul-based Minnesota Commercial market is mostly local, though it has Railway’s Hugo Line, which connects Thank You a national presence. The company Hugo to the big railyards in the Twin to our team of employees, customers, vendors, has expanded twice in the past 10 Cities. Loadmaster Lubricants and Hugo Business Association, City of Hugo, and Washington County years; its current facility is now 64,000 several other businesses in Hugo de- for supporting our business and community. square feet. pend on that short line for shipping. Founded in 1899, Glamos Wire is Between 2000 and 2015, Hugo’s We welcome the opportunity to deliver our commitment one of the county’s older businesses. population grew from 6,363 to of quality, service and delivery for the lawn and garden, But as company president Paul more than 14,000, which has meant recycling, landscape and concrete/custom wire industries. Glamos notes, it’s lucky to still be in more opportunities for service business. In 2011, Glamos Wire had entrepreneurs seeking to open www.glamoswire.com a fire that nearly wiped the company restaurants or day care centers. “We out. With help from its employees, try to make sure that the regulatory Standard, vendors and customers, Glamos environment here is attractive,” says Galvanized Wire has risen from the ashes, with Bear, who notes that his city has no Baling Wire revenue rising and its employee count business license fees. “If you come to Always in stock growing. Glamos says that his firm’s City Hall, we’re going to try to help and ready for location has helped. “We can reach you figure out a way to make your shipment any place in North America quickly,” expansion plan work, or find a site which has allowed his firm to com- for you.” Though the city occasion- pete with imports. ally offers incentives, Bear says that Another growing business is his hope is that the city has created Loadmaster Lubricants LLC, which an environment that will allow a manufactures specialty lubricants, business to thrive on its own.

SEPTEMBER 2017 tcbmag.com TWIN CITIES BUSINESS 65 SPECIAL REPORT | WASHINGTON COUNTY

Stillwater, Oak Park Heights, Bayport

Stillwater is, of course, renowned for its charming downtown. The Highway 36 corridor is a retail center, and will likely become more prominent with the recent completion of the St. Croix Crossing bridge. The new bridge should make downtown Stillwater an even more appealing destination, as it will reduce the sometimes glacial traffic flow caused by the old downtown lift bridge. Stillwater has a business park that includes a brewery and health care service providers, but city administrator Tom McCarty makes it clear other opportunities exist for companies to establish themselves here. There are other pockets in the city that are available as business campuses for research facilities or health care organizations, McCarty says. One distinctive health care business Downtown Stillwater already making its mark in Stillwater is RALPH WINN0

SPONSORS:

OCTOBER MONTHLY LUNCHEON: INTERNATIONAL TRADE IN A TIME OF NATIONALISM

An update on the state of international trade as the rules of the game change. October 17 • 11:30AM Windows On Minnesota IDS Center • 50th Floor Minneapolis, MN

To register, visit www.acg.org/minnesota For questions, contact [email protected] or 612-590-1041

Attire: Business $35 Members | $75 Non-Members

66 TWIN CITIES BUSINESS tcbmag.com SEPTEMBER 2017 DiaSorin Inc. Last summer, the U.S. Department of Health and Sara Hayden’s Famous Tipsy Pies Human Services awarded the company a $2.6 million contract Washington County is home to numerous businesses founded decades to develop a test for more ago. But it also has proven fertile ground for entrepreneurs creating quickly diagnosing the Zika distinctive, even surprising, products and services. virus. The virus is transmitted Take Sara Hayden, for instance. About a decade ago, she was primarily by mosquitoes, and it’s looking to earn some money for her family’s household—and have particularly dangerous to preg- something that she could do that was her own. “I never thought in my nant women since it can cause wildest dreams I would run a business,” Hayden says. birth defects. It’s endemic in the Hayden incorporated Rustic Pies of Stillwater LLC in 2012. But to Caribbean and Latin America, her growing coterie of fans both locally and nationally, her wares are but there have been a few cases much better known under the name Sara’s Tipsy Pies. What makes in the U.S. DiaSorin SpA has its them “tipsy” are the small quantities of Minnesota-made alcoholic headquarters in Italy, but opened beverages she adds to her recipes. They won’t actually make you unsteady, but they do have flavors not found in other pies. its American outpost in Stillwater. The idea came to Hayden about seven years ago. Looking for a way to give her pies “a local flavor” and support other South of Stillwater, the communities small businesses in the area, she hit upon craft breweries. She contacted Lift Bridge Brewing Co. in Stillwater about of Oak Park Heights and Bayport are putting its beer in her pies, and the brewer enthusiastically replied. She created apple pies flavored with Lift Bridge beers, anchored by Andersen Corp. Andersen's mastered the recipes, then branched out with other local companies that make craft alcohol. corporate administrative office is in Oak Last October, after operating out of other businesses’ kitchens for several years, Hayden was able to get her own Park Heights, while its plant-producing space, just off Highway 36 in Stillwater. The space has been “completely worth it because of the added revenue and the windows and doors manufacturing interest of people stopping by,” says Hayden. To help pay rent, Hayden is sharing her kitchen with two startups: a baker of facility and R&D center are located in German-style breads and North Mallow, which produces artisan marshmallows in a variety of flavors. Bayport. The company currently employs approximatley 3,000 people in Washing-

PETE CROUSER ton County. tcbmag

2017 Awards of Excellence Nominees 2700 University th 610 West 34 ANNUAL NAIOP MINNESOTA 651 Nicollet Mall AC Hotel Minneapolis Downtown by Marriott ATRIA Corporate Center Caribou Technologies CaringBridge Central Park Commons Children's Learning Adventure Climatech Custom House ThaSignnkatu Yreou Design Ready Controls Downtown East Development Sponsors Edition Embassy Suites-Plymouth Building Fairview Clinics Foundry Gateway South 2301 (Milestone AV Technologies) HealthPartners Neuroscience Center Hewing Hotel Highlight Center Holly Hoglund-Klein Service Center IndiGO at BCS Kenwood Village Lindquist & Vennum Remodel RECOGNIZING EXCELLENCE IN MINNESOTA COMMERCIAL REAL ESTATE Machine Shop MacQueen Equipment Group Corporate Office A w a r d s o f E x c e l l e n c e Maverick North Loop Midway Business Center Miller Textile Building Millwright September 28, 2017 - 4:00 pm Northern Stacks II OATI Microgrid Technology Center One MarketPointe Nicollet Island Pavilion Pier B Hotel Radisson Red Hotel Rochon Corporate Headquarters Solutran Headquarters South Minneapolis Regional Service Center Media St. Francis Regional Medical Center Star Exhibits Partner Steamworks – Lexington Preserve Business Center Summit Orthopedics Eagan Summit Orthopedics Clinic and Wellness Center T3 (Timber, Transit & Technology) Valley Park Business Center III Cocktails, Awards Ceremony and Reception Wagner SprayTech - Gateway North Business Center For tickets or sponsorship opportunities: Waterford Innovation Center (Intereum) Wells Blue Bunny NAIOP West End Plaza Westside Center (952) 928-4647 | www.naiopmn.org | [email protected] White Bear Heights Senior Living Zvago Glen Lake

SEPTEMBER 2017 tcbmag.com TWIN CITIES BUSINESS 67 TCB FORUM HIGHLIGHTS

What Does It Take to Build a Major Project in the Twin Cities? At TCB’s real estate forum, key developers assess the factors driving high-profile projects, including Macy’s. By Kate LeRette

Bill Katter, right, of United Properties, TCB’s Burl Gilyard, far left, moderated the Commercial Real Estate Forum. Panelists Forum attendees discussed development was a real estate forum panelist. from left were: Collin Barr, Kelly Doran, Bill Katter and Ravi Norman. challenges in small groups.

ommercial real estate always has been a cyclical business. But with an evolving near the football stadium in down- ourselves against the typical high correla- retail environment and shifts in how and where younger generations want to live, town Minneapolis. Where are the tion between the commercial business and changes are occurring much more rapidly. At the same time, the sector is experi- tenants who are going to pay the new the general economy is senior housing. Cencing a number of challenges that are influencing developers to look at new opportunities construction rents? We have vastly accelerated the pace of our such as senior living and multifamily housing. Collin Barr: The office market in general, senior housing business, which is largely To better understand the challenges Minnesota developers are facing and learn about compared to prior cycles, is thin. We driven by needs, demographics and the the projects they are working on, Twin Cities Business hosted its first Commercial Real Estate don’t see robust growth of absorption in aging population of the U.S. Forum on June 28 at the Metropolitan Ballroom in Golden Valley. The forum was moder- office. At the same time, there is a talent ated by senior writer Burl Gilyard and sponsored by Briggs and Morgan and MNCAR. attraction and retention crisis, and people Kelly Doran: I think you are going to see Joining TCB as panelists were Collin Barr, regional president of Minneapolis-based are trying to figure out what they can do ups and downs in markets and submar- developer Ryan Cos.; Kelly Doran, principal and founder of Bloomington-based with their office space to make sure they kets. However, there is a debate going on developer Doran Cos.; Bill Katter, regional president and chief investment officer of are getting and keeping that talent. So it’s in Washington about the elimination of Minneapolis-based developer United Properties; and Ravi Norman, CEO of Fridley- going to be someone who recognizes the deductibility of corporate interest. If that based general contractor Thor Construction. Thor is building a new headquarters in unique benefits and sees it as a primary happens, that will have a significant im- north Minneapolis. tool to help them attract talent. pact. Our whole industry is fed by debt in one form or another, so a change in Q: You are one of the partners in a the deductibility of that interest increases plan in Edina to build a couple of taxable income, which increases taxes, Here are edited excerpts the development challenges is trying to condo towers. Given the initial resis- which correspondingly is going to have from the forum event. bring food and amenities that support tance from the city about the height, to have a higher yield and that means downtown workers into that lower level. how are you going to move forward? higher rents. It will definitely disrupt the Q: Why did United Properties get Barr: Persistence. I think that whole model if that goes forward. involved in the Macy’s project with Q: Who do you see as the type of ten- corridor, both Xerxes and France avenues New York-based developer 601W ants that might occupy that space? in Edina, is going to see an immense Ravi Norman: We are doing a lot of Cos.? What are your plans? Katter: The goal is to have companies in amount of development over the next 20 groundwork to build up prospective ten- Bill Katter: What drew us to the site was downtown that aren’t downtown today, to 30 years. There is an opportunity for ant markets in places where the tradition- the desire to help put a new face on the like Apple, Hammer Made, Athleta, Lu- that area to be urbanized. The market is al anchor strategy might not be the way building and positively impact the down- lulemon. I would say it would be a set of there, it’s just a matter of whether the city to operate. Also, I think the shortages in town community. We had some concern fashion retailers who can play off of the leaders and the neighborhood embrace craft labor are going to increase the rate about a new owner coming into the Min- people downtown during the weekday, the bold vision. of adoption of new technological innova- neapolis market not having any history and it would be a significant food hall, tions. You’re going to see embracing of with our downtown or our city. It’s a little which becomes a destination on week- Q: How do you plan to navigate systems, sensors, software and technol- early to get too public with what we are ends. If we can’t get people down there through the next economic downturn? ogy. We’re in an interesting time for doing there, but generally it’s going to be a on the weekends then the rest of the retail Katter: We are already seeing a slowdown transformation, and I think that’s going mixed-use environment. It’s experientially is not going to be successful. in demand on the commercial side. If there to help with the next downturn. tcbmag driven, where the retail will hopefully be is a major change in tax law, corporate tax a significant factor in making the office Q: Ryan Cos. is proposing to build rates could have a big effect on our busi- Kate LeRette is associate editor space an attractive environment. One of another office building, Block One, ness. Something we have done to diversify of Twin Cities Business.

68 TWIN CITIES BUSINESS tcbmag.com SEPTEMBER 2017 TCB FORUM HIGHLIGHTS

Finding and Keeping Tech Talent At TCB’s CIO Forum, industry leaders highlight tech innovations and how they are building a talent base. By Kate LeRette

TCB’s Dale Kurschner, far left, moderated the CIO Forum. Panelists from left were: Jackie Hartman, Attracting top tech talent was a major issue discussed by panelists Anudeep Parhar, Lisa Schlosser and Matthew Werder. and attendees of the annual CIO Forum. ADAM BETTCHER PHOTOGRAPHY ADAM BETTCHER

hief information and technol- Fostering innovation and high-potential talent to come in, way to show [employees] where the path ogy officers are leading their Staying ahead of the competition is no show the business what to do and then is and where we are going,” Schlosser says. organizations through perhaps easy feat, and when most of your time is move on.” Additionally, Parhar says the At Jack Link’s, “we connect [our Cthe most tumultuous and critically spent covering the basics—maintaining company is looking to acquire a number team’s] work to the strategies that are important challenges addressing how and existing software, servers and networks— of businesses, which he says will be a important to the organization,” Hartman where information is generated, shared, it leaves little time for innovation. That’s natural opportunity for new talent and says. “That not only engages people in stored, secured and accessed. As technol- one of the greatest challenges CIOs and new ideas. the work, but really helps people feel that ogy continues to advance, these leaders CTOs are facing today. they are valued.” are focused on being more strategic, “About 85 percent of our time is Fight for talent proactive and innovative to keep their spent running the business—keeping Attracting top tech talent is key for New opportunities companies’ IT infrastructure up-to-date, the lights on,” Werder says. “But we have companies to remain competitive, but the Despite the many challenges CIOs and and in many cases, ahead of the curve. taken considerable action this year by search is becoming increasingly difficult. CTOs are facing, there are plenty of To learn how chief information and doing some outsourcing to free up [our “The roles have reversed,” Werder says. opportunities. For example, FindLaw chief technology officers are tackling team’s] time so they can focus more on “We have to actually sell to employees recently created an internal kiosk where these challenges, Twin Cities Business transformative work.” One action HCMC and potential employees. There is a con- employees can immerse themselves in hosted its annual CIO Forum on July took was moving its data center. stant recruiting effort.” various customer service experiences. 12 at the Nicollet Island Pavilion in Outsourcing also has been helpful One way FindLaw is recruiting new Through the kiosks, the company has Minneapolis. The forum was moder- for FindLaw. Its strategy to outsource talent is through a student consulting identified where improvements need to ated by editor-in-chief Dale Kurschner some of its support-related functions has company called Maverick. The program be made, while also helping employees and sponsored by RSM, Marco, Robert not only provided Schlosser’s team with gives students an opportunity to gain understand what the customer experi- Half Technology and Minnesota High more time to focus on other tasks, but first-hand business experience while they ence is. Technology Association. “it’s been a way for us to look at the roles are in school by working part time for A big opportunity for Jack Link’s is its This year’s panelists were Jackie and responsibilities that our technology a company. “It’s also a way for us to test new office space and technology center in Hartman, vice president of information team has and try to put them in the right them out,” Schlosser says. “More often Mayo Square, which the company hopes technology at Jack Link’s, a protein snacks cost-model for what we are trying to do,” than not, we hire students who worked will help broaden its profile and attract supplier based in Minong, Wisc., with she says. for us.” new customers. “It’s our first time having offices in Minneapolis; Anudeep Parhar, In terms of innovation, Schlosser Retention, however, is just as crucial an urban technology facility, and it will be CIO of Entrust Datacard, a Shakopee- hopes to get her team’s creative juices as attracting talent. “One of the critical the first time making jerky in downtown based provider of identity and secure flowing through innovation labs recently pieces of retention is creating a culture Minneapolis,” Hartman says. transaction technology; Lisa Schlosser, developed by Thomson Reuters. Though where people feel that they are part of the While technology plays a large role in vice president and CTO of FindLaw, still new, she sees the labs as a way for business, not a provider of services to the a CIO’s responsibilities, it’s still a people part of New York City-based Thomson her team to test emerging technologies. business,” Parhar says. business, Hartman says. “Every element Reuters, which provides online legal “Many of the innovation labs have an ex- To keep their employees engaged and of technology that we deploy, that we information and marketing solutions for pertise around data analytics, data science in the know, FindLaw has created a pro- support, that we touch, affects somebody law firms, with offices in Eagan; and Mat- and cognitive computing,” she says. gram called Tech Tracks. Experts in the somewhere.” tcbmag thew Werder, CTO of Hennepin County Parhar’s focus is similar to Schlosser’s. organization get together for a day to talk Medical Center (HCMC), a Minneapolis- He’s developing a business incuba- about where big growth areas exist and Kate LeRette is associate editor based trauma center. tor, which will allow for “high-profile what’s happening in those areas. “It’s a of Twin Cities Business.

SEPTEMBER 2017 tcbmag.com TWIN CITIES BUSINESS 69 Join us at these upcoming TCB Events!

Join us for a panel discussion where we will The Minnesota Family Business Awards honors five place the spotlight on three recently-former outstanding family-owned businesses and the value CEOs, who will be asked to discuss and share they add to Minnesota’s economy and overall quality of highlights of their careers, words of wisdom life. These businesses have strong records of success, for the next generation of leaders, and future family involvement, community service and philanthropy, challenges for their industries, our society multi-generational culture, and a positive family business structure. Join us as we celebrate! and our economy. 2017 HONOREES 2017 FINALISTS Dalsin Industries Celarity, Inc. Felling Trailer EDCO Products, Inc. New Market Bank Empirehouse Schuler Shoes Ideal Printers Supportive Living Solutions The Specialty Manufacturing Co. September 19th • Metropolitan Ballroom

NOVEMBER 30, 2017 • HILTON MINNEAPOLIS 2017 PANELISTS 1001 Marquette Ave S • Minneapolis, MN 55403 Cocktail Reception 5:30 pm Welcome & Dinner 6:30 pm Awards Program 7:30 pm Richard Anderson Mary Brainerd Richard Davis TICKETS • tcbmag.com/MFBA17 President & Co-CEO, Former CEO, Former CEO, $100 per ticket | $800 per table of 8 Amtrak HealthPartners U.S. Bancorp

PRESENTED BY: Register Today • tcbmag.com/CEO17 Registration Panel Discussion

3:45 PM | Registration Networking Cocktail Reception GOLD SPONSORS: 4:00 PM - 5:30 PM | Panel Discussion Event Concludes 5:30 PM - 7:00 PM | Networking Cocktail Reception TICKET INFORMATION | $60 per ticket

PLATINUM SPONSORS:

SILVER SPONSOR: RECEPTION SPONSOR: TRENDING | HEALTHCARE

Healthy Partnerships How health care collaboration can improve quality and cut costs.

By Burl Gilyard

n the Twin Cities region, Minneapolis-based Allina Health and Bloomington-based HealthPartners are competing providers. But in the northwest corner of the metro, the two nonprofit health systems are working ary Allina and HealthPartners struck together in a unique partnership. Allina an agreement to extend the Northwest and HealthPartners, which also offers Metro Alliance partnership through 2019. a hospital within 30 days of discharge is insurance, joined forces in 2010 to create “We’ve seen really nice progress,” an ongoing issue for elderly patients. By an initiative known as the Northwest says Andrea Walsh, president and CEO adding transition conferences, improving Metro Alliance. of HealthPartners. She notes the cost communication and making follow-up the country who want to find out more Patients with HealthPartners or Med- increases in the area covered by the alli- appointments before the patient leaves about how the affiliation works. icaid insurance can get coverage in the ance have been lower than the rest of the the hospital, Mercy reduced readmissions In the changing health care environ- area at any of the five Allina clinics, four metro average. “We think this partner- by 11 percent from 2013 to 2014. ment, with an increased focus on deliver- HealthPartners clinics and Allina’s Mercy ship is a model that can and should be “We can actually share records back ing better care at a lower cost, many Hospital in Coon Rapids. Under the replicated,” Walsh says. and forth. It avoids unnecessary duplica- providers are starting to explore the affiliation, the Northwest Metro Alliance One issue the alliance grappled with tion,” says Wheeler, who points to X-rays potential benefits of forging partnerships serves approximately 300,000 patients in was the high volume of patients—more as an example. with other health groups. Anoka County and southern Sherburne than 3,000 annually—who were having The average patient, however, is likely The Northwest Metro Alliance is an County. a mental health crisis and showing up at unaware of the Northwest Metro Alliance example of what has become known in The alliance emerged when both the Mercy Hospital emergency room. By name and what it means behind the the health care industry as an account- Allina and HealthPartners were trying to boosting outpatient services for mental scenes. able care organization (ACO). The push determine why providing health care cost health, the alliance cut hospital admis- “Our goal has been to make care for health groups to collaborate has been more in that corner of the metro. sions for those issues by 7 percent in seamless. We’ve wanted to make sure that driven in part by the Affordable Care Act, “We are competitors, but we are not- 2015. patient needs are met,” Walsh says. “The which was signed into law by President for-profit organizations that collaborate “The community just didn’t have point isn’t the structure; the point is what Obama in 2010. The ACA allowed and in a significant way,” says Dr. Penny enough behavioral health services avail- we’re able to do together.” encouraged the creation of ACOs, to cre- Wheeler, CEO and president of Allina able,” Walsh says. ate groups to provide better-coordinated Health. “We could have had an arms race. Groundbreaking alliance care for Medicare patients. In Houston they’re building hospitals Reducing readmissions heeler and Walsh say that the There is also much talk in health care across the street from each other. We n analysis of Medicaid patients W collaboration of Allina and circles these days about the “Triple Aim,” knew we were interdependent for that A covered by the Northwest Metro HealthPartners was fairly unusual, both a concept outlined by the Massachusetts- community.” Alliance found that costs declined nearly locally and nationally, when it started. based Institute for Healthcare Improve- Both groups are pleased with how 2 percent from 2013 to 2014, saving Today they both routinely field inquiries ment. It calls for improving the patient the arrangement is working. In Febru- almost $7 million. Being readmitted to from health system executives around experience, improving health of the

SEPTEMBER 2017 tcbmag.com TWIN CITIES BUSINESS 71 TRENDING | HEALTHCARE

overall population and reducing the for the group market and now per-capita cost of health care. has 60,000 members. “Health care is fairly competitive, n Medica VantagePlus with and there’s always room for competi- Fairview, North Memorial and tion, but we need to define those areas HealthEast (added in 2016). where we will collaborate,” says Jim Partnership started in 2013 for Eppel, who joined HealthPartners in the group market; it currently July as its chief administrative officer has 14,000 members. and executive vice president. (Previ- n Fairview UCare Choices. It ously, Eppel was CEO of the Minne- debuted in 2014 for the indi- apolis-based UCare health plan.) His vidual market and has 11,000 extensive health care industry resume members. includes COO for Blue Cross Blue Shield of Minnesota and a senior In the case of VantagePlus, Fair- Wells Fargo presents vice president with OptumInsight, a view teamed up with Minnetonka- division of Minnetonka-based United based insurer Medica, and two other Health Group. providers, St. Paul-based HealthEast st Eppel says that data is a natural and the Robbinsdale-based North 1 Tuesday area for providers to consider shar- Memorial Health. ing. But he adds that collaboration The network of collaborating DINE, NETWORK, AND LEARN WITH RENOWNED and sharing best practices also make providers are all available to plan BUSINESS AND COMMUNITY LEADERS. a lot of sense for addressing large, members. Fairview and HealthEast seemingly intractable conditions such merged earlier this year. as diabetes or how best to handle end- The PreferredHealth plan began of-life health care. Those are issues as a partnership with the Golden that affect all providers and a large Valley-based PreferredOne. Fairview SEPTEMBER 5 • 2017 number of patients. previously owned 50 percent of “Should we have better com- PreferredOne, but became the sole munitywide standards or guidelines owner in January 2016. (Fairview and about how care is delivered in the the UCare health plan announced later stages of life?” Eppel says. plans to merge in 2016, but the deal was ultimately abandoned.) Data-sharing wariness When a new member signs up for ne challenge to potential collabo- one of the health plans, René Coult- O ration is that in some cases doc- Calendine, Fairview’s vice president tors and clinicians are cautious about of market and product development, relying on information provided by a says that Fairview receives an “enroll- NEEL KASHKARI competitor. Eppel gives the example ment file” from the health plan. President and CEO of a patient who may be seeking a sec- After reaching out to all Federal Reserve Bank of Minneapolis ond opinion before proceeding with members, she says, Fairview can surgery. Some providers don’t neces- do clinical followups with patients 11:30 a.m. – 1:00 p.m. sarily have faith in tests conducted by who have chronic conditions or another health care organization and other issues to provide support McNamara Alumni Center, will order their own round of exams and information about potential University of Minnesota before offering an opinion. preventative health measures. That “In this day and age, with digital can be good for the patient, but it For more information and to register visit: imaging and so forth,” Eppel says, also helps to reduce overall health z.umn.edu/FirstTuesday there are “times when it just makes care costs. no sense to repeat the CAT scan or “It was really about sharing info the MRI.” and getting more knowledge about Health care collaboration pos- who potential patients were for us,” The 1st Tuesday Speaker Series convenes Twin Cities’ professionals sibilities extend beyond providers says Coult-Calendine. to address hot topics in business, management, and leadership. A working together. Minneapolis-based To gauge the effectiveness of the Carlson School tradition since 1992, the monthly event is one of the Fairview Health Services, primarily plans, Coult-Calendine says that largest gatherings of corporate and community leaders in the area. a health care provider, has teamed Fairview has done surveys with both up with health insurers to craft new employers and patients. Presented by health plan offerings. “We’ve also seen much higher levels of satisfaction. The employers that Fairview now has three different we’re working with have been very plans with a variety of partners: satisfied,” says Coult-Calendine. n PreferredHealth with Fairview, Patient satisfaction surveys are HealthEast and North Memo- conducted. “We’ve seen the results of rial. The plan launched in 2012 that be very positive,” she says.

72 TWIN CITIES BUSINESS tcbmag.com SEPTEMBER 2017 Tackling the opioid problem every provider’s system is slightly he local nonprofit Institute for different, which could require some T Clinical Systems Improvement adjustments for the systems to work (ICSI) is working to bring health together smoothly. He says that he 2017 care leaders together to collectively sees some providers being open to tackle some of the largest challenges. collaboration, but that others have Two topics currently in focus are not given it much thought. But he the opioid crisis and mental health contends that the market will ulti- issues, which rose to the top based on mately drive more cooperation. the magnitude of the problems for “I think that just the way health health care providers and insurers. care’s going, it should be something CELEBRATE “The opioid problem and mental that everybody sees the benefit of,” health are so large that it needed the Degnan says. “In the long run, if they INNOVATION! attention of the chief executive of- collaborate, it’s going to be more ficers. Those are so important for ev- efficient.” erybody that we need collaboration,” says Dr. David Abelson, president of History of collaboration The Tekne Awards celebrate Minnesota innovation and ICSI. Abelson previously served as everal health leaders point to recognize those who make it happen. Join us for the 18th senior executive vice president with a historical spirit of coopera- Annual Tekne Awards to honor the best and brightest of S Minnesota’s diverse science and tech-based economy. HealthPartners and as CEO of Park tion and big-picture thinking for Nicollet Health Services. “The opioid health care in the state. Back in 1970, Visit tekneawards.org to learn more. epidemic is exploding in front of us,” Minnesota physician Paul Ellwood Abelson says. Jr. proposed offering incentives for ICSI is convening leaders to pre-paid comprehensive care that Wednesday, November 15, 2017 tackle thorny issues that no single would be managed by groups called 4:30 pm VIP Reception group can solve on its “health maintenance 5:45 pm Dinner own, he says. In De- organizations.” His 7:00 pm Awards Ceremony cember, CEOs of 15 concept for HMOs 8:30 pm Post-Event Reception health care organiza- emerged as part of Reserve your tickets today! tions signed a pledge efforts to reform the $195 Individual Tickets to collaborate on spe- nation’s health care $1800 Table for Ten cific and persistent under President Rich- $2800 VIP Corporate Table (for Ten) problems that cannot ard Nixon. be solved by any indi- “I think it’s partly PRESENTING SPONSORS: vidual entity or solely the environment that through competition. we have here in the Abelson is encour- state,” says Wheeler aged by Minnesota of local willingness to health care leaders’ Jim Eppel work together where RED CARPET SPONSOR: PLATINUM SPONSOR: commitment to find possible. “Minnesota common ground. has traditionally been pretty progres- “Collaboration is part of the sive in the health care space.” FINALIST RECEPTION VIP RECEPTION: culture of health care,” Abelson says. For Allina and HealthPartners, SPONSOR: Genesis10 “Every large health care system in the the Northwest Medical Alliance has Robins Kaplan state is there. Every major system is been an encouraging collaboration. represented.” “We think this partnership is GOLD SPONSOR: MEDIA SPONSOR: For many potential collabora- a model that can and should be Padilla Twin Cities Business tions, data is the likely starting point, replicated,” says Walsh, who adds that POST-EVENT RECEPTION: SILVER SPONSORS: says John Degnan, a shareholder at HealthPartners is considering other Computex Technology Unisys Minneapolis-based Briggs and Mor- potential partnerships with both Al- Solutions Minnesota Cup gan who specializes in health law. lina and other organizations. “It’s real important for the pro- “There was some trust-building WEBCAST SPONSOR: EVENT PARTNERS: vider to be able to access the history at the beginning of this, but we’ve just Implex Medical Alley of the patient,” Degnan says. “That’s recently extended it through 2019,” Sponsors as of 7/24/2017 an area of collaboration that I think Wheeler says. She envisions other Sponsorships are available — learn more at mhta.org could be of great value to patients.” areas in which collaboration can Shared access to patient records occur. “I think this is going to become Visit tekneawards.org to learn more. would improve the continuity of more commonplace,” she says, noting Presented by care, says Degnan. that her overarching goal is partner- The dominant electronic medical ing with others to help support and records platform in the Twin Cities coordinate better care. tcbmag area is from Wisconsin-based Epic Systems Corp. But Degnan says that Burl Gilyard is TCB’s senior writer.

SEPTEMBER 2017 tcbmag.com TWIN CITIES BUSINESS 73 2017 Nonprofit Event Calendar

Twin Cities Business encourages the business community to support the following nonprofits at their upcoming events.

Minnesota manufacturers survived the September Great Recession, but they continue to deal with a relatively slow-growth economy and now face uncertainties involving 20 | Wednesday labor and immigration reform, foreign policy, interest rates, Feed My Starving Children cybersecurity threats and other competitive challenges. Pack at the Park Join us as we discuss these issues as well as corporate growth initiatives, R&D goals, smart innovations and ways to Save the Date! Join Feed My Starving Children at Target Field for Pack at the Park, a meal packing event. To sponsor, mitigate risk in the months and years ahead. contact Barb Shimshock at [email protected]

23 | Saturday TUESDAY, SEPTEMBER 26 Minnesota Adult & Teen Challenge Freedom 5K Run/Walk and Family NICOLLET ISLAND PAVILION Join Minnesota Adult & Teen Challenge for a day filled $60 per ticket | $480 per table with entertainment, food, prizes, and so much more. The day will begin with a 5K chip-timed run on Harriet Island, 2017 PANELISTS followed by a 5K walk, a Kid Fun Run, breakfast, music, bounce houses and face paint! Erik Gibson Tom Schabel mntc.org/freedom5K President CEO Ultra Machining Company Alexandria Industries

November Joan Schatz Jon Wikstrom Co-President President & CEO 11 | Saturday Park Industries Cool Clean Technologies Feed My Starving Children Hunger to Hope Gala Registration 2:45 pm Enjoy fundraising activities (live auction, shopping) and Panel Discussion 3:00 pm - 4:30 pm inspirational stories from an international FMSC food distribution partner. Share HOPE with starving children Networking Reception 4:30 pm - 6:00 pm around the world. fmsc.org/MNGala Register Today | tcbmag.com/MAN17

PRESENTED BY: PLATINUM SPONSOR: TRENDING | LAW

SAFEGUARDING INTELLECTUAL PROPERTY

Minnesota businesses can take multiple he term “intellectual property” Protecting company secrets says attorney Kyle Peterson, a partner at steps to prevent ex- covers a lot of ground—patents, “According to the court, it is not enough Patterson Thuente Pedersen P.A. in Min- employees from using trademarks and trade secrets. for a company to intend to keep some- neapolis. Intellectual property theft could thing secret—they must actually act to Before a court can consider a com- and transferring key Toccur any time an employee leaves any do so,” says Lisa Colburn, an attorney pany’s information a trade secret, that company, on good or bad terms. with Briggs & Morgan in Minneapolis. company must demonstrate reasonable company information. A number of factors can contribute Colburn provided the case overview. efforts to keep it secret, according to to the likelihood that a company will fall Enforcement of that requirement Christopher Larus, a partner at the Min- victim to intellectual property theft, and became stricter in May 2016 when Presi- neapolis law firm Robins Kaplan LLP. particularly to losing trade secrets. dent Barack Obama signed into law the Those efforts include setting policies that An important Minnesota case from Defend Trade Secrets Act, which created a spell out which employees have access By Nancy Crotti 1983 is Electro-Craft Corp. v. Controlled private right of legal action for owners of to the information and requiring those Motion Inc. An employee of motor trade secrets. employees to sign documents indicating manufacturer Electro-Craft left to start The new law provides a remedy to that they have read and understood the a competing company, Controlled Mo- seize hard drives and employees’ per- policies, says Larus, chair of Minneapolis tion. Controlled Motion began making sonal mobile devices. This provision IP and technological litigation at Robins. motors similar but not identical to those was included to allow the authorities Having those signatures gives the made by Electro-Craft. to obtain the purloined information employer better odds of prevailing in a The Minnesota Supreme Court ruled from ex-employees before they can lawsuit against an employee who steals that Electro-Craft had failed to suffi- transfer it to a competitor. The law also secrets, says Larus and Kristin Dean, ciently protect its trade secrets. Security allows a judge to issue an injunction president of Human Resources Profes- measures at its plants were lax. Employ- enjoining the ex-employee from shar- sionals of Minnesota. ees were not required to wear identifica- ing the information, and provides for Having employees acknowledge and tion badges. Drawings and plans for the fines and jail time. sign such a document makes a “huge motors were neither locked away nor “It’s a pretty strong deterrent, much difference,” Dean says. At Delaget, the St. kept in a central location. stronger than what existed before that,” Louis Park restaurant business software

SEPTEMBER 2017 tcbmag.com TWIN CITIES BUSINESS 75 Protect Your Intellectual Property TRENDING | LAW

company where Dean works as vice in May 2015 to take the job of CEO president of operations, the direc- of Urotronic, but not before helping Protecting IP assets tor of IT talks to new hires about himself to “numerous trade secret the company’s systems, policies and files” belonging to Lutonix, according is a multi-faceted appropriate use of company informa- to a statement from the U.S. Attor- problem. From tion. This material also is included in ney’s Office for Minnesota. policy development the employee handbook. Barry was responsible for research Dean recommends that compa- and development, quality assurance and employment nies invest in backup software that and manufacturing at Lutonix. He practices to contracts can recover stolen information and was also directly involved in the devel- pinpoint the employee who stole it. opment of Lutonix’s primary product, and litigation, Chris Companies may also believe that “an extremely valuable proprietary Harristhal and the noncompete agreements can protect [drug-coated balloon] called the Lu- Larkin Hoffman them from losses after employees tonix 035 DCB,” the statement says. abscond with their secrets, but the Once he got to Urotronic, Barry team can provide courts have looked skeptically on such transferred the stolen trade secret files the 360-degree provisions, according to Adam Stein- from his portable hard drive onto ert, a shareholder with the Fredrikson his Urotronic work computer. He protection you need. & Byron law firm in Minneapolis. shared several procedural documents Judges look at the reasonableness of containing Lutonix trade secrets with noncompete provisions in terms of other Urotronic employees. their subject matter, and geographic Officials of Urotronic told the and time scopes, Steinert says. Star Tribune in a statement that the Chris Harristhal For example, a medical device company had “no knowledge of or [email protected] company might be allowed to legally involvement with Mr. Barry’s actions. 952-896-3312 prohibit an employee from going When Urotronic learned of his ac- to work for a direct competitor, but tions, it demanded his resignation.” not from working for medical device companies in general, he explains. Guilty plea in Minnesota Judges also consider the reason- Barry, 46, pleaded guilty in May to ableness of a company’s attempts stealing trade secrets. He agreed to Harristhal_TCB_2017.indd 1 7/21/2017 3:38:29 PM to protect its intellectual property, pay the approximately $533,842 in in- according to Peterson. In addition to vestigative and legal fees that Lutonix having solid employment agreements, incurred, according to the plea agree- companies should limit access to the ment. By pleading guilty, Barry could trade secrets in any way they can. avoid the maximum sentence of up That might include a manufacturer to 10 years in prison and a fine of up banning cell phones from the shop to $250,000, according to his attorney, floor and being careful whom they James Volling of Faegre Baker Daniels allow to enter and leave their facilities. in Minneapolis. Companies that hire employees from Barry is scheduled to be sentenced SAVE THE DATE competitors must also be wary of the in late summer. secrets those new hires might bring. Companies that take advantage of new hires bearing trade secrets from Join Twin Cities Business, the National Association of Hiring from competitors their previous employers also are sub- Corporate Directors and our sponsors as we celebrate “When hiring an employee from a ject to liability under the Trade Secrets honorees who have made signi cant contributions as a competitor, as a company, you really Act, according to Peterson. need to vet them at the beginning and “Trade secrets, which I think board member. say, ‘Look, if there are secret things historically have maybe not been on Phil Soran that you’re aware of, understand that par with trademarks and patents as a for Wednesday, October 18 • McNamara Alumni Center we don’t want to know those things,’ ” tool for protecting intellectual assets, Board Peterson says. are certainly bolstered by that new law SPS Commerce Or you could do what Plym- with remedies like the seizure mecha- For tickets, visit: tcbmag.com/ODA17 outh-based medical device startup nism, monetary damages, attorneys’ Urotronic Inc. did. It was founded to fees you can go after,” he adds. $110 per ticket, $880 per table of 8 develop drug-coated balloons for use “Unless employees have a need in the urinary tract. Its founder was to know within the scope of their a former employee of an established employment, don’t give them access SPONSORED BY: PROMOTIONAL PARTNER: New Hope firm, Lutonix Inc., which to your company’s secret sauce, so to makes a drug-coated balloon catheter speak,” Peterson says. “It gets to be for use in cardiac procedures. a relatively sticky area, especially in Lutonix employee Christopher high-tech industries. These people Barry of Medina left that company become experts on some very narrow

76 TWIN CITIES BUSINESS tcbmag.com SEPTEMBER 2017 aspects of technology.” Today’s way of doing business presents its own problems, particularly with the proliferation of mobile ™ technology and the use of independent contractors, who more readily move from company to company. Mobile device management (MDM) software can locate, lock and potentially wipe devices containing key information, but it’s simpler if all of the company’s information is contained in one application, says Karen McDaniel, an attorney and shareholder at Briggs & Morgan. Startups are at particular risk for a wide range of intellectual property issues. For example, potential investors who want to know about the new company’s product or service before they put money into it can easily make off with that information and license it unless they agree to sign a confidentiality agreement, Steinert says. Startups can protect themselves by consulting an attorney who specializes in new companies. They also can include password protection for proprietary information when setting up IT systems, Larus adds. “Being aware of these problems and setting ® up systems at the outset Ideas. Owned. doesn’t have to be particularly complex or onerous,” The move to patent an idea is one of the first steps in protecting its he says. “A lot of the purpose, exclusivity and ultimate value. At Patterson Thuente, we problems that I see are ones understand the importance of being comprehensive, creative and agile where the problem kind of arose at the early stage but through every step of safeguarding our business clients’ intellectual it didn’t manifest itself until property. Which is why we are solely devoted to the nurturing, quite late.” support and security of ideas. Call 612.349.5740 or visit PTSLAW.com to “The goal on this is to discover how we ensure that whatever’s in your head, comes out ahead. keep the horse in the barn,” McDaniel says. “There are all kinds of problems once the horse gets out of the barn. The whole trick is to prevent the theft in the first place.” tcbmag

Nancy Crotti is a St. Paul- based writer and editor.

SEPTEMBER 2017 tcbmag.com TWIN CITIES BUSINESS 77 Losing the Company Leader Through a CEO’s death or incapacitation, a family business can be thrust into a vulnerable state if it lacks a well-conceived succession plan.

e don’t linger on thoughts about our own or a were ready to run the company. He was planning for a stable IT’S ALL RELATIVE loved one’s death. Nobody expects to die pre- leadership succession with his wife as a trustee, as well as a By Tom Hubler maturely. Sudden death or incapacitation of board of directors that included family members and other Wthe entrepreneur in the family business is doubly devastating professionals. The transition seemed to be carefully planned, because it shocks both the family and the business. but then reality set in. Several of my clients have suffered such crushing events. Mrs. Carlsen chafed under the trust restrictions. She Yet families who own businesses seldom have the time or went to the company every day. She caused conflicts with inclination to prepare early for the loss of an entrepreneur the non-family president. Family members didn’t commu- who is often the head of the business nicate well with each other. as well as the family. They’re left with I helped the family move forward by guiding them dur- no succession plan, no emotional ing family meetings, helping assure them about profession- safety net, no sense of potential alism on the board, and encouraging the review of regular financial or relationship effects. company financial reports to show the company was being I’ve been part of several situa- well run. Also, one of the sons was being mentored to be- tions like this and have seen whether come company president. A family participation plan would business families were ready and how have helped the Carlsens discuss, define and grow into their they reacted. Each coped, yet their new roles. range of responses offer valuable The key lesson I took from the Carlsen family is: Con- lessons that can help prepare for the duct candid, open family meetings about succession long unthinkable. I offer three examples before it is expected so that everyone can share their feelings from my own practice; I’ve changed and expectations. people’s names and the details of the scenarios. The Peterson family: Overcoming differences The Peterson patriarch recruited his son to join the busi- Bringing it together The Horwath family: ness. The son was successful in a parallel business, but the n Contribute to the growth of Avoidance and competitiveness pair quickly clashed over business operations. The son was others. Mr. Horwath was the heart of the company, a larger-than- ambitious and wanted to grow the business. The father had n Know and encourage their life personality, the keeper of important relationships. But become more risk-averse as he aged. The risk issue became a expectations. suddenly he was gone. His grown sons vied for his business father-son conflict and their close relationship deteriorated. n Reach out with generosity, chairmanship and position in the family. Each believed in I was asked to address this strained relationship and his own capacity to help the business survive, and they were help them resolve their differences. It took years before they trust and love. not mean-spirited. Mrs. Horwath, who now owned the implemented many of my business recommendations. I n Make the way they live a company, was caught in the competition between two sons suggested they create a board of directors with outside advi- demonstration of support she loved. sors, develop a joint approach that respected both parties’ and interest in others, their Family dynamics and business disruptions add special needs, consolidate a business plan and complete leadership triumphs and worries. stresses to a family business. The unexpected loss of Mr. training for the son. n Bring everyone in to consult Horwath’s presence and leadership isolated family members Then the father died unexpectedly—but the prepara- on succession plans, rather than brought them together. They avoided talking tions were in place. The son had already become company business roles, family-role about the loss, acted as if nothing had changed and did not president and led the business and family through the acknowledge the grieving process. Nothing was resolved emotional loss. The company reached out to employees, participation and transition in family meetings; instead, everyone channeled their grief customers and financial partners to assure all of them of the processes. individually. This went on for several disruptive years. company’s stability and commitment to the future. n Prepare for the unexpected I was brought in to help the family become a team again, The Peterson family joined with the community in a by understanding the impact work through their sense of vulnerability and help them un- memorial ceremony to honor the father’s life and legacy. of loss. Don’t avoid or subvert derstand their reactions as well as how to be more collabora- More than a tribute to the entrepreneur, it contributed to grief or vulnerability— tive. I took a powerful lesson from the Horwath family: Do the healing process of the community and the family. This embrace it. not grieve alone. Share feelings and the experience. example demonstrates how important it is to share experiences and continue emotional support for the long haul. n Acknowledge and resolve The Carlsen family: Open, honest discussion The lesson I took from the Peterson family is: Healing does conflict. Mr. Carlsen knew he was dying of cancer and prepared by not happen overnight and usually takes longer if feelings are n Participate and share as a creating a trust for the benefit of his wife and their four chil- suppressed and business preparations are delayed. tcbmag family. dren. It also was designed to influence business factors after his death because he thought none of the family members Tom Hubler ([email protected]) is president of Hubler for Business Families, a family business consulting firm.

78 TWIN CITIES BUSINESS tcbmag.com SEPTEMBER 2017 Who Moved Your Cheese? Embracing the rat in the room.

n Ken Blanchard’s book Who Moved My Cheese? he cre- yourself worthy of admission” that favors incumbency and FRONT LINES ated four imaginary characters: Sniff, Scurry, Hem and limits new or opposing ideas seems to be the default ideology. by Ravi Norman Haw, who are in a maze looking for cheese. The cheese This structural comfort will need to be challenged in this age Iis a metaphor for what we want in life—a job, relationship, of acceleration and talent shortages if we are to succeed. house, money, freedom, health, recognition, spiritual peace, The final blind spot seems to revolve around technology. etc.—and each character represents the simple and complex The revolution has arrived! What started out as streaming parts of ourselves. music has grown into Spotify, Facebook, LinkedIn, Twitter Sniff, a mouse, sniffs change early. Scurry, another and Instagram. Personal computers are phones and pads. mouse, scurries into action. Hem, a little person, denies and Kids don’t play outside; they’re too busy with gaming con- resists change, as he fears it will lead to something worse. soles. Supercomputers are now handheld devices. While Haw, another little person, learns to adapt in time But for the homogenous cohort listed above, technol- when he learns it will lead to something better. ogy still seems to be a tool for the economic agenda in Though nearly 20 years old, this wonderful read is lieu of the primary economic model itself. The ability to timely as we contemplate the future of our region and con- leverage technology to improve engagement, analyses and sider its changing social, political and economic paradigm. holistic outcomes, while also increasing valuation through This includes witnessing the transitional roles of some of information, use and volume, is still being constrained by the great leaders who have helped put us on the world map, a general lack of understanding and utilization by those in and keep us there: Richard Davis, Mary Brainerd, and Ken real power in our region. Powell among others. An example of these blind spots coming together in a If we are going to sustain our world-class position, it is traditional business situation happened about a month ago, critical that we fully embrace the “rat” that has traditionally when two highly acclaimed real estate executives were asked been regulated to the ancillary parts of the economic room. about the vacant Macy’s building downtown and possibili- Who or what is that rat? It’s race, age and technology. ties for future use. The traditional economic model for real The biggest threat to Minnesota’s continued global lead- estate downtown is rooted in office towers or big retail. ership is that most of our wealth, power and influence re- However, neither seems to work at this time. main overly concentrated in a homogenous cohort of white A big reason they do not work is that real estate prices men and women older than 50. Now, let me emphasize that are vastly overvalued, in particular in downtown environ- I work closely with, fully respect and admire this group of ments. Another reason is that the economics of office leaders and acknowledge the work they have put in to earn environments and retail are changing because people’s pref- the assets and recognition they have attained. Unfortunately, erences are changing. Younger and hipper workers do not the aforementioned concentrations can create a certain level want or need to work in big offices, when they can do most of group-think and blind spots that can potentially limit our of their work from laptops and iPads in more congenial The biggest threat to future productivity, innovation and resiliency as a region. situations; they also don’t use brick-and-mortar stores for Minnesota’s continued The first blind spot seems to revolve around race. This shopping as much as anymore, thanks to Amazon. global leadership systemic issue has had many names, such as gaps, disparities, The appropriate use of the space is going to need new is that most of our diversity, equity and even radical inclusiveness. Yet most of the and fresh ideas, such as gaming tech centers, virtual experi- wealth, power and approaches to solving the issue still seem to fall predominantly ence HR training centers, and other cool uses. Can you influence remain outside of the primary economic agenda. As a result, the imagine the biggest virtual gaming and training center in overly concentrated in policies, programs and initiatives typically have two similar at- the U.S. in the heart of the downtown hospitality, entertain- tributes: They are nonprofit led and they are undercapitalized. ment and business district, between U.S. Bank stadium and a homogenous cohort My contention is that adequate investment in the mi- the renovated Target Center, with a $1 million John Madden of white men and nority-owned private sector and entrepreneurship is the key football gaming tournament for the Super Bowl? Now that women older than 50. ingredient to transforming racial outcomes. According to a would attract millennials. recent Metropolitan Council report, our region compared My hope is that these great stars of yesterday and today to similar cities is at the bottom of the pack in its share of will truly prioritize their primary economic agendas, em- minority businesses as a ratio of their representation in the brace the “rat” in the room, and be intentional in investing population as a whole. To be world-class this must change. in the future of our region. The millennials, Gen Zs and younger generations just In the meantime, take care of yourself and each see the world differently. Unfortunately, they are often not other! tcbmag in the room when important regional decisions are being conceived, vetted and determined. I am on 11 influential Ravi Norman ([email protected]) is the boards, and as a mid-1970s baby, I am usually the youngest CEO of Thor Cos., a holding company for development, design, participant in the room. Most, if not all, of these boards have construction and consulting businesses. He holds degrees a hierarchy structure to influence for decision-making, cul- in economics, business management and finance from the minating in the executive committee. A preference for “prove University of Minnesota.

SEPTEMBER 2017 tcbmag.com TWIN CITIES BUSINESS 79 How to Reform State Government at No Cost

To: The Honorable Jack Davies c/o Maslon LLP Wells Fargo Center Minneapolis, Minn. OPEN LETTER Dear Jack: by Vance K. Opperman

This letter is coming to you because, as the drafter of our the practice; the Legislature will continue to hide behind 1974 Constitution and former senator and judge, you budget bills to avoid voter accountability. have been a tireless proponent of returning our legislative This continued violation of the Single Subject clause de- process to the requirements of the Minnesota Constitution. prives Minnesotans of the right to know what their elected Specifically, that section of the Minnesota Constitution (Ar- representatives are actually voting on, and to hold those ticle IV, Section 17) often called the Single Subject and Title representatives accountable. As Gov. Dayton stated when clause, which requires that “ … No law shall embrace more he signed the Omnibus Bill, he was deeply concerned about than one subject, which shall be expressed in its title.” Now the auditor privatization clause, but felt unable to exercise there is the Otto case going to our Supreme Court. his veto power because doing so would have resulted in Elections happen in November, but Christmas is thousands of state government employee layoffs. Among frequently an early-June experience in the Minnesota the non-budgetary provisions of this omnibus budget was Three times in the past Legislature when it passes what is colloquially known as a the establishment of a “healthy eating” program, continuing 30 years, our Supreme “Christmas tree” bill. Legislators of either party—this is a education requirements for nail technicians, the season for Court has warned the bipartisan problem—will “load up” the budget bill with a pari-mutuel horse racing and limiting the audit authority number of special-interest gifts to lobbyists. While none of state auditor Otto. Legislature. It is time for of these lobbyist gifts would withstand the scrutiny of a The Minnesota Supreme Court has referred to this the Minnesota Supreme legislative hearing, let alone a recorded vote, neither occurs practice as “log-rolling,” as a way to convert disparate fac- Court to step in. because the omnibus budget bill is drafted in conference tions into one majority vote. It is precisely this practice that committee. The budget bill conference committee usually is prohibited by the requirement of a single subject for each occurs in the 11th hour of a legislative session; if the bill bill. The practice has been criticized on a bipartisan basis by isn’t passed, government comes to a standstill. Govs. Arne Carlson and Tim Pawlenty, as well as Dayton. While the conference committee is meeting, the bodies Attorneys in the Otto case have started to seek addition- are also at a standstill. Conference committees meet in secret; al parties to join the Hon. Jack Davies in his amicus curiae matters are included or excluded that never had a hearing or brief. It is anticipated that additional organizations and par- saw the light of day. The conference bill is then reported and ties will join. If the case is successful, it is truly government must be voted either up or down without amendment or a reform without taxpayer cost. Voters would have a clear hearing. By one count, the 2017 Legislature included 609 idea of what their representatives voted for and can take ap- separate policy provisions in budget bills. propriate action at election time. A governor will have more It is time for the Minnesota Supreme Court robust veto power. And taxpayers would not be forced to to step in. Three times in the past 30 years, our face a government shutdown, with its resultant disruption Supreme Court has warned the Legislature. of services and state bond rating, because of extraneous Justice Lawrence Yetka referred to the practice of policy matters contained in an end-of-session budget bill. including everything in omnibus legislation “a It is time for the Supreme Court to act and return worm . . . that . . . has become a monster eating our legislative process to our constitutional standard. If a Constitution.” asked by the amici to this action, this company will join And this brings us to the strange case of state in the brief. tcbmag auditor Rebecca Otto. Two years ago, legislators (and their county supporters) wanted Sincerely, to strip Otto of her constitutional authority to audit county budgets. Legislation was inserted in the bud- Vance K. Opperman get bill that would allow counties to opt out of state audits For Constitutional Single Purpose by hiring an auditor of their choosing. While this provision would not have been signed by Gov. Dayton (a former state Vance K. Opperman ([email protected]) auditor) in a piece of stand-alone legislation, the provisions is owner and CEO of MSP Communications, which publishes were put into a budget bill that had to be signed to avert Twin Cities Business. a July 1 government shutdown. The governor signed the bill. The Otto matter will now come before the Minnesota Supreme Court with former Senate President Jack Davies as one of the parties to an amici curiae brief. Former speaker of the house and Minority Leader Paul Thissen has said that only the Supreme Court can stop

80 TWIN CITIES BUSINESS tcbmag.com SEPTEMBER 2017

Best Lawyers® defines the Minneapolis region to include Minneapolis, St. Paul, St. Cloud, Rochester, and surrounding communities.