AzBusiness magazine September/October 2016 by AZ Big Media

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2016

SEPTEMBER// OCTOBER 2016

MOST ADMIRED

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PAUL SIMON PHOTOGRAPHY

211 PHOTOGRAPHY

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Table of Contents 6

Up Front

CEO Series

Marketing

Law

Education

Dining

22 Most Admired Companies 52

Financial Planning

Meeting 57 Professionals International 73

There is much to admire in Arizona business

Arizona Society for Human Resource Management

97 Arizona Technology Council 113 Arizona Bioindustry Association

113

his is always one of the most popular issues of Az Business magazine because it features the annual list of the Most Admired Companies in Arizona. As always, this year’s list of honorees is stellar, including seven companies who have made the list of Most Admired Companies for all seven years of the program’s existence. But beyond the list of the Most Admired Companies, this issue of Az Business showcases four organizations that are also driving the economy in Arizona: • Read about the The Arizona Bioindustry Association (AZBio), which is driving the exploding economy surrounding life sciences and will host Arizona Bioscience Week beginning Sept. 18. • Learn more about the Arizona Technology Council, which is a driving force in making Arizona a technology hub. The Tech Council will honor many of its members’ successes at the Governor’s Celebration of Innovation in November. • Find out how the The Arizona Society for Human Resources Management (AZSHRM) engages, educates and is an advocate for all Arizona human resources professionals and the business community at large. • Read how the Meeting Professionals International (MPI) Arizona Sunbelt Chapter is driving the state’s tourism industry and taking steps to make meetings and conventions more healthy and more safe. Enjoy learning about the innovators and leaders that are driving our economy in this issue of Az Business.

Michael Gossie Editor in chief michael.gossie@azbigmedia.com 2

AB | September- October 2016

SHOUT-OUTS Revving up the economy

ccording to a report by Elliott D. Pollack & Company, the BarrettJackson Collector Car Auction in Scottsdale produced a total economic impact of $167,800,000 in 2016. The auction is one of Scottsdale’s most widely-attended events, attracting more than 350,000 attendees, exhibitors, consignors, and bidders from across the world. Indeed, there were visitors from all 50 states and more than 15 nations.

Global leadership The City of Phoenix, Tucson-based Cloud Microphones and Phoenix-based EXOS were honored with the President’s “E” Award for Exports. This award is the highest recognition any U.S. entity can receive for making a significant contribution to the expansion of U.S. exports.

Big win for business The Fiesta Bowl and Cactus Bowl, the two annual college football bowl games hosted in the Valley during the 2015-2016 season, combined to generate an estimated $169.4 million in economic impact, including $79 million in total direct spending for the Valley and more than $7.5 million in direct tax revenue. The breakdown specifically between the two games attributed $111.6 million from the Fiesta Bowl and $30.7 million from the Cactus Bowl, in addition to $27.1 million in organizational spending.

In support of STEM

Fourteen nonprofit organizations located throughout Arizona and the Four Corners area will receive more than $1.2 million in STEMsupported grants from the APS Foundation announced. Supporting science, technology, engineering and math programs has been the Foundation’s principal focus since 2012. Abrazo Arizona Heart Hospital became the first in Arizona to perform the first Transcatheter Aortic Valve Replacement procedures on low-risk patients. The procedures are performed by a team of physicians and other caregivers from the hospital’s Institute for Valvular Diseases who specialize in treating structural heart conditions that interrupt the natural flow of blood through the body.

Help for

heart patients

AB | September- October 2016

President and CEO: Michael Atkinson Publisher: Cheryl Green Vice president of operations: Audrey Webb EDITORIAL Editor in chief: Michael Gossie Associate editor: David McGlothlin Interns: Jesse Canales | Matt Durack | Alyssa Hesketh Taylor Neigum Contributing writers: Erin Davis | Laurie Haas | Sonja Talley | Alexi Venneri | Steven G. Zylstra ART Art director: Mike Mertes Graphic designer: Anita Richey Intern: Shannon Finn DIGITAL MEDIA Digital editor: Jesse A. Millard MARKETING/EVENTS Marketing & events manager: Heidi Maxwell Marketing coordinator: Kristina Venegas OFFICE Special projects manager: Sara Fregapane Executive assistant: Mayra Rivera Database solutions manager: Cindy Johnson AZ BUSINESS MAGAZINE Senior account manager: David Harken Account managers: Jennifer Heberlein | Brit Kezar | Bailey Young AZRE | ARIZONA COMMERCIAL REAL ESTATE Director of sales: Ann McSherry AZ BUSINESS LEADERS Director of sales: Sheri Brown RANKING ARIZONA Director of sales: Sheri King EXPERIENCE ARIZONA | PLAY BALL Director of sales: Jayne Hayden CREATIVE DESIGNER Director of sales: Joe Freedman AZ BUSINESS ANGELS Director of sales: Felix Mayo Az Business magazine is published bi-monthly by AZ BIG Media, 3101 N. Central Ave. Suite 1070, Phoenix, Arizona 85012, (602) 277-6045. The publisher accepts no responsibility for unsolicited manuscripts, photographs or artwork. Submissions will not be returned unless accompanied by a SASE. Single copy price $4.95. Bulk rates available. Copyright 2016 by AZ BIG Media. All rights reserved. No part of this publication can be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without permission in writing from AZ BIG Media.

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UP FRONT

The impact Which counties are getting of wage

hike

f Arizona voters pass the proposed minimum wage hike that’s on the November 8 ballot, it would increase the minimum wage to $12 an hour. Here are the changes that Fennemore Craig’s John Balitis says employers will need to be aware of: • The increase will be gradual. The current minimum wage of $8.05 per hour (higher than the federal minimum wage of $7.25 per hour) would be increased to $10 per hour on January 1, 2017. From there, it will gradually increase to $12 per hour by 2020. • Tip-based worker salaries would increase to $9 per hour. • Employers would be required to offer mandatory sick leave days totaling five days per year with companies who have 15 or more employees and three days for those with less than 15 employees.

the most investment?

ocal investment and economic expansion are positive signs for communities because of the inherent quality of life improvements they represent. Financial technology company SmartAsset recently completed a study on counties receiving the greatest amount of investment in their local economies. Arizona counties were ranked by their performance across four categories: business establishment growth, GDP growth, new building permits and municipal bond investment. Here is where Maricopa County ranked and how other counties stacked up against it: Rank County Business growth GDP growth (In millions) New building permits (per 1,000 homes) Municipal bonds (per capita) Incoming Investment Index Rank

County

Business GDP Growth New Building Permits Growth ($ in millions) Per 1,000 homes

Municipal Bonds (per capita)

Incoming Investment Index

Maricopa, AZ

4.8%

$6,971

12.2

$6,171

42.30

Greenlee, AZ

26.7%

1.6

34.72

Pinal, AZ

4.7%

$267

13.2

$226

31.56

La Paz, AZ

1.2%

$28

1.9

$23,631

30.60

Yavapai, AZ

2.8%

$450

12.4

$517

29.89

Yuma, AZ

0.3%

$232

8.6

$4,727

26.75

Coconino, AZ

-0.2%

$281

8.9

$723

24.57

Pima, AZ

-0.6%

$1,588

5.5

$1,777

23.33

Mohave, AZ

-0.8%

$289

5.7

$1,355

22.65

Santa Cruz, AZ

1.2%

$91

3.7

$639

20.40

HIGHLY RANKED

• Arizona’s economic success continues to draw national attention. Kiplinger has ranked Arizona No. 2 in the United States for 2016 job growth and Forbes has named the state a “Clear Rising Star” for technology and information jobs.

• A recent report from Gust and Fundacity named Phoenix-based Seed Spot as one of the Top 20 Global Accelerators. Seed Spot helped accelerate 75 startups in 2015.

How much do Arizonans owe?

he price tag for owning a home varies widely across the country, according to an analysis by Credit Karma. The city with the lowest average mortgage in the United States is Buffalo, N.Y., at $78,314.37. The highest: San Francisco at $505,072.32. In Arizona, there are cities spanning the lower end of the national rankings and the higher end:

Lowest in Arizona:

Highest in Arizona:

• Rio Rico: $116,827 • San Luis: $117,575 • Douglas: $118,371

• Fountain Hills: $269,751 • Scottsdale: $304,276 • Cave Creek: $311,212

The state’s average mortgage debt is $191,123.

AB | September- October 2016

• Phoenix moved up nine spots to No. 11 overall in CBRE’s annual “Scoring Tech Talent” report, which examines the top 50 tech labor markets in North America.

AB | September- October 2016

UP FRONT

SkySong hits high note for economic impact

kySong, The ASU Scottsdale Innovation Center is projected to generate more than $32 billion in economic output and more than 10,000 new jobs across the Valley over the next 30 years, according to new

analysis performed by the Greater Phoenix Economic Council. The analysis examines the impact of 11 SkySong buildings and a restaurant/retail component on site. SkySong buildings 1-3 are complete and SkySong 4 is expected to be completed

Arizona

How big is

is the place to rent

manufacturing in Arizona?

anufacturing in Arizona contributed $18.3 billion to the state’s exports in 2015, which accounted for 81 percent of total exports. Some other Arizona manufacturing facts: • The manufacturing industry employs more than • Arizona ranks No. 4 in the U.S. for semiconductor 160,000 Arizonans. manufacturing employment. • The manufacturing industry is comprised of more • Arizona ranks No. 5 in the U.S. for technology than 4,500 companies. manufacturing employment. • Arizona ranks No. 2 in the U.S. for space and defense • Some of Arizona’s largest manufacturers include Raytheon, systems manufacturing employment. Intel, Honeywell, Boeing and General Dynamics.

Arizona Commerce Authority exceeds its goals

ust four years into its five-year plan, the Arizona Commerce Authority has reported $7 billion in projected capital investment, which puts the economic development association ahead of its five-year goal. The ACA has been the catalyst for capital improvements that total $1 billion more than the group’s goal for deals closed by June 30, 2017. That’s not the only good news: the ACA has commitments for 67,659 jobs, which is only about 7,000 jobs short of its five-year goal. Here’s a look at the agency by the numbers: ACA job recruiting goals

ACA recruitment 2013-2016

2015-2016 results

Goals

Actual

Fiscal years

Job commitments

Economic output

Tax revenue

Projected new jobs

17,000

17,629

2013-2015

112,905

$58.93B

$1.69B

Capital investment

$1.3B

$920.8M

2016

38,392

$27.11B

$590M

Projected wage

$55,145

$50,803

4-year total

151,297

$86.04B

$2.28B

Source: Arizona Commerce Authority

AB | September- October 2016

before the end of the year. The restaurant/ retail building is expected to be completed in 2017, and SkySong 5 and 6 are expected to be completed in 2018. SkySong buildings 7-11 are expected to be completed by 2022.

f you’re looking for a place to rent, Arizona is the place to be. Six Arizona cities made WalletHub’s Top 10 best cities in the U.S. for renters. Cities were ranked based on their rental attractiveness, quality of life, historical rental-price changes, cost of living and jobs availability. Here are the Top 10: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Scottsdale Overland Park, Kan. Chandler Tempe Gilbert Plano, Texas Las Vegas Peoria Phoenix Tampa

Nominations are open 2017 Arizona Corporate Counsel Awards AZ Business magazine recognizes the vital role that in-house counsel plays and acknowledges the accomplishments of leading in-house attorneys. Candidates in each category will be recognized for extraordinary legal skill and achievements across a full range of in-house responsibility, exemplary leadership and for contributions to the Arizona community at large.

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UP FRONT

2. Banner University Medical Center Phoenix

3. Banner University Medical Center Tucson

4. Banner Estrella Medical Center

What are the BEST hospitals in Arizona?

1. Mayo Clinic

9. Tucson Medical Center

ow in its 27th year, U.S. News & World Report’s annual list of the best hospitals recognizes healthcare facilities that excel in treating the most challenging patients. So, what are Arizona’s Top 10 hospitals, according to the report?

9. HonorHealth Scottsdale Shea Medical Center

5. Flagstaff Medical Center

1. 2. 3. 4. 5. 6. 7. 8. 9. 9 9

Mayo Clinic Banner University Medical Center Phoenix Banner University Medical Center Tucson Banner Estrella Medical Center Flagstaff Medical Center St. Joseph’s Hospital and Medical Center Banner Desert Medical Center Banner Boswell Medical Center (tie) Banner Baywood Medical Center (tie) HonorHealth Scottsdale Shea Medical Center (tie) Tucson Medical Center

9. Banner Baywood Medical Center

25 YEARS OF REVOLUTIONIZING

THE LAW W

hile always looking forward to “what’s next?” at the intersection of the law, technology and politics, Fennemore Craig’s Marc Lamber reflects on changes he’s seen as he celebrates 25 years in the legal profession. Biggest change: “The legal field has become nationally – and globally – more competitive … Like in most industries, national law firms are now ubiquitous, and it has created greater competition … The challenges placed on attorneys today is greater than I’ve ever seen before.” The future: “Nothing is certain, except for constant change. If I was a soothsayer, I’d say that technology will continue to play a more and more significant and widespread role in our practice. Technology’s rapidlychanging tentacles will continue to permeate all aspects of the law. I can envision a day when law firms will employ holographic workstations, allowing attorneys to view, process and analyze vast amounts of data 10

AB | September- October 2016

6. St. Joseph’s Hospital and Medical Center

8. Banner Boswell Medical Center

7. Banner Desert Medical Center

Is being tired a

workplace epidemic?

t’s time for a wake-up call: Nearly three-quarters (74 percent) of U.S. workers say they work while tired, with nearly one-third (31 percent) saying they do so very often, according to a new survey by staffing firm Accountemps. The costs of working tired – both for professionals and the businesses they work for – are high: Respondents cite lack of focus or being easily distracted (52 percent), procrastinating more (47 percent), being grumpy (38 percent) and making more mistakes (29 percent) among the consequences. Professionals admitted to making these mistakes due to being tired on the job:

in 3D and 2D environments. Artificial intelligence has the amazing potential to interact, and suddenly, the computer becomes your legal partner, allowing for real-time strategizing, debate and negotiation.”

• Made a $20,000 mistake on a purchase order • Deleted a project that took 1,000 hours to put together • Fell asleep in front of the boss during a presentation • Missed a decimal point on an estimated payment and the client overpaid by $1million • Accidentally paid everyone twice

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CEO SERIES

Class act Dr. Maria Harper-Marinick becomes first Latina chancellor of Maricopa Community College District PHOTO BY SHANNON FINN, AZ BIG MEDIA

MARIA HARPER-MARINICK: “I want everyone to be proud and to celebrate all that we do for so many people,” says the first Latina chancellor of the Maricopa Community College District. “More than 200,000 individuals benefit from what we do every year, so we need to do an excellent job for them.”

By Jesse A. Millard

uring the last legislative session, the Maricopa Community College District was snubbed from state aid, and this year, its longtime Chancellor Rufus Glasper stepped down to pursue an opportunity as a CEO for an education nonprofit. Sitting in for someone who’s leaving behind a 13-year legacy and facing upcoming financial troubles doesn’t seem to have Dr. Maria Harper-Marinick worried. In May, she was announced as the district’s first Latina chancellor and she has her eyes set on successfully moving the system forward through these trying times. “Whatever we do, we need to make sure that access (to Maricopa Community College) is not denied to anybody because we do not have the resources,” Harper-Marinick said. Az Business sat down with Harper-Marinick to talk about what she has in store for the district’s future and more. Az Business: How does it feel to be the first Latina chancellor of the district? Maria Harper-Marinick: Part of me is obviously proud, but the second thought is, “Really?” It’s 2016, you know. What took so long? But I’m looking forward to serving the district with excellence, because I know for a lot of young women, I can be a role model. And I am a role model. So for them, I need to serve as well as I can. I need to take the system to the next level, and make sure all of the students are as proud to be a part of the system as I am. AB: What are some of your goals with the district?

AB | September- October 2016

MHM: We are facing financial challenges, so we need to make sure we have a sustainable financial model for the system. We are reliant on enrollment because we don’t have any state aid anymore. So we need to make sure we find ways to be a little more entrepreneurial than we have been—that is one of the challenges. Also, we need to sell the system, to make sure that more people know about what we do, especially the connection with the business community. I want them to have us top of mind. I don’t want people thinking, ‘Oh there’s Maria. We forgot.’ I want them to know if we need to have innovation in place, if we need to have a new program in place, then Maricopa Community Colleges is the first place to go to get that solution. AB: Education funding has been a big challenge in Arizona. How do you hope to overcome the funding woes? MHM: Some of it will be working with legislators in a different way. Maybe they need to understand better what we do and for whom we do it. But that’s not the only thing we need to do. We need to find other ways to either serve the business community in a partnership that would generate revenue for us, or be more entrepreneurial. We have limitations on what we can do around that space, but I think we need to find new and innovative ways to provide a service that generates resources so that we can serve all of the students that come to the system. Whatever we do, we have to make sure that access is not denied to anyone because we do not have the resources.

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MARKETING

Why mobile marketers must pay attention to Angie’s List

s a mobile marketer who deals with consumers, one of the problems you face is the proliferation of sites on which you have to manage your business’s reputation. Depending on where your audience is, you might have to be on Facebook, Twitter, Instagram, Pinterest, Yelp, and more. By managing reputation, I mean not only monitoring for bad reviews, but encouraging customers to share their happy experiences. Even though Yelp itself has become less trusted over the years, we all know people still read Yelp reviews. Up until now, bad Yelp reviews have been the biggest scourge for companies delivering a service, but there will soon be a “new” competitor. Alexi Venneri Angie’s List was founded in Marketing 1995 (by a woman whose name is actually Angie) as “Columbus Neighbors.” In 2002 it became one of the first internet-based review sites, and it has long enjoyed a great reputation of its own for being the anti-Yelp, as well as for calling out sloppy service. Contractors, repairmen, followed by health professionals were anxious to get on the list, although they couldn’t nominate themselves even by subscribing to the service. A customer had to do it. Because Angie’s List was a subscription-based, crowd-funded review site, people came to depend on it for reliable reviews. The theory was that Angie’s List couldn’t be “gamed.” The company is a consumer-driven organization that collects customer satisfaction ratings on local service companies in

AB | September- October 2016

more than 720 categories and provides an exclusive list of these companies based on feedback from local consumers who know who to turn to when the gray clouds of disrepair loom. It’s a wordof-mouth network solidified into one handy “who can I call” list. Now, Angie’s List wants to attract the new generation of mobile-first searchers. It currently has over three million members, and it wants to keep growing, so it changed its business model and is now a free service − allowing anyone to post and read reviews. This is big news for businesses. Formerly, customers had to be paying members of Angie’s List to see the customer reviews. According to the company’s CEO, the members-only restriction caused 90% of the site’s 100 million monthly views to bounce. So Angie’s List removed that barrier. So imagine: millions more views of your reviews and your business. Makes you want to be sure what’s posted is positive – and what isn’t positive is resolved quickly. As the leader in digital engagement and social media and online reputation management, Digital Air Strike helps customers leverage positive reviews across multiple review sites – including some that are industry specific such as Cars.com. The list of businesses included in Angie’s List remains mostly home repair, healthcare and other service providers. If this applies to your business, the first step is to claim your business profile and to actively monitor the site for reviews. You should already have a plan in place to help happy customers share their positive feedback publicly on social and review sites. Now, add Angie’s List to that plan. Alexi Venneri is the co-founder and CEO of Digital Air Strike, an Arizona-based social media and digital engagement company.

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LAW

Office

politics What employers can and cannot do to limit political debates in the workplace By MICHAEL GOSSIE

he popular saying “never talk about politics or religion” exists as a rule of etiquette because of the potential conflict those topics can create, says Shawn Oller, office managing shareholder for Littler in Phoenix. “Even in the best circumstances, political discussions bring forth very strong personal opinions from all sides,” Oller says. Political discussions in the workplace, however, are even more problematic as these discussions can escalate into heated arguments among employees or cause employees to feel isolated or bullied. A once harmonious workplace can quickly devolve into lost productivity, lower employee morale and strained working relationships. With the country more polarized on a variety of issues, many employers are trying to minimize such discussions.

AB | September- October 2016

But the freedom to discuss and debate politics is what makes America great, right? Not in the workplace, experts say. “A heated debate about a candidate’s stance on immigration may be construed as evidence of national origin discrimination,” says Marian Zapata-Rossa, partner at Quarles & Brady LLP. “Discussions about police brutality could develop into a racially charged hostile work environment. Even seemingly innocent John Balitis discussions about political issues can rapidly turn into heated arguments that interrupt an employer’s operations.” The political and social landscape of 2016 — fostered by political newcomer Donald Trump’s unabashed blustering — has created more workplace interruptions than most other election years. About 25 percent of human resources professionals say tension, hostility and arguments about politics among employees is more prevalent than during previous elections, according to a recent survey by the Society for Human Resource Management. Beyond political posturing and bickering, political talk in the workplace can become problematic from a legal standpoint, experts warn. “Even at its most benign, it can make employees uncomfortable,” says Kent Brockelman, managing partner at Coppersmith Brockelman. “It can be divisive and lead to morale problems. In more extreme versions, it can lead to, or even support, legal claims from employees against employers.” While employers can’t ban political discussions, hostility and workplace chaos is not conducive to productivity or profitability. In an effort to maintain a calm workplace, what can employers do to calm the potential political storm? “As a general rule, private sector employers may impose broad restrictions related to political discussions in the workplace,” says Stephanie Fierro, a partner at The Frutkin Law Firm. “Employers can restrict political discussions during work hours or restrict the disbursement or display of political material, when such restrictions are uniformly applied. But, employers must be mindful of the National Labor Relations Act (NLRA).”

What can you do?

In Arizona, as in most states, employers have significant leeway to implement policies governing employee conduct. “Arizona law would not prevent an employer from implementing a rule prohibiting ‘excessive’ or ‘disruptive’ political talk in the workplace, or even prohibiting any political discussions at all,” says Don Johnsen, shareholder at Gallagher and Kennedy. A private employer generally is free to regulate political speech in the workplace unless the employer operates in a state or city that specifically protects employees against discrimination because of political expression, or the employer is a party to a collective bargaining agreement that includes the same protection, according to John Balitis, director at Fennemore Craig. “There is no federal law that specifically protects employees from discrimination or retaliation because of their political activities, affiliations or expressions,” Balitis says. “And the First Amendment largely is inapplicable in the private sector as it only protects a

Kent Brockelman

Don Johnsen

Joseph T. Clees

Stephanie Fierro

Shawn Oller

Marian Zapata-Rossa

It can be divisive and lead to morale problems. In more extreme versions, it can lead to, or even support, legal claims from employees against employers. person’s right to free speech from government interference, not from interference by anyone else.” Here are some other things Joseph T. Clees, shareholder at Ogletree Deakins, says an employer CAN do to limit political disharmony in the workplace: • An employer can clearly communicate general expectations and foster a culture of mutual respect and understanding. • An employer can establish a policy reaffirming that work time is for work and, consequently, political speech at work is only permissible at a designated time and place (lunch breaks, rest breaks, etc.). This minimizes disruptions, reduces distractions and encourages productivity. AB | September- October 2016

LAW

Have questions?

hawn Oller, office managing shareholder for Littler in Phoenix, says an employer that has questions about the permissible scope of its political activity, or the activity of its employees, should:

• Adopt and consistently enforce a policy that minimizes ambiguity regarding whether employees can engage in political activity in the workplace.

• Consult counsel as to state and federal requirements or limitations on political activity.

• Consider making dispute resolution procedures available to employees who may feel

• An employer can establish or reinforce a general policy limiting use of the employer’s equipment and communication systems to work purposes. • An employer can establish or reinforce a general policy prohibiting the solicitation or distribution of political materials during working time. • An employer can remind employees that its policies regarding unlawful harassment, discrimination, and retaliation apply to political speech.

What can’t you do?

One the flip side, here is what Clees says an employer CANNOT do: • An employer cannot establish rules or policies that limit employee speech about workplace conditions because employees have the right to discuss their working conditions under the federal National Labor Relations Act (“NLRA”). • An employer should tread carefully when banning political buttons and other such items unless it has a legitimate basis for such a restriction. Overly broad dress codes risk violating employee rights under the NLRA. • An employer should avoid a total ban on political speech in the workplace. Not only is a blanket prohibition unrealistic and likely to be seen as overly harsh, but it may also be found unlawful under the NLRA because it could be interpreted as restricting employee speech regarding working conditions and/or terms or conditions of employment.“An employer cannot impose a blanket restriction regarding political discussions in the workplace,” Fierro says. “The NLRA protects employees’ right to engage in a concerted activity for their ‘mutual aid and protection.’ Thus, employers generally cannot prohibit discussions that relate to the terms and conditions of their employment. For example, if employees are discussing a candidate’s views on working conditions or the minimum wage, employers will want to think twice before trying to quash such a discussion.” Brockelman suggests that now is a good time to remind all supervisors that they have special responsibilities and that their failure to live up to those responsibilities can lead to legal problems. “Supervisors should not suggest that employees they supervise ought to support any particular political candidate or viewpoint,’ Brockelman says. “In addition, supervisors should not express their own political viewpoints in ways that suggest 18

AB | September- October 2016

uncomfortable by political activity in the workplace. • Ensure that employees are not pressured to contribute to or volunteer for any political candidate. • Ensure that employees are not discouraged by supervisors from voting or engaging in political activity outside of the workplace.

they are biased against groups of people based on characteristics or classes, including those protected by federal and state employment laws.” For example, expressed support for either Hillary Clinton or Donald Trump based on gender could lend arguable support for an employee’s claim of sex discrimination, Brockelman says. Of particular concern to Arizona employers might be expressed support for Trump’s statements about building a wall along the U.S. – Mexico border, or other reported statements about Mexico and individuals of Mexican heritage. Such statements could potentially be used in an effort to show the supervisor’s — and by extension the employer’s — bias based on national origin or race.

What to do now?

Balitis says there many steps employers can take to address political expression in the workplace while at the same time maintaining morale and avoiding running afoul of laws that may be implicated to one extent or another: • Do not engage in inappropriate commentary or jokes about political views. These can make certain employees feel singled out. • Remind employees of your harassment, discrimination, and equal employment opportunity polices and retrain employees on them if necessary. • If you do not have one, consider adding a company “Code of Conduct.” It should outline your expectations that all employees will treat each other with respect despite differences in opinion. • Thoroughly and quickly investigate any allegation of bullying or harassment. Before disciplining an employee for political expression, check to see if the political expression is concerted protected activity, if the manner of expression is protected, and whether your policies, as previously applied, allow you to discipline the employee. • Consider amending your dress code policies to cover political apparel. “Despite an employer’s best efforts to diffuse issues in advance, employers should be prepared to address complaints,” Fierro says. “Establish a clear and concise dispute resolution process to promptly investigate and address such complaints. Employees should not be allowed to create a hostile or threatening workplace. Employers should remind employees that hostile or threatening behavior may result in discipline up to and including termination. If an employer has concerns regarding the implementation of any such policies they shouldn’t hesitate to consult legal counsel.”

EDUCATION

Changing the game Doctoral degree is the new master’s degree, according to Millennials By AZ BUSINESS

10 economic facts about Millennials 1. Millennials are now the largest, most diverse generation in the U.S. population. 2. Millennials have been shaped by technology. 3. Millennials value community, family, and creativity in their work. 4. Millennials have invested in human capital more than previous generations. 5. College-going Millennials are more likely to study social science and applied fields. 6. As college enrollments grow, more students rely on loans to pay for postsecondary education. 7. Millennials are more likely to focus exclusively on studies instead of combining school and work. 8. As a result of the Affordable Care Act, Millennials are much more likely to have health insurance coverage during their young adult years. 9. Millennials will contend with the effects of starting their careers during a historic downturn for years to come. 10. Investments in human capital are likely to have a substantial payoff for Millennials. Source: The Council of Economic Advisers

illennials represent the largest generation in the U.S. workforce today and are known for placing value on team collaboration and workplace flexibility. They also place strong value on their education, and have outpaced educational attainment of previous generations. In today’s increasingly competitive job market, it may not be much of a surprise that Millennials say advanced education is valuable to their careers. When it comes to the perceived value of a doctoral education in the workforce, 78 percent of millennials agree that professionals with doctoral-level education are perceived as superior in the workplace, compared with 67 percent of U.S. adults overall, including Gen Xers and Baby Boomers, according to a recent survey by Harris Poll commissioned by University of Phoenix School of Advanced Studies. “Many Millennials entered the workforce in a post-recession economy, where the perception of a bachelor’s degree shifted from being a ‘nice-to-have’ to being a requirement to start their careers,” said Hinrich Eylers, Ph.D., executive dean for University of Phoenix School of Advanced Studies. “It is arguably more important than ever before to provide advanced education that is calibrated with the needs of today’s economy and employers. At University of Phoenix, our doctoral curriculum is designed to teach research for real life so that doctorate-level education delivers value to the workplace for this new generation of workers and the future workforce.” So is a doctoral degree the new master’s degree? Maybe so, according to millennials While most U.S. adults today still agree that employers place the greatest value on master’s and bachelor’s degrees (32 and 24 percent respectively), they see the potential of a doctoral degree. Seventy percent agree that obtaining a doctoral-level education can open up a wide variety of career options outside of academia. Again, millennials overwhelmingly agree, with 74 percent saying doctoral-level education can open a wide variety of career options and 78 percent agreeing that doctorally educated employees are valuable to an organization’s success. AB | September- October 2016

DINING

Tastes of the Valley:

Kitchen West Restaurant $10M in rennovations with food and service to match By DAVID MCGLOTHLIN

ast October, the Kitchen West Restaurant opened within the newly renovated Scottsdale Re-sort at McCormick Ranch delivering top-notch food and service to reflect the $10 million in-vestment by new owners to upgrade the resort. One year later and the demonstration kitchen with wood grills and ovens serving up a modern interpretation of American Western cuisine continues to dish out house specialties, cocktails and a fine dining experience that warrants a return visit. Tucked away in the heart of the resort’s rolling green fairways, a winding road takes you to Kitchen West, which was relocated to the lobby level of the former bar and lounge that neigh-bors the garden-front lobby area and the new Bar Six40. Elegant dark wood finishes, white pillars, overhead light fixtures and prominent southwestern decor like bull horns, antlers, ropes and ranching equipment are weaved throughout the restau-rant reflective of the surrounding desert and the history of McCormick Ranch. Once seated, guests peruse the list of items on the menu served as single or family style plates at lunch and dinner. Depending on your selection, an extensive wine list offers great pairing for your meal, which the servers are happy to identify if asked. When it comes to the food, there’s no going wrong with the house specialties.

AB | September- October 2016

Like the brisket burger with two beef patties, melty cheese coupled with tender beef brisket and all the traditional hamburger fixings served on a brioche bun. Narrowing down a list of appetizers to start the meal can be challenging but the menu offers an option to select four choices to be shared. Such as the fire-roasted corn cobb salad with chicken, bacon and all the usual suspects that compose a well-balanced salad or the chino peppers, which brings a nice southwest and smoky flavor from a light sear on the grill. Each menu item from the starters to the main course featuring dishes like Copper City bourbon sea scallops, wild Alaskan Salmon chop, double-cut pork chop and filet mignon were all cooked to perfection, which leaves your taste buds wanting more. You’re in luck because there’s more deliciousness in store on the dessert menu. None of the choices will disappoint your sweet tooth whether it’s the rich flourless chocolate cake served with a caramel cashew brittle and buttermilk ice cream, Dutch oven peach cobbler or the magnificent seven, which are seven light and delectable beignets served with chocolate pudding. Overall the experience and cuisine at Kitchen West Restaurant is on par with the new owners’ efforts to restore the former glory and status of the Scottsdale Resort at McCormick Ranch.

The Scottsdale Resort at McCormick Ranch Kitchen West Restaurant 7700 E. McCormick Parkway, Scottsdale 480-991-9000 thescottsdaleresort.com

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go to azBIGmedia.com to subscribe AB | September- October 2016

Leadership excellence, social responsibility, customer opinion, workplace culture and innovation separate MAC winners from the rest By MICHAEL GOSSIE

any people consider 7 to be a lucky number. And since this is the seventh edition of the Most Admired Companies in Arizona, some might look at the businesses who are being honored on this prestigious list as being “lucky.” If anything, the companies who earned a spot on the 2016 list of the Most Admired Companies prove that the business advice that many leaders offer is true: “The harder you work, the luckier you become.” When AZ Business magazine and BestCompaniesAZ developed the Most Admired Companies program in 2010, the primary goal was to find and recognize those organizations that excel in five key areas: • Leadership excellence • Social responsibility • Customer opinion • Workplace culture • Innovation Based on those five pillars of excellence, a selection committee comprised of Az Business magazine’s editorial and management team, BestCompaniesAZ’s leadership

AB | September- October 2016

team and professionals from a wide range of industries rate and select the most accomplished and prestigious companies in Arizona. It’s appropriate in this seventh year of the Most Admired Companies awards that seven companies have separated themselves by being named to this prestigious list all seven years. They are: • American Express • CBRE • Infusionsoft • Shutterfly • Sonora Quest Laboratories • Sundt • UnitedHealthcare With hundreds of nominations representing the most innovative and successful companies in Arizona, being one of Most Admired Companies for 2016 shows that the companies profiled on the pages that follow truly represents the best in Arizona. If you want to apply for the 2017 Most Admired Companies awards, visit azbigmedia.com.

Here’s how to build an employer brand to boost your bottom line

strong employer brand is now a necessity. Every company has an employer brand or reputation, whether by design or by chance. Strong employer brands attract and retain strong talent. With a weak employer brand, just a few disgruntled employees can do significant damage. When an organization builds Denise Gredler a strong employer brand, four Corporate branding things happen: 1. Employees become ambassadors. Only with a strong employer brand will the positive voices speak as loudly as the negative ones. People only go to social media to express their delight or their disappointment – not their indifference. 2. The company becomes a talent magnet. Unemployment is zero percent in many fields. Rock stars aren’t looking for jobs, but are interested in conversations with attractive employers. Engaged employees refer their friends, often passive candidates who work for competitors. 3. Overall company performance improves. There is an economic link between a positive employer brand and broader performance. In the stock market, best companies outperform the S&P 500 by 84 percent to 115 percent. 4. Customers turn into fans. A great employer brand creates confidence in customers that they will receive superior quality products or services from engaged employees. What are the essential components to building a strong employer brand?

Positive culture. Culture is the overall employee experience that results from vision, values, manifesto, leadership, practices and people. It can’t be copied. Workplace cultures are a one-of-a kind art and a good one is a masterpiece. 2. Brand consistency. Linking employer brand with the product/service brand strengthens both. 3. Differentiation. Great companies are like ice cream. They all share some common ingredients, but come in many different flavors. A company’s unique “flavor” can be defined through internal communication and specialized career events. 4.

A well-designed careers page and blog create the desire to be a part of something amazing. Job postings have

transformed from lists of qualifications into inspiring stories describing dream jobs. Blog posts associating a company with a positive employee experience are effective brand builders, especially when they come from a source with solid credibility. 5. Recognition as a Great Place to Work. Companies that win awards such as Arizona’s Most Admired Companies or Fortune’s 100 Best Places to Work often become “destination workplaces”, as famous for their corporate cultures as for their products. USAA, Charles Schwab and GoDaddy are examples of local and national award winning employer brands. Awards are even more important for lesser-known B2B brands. There is no downside to building a strong employer brand. Your employees are a powerful force, and they want to buy in to your company’s powerful story. Denise Gredler is founder and president of BestCompaniesAZ, which works with CEOs and HR leaders to maximize the value of their company’s brand and at the same time attract world class talent.

Benefits of a strong employer brand

n a poll of award-winning employers, 83 percent agreed that employer brand has a significant impact on ability to hire great talent. The stats are impressive: • 50 percent reduction in overall recruitment costs • 22 percent reduced third

party recruitment fees • Draw from 60 percent of the labor market, vs. 40 percent available to those with weaker brands • 94 percent of applicants more likely to apply for a job if the employer has a strong employer brand

• 54 percent increase in the quality of the talent pool for strong brands • Candidates under 40 are 61 percent more likely to make career decisions based on employer brand

AB | September- October 2016

Follow your heart. Spread humankindness. Dignity Health is a proud sponsor of the 2016 Arizona’s Most Admired Companies Program. We’re passionate about spreading humankindess at our four outstanding hospitals throughout the state. As one of the nation’s leading hospital networks, we are committed to delivering superior care to create a stronger, healthier world. Our mission is to heal our communities with dignity and compassion, and our priority is to create a supportive environment for our team members to fulfill that mission. We invite you to explore the incredible impact you can make with Dignity Health. Join us in building a healthier future. To learn more, visit: careersatdignityhealth.com/AZBusiness Dignity Health is an Equal Opportunity / Affirmative Action employer. All qualified applicants will receive consideration for employment without regard to race, color, religion, sex, sexual orientation, gender identity, national origin, disability, or protected Veteran status.

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Arizonaâ&#x20AC;&#x2122;s Most Admired Companies 2016 American Express Most Admired Company: 2010, 2011, 2012, 2013, 2014,

2015, 2016

Top Arizona executive: John Standring, senior vice president What it does: American Express is the largest credit card

issuer by purchase volume.

Admirable quality: American Express employees donate

thousands of hours of service to nonprofit organizations all over Arizona. The company uses an internal employee volunteer program site called Serve2Gether to post available opportunities for employees. American Express matches dollar for dollar donations made by employees to nonprofit organizations through its gift matching program. Employees who serve on boards of directors are eligible for a double match.

Arizona Charter Academy

Most Admired Company: 2010, 2011, 2012, 2013, 2015, 2016 Top Arizona executive: Melissa Holdaway, CEO What it does: ACA is a Valley-based, co-educational,

public charter school. Admirable quality: Celebrating is part of ACAâ&#x20AC;&#x2122;s DNA, from kicking off each year with a party at a high-end bowling alley, hundreds of hours of paid training, a themed annual holiday party where every employee leaves a gift, and an entire week dedicated to employee appreciation with food, swag, chair massages, gift certificates and more. Employee turnover is low because there is a 97 percent employee satisfaction rate.

Arizona Diamondbacks

Most Admired Company: 2011, 2013, 2014, 2015, 2016 Top Arizona executive: Derrick M. Hall, president and CEO What it does: Major League Baseball team that won the

2001 World Series.

Admirable quality: Yahoo! and Forbes have recently

tabbed the D-backs among the best workplaces in sports and last year the D-backs were named the No. 1 place to work in the state according to Ranking Arizona. The organization also has D-backs University, a comprehensive educational learning experience for employees to enhance their abilities. With the changing demographics, the organization is taking Spanish classes.

AB | September- October 2016

You’ve earned your money, but are you owning it?

In life, you question everything. The same should be true when it comes to managing your wealth. Do you know what your investment recommendations are based on? Does your ﬁnancial professional stand by their word? Do you know how much you’re paying in fees? And how those fees affect your returns? Ask your ﬁnancial professional, and if you don’t like their answers, ask again at Schwab. We think you’ll like what we have to say. Talk to us or one of the thousands of independent registered investment advisors that do business with Schwab. Ask questions. Be engaged. Own your tomorrow.TM

Schwab ranked “Highest in Investor Satisfaction with Full-Service Brokerage Firms.” *

Wealth Management at Charles Schwab PLANNING | PORTFOLIO MANAGEMENT | INCOME STRATEGIES | BANKING

Brokerage Products: Not FDIC Insured • No Bank Guarantee • May Lose Value To see how Schwab stands by our word, visit www.schwab.com/accountability *Charles Schwab received the highest numerical score in the J.D. Power 2016 Full-Service Investor Satisfaction Study, based on 6,006 responses from 20 ﬁrms measuring opinions of investors who used full-service investment institutions and were surveyed in January 2016. Your experiences may vary. Visit jdpower.com. There are eligibility requirements to work with a dedicated Financial Consultant. Wealth management refers to products and services available through the operating subsidiaries of the Charles Schwab Corporation of which there are important differences including, but not limited to, the type of advice and assistance provided, fees charged, and the rights and obligations of the parties. It is important to understand the differences when determining which products and/or services to select. The Charles Schwab Corporation provides a full range of brokerage, banking, and ﬁnancial advisory services through its operating subsidiaries. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (“Schwab”), Member SIPC, offers investment services and products, including Schwab brokerage accounts. Its banking subsidiary, Charles Schwab Bank (member FDIC and an Equal Housing Lender), provides deposit and lending services and products. ASK QUESTIONS. BE ENGAGED. OWN YOUR TOMORROW. is a trademark of Charles Schwab & Co., Inc. ©2016 The Charles Schwab Corporation. All rights reserved. (0516-FTV3) ADP77864-02

Arizona’s Most Admired Companies 2016 AXA Advisors Southwest

Most Admired Company: 2014, 2015, 2016 Top Arizona executive: Dillan Micus, executive vice president What it does: Assists individuals and businesses with financial planning needs. Admirable quality: AXA was named a 2016 Best Place to work by

the Human Rights Campaign (corporate equality index) for a third consecutive year and earned a perfect score of 100 percent. The company is ranked in the Top 25 best companies for multicultural women by Working Mothers Magazine, earned the Women Presidents’ Educational Organization Corporate Leadership Award and was named as one of the Equal Opportunity Magazine’s Top 50 Employers.

Bankers Trust

Most Admired Company: 2015, 2016 Top Arizona executive: Patricia F. Rourke, Arizona market president What it does: Full-service bank. Admirable quality: In 2015, Bankers Trust employees gave more than

14,000 volunteer hours in support of their communities. Every year, Bankers Trust allocates more than $1.3 million in sponsorships and charitable contributions. In the past 18 months, Bankers Trust employees in Phoenix have volunteered their time with more than 25 nonprofit and community organizations. Market President Pat Rourke has been recognized by both the Association of Fundraising Professionals and the YWCA for her volunteer and community service endeavors.

Blood Systems

Most Admired Company: 2015, 2016 Top Arizona executive: Dan Connor, CEO What it does: Provides blood, blood components and special

services to patients in nearly 600 hospitals across the country.

Admirable quality: Blood Systems and United Blood Services makes a

difference in people’s lives by bringing together the best people, inspiring individuals to donate blood, producing a safe and ample blood supply, advancing cutting edge research and embracing quality improvements. Loyalty is prevalent among its employees. Sixteen percent of its employees have more than 15 years of service and 30 percent have more than 10 years of service.

CBRE

Most Admired Company: 2010, 2011, 2012, 2013, 2014, 2015, 2016 Top Arizona executive: Craig Henig, senior managing director,

Southwest Region and Arizona market leader What it does: CBRE is a full-service real estate services company. Admirable quality: CBRE’s workplace culture stems from its RISE values — respect, integrity, service and excellence — which are the foundation upon which the company is built. These values transcend all markets, service lines, languages and business cultures. As a global organization, diversity and inclusion are woven into every aspect of CBRE, which fosters an environment that provides everyone the opportunity to succeed.

AB | September- October 2016

Arizonaâ&#x20AC;&#x2122;s Most Admired Companies 2016 Charles Schwab

Most Admired Company: 2013, 2014, 2015, 2016 Top Arizona executive: Bernie Clark, executive vice

president and head of Schwab Advisor Services What it does: Provides help with financial planning, investments, retirement planning and more. Admirable quality: All Schwab employees receive eight hours of paid time off each year for community service and the Charles Schwab Foundation matches their charitable contributions dollar for dollar up to $1,000 per year. In 2015, nearly 1,600 Arizona employees contributed more than 6,000 volunteer hours, donated $426,000 including company match, and an additional $159,000 was contributed to causes that are important to them.

Cresa

Most Admired Company: 2014, 2015, 2016 Top Arizona executive: Gary Gregg, managing principal What it does: Corporate real estate advisors specializing

in tenant representation.

Admirable quality: The Watkins Survey, a survey of real estate

decision-makers that measures how companies are perceived by clients and prospects, measured 10 factors deemed critical for effective client service. Cresa ranked No. 1 in nine of the ten factors. When a single combined factor rating was posted, Cresa was voted as the Best Overall Commercial Real Estate Service Firm in the world, scoring more than 20 points higher than the nearest competitor.

Edward Jones

Most Admired Company: 2016 Top Arizona executive: Dave Long, principal What it does: Financial services firm that serves

investment clients.

Admirable quality: A sports committee was formed to provide

opportunities for all associates to get to know each other better. It organizes sports teams to play in city leagues. In the first year, about 15 percent of the campus participated on at least one team. The firm pays the fees and provides T-shirts. The company also introduced Bring your Parent to Work Day, a twist on the more familiar Bring Your Child to Work Day.

AB | September- October 2016

Arizona’s Most Admired Companies 2016 Equity Methods

Most Admired Company: 2016 Top Arizona executive: Takis Makridis, president and CEO What it does: Provides valuation, financial reporting, and human

resources advisory services.

Admirable quality: Every year, Equity Methods’ CEO undertakes

an in-house survey called “How to Improve EM” to solicit ideas for improvement and to provide a safe outlet for employees to share what’s on their minds. He collates survey results and meets individually with respondents about implementation strategies. Numerous improvements — including the company’s Culture Committee and its professional development program — have resulted from the ensuing follow-up work.

Fennemore Craig

GoDaddy

Most Admired Company: 2010, 2014,

Most Admired Company: 2011, 2012, 2014,

2015, 2016

managing partner What it does: A full-service law firm for businesses. Admirable quality: Through the firm’s involvement in Arizona’s water law, tax policy, telecommunications services, and mining and transportation industries, Fennemore Craig has played an instrumental role in moving the region’s economy forward. The firm also operates the Venture Accelerator Program, which focuses on startups by providing access to legal services, as well as helping launch their enterprises. The firm enlisted Roy Farrow, a veteran Silicon Valley start-up consultant, as the program’s business services manager.

web hosting company. Admirable quality: Collaboration and innovation are key components to GoDaddy’s culture. Work spaces are designed to integrate innovation and creativity, enabling employees to easily join forces. GoDaddy’s brightly colored offices, high-ceilings, whiteboard walls, bean bag chairs, ping-pong tables, gaming areas and workout facilities create a cohesive, fun and engaging place to work. GoDaddy was honored as a four-time winner in the 2016 international Stevie Awards for Customer Service, winning in four categories.

Top Arizona executive: Stephen Good,

AB | September- October 2016

Top Arizona executive: Blake Irving, CEO What it does: Internet domain registrar and

Habitat for Humanity Central Arizona Most Admired Company: 2016 Top Arizona executive: Jason Barlow,

president and CEO What it does: Nonprofit homebuilder for low-income families. Admirable quality: Habitat has built more than 1,100 hundred homes in the Valley since 1985 for people who otherwise would not have qualified for a conventional home loan. Habitat’s goal this year is to serve more than 300 families who need a new home, home repairs, or other help in and around their neighborhood. All of Habitat’s homes are built to Energy Star standards and five earned LEED certification from USGBC this year.

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Arizona’s Most Admired Companies 2016 Henry & Horne

Most Admired Company: 2015, 2016 Top Arizona executive: Chuck Goodmiller, CPA, co-

managing partner What it does: Provides expertise in accounting, estate and tax issues. Admirable quality: Henry & Horne’s leadership team has a strong focus on the growth of its firm and its continued success. Their vision has led to growth of nearly 60 percent in the last six years. Through organic growth and several acquisitions, Henry & Horne has become a Top 150 firm in the U.S. The leadership is consistently looking for opportunities to expand its reach and develop new areas of expertise to offer its clients.

Homeowners Financial Group

Most Admired Company: 2010, 2011, 2013, 2014, 2016 Top Arizona executive: Bill Rogers, founder and CEO What it does: Mortgage company. Admirable quality: The leadership of Homeowners

Financial Group takes part in offsite workshops for team building, developing and strategizing. Each member of the leadership team has access to a business coach and are given an Insights Discovery Personality Profile tool for themselves and their team members. Homeowners Financial Group’s value, “Our people act with the highest ethics and integrity,” translates into the company only hiring like-minded individuals who share the same values.

Hyatt Regency Phoenix

Most Admired Company: 2013, 2014, 2015, 2016 Top Arizona executive: Thomas Delaney, general manager What it does: Hotel with 693 rooms and mountain or

downtown views.

Admirable quality: In 2016, Hyatt has jumped

31 places to land at No. 47 on the Fortune Best Companies to Work For list. Its culture reflects an environment where people can be their true selves. This is exemplified by other accolades, including being named to the 100 Best Workplaces for Women by Great Place to Work, Fortune’s 50 Best Workplaces for Diversity and Best Places to Work for LGBT Equality by the Human Rights Campaign.

AB | September- October 2016

Arizona’s Most Admired Companies 2016 Infusionsoft

Most Admired Company: 2010, 2011, 2012, 2013, 2014, 2015, 2016 Top Arizona executive: Clate Mask, CEO What it does: Offers an e-mail marketing and sales platform for

small businesses.

Admirable quality: All employees follow Infusionsoft’s Leadership Model,

which is designed to help employees develop their talents, challenge themselves professionally and spur personal growth. Leaders support, mentor and grow each other in a variety of ways. Leaders conduct weekly one-onone meetings with team members to chat about priorities, provide positive feedback or constructive criticism and support employee’s personal and professional dreams and map out plans that help them achieve their dreams.

JDA Software

Most Admired Company: 2016 Top Arizona executive: Marc Levine, CFO What it does: Software company providing supply chain

management, manufacturing planning, retail planning, store operations and collaborative category management solutions Admirable quality: JDA’s workplace culture encourages associates’ success in a fun and energizing environment. From perks like a free on-site fitness room and game room to the casual dress code, associates truly look forward to coming to work each day. The open space concept in the office – complete with “huddle rooms” – inspires a collaborative environment, while flexible hours allow associates to work virtually if they choose.

JE Dunn Construction

Most Admired Company: 2016 Top Arizona executive: Ben Strobl, vice president of Southwest operations What it does: Commercial construction company. Admirable quality: JE Dunn’s employee on-boarding program, Dunn from

Day 1, partners new employees with seasoned employees to help foster a comfortable working relationship and to learn about corporate culture, norms and expectations of the company. The program continues through the first 90 days of employment. The Dunn Well health and wellness program offers employees a number of resources to monitor their health, set goals, and learn about health-friendly diet and lifestyle choices.

Keyser

Most Admired Company: 2016 Top Arizona executive: Jonathan Keyser, founder and owner What it does: Real estate advisory firm helping tenants with lease

renewals, relocations, build-to-suits, acquisitions and dispositions.

Admirable quality: In line with Keyser’s core business methodology

of success through selfless service is the formation of the Disruptive Institute at Keyser. The institute looks to not only disrupt the commercial real estate industry, but to show other industries how they can apply these same principles and concepts to their own businesses. The long-term goal is to ultimately change and shape the business world through the practice of selfless service. 36

AB | September- October 2016

Arizona’s Most Admired Companies 2016 Kitchell

Most Admired Company: 2013, 2014, 2015, 2016 Top Arizona executive: Jim Swanson, CEO What it does: Handles all aspects of the construction

business, from concept through ribbon-cutting and beyond.

Admirable quality: Kitchell’s Interactive Virtual Tours

(IVTs) draw viewers into the finished space before construction is complete, letting them envision furnishings and flow. It takes the best of technology to engage facilities-users into the entire process and instills excitement for the final product at the earliest stages. In addition, IVTs help shorten transition times into new facilities. This has been a critical, proprietary selling tool for Kitchell’s transition management services.

Laser Spine Institute Most Admired Company: 2011, 2012, 2013, 2014, 2015, 2016 Top Arizona executive: Heidi Lenderking, executive director What it does: Helps patients with chronic neck or back pain. Admirable quality: Since 2005, Laser Spine Institute has

helped more than 60,000 patients. The Laser Spine Institute business model streamlines the healthcare process, resulting in lower costs for its patients and for insurance providers, while also allowing the company to reinvest in better equipment and training that produces better surgical results. This unique approach to healthcare allows surgeons to focus exclusively on what they do best — patient care and recovery.

LAVIDGE

Most Admired Company: 2011, 2013, 2016 Top Arizona executive: Bill Lavidge , CEO What it does: Advertising and public relations company. Admirable quality: LAVIDGE has recently incorporated

NetBase, a social media analytics tool, into its scope of work. NetBase is key for zoning in on relevant pitch topics for new clients, as well as sharing knowledge from all social media platforms. This helps LAVIDGE track brand trends for all clients, and building client trust immediately. LAVIDGE also partnered with Mosaic Multicultural, a new strategic consulting firm, to expand multicultural marketing services among LAVIDGE’s existing clients, while attracting new clients.

AB | September- October 2016

Congratulations We congratulate JDA Software on its inclusion in AZ Business Magazineâ&#x20AC;&#x2122;s 2016 Most Admired Companies

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AB | September- October 2016

Arizona’s Most Admired Companies 2016 Lovitt & Touché

Most Admired Company: 2015, 2016 Top Arizona executive: Charles Touché, CEO What it does: Insurance agency offering personal lines, property

and liability protection, employee benefits, claims administration, workers compensation and more. Admirable quality: Recognizing the changing healthcare landscape, Lovitt & Touché developed a proprietary private healthcare exchange, ClearPath Prime, to better serve small and medium-sized employers. ClearPath Prime functions like an online store, enabling employees to “shop” for health insurance and other benefits. ClearPath Prime allows companies to provide their staff with individualized coverage, helps reduce administrative burdens, streamlines the benefits selection process, controls and predicts costs and bolsters employee satisfaction.

MC Residential Communities

Most Admired Company: 2016 Top Arizona executive: Lesley Brice, president What it does: Full-service real estate investment

and property management company. Admirable quality: When designing the corporate office, MC’s partners created an environment that promotes fun and engagement. A 1950s diner-themed lunch room ensures that lunch provides an atmosphere that fuels employees’ bodies with nourishment, but provides healthy mental nourishment. The MC Game Room, complete with a vintage video arcade game, offers fun. Many team meetings are hosted in this setting. The Think Tank, a room surrounded by white boards and inspirational messages, allows creative juices to flow during meetings

AB | September- October 2016

Medtronic

Most Admired Company: 2015, 2016 Top Arizona executive: Ron Wilson, vice

president and general manager What it does: Medtronic is a global leader in medical technology. Admirable quality: Medtronic has been recognized many times over the years as a preferred employer by a variety of organizations. This includes Diversity Inc’s Inclusion Index “Top 50,” Arizona Manufacturer of the Year, State of Arizona Rehabilitation Service’s “Dynamic Partner of the Year” and the City of Phoenix Mayor’s Disability Award for Industry. The Tempe Campus is also focused on reducing energy consumption and supporting a sustainable environment.

Musical Instrument Museum Most Admired Company: 2015, 2016 Top Arizona executive: April Salomon,

executive director What it does: MIM showcases a collection of more than 15,000 musical instruments and associated objects. It is the largest museum of its type in the world. Admirable quality: MIM was planned and constructed using sustainable design practices and landscaping featuring drought- resistant plants that are native to the environment. The building utilizes sustainable design practices including efficient wall systems and windows with a high insulation value, a reflective roof and solar panels, and a low- chemical water treatment system, among other features.

IN THE TIME IT TOOK YOU TO READ THIS SENTENCE, SIX MORE LIVES WERE IMPROVED

Each year, Medtronic helps alleviate pain, restore health and extend lives for millions of people around the world. In fact, two people every second are positively impacted by our breadth of medical technologies and therapies. Because every second counts. Learn more at medtronic.com/furthertogether.

AB | September- October 2016

Arizona’s Most Admired Companies 2016 Nextiva

Most Admired Company: 2015, 2016 Top Arizona executive: Tomas Gorny, CEO What it does: Provider of cloud-based unified

communications, hosted PBX and online fax services.

Admirable quality: Nextiva’s technology is vastly forward-

thinking and the company prides itself on being the architects of the future. Nextiva recently broadened its scope again with the launch of Nextiva Analytics. This solution allows businesses to access and manipulate their call data through customizable reports, wallboards, dashboards, and company-wide gamification. The powerful tool contains over 225 report combinations and infinite ways to analyze both real-time and historical data.

Phoenix Children’s Hospital Most Admired Company: 2010, 2013, 2014, 2016 Top Arizona executive: Robert Meyer, president and CEO What it does: Named one of the Best Children’s Hospital

in the United States by U. S. News and World Report.

Admirable quality: Phoenix Children’s has the technology

to turn two-dimensional images from a CT scan into three-dimensional heart models. A 3-D printer creates a color coded, three- dimensional, plastic model of a patient’s heart. With these exact replicas of a child’s heart, surgeons can see and touch the actual size of the structure before surgery even begins.

Plaza Companies

Most Admired Company: 2011, 2013, 2016 Top Arizona executive: Sharon Harper, president and CEO What it does: Full-service real estate firm specializing

in the management, leasing and development of commercial properties and senior housing communities. Admirable quality: Plaza Companies actively identifies new industries, such as research and biotechnology, where it can play a leadership role. It is on the cutting edge of some of the Valley’s most innovative economic development projects. Those include: SkySong, The ASU Scottsdale Innovation Center; BioAccel in the creation and development of BioInspire; and, most recently, Plaza Companies was selected to build a 17-acre Peoria Innovation Campus.

AB | September- October 2016

â&#x20AC;&#x153;Blessed is the person who has learned to admire but not envy.â&#x20AC;? William Arthur Ward

Thank you Arizona for recognizing us as a Most Admired Company.

AB | September- October 2016

Arizona’s Most Admired Companies 2016 Protiviti

Most Admired Company: 2016 Top Arizona executive: Alex Robison, managing director What it does: Global business consulting and internal audit firm. Admirable quality: Protiviti actively seeks to recruit employees from diverse

backgrounds. For example, in 2012, Protiviti’s campus recruiting was 70 percent male and 30 percent female. In 2014 and 2015, it was 50-50 split. Protiviti promotes collaboration through initiatives like its #Innovation program: any employee can submit an innovative idea through the company’s intranet; if the idea is implemented, he/she receives rewards based on the contribution and its impact. Protiviti’s initiatives extend across the firm.

Quarles & Brady

Most Admired Company: 2014, 2015, 2016 Top Arizona executive: Nicole Stanton, office managing partner What it does: Full-service law firm for businesses and individuals. Admirable quality: The firm’s Wellness Committee nurtures employee health,

increases day-to-day workplace satisfaction, enhances productivity and results in long-term, measurable improvement in employee wellness, along with reduced medical costs. Quarles facilitates these goals through an internal website dedicated to employee wellness, regular educational emails, lunch/learns, individual and team-based health challenges, themed walks, health fairs, onsite screenings, and flu shots. Quarles partners with third-party organizations for disease management and employee assistance services.

Ryan, LLC

Most Admired Company: 2012, 2013, 2014, 2015, 2016 Top Arizona executive: Jon Sweet, executive vice president and vice chair What it does: Ryan provides a comprehensive range of state, local,

federal, and international tax advisory and consulting services.

Admirable quality: In 2015, Ryan won 75 awards including

international, national, state, and city level programs. They include Working Mother 100 Best Companies, Work-Life Seal of Distinction award, Companies that Care honor roll, National Best and Brightest Companies to Work For, FORTUNE’s Top 100 Companies to Work For and was recently names Fortune’s No. 1 place to work for flexibility.

Shutterfly

Most Admired Company: 2010, 2011, 2012, 2013, 2014, 2015, 2016 Top Arizona executive:Corey Conklin, vice president of customer care What it does: Internet-based image publishing service. Its flagship

product is its photo book line. Admirable quality: The mission of Shutterfly’s foundation is to strengthen the connection to local communities through donations and organizational assistance, specifically reaching out to organizations that focus on children and families. Shutterfly focuses its resources on those two groups because there are so many family support needs in each community, and because the memories the company preserves for people through its products are most often about family. 44

AB | September- October 2016

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Arizona’s Most Admired Companies 2016 Sonora Quest Laboratories

Most Admired Company: 2010, 2011, 2012, 2013, 2014, 2015, 2016 Top Arizona executive: Dave Dexter, president and CEO What it does: Sonora Quest schedules and conducts thousands of

diagnostic lab tests daily.

Admirable quality: In November 2015, Sonora Quest Laboratories

launched a collaboration with Safeway to open Patient Service Centers within select Safeway stores in Arizona. The new Sonora Quest Laboratories Patient Service Centers provide consumers access to lab testing inside Safeway stores, directly next to the pharmacy. Customers can utilize up-to-date diagnostic capabilities, whether they have a doctor’s order for lab work or they request select lab tests on their own.

Sundt

Suntec Concrete

2013, 2014, 2015, 2016 Top Arizona executive: Mike Hoover, president What it does: Construction services. Admirable quality: Sundt’s donation to the East Valley Institute of Technology in Arizona and sponsorship of Arizona Construction Career Days enabled its employee-owners to connect with high school students who are considering construction careers. Getting recent graduates into the business is critical; the average craft worker is in his or her late 40s. Sundt also works with school districts to construct career and technical education centers that offer high schoolers the chance to get a head start on a trades career.

construction company. Admirable quality: Suntec Concrete creates a culture and environment that allows each individual the potential to grow constantly in the company. Suntec has a leadership mentoring program to help individuals reach their goals and give them the opportunities to step into leadership roles. The president of Suntec oversees the program and allows each manager and individual the opportunity to not only gain the knowledge and strength to grow in their current job role, but to learn and be promoted into new roles.

Most Admired Company: 2010, 2011, 2012,

AB | September- October 2016

Most Admired Company: 2015, 2016 Top Arizona executive: Derek Wright, president What it does: Commercial concrete

The Phoenician

Most Admired Company: 2016 Top Arizona executive: Mark Vinciguerra,

managing director What it does: Upscale resort. Admirable quality: The Phoenician promotes the true essence and spirit of family yearround through a variety of activities. This starts by providing a healthy, comfortable workplace that encourages interaction between all associates and departments. In this collaborative environment, everyone has a voice. Individual and group achievements are celebrated through the monthly “Phoenician’s Finest” award program, as well as an annual service gala. At the end of summer each year, The Phoenician Fair is held, which provides school supplies for associates’ children.

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AB | September- October 2016

Arizona’s Most Admired Companies 2016 UMB Bank

Most Admired Company: 2015, 2016 Top Arizona executive: Jim Patterson, CEO of UMB Bank Arizona What it does: Provides a comprehensive suite of banking products

and services.

Admirable quality: Patterson has been CEO of UMB in Arizona since

2009. During that time, he has helped the region become one of the largest in UMB’s footprint. In the first quarter of 2016 alone, Patterson’s team increased total loans by 42 percent, compared with a year ago. Additionally, UMB Bank acquired Marquette Financial Companies in 2015. Patterson has led the transition of Meridian Bank (Marquette) in the region, which includes eight newly added branches and nearly 80 associates.

UnitedHealthcare

Most Admired Company: 2010, 2011, 2012, 2013, 2014, 2015, 2016 Top Arizona executive: Wendy Arnone, West Region CEO What it does: Offers employer, individual and family health insurance plans. Admirable quality: UnitedHealthcare’s myHealthcare Cost Estimator

tool is now available to more than 1.8 million Arizonans, giving consumers an integrated online and mobile service that brings a retail shopping experience to health care. The tool shows consumers both quality and cost measures associated with common medical procedures. UnitedHealthcare is also expanding consumers’ access to affordable health care options with its virtual physician visit benefit coverage.

USAA (United Services Automobile Association) Most Admired Company: 2015, 2016 Top Arizona executive: Robert Schaffer, vice president of regional

strategy and general manager What it does: Provides military members and their families with insurance, banking and investment services. Admirable quality: USAA recognizes and develops a local spirit of innovation through fun and engaging forums, like the Phoenix Innovation Tank. Employees are selected to pitch their idea to a leadership panel for sponsorship. As a testament to USAA’s pursuit of innovative excellence for its members and employees, patents for employee inventions are celebrated by the USAA on numerous wall displays in its campuses.

Vanguard

Most Admired Company: 2011, 2013, 2014, 2015, 2016 Top Arizona executive: Bridget Olesiewcz, principal What it does: Offers mutual funds, ETFs, financial advice and related services. Admirable quality: Vanguard employees can search and sign up for

any one of the company’s 12 service programs, which range from drives for blood and canned food to holiday giving programs and Skills-Based Volunteers, through the Vanguard Gives Back Portal. The Vanguard Skills-Based Volunteering Program aligns crew talents, experiences, and interests with the needs of nonprofit organizations in the local community. This program is powered by Vanguard crew seeking additional ways to make a meaningful impact. 48

AB | September- October 2016

Arizona’s Most Admired Companies 2016 Ventana Medical Systems, Inc.

Most Admired Company: 2013, 2016 Top Arizona executive: Ann Costello, president What it does: Innovator of tissue-based diagnostic solutions. Admirable quality: Ventana is helping unlocking the DNA of cancer.

In 2016, the VENTANA PD-L1 test received U.S. Food and Drug Administration approval for use as a complementary diagnostic to provide PD-L1 status on patients with metastatic urothelial cancer. It’s the first major advancement in more than 30 years in the treatment of urothelial cancer and is anticipated to be the foundational complementary test for Roche’s TECENTRIQ therapy in other cancer indications.

V.I.P. Mortgage

Most Admired Company: 2013, 2016 Top Arizona executive: James Barbour, V.I.P. Mortgage founder and president What it does: Specializes in home loans, refinancing and reverse mortgages. Admirable quality: VIP was the first company to apply Theory of

Constraints (TOC) principles and philosophy to the mortgage industry. Typically used in manufacturing and project management environments, VIP adopted TOC to facilitate the flow of loan files through its pipeline. It allowed the company to look at originating and figure out how to speed up the transaction process without sacrificing quality, time or profitability, setting business rules to maximize the flow of loans along with focus, discipline, values and alignment.

WebPT

Most Admired Company: 2013, 2015, 2016 Top Arizona executive: Heidi Jannenga, president and co-founder What it does: Provides cloud-based electronic medical records and

practice management software for physical therapists. Admirable quality: By creating an affordable, intuitive, and technologically sound cloud-based EMR for rehabilitation therapists, WebPT brought all the benefits of EMR to rehab therapy practices that otherwise would have fallen behind. WebPT makes it possible for therapists to advance their practices — and thus, their quality of care — despite government incentive exclusions, thereby empowering an entire community to elevate their profession. WebPT has helped more than 55,000 therapy professionals adopt EMR.

Wildflower Bread Company

Most Admired Company: 2016 Top Arizona executive: Louis Basile, founder and CEO What it does: Offers a full line of specialty bakery items, gourmet

sandwiches, salads, homemade soups and cafe beverages.

Admirable quality: Wildflower developed a unique on-boarding experience for

all new Breadheads (employees). During the first four weeks at Wildflower, Breadheads are asked to complete a passport journey based on the company’s purpose, values and safe space communication toolset. This interactive journey allows each Breadhead to make a conscious choice to align their actions and interactions with Wildflower’s values. Those who complete the journey receive a pin symbolizing their understanding, commitment and passion. 50

AB | September- October 2016

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AB | September- October 2016

FINANCIALPLANNING

anxiety Performance

How to tell if your 401(k) plan is underperforming and how to fight for a better one

By MICHAEL GOSSIE

good 401(k) plan should be built around your goals, risk tolerances, anticpated age of retirement and expected rate of return. The problem is, many 401(k) plans are laden with high fees and underperforming investment choices, experts warn. “It is important to review your 401(k) plan at least every three months,” says Keith J. Kormos, senior vice president of private banking for Bankers Trust. “Many 401(k) plans allow for daily online access, but watching frequently will probably not serve you well. Large interim swings in the market often cause investors to react and sell at precisely the wrong times. Your investment portfolio is a long-term investment that over time, regardless of what the market does, should increase in value. When you do look at your portfolio, take a few moments and review your investment returns over time.”

AB | September- October 2016

Is your 401(k) working?

ere is what experts say to look for in a 401(k) plan to know if it works best for you:

Jack Barry, president and CEO, Arizona Region, Enterprise Bank & Trust: “Plan participants should look for a diverse menu of investment options. Also, look for variety, and a welldiversified plan will have more than one mutual fund company represented on the list.” Matt Dana, partner, Quarles & Brady: “You should first look to see what the company’s ‘matching contribution’ will be for your volunteer employee deferrals. A dollar-for-dollar match is the best. Look for a variety of investment options and rapid vesting for employer contributions. Also, make sure there are immediate distribution provisions for education expenses and home ownership. And last, it is nice if you can borrow from the plan.” Keith J. Kormos, senior vice president of private banking, Bankers Trust: “A good 401(k) plan should be built around your goals, risk tolerances, age of retirement and expected rate of return. … It is also important that once you paint your retirement picture that the dream is reconciled against your estimated income stream and it is equally important to reconcile your investment strategies to your risk tolerances. Low risk equals lower returns and of course the higher the risk the higher the returns, but a greater chance of losing all or a portion of your investment … A great rule of thumb is to lower your portfolio risk the closer you get to retirement or as you age.” Robert Nichols, financial advisor/CMFC, Desert Schools Financial Services: “Some of the key things to consider when evaluating a 401(k) plan are the employer contributions, vesting schedule, fee structure and investment options. Check if the plan offers both Traditional and Roth versions. The Traditional 401(k) can help save taxes now, but will be taxable when withdrawn. The Roth 401(k) receives after tax contributions that may be withdrawn tax free later.” Tom Swanson, regional relationship management director, Wells Fargo Institutional Retirement and Trust: “Plans should be easy to use and encourage participants to start saving as soon as possible. Effective plans often utilize auto features that get participants saving as soon as they are eligible and allow participants to increase their contributions automatically. Appropriate diversification of investments is also critical, so investment options available to participants to allow for diversification are critical to success.”

First, make sure large amounts are not invested in company stock

But that might not be so easy. Here’s the problem with the intimidating world of retirement investing, according to the experts at Money Under 30, which aims to help young adults take charge of their money, prioritize financial goals, and choose financial products wisely: • Many “financial advisors” who sell retirement investments have no legal obligation to put your financial interests first; they can (and will) sell you the product for which they receive the highest commission. (But there are good guys; look for fee-only financial advisors who are fiduciaries, meaning they have to put your interests first.) • Most 401(k) plans are intentionally complicated and riddled with high fees that enrich investment companies at the expense of your life’s savings. • These fees seem tiny—one percent here, a quarter of a percent there—but when compounded over 30 years can add up to hundreds of thousands of dollars flowing out of your account. • To make matters worse, many of the expensive mutual funds in your 401(k) may perform worse than if you invested completely at random. So what are some of the red flags you should look for to make sure your 401(k) is working for you? “First, make sure large amounts are not invested in company stock,” says Matt Dana, partner at Quarles & Brady in Scottsdale. “Next, review your options if you terminate employment with the company and make sure you can roll your 401(k) immediately into an IRA. And last, read the fine print to see what options are available if you die and make sure you can integrate the beneficiary designations into your estate plan with the least amount of income tax.” Another potential red flag could be a lack of information. “A good 401(k) plan should offer comprehensive education tools to help participants make decisions appropriate for them,” says Tom Swanson, regional relationship management director for Wells Fargo Institutional Retirement and Trust. “If you aren’t receiving regular messaging and required notices from your provider, including good steps to take to save enough for retirement, you AB | September- October 2016

FINANCIALPLANNING

Jack Barry

Matt Dana

could be missing out.” Swanson says another area to watch is investment choices. Too many funds, too few funds, underperforming funds or the lack of low-cost investment options could also be indicators of areas that may need improvement. “Drill down to the individual mutual funds, stocks or bonds and compare the investments to other offerings,” Kormos says. “For example, if you are looking at mid-cap mutual fund, get a rating from Morningstar and compare that fund to other mid-caps that your plan provider might offer. It’s also good to know the fees you are paying on your mutual funds. These embedded fees can be substantial on some funds and should be compared to comparable plan offerings that might carry lower fees and higher returns.” So what happens if your 401(k) plan is underperforming? You may be able to do something about it by lobbying your employer to re-negotiate its 401(k) plan, or change providers altogether. The experts at Money Under 30 say that even though the 401(k) plan is sponsored by your employer, the plan is administered by a third-party, commonly known as a trustee. That party can be a large investment company, or it can be an individual investment broker. You may be able to determine who the plan administrator is by contacting your human resources department. “These 401(k) plans are often used to attract the best talent,” Dana says. “As such, look at other companies in your industry to see what benefits are offered — such

Keith J. Kormos

These 401(k) plans are often used to attract the best talent

Robert Nichols

Tom Swanson 54

as the matching contribution, vesting, distribution options, investment options, etc. Then, sit down with your HR person and review these options with him or her and see if they will act as a voice back to the employer to encourage an amendment or restatement of the 401(k) to incorporate some of these benefits.” But if it comes down to requesting a change in your company’s 401(k) plan, the folks at Money Under 30 say you better do your research so you can make

AB | September- October 2016

a solid case for the change. You should be prepared to indicate that the funds available suffer from the following limitations: • Poor performance: That means that the fund or funds available have been under-performing either the market or the related industry class. • Limited fund selection: The funds offered do not provide for adequate diversification or alternative investment options. • High fund fees: The fees being charged in connection with the available funds are higher than the industry average. Be sure to look at load fees (if any), commission charges, and 12b-1 fees. In pointing these issues out, you’re effectively defining the problems that need to be addressed. “It makes sense for employers to ask alternative providers to review its existing plan in order to compare fees, performance and product offerings,” Kormos says. “Many times when I’m calling on a company regarding its 401(k) plan, I offer a free side-by-side comparison. We even drill down to the embedded fees within mutual funds to give the employer a true overall cost. Also, oftentimes we find the company owner or president serving as the plan trustee, not realizing the personal liabilities associated with that role vs. a corporate trustee. All companies offering 401(k) plans should have and offer robust employee educational meetings. The goal is to improve plan participation and educate employees about the plan’s investment choices, as well as answer questions. Employee meetings should be held annually to catch new employees and answer questions other plan participants might have regarding their accounts and/or enrollment.” When talking with employers about changing 401(k) plans, experts say you should be fully prepared to present reasonable alternatives. That means offering examples of three or four funds in each asset class offered that exceed the performance or price of the current funds provided. This will not only make it easier for the administrators to make the change over to new funds, but it will also serve as evidence that the existing funds offered are deficient. “Ask your employer what resources they are using to benchmark the features, services provided and cost of the plan,” Swanson says. “Utilize publicly available research on retirement plan providers to educate yourself and identify top providers with some of the best rankings for customer satisfaction, online and mobile capabilities and advice tools. With that information, you can have a productive discussion with your employer and gain confidence that your plan is working for you.”

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AB | September- October 2016

FINANCIALPLANNING

AreYou covered?

s wealth increases, so does exposure to risk. High-networth individuals and families are often targeted with lawsuits due to their wealth (and the potential lucrative payout), making it vital they consider additional coverage options to ensure their lifestyles and hard-earned assets are protected when unforeseen and unfortunate events occur. Personal umbrella/excess liability/personal catastrophe coverage: This coverage provides personal liability limits well beyond the dollar amount provided by a typical home and auto insurance policy. When the primary insurance limit is exhausted, an umbrella policy affords additional coverage, including coverage not found Laurie Haas in your primary policy in many Financial planning instances. An umbrella policy generally covers you and family members residing in the household if found negligent for accidental injuries to another person or their property. For example, let’s say you host a party in your home and a guest suffers an injury. If you are subsequently found liable, an umbrella policy will pay the cost of a judgment entered against you up to the limit of liability. Further, defamation and slander lawsuits are more prevalent today with social media. If you (or perhaps your child) are sued because of a post that is perceived to damage someone’s reputation, this type of coverage can defend against a personal injury claim. For full protection, it’s important that the legal defense costs are included outside of the policy limits of coverage. 56

AB | September- October 2016

Assessing the insurance needs for high-net-worth individuals

Excess uninsured/underinsured coverage: This type of coverage protects you when another party is responsible for damages sustained by you, and either does not have any insurance or does not carry enough insurance. It’s not limited to auto accidents, as commonly associated. It also applies to a swimming pool mishap away from your residence, or if you suffer an injury at someone else’s home. Moreover, if your injury is severe and prevents you from working long-term, it can cover loss of income for you and your family. Without excess uninsured, these costs will come out of your pocket. Luxury items: There are specific policies to protect the luxury items we acquire. The importance of retaining coverage for big-ticket items, such as boats and recreational vehicles is fairly common knowledge, yet there are also policies specific to wine, which can cover issues like spoilage, or for fine art, furs and jewelry. Homeowners insurance: Surprisingly, high-valued homes are often underinsured. High-net-worth homeowners can benefit from a policy that includes guaranteed replacement costs with no cap, as the home’s market value and replacements costs can vary significantly. For example, a home may be valued at $1 million, yet it could cost $4 million to rebuild with all the bells and whistles. While most people have a contingency plan for an emergency, covering a shortfall in your insurance program is typically not one of them. Wealth takes an incredible amount of time and energy to acquire, and insuring against life’s risks can ensure that your wealth and hard work is preserved when accidents happen. Laurie Haas is vice president of Private Risk Services at Lovitt & Touché and the only Arizona agent to hold the Certified Advisor of Personal Insurance (CAPI) designation.

2016

Engagement party Page 60

Safety in numbers Page 64

Time for a checkup Page 68 MPI ARIZONA SUNBELT CHAPTER BOARD OF DIRECTORS: Front row, from left: David Rosenbaum, CHME, Carefree Resort & Conference Center; Sharon Scronic, CMP, American Express Meetings & Events; Shelley Sullivan, KCA. Second row: Penny Allphin, CHME, Hassayampa Inn/Aris Hospitality; Lee Smith, Hotel Valley Ho; Joanne Winter, MPI Arizona Sunbelt Chapter; Tiffany Higgins, The Tiffany Event. Third row: Kelli Dawson, SMMC, American Express Meetings & Events; Sukki Jahnke, Microchip Technology; Susie Molinich, CMP, SMMC, American Express Meetings & Events. Back row: Troy Peters, CTS, Video West Inc.; Michelle Fulcher, CMP, Organized Affair; Debbie Elder, independent meeting planner; Danielle Adams, WM Symposia. Not pictured: James Eggimann, The Ritz-Carlton Leadership Center; and Wendy Frank, Sheraton Grand Phoenix.

MEETING PROFESSIONALS INTERNATIONAL

Engagement

party

MPI’S NEW PRESIDENT: “I am extremely proud to be an integral part of the Meeting Professionals International - Arizona Sunbelt Chapter leadership team,” says David Rosenbaum. associate director of sales for the Carefree Resort & Conference Center. PHOTO BY SHANNON FINN, AZ BIG MEDIA

AB | September- October 2016

MPI – Arizona Sunbelt Chapter’s president looks to increase membership participation to help boost industry

eader, consistent, professional and inspirational — a few words used by colleagues to describe Meeting Professionals International – Arizona Sunbelt Chapter’s newest president, David Rosenbaum. Currently associate director of sales for the Carefree Resort & Conference Center, Rosenbaum manages the Northeast, Canada and Midwest markets, enticing businesses and groups to utilize the resort’s extensive offerings and surrounding activities. Bringing business to the Valley of the Sun is by no means a new fete for Rosenbaum. With more than three decades in the local resort industry, there’s no doubt why he’s earned the accolades freely bestowed by his colleagues and peers, not to mention his newest title as MPI Arizona Sunbelt Chapter president. Az Business sat down with Rosenbaum to talk tourism and the meeting and events industry in Arizona. Az Business: What are you most looking forward to accomplishing as MPI Arizona Sunbelt Chapter president? David Rosenbaum: This fiscal year, along with growing our overall membership base, I look forward to continuing to increase our membership participation and engagement and our overall membership satisfaction. I am a firm believer that when our

members are engaged and participating (such as being members of committees), that they are much more likely to receive a return on their investment. Whether they are looking for additional education, professional development, or simply doing more business, their odds increase tremendously when they become involved. In 2015, I had the opportunity to personally head up our 2nd Annual Volunteer-A-Thon. From June 15 through August 15, the 16-member task force reached out to 234 members of the association that were not already involved on the leadership team. The taskforce contacted these members by phone and by email. At a minimum, the task force estimated over 700 phone calls and/or e-mails were made in the process. The results were impressive. The task force was able to encourage 34 members — who were not already part of the leadership team or a committee — to join. There were 12 committees that benefitted from the VolunteerA-Thon, including EduCon, Raffles, Host & Hospitality, Golf, Website, Student Relations, Membership, Certification, Special Events and more. For our efforts, we earned a RISE Award from MPI International, and today, I am proud to say, over 30 percent of the Arizona Sunbelt Chapter’s membership is engaged and involved on a committee.

What is MPI? Meeting Professionals International (MPI) is the largest and most vibrant global meeting and event industry association. The organization provides innovative and relevant education, networking opportunities and business exchanges, and acts as a prominent voice for the promotion and growth of the industry. MPI membership is comprised of approximately 18,500 members belonging to 70 chapters and clubs worldwide.

For additional information or to join, visitmpiweb.org. ARIZONA CHAPTER: Active since 1979, the Arizona Sunbelt Chapter is MPI’s 13th largest chapter in the world. The organization is comprised of 330 members throughout Arizona, representing a mix of corporate, association, government and independent meeting planners, suppliers who provide a variety of

products and/or services to the meeting and hospitality industry as well as student and faculty from our local colleges and universities. The local chapter offers members educational, networking, and community volunteer opportunities, plus industry certification and professional growth opportunities. For more information, contact Executive Director Joanne Winter, at 602-277-1494 or visit the chapter website at mpi-az.org.

AB | September- October 2016

MPI AB: How has MPI helped to enhance your professional career? DR: Along with creating a network of associates that have

supported me along the way and booking some business directly due to my MPI involvement, my association with MPI has definitely directly contributed to my professional development. Sometimes, I utilize the education I have received (through MPI) to directly help me in my professional position — be it with contracts, budgets and negotiating — and other times I recognize the contribution in terms of public speaking or delivering a presentation. MPI has given me many tools to use along the way. I use the MPI logo and title in my signature line and I can think of a number of instances where that has sparked a conversation and possibly helped seal some business. AB: What trends do you see in meeting and event planning? DR: Being the hotel guy that I am, I value the opportunities to bring people together. I think so much information is shared when attendees visit in person. People can create networks of colleagues that they can approach if they need assistance or to bounce an idea off of. One can do this electronically, of course, but I think having a personal connection makes this a much easier task. Having said that, the trends I see continuing in meeting and event planning would include even more technology – connecting the attendees and increasing engagement — and an even greater focus on healthy, creative meals. It is very rare for a group to expound on a very successful program and have them not mention the meals and the culinary team. AB: How is Arizona (or how can it be more) competitive as an events destination? DR: In terms of sporting events, Arizona is already there — hosting Super Bowls, the College Football Playoff National Championship, Major League Baseball’s All-Star Game, the upcoming NCAA Final Four, the Phoenix Open and so much more.

As far as Arizona being competitive in general, I think the weather, along with the diversity of the state, lends itself well to being a competitive destination. We have the golf, shopping, world-class spas, various tours and activities, and the professionals in the industry that can help create successful events. AB: Are there any aspects of Arizona meeting and event planning that set us apart or raise the bar? DR: Arizona is always looking for more competitive edges to raise the bar. We have a number of first-class resorts with extensive meeting space and unique venues. Many cities in Arizona, such as Phoenix, Mesa, Glendale, Tucson and Flagstaff have convention centers, which can attract large groups. These cities, and other communities within the state such as Scottsdale, Tempe, Sedona, Prescott, Lake Havasu and Yuma, have convention and visitors bureaus with very knowledgeable and creative staff to assist in enhancing any program. When you see things such as the Skywalk at the Grand Canyon or the Extreme Adventure Course in Flagstaff, these are reflections of Arizona staying competitive. AB: How does MPI impact Arizona’s tourism industry overall? DR: MPI helps create more knowledgeable, creative industry leaders. We offer the professional development, industry certification, and the network to draw from to help professionals in the industry become more successful in their respective business. AB: If you were given free reign to create any event imaginable — without financial or location restraints — what would it be? DR: That is an easy one. As I do not actually plan meetings and events, I would turn to my colleagues within our local MPI chapter and select members who have planned and created memorable programs all over the globe. I assure you that we would create a most memorable event indeed.

“I look forward to continuing to increase our membership participation and engagement” 62

AB | September- October 2016

MPI

Safety in numbers

MPI members increase focus on security

By Erin Davis

ith recent events in Dallas, Orlando and Baton Rouge, accompanied by public acts of aggression and terrorism overseas, the world is changing. New safety initiatives are being created every day to accommodate heightened security awareness and MPI is following suit. No stranger to the importance of safety and security, MPI is doing even more to arm its members with knowledge and preparedness required to rise to new and growing challenges. From thoroughly scouting venue locations to establishing impeccable emergency plans, community leaders and members of the MPI Arizona Sunbelt Chapter are making sure to lock down every necessity to keep businesses and event attendees safe and secure.

Thorough venue review Local professionals agree that the key to event safety and security readiness begins with site selection. “Pick a known location,” advises Jim Driscoll, chief deputy of the Coconino County Sheriff’s Office, “and always do an initial walk-through of the property before committing.”

MPI member

spotlight

Cathy Clifton, CMP, CMM Senior director of global meetings and events Socious/Higher Education User Group (HEUG) 64

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Driscoll points out that although shootings have been highly publicized, there are other issues of importance and concern, beginning with environmental safety issues. When surveying potential locations, experts encourage scanning for exit areas, assessing stairways and stairwells, apprising any electrical issues and examination of fire alarms (among others). “When I consider using a venue or building, I make sure that all safety measures regarding the location are in the (request for proposal),” says Cathy Clifton, CMP, CMM, senior director of global meetings and events for Socious/Higher Education User Group (HEUG). And don’t forget to walk out the double doors for a simple safety check – those doors should be unlocked, they are an exit in case of emergency. For an accurate assessment of the neighborhood, Clifton often zeroes in on a specific source of expertise. “If I’m dealing with an area I’m not familiar with, I like to talk to the bellman up front,” Clifton says. “It’s a great way to find out what the neighborhood is like. How safe is it?”

Recent honor: MPI Planner of the Year Industry start: “I graduated from ASU with a degree in economics and went to work for the Department of Real Estate in the College of Business. I quickly realized that being a numbers cruncher was not the job for me, however I liked planning the quarterly breakfast meeting we held in conjunction with publishing our housing report. Since I worked at ASU, I went back and started to take ‘fun’ classes. I stumbled upon the Special Events Management class and had my lightbulb moment. It finally occurred to me that could earn a living doing what I was meant to do and loved — planning events. I went back to school and earned a second bachelor’s degree in hospitality management.” Impact of MPI: “I was introduced

to MPI while I was working in the Department of Real Estate. Another department manager was a member and once she found out I wanted to be an event planner, she encouraged me to join. I went to a couple meetings and became a member in 1994, after I had graduated and gotten my first real meeting planning job.” Trend to watch: “Emergency management. 9/11 really was the start of this and as incidents have increased world-wide, we as planners, need to make sure we have taken all the steps to provide as safe a venue as possible for our attendees, and also make sure we have the correct clauses in contracts to protect us when cancelations need to happen. Creating a thorough emergency plan is so important and should be as commonplace as selecting food and beverage.”

Security checklist “The takeaway is not that a building should provide security for an event,” explains Phoenix Convention Center Deputy Convention Center Director Kevin Mattingly, “but that security should be provided for the building.” When assessing the security protocols for a venue, Mattingly considers a series of factors: • What kind of medical responses are rolled into security? • What safety equipment is provided onsite? • Are there first aid kits, and if so, where are they located? • Is there a house phone easily locatable for emergency purposes? • Does the property/venue have personnel specified for safety and security? Depending on the type of venue, it’s also important to assess property-specific safety precautions. “If I’m looking to hold an event in a high-rise, I know the evacuation procedures will be different than a single-story or resort property,” Clifton says. According to Clifton, it’s also valid and appropriate to inquire how previous emergency situations were handled onsite. This will provide insight into how thorough (or not) the safety standards are for each particular property.

Liability and insurance “It’s important to discuss how safety ties in with a property’s insurance company, says Kate Christensen, president of KCA Association of Management Meetings & Events. Mattingly stresses the importance of making sure to establish who is carrying the liability — the venue location, event planner or both? And be sure to read the fine print. “Pay attention to things like fire codes — most jurisdictions have a provision for a fire-crowd manager,” Mattingly explains. “For every 250 people in a building, you need at least one crowd manager.” If you know your event will hold more attendees, the fire marshal has the authority to change the stipulation to require one crowd manager for up to a 500-group ratio, but it must be approved. Lastly, Clifton emphasizes the importance of a strong “force majeure.” Be informed about what a contract states in terms of liability and financial obligation in connection to security compromises or security breaches as they relate to cancellation clauses.

Surrounding spaces, places and people One of the earliest lessons taught regarding overall safety: be aware of your surroundings. Equal in importance to surveying properties and procedures of a facility is taking an inventory of what is, or will potentially, take place surrounding your event. “As a matter of diligence, you need to consider what else it going on,” Mattingly says. “If you know what other meetings/events are going on, it’s easier to assess the risk factor of your event.” This isn’t limited to simply the location being considered for your event. “Look into what events are taking place at surrounding hotels, even those across the street,” Mattingly says. And pay attention to the subject matter and purposes of the events. Although a personal security check can’t be applied to every group — let alone every event attendee — there are some basic assessments to help determine what security measures should be established. “You prepare and increase security provisions differently depending on who’s attending,” Christensen says, “such as a high-profile CEO or speaker, controversial entertainment, or if potential protests might be involved.”

Communication safety boost

ecently, Smart City Networks received approval for a public-safety distributed antenna system (DAS) at the Phoenix Convention Center. This security upgrade will boost communication and increase safety monitoring of events to come. How are MPI experts using their personal acumen and resources to provide the best in safety communication on a micro — yet no less vital — wavelength? Kevin Mattingly, deputy Convention Center director, Phoenix Convention Center: “Request that all front desk staff mandate that an I.D. from individual event attendee is presented before badges and credentials are handed over.” Cathy Clifton, senior director of global meetings and events, HEUG: “Event planners should have a paper back-up of all security and safety protocols for each particular event at all times, including emergency information for attendees.” Kate Christensen, president, KCA Association of Management Meetings & Events: “Create and establish policies for your events and staff to understand expectations of safety and awareness — ‘see something … say something.’” Jim Driscoll, chief deputy, Coconino County Sheriff’s Office: “Utilize people as part of the solution, instead of contributors of the problem by educating them on medical and fire emergencies and safety relocation procedures.

AB | September- October 2016

MPI Additional security costs? When it comes to incurring additional costs for added security, most experts say skip it. “Throwing money into security isn’t always the answer,” Driscoll says. “If you have staff that is well trained, that will save you a lot of direct security costs.” Mattingly generally agrees, adding, “There is no ‘one size fits all’ solution when it comes to security.” Kate Christensen In other words, paying for additional security may not be necessary, provided that an event planner assesses each individual safety aspect and plans accordingly. Clifton also recommends that doing extra homework will help determine when additional security should be provided. Find out what is the area’s crime rate or even extreme weather safety protocols. In certain instances — like those involving celebrities and controversial issues — incurring the cost of additional security may Jim Driscoll be warranted. “If I’m having a party with alcohol, I might require additional security,” Clifton says. “But I always make sure that any added security needs comply with the venue.” One unanimous agreement among planning professionals: It’s time to up the safety/security ante. “Doing nothing isn’t going to cut it anymore,” Mattingly cautions. “Safety needs to be part of our culture now,” Kevin Mattingly Driscoll says. “And we need to be reminded that technology does not take the place of common sense. People think security cameras are great, but they don’t prevent an action from happening. They’ll show you who got (injured), but won’t prevent someone from being struck by a bullet.” “I think we will need to be more active in our security measures going forward,” Clifton says. “Too much information can cause panic. But at a minimum, it’s vital to be informed.”

Throwing money into security isn’t always the answer... 66

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MPI member

spotlight

James Eggimann Senior manager, Global Learning Solutions The Ritz-Carlton Leadership Center Recent honor: MPI Supplier of the Year Industry start: “It is never a dull moment in this industry. Always exciting to meet people from all over the U.S. and abroad and I can tell you that after all of my years in the hotel business, there is a meeting for everything.” Impact of MPI: “I was part of the board of directors when the Utah Chapter was established in the early 1990s. Once I realized how valuable it was to have a professional industry relationship with clients and colleagues, there was no looking back and I have been a member ever since.” Trend to watch: “I think we will continue to see an evolution of ‘smart technology’ and how this is incorporated not only into the guests’ stay, but also applicable to the meeting professional planning an event and how this augments the relationship with the venue, as well as those attending.”

MPI

Time for a

checkup MPI makes moves to incorporate health and wellness into meetings and events

By Erin Davis

L Erin Forrest

actose intolerant, gluten sensitivity, vegan, paleo diet: words and phrases that are steadily becoming more common in Americans’ vocabulary. By no means are dietary requests a new thing, but with growing awareness of how lifestyle can be heavily impacted by the way we live and what we ingest, it’s not surprising that meeting and event planners are being inundated with personal health preferences. More individuals are becoming advocates for their own health and MPI professionals are accommodating this call to action. So, how are leaders of meeting and event planning promoting and perpetuating health and wellness within their industry?

How the game has changed

Anne King

Lee Smith 68

Gone are the days of pastries piled high on a platter. Business travelers and serial-event attendees more often than not are seeking to maintain the healthy practices they have established at home. “We are seeing more and more health-conscious menu options,” says Erin Forrest, catering sales manager for DoubleTree by Hilton Phoenix Tempe. “Now, we provide things like turkey bacon, fruit, yogurt and oatmeal. We’ve taken pastries off our basic menus because they were increasingly left uneaten at events.” What was once an occasional appeal for healthymeeting menu options has become more of a standard. “The focus on health is forcing changes in menu design — balanced healthy options, low sugar, complex carbohydrates,” explains Lee Smith, director of

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conference services at the Hotel Valley Ho in Scottsdale. Is this trend one that’s passing? Not likely. “I think you have to offer some type of food alternatives these days,” says Anne King, owner of MeetingWise, LLC. “It’s just a matter of how far you can go. I had an attendee at a meeting one time who not only had extreme food requirements, but she had to eat at certain times of the day. It was challenging to accommodate.” There’s also a matter of food delivery for individually specialized meals that, according to King, can still take extra time to serve, which in turn can create feelings of embarrassment or exclusivity for guests. How are meeting planners handling the game change? “Within the last four or five years, meeting planners have become more aware and accommodating of health-conscious options,” Forrest says. “It’s not simply ‘I’m a vegetarian’ anymore.’” Since there are almost unending dietary-need possibilities among event attendees, meeting planners are vigilant about asking for individual preferences prior to the events or at registration. This is particularly important when dealing with large-scale groups. “The larger the group,” Smith says, “the greater the likelihood that there will be more guests with food allergies and restrictions. For this reason, Smith has observed that meeting planners are more diligent in their initial review of menu offerings. They are trying to select options that will cater to everyone, rather than having to create individual dishes as part of dietary requests or requirements.

MPI member

spotlight

Troy Peters, CTS Vice president of marketing and business development Video West, Inc.

“It’s beneficial to both the planner and venue to provide dietary information early in the process as it creates a win-win situation for all parties involved,” Smith says.

Working out the changes Of course, part of the new health trends doesn’t simply center on dietary needs. Fitness has become equally — if not more — dominant as an event-preference staple. “The focus on health and fitness affects the day-to-day meeting agenda,” King says. “More people want to get a workout done at the beginning or end of their day.” Meeting planners are becoming more creative in the way they structure events based on meeting the fitness needs of attendees — starting meetings later or ending them sooner. Experts agree that group fitness is one of the major health trends they’re witnessing. “A lot of planners are incorporating optional early morning fun runs, 5Ks and yoga sessions prior to their meetings,” Smith says. “It’s a great way to get everyone up and active and an easy element to incorporate into an agenda, while being the easiest to facilitate with venues.” Above and beyond group fitness, professional planners are thinking about other ways to incorporate movement into the mix. “The easiest, no-work-required idea would be to get people to take stretch breaks in between each session,” King says. As part of agendas, planners are also providing attendees with alternate fitness options to the onsite gym. “A great way to keep guests in the fitness loop,” Forrest says, “is to offer them directions to outdoor walking paths and trails near the location where they’re staying.”

Recent honor: MPI Sponsor of the Year Industry start: “My dream was to work in Hollywood and after successfully doing that for 15 years, I asked myself, ‘Now what?’ I came across a job posting with an international association with events located around the world. They were looking for someone with more of a production background to elevate their events and I was a solid fit.” Impact of MPI: “With Video West, Inc. a global AV technology supplier based here in Phoenix, we needed to expand our brand. The first step was to engage with the premier meetings association in the area with the benefit of a global reach. By immediately becoming an engaged member, we became a resource for our knowledge and support, our willingness to serve, and ultimately this has turned into an opportunity where we can truly shape our industry moving forward.” Trend to watch: “(After the recession), the No. 1 question was, ‘How can we put together virtual or teleconferences in order to bring more people together without the need for expensive travel?’ That question has gone away. Now, people want the experiences. They already interact virtually as the norm, so human-to-human experiential contact has now become the difference maker and people want to share in those mutual life experiences, whether it’s a destination, a venue, or just a unique menu item.”

AB | September- October 2016

MPI

MPI member

spotlight

Erica Allen, CMP Meetings manager Socious/Higher Education User Group (HEUG)

Recent honor: MPI Lifetime Achievement Award Industry start: “I started working the association market as an internal meeting/registration coordinator for a national nursing council. I truly loved the job and all the facets of the meetings industry. Wanting to learn more, I moved to the corporate side of meetings and conferences, got involved in MPI and continued to grow, learn and focus on perfecting each event.” Impact of MPI: “I joined the Chicago chapter of MPI in 1997 and served on several committees; also receiving the Rising Star award in 2001. I transferred my membership to the Arizona Sunbelt Chapter when I moved in 2001. I was going to sit back and take it all in, but quickly jumped onto two committees. Over the next few years, I served on several committees including host and hospitality, membership, holiday party, special events/ fundraising, and education forum.

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Recent honor: MPI Rising Star Industry start: “I was attracted to this industry mainly because of the people. This industry is all about building relationships and everyone is so personable. You start with a handshake and by the end of a conversation you end with a hug. You make friends with people from all over the world and have the opportunity to learn about different cultures.” Impact of MPI: “I attended a couple of MPI AZ meetings with my previous employer, but it was not until my current work position that my manager encouraged me to become more involved. I first joined the EduCon committee to assist with transportation and have since taken responsibility as a co-chair. This has impacted me professionally because I have been able to develop an excellent network with other members of

I joined the board of directors as director of special events/ fundraising in 2006-2007 and served as vice president of finance for a year before becoming president-elect in 2011-2012. My year as chapter president in 2012-2013 was both rewarding and educational built from the involvement up to that point and beyond. I remain actively involved and currently serve on the Community Outreach Committee. The professional impact helps me continue to develop my business as I deliver exceptional programs and events for clients.” Trend to watch: “We are seeing the necessity of longer lead times in securing hotel and venue space to accommodate groups, especially larger conferences. This means we have to continuously work with our clients to identify the goals and objectives of said conferences and partner with them to determine the baseline components on a long range calendar plan.”

MPI. I find that my fellow MPI members are the best resource when it comes to seeking advice or assistance regarding an event.” Trend to watch: “I think the need for Wi-Fi will further impact our industry. Attendees now expect to have Wi-Fi readily available at lightning speeds during an event. In addition an increasing number of attendees have desire to connect multiple devices to a Wi-Fi signal creating a greater demand for this service. While this need continues to grow, the cost and data speed of Wi-Fi can vary significantly between venues making it difficult to plan and budget an event. This may pose as a challenge when searching for a venue, and I believe the demand for consistency regarding Wi-Fi services within the industry will only strengthen as time goes on.”

MPI member

spotlight

Donna Masiulewicz, CMP Timeline Meetings and Events

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AB | September- October 2016

2016 Page 76

Human resources industry group makes a difference Page 78

Prescription for profit

Page 86

The transformation of human resources

(844) 508-2273 wdmybusiness.com

ARIZONA SOCIETY FOR HUMAN RESOURCE MANAGEMENT

AZSHRM

makes a

difference for human resources and business leaders

he Arizona Society for Human Resources Management (AZSHRM) is an affiliate of the Society of Human Resources Management (SHRM). AZSHRM is strictly a volunteer organization comprised of the Arizona State Council in support of seven local state chapters with approximately 1,200 members in Phoenix (SHRM-GP), Tucson (SHRM-GT), Yuma (SAHRA), Casa Grande (CAHRMA), Prescott (PAHRA), Kingman (NWAHRA) and Flagstaff Sonja Talley (NAHRA). We are the Human Resources trusted resource to engage, 76

AB | September- October 2016

educate and advocate for all Arizona HR professionals and the business community at large. We are the difference makers and leaders who support Arizona business and organizational success. The AZSHRM State Council and its chapters are engaged in workforce development, college relations, diversity initiatives, government affairs (both local and national), HR certifications, communications, awards and recognition of Arizona HR professionals; and educational scholarships through our foundation. Our workforce development initiatives partner with Junior Achievement (JA) and look to bridge the skills gap of our workforce. Our diversity initiatives partner with the Diversity Leadership Alliance (DLA) in collaboration with the Diversity Leadership Awards. Government Affairs is active with providing guidance and initiatives to both our Arizona legislators and

on Capitol Hill. Our college relations area supports our student chapters, developing our future Leaders in HR. Our awards and recognition volunteers drive recognition for three distinguished HR awards: the Judith Krebs Volunteer of the Year Award, the Ann Byrnes Professional Excellence Award and the Al O’Connor Lifetime Achievement Award. All three awards are unveiled each year during our phenomenal annual conference. In addition, AZSHRM partnered with the When Work Works institute (WWW) and hosts an annual When Work Works, workplace flexibility award breakfast. AZSHRM holds four educational events each year for our HR and business community. • The Employment Law and Legislative Conference is dedicated to helping HR professionals stay on top of recent court decisions, regulations, and newly enacted legislation that are critical to professional development and to company’s success. The conference focuses on the latest legislative issues pending at the local, state and federal level. • Advocacy Day at the Arizona Capitol provides a unique opportunity to learn about imminent legislation in our own state and also to meet face-to-face with our legislators to discuss and advise on pertinent topics affecting employment

Arizona Society for Human Resource Management Mission: AZSHRM is the trusted resource to engage, educate and advocate for human resources professionals. Objectives: • Prepare and educate practitioners and leaders • Recognize excellence in the profession • Act as thought leaders in HR and business strategies • Appropriately influence state legislation and legislators • Support and promote SHRM state chapters and memberships • Establish outstanding statewide HR conferences

2016 AZSHRM award winners: Al O’Connor Lifetime Achievement Award: Gail Perry

Perry, MS, SHRM-SCP, SPHR, ACC, is principal with Gail Perry Coaching and Consulting, LLC. In a career spanning 40 years, she has served as chief human resource officer in a variety of industries, including hospitality, healthcare, government and academia. Her dedication to advancing the human resource profession and the careers of Gail Perry HR professionals has been demonstrated through volunteer leadership at the chapter, state and

law and business operations. • AZSHRM’s annual conference, in its 22nd year, is focused on cutting-edge education and practices for HR professionals and business leaders. It is the largest HR conference in Arizona, drawing upwards of 1,200 attendees. • New in 2016 is our When Work Works Flexibility Awards Recognition Breakfast. This event celebrates local companies who practice workplace flexibility. We hope you will join us and learn how you can implement some of these practices. The event will be held at the Arizona Biltmore on October 12. Visit azshrm.org for more information. AZSHRM strives to be the trusted leader by providing HR expertise to achieve a sustainable competitive advantage for local chapters and the employer community. Human resources professionals touch on all issues that impact an organization’s most valuable asset – its employees. HR professionals provide administrative, business, and strategic support by partnering with business leaders to create a sound 21st Century workplace that is innovative, fair and competitive. Sonja Talley, MA, SHRM-SCP/SPHR, is the state director of AZSHRM and principal of CORE HR Solutions, LLC.

regional levels, including having been the only professional to have served as Arizona SHRM State Council director twice (1989 and 2014-2015). Perry has mentored countless HR professionals, especially students and emerging leaders.

Ann Byrnes, SPHR Award for Professional Excellence: Bruce Gardner

Gardner has always been passionate about human resources and has worked in the profession since 1994, all of it in the public sector. In 2007, he was selected as the human resources director for the Town of Queen Creek, but now serves as the assistant town manager. Gardner received his bachelor’s degree in business Bruce Gardner management and a master’s in public administration from ASU. From a volunteer basis, he most recently served as the Western Region president of IPMAHR, is active in the Boy Scouts of America and a staunch supporter of the United Way.

Judith Krebs, PHR Memorial Volunteer of the Year Award: Terrie Naylor

Terrie Naylor

Naylor is a human resources generalist for Kingman Hospital, Inc. At work, she enjoys working with her business partners as they find the strategies to address a variety of business and employee needs. After hours, you will find Naylor volunteering her time throughout the community. No task is too small, if it makes life a little better for someone else.

AB | September- October 2016

AZSHRM

Prescription for profit Workplace wellness initiatives can improve morale, reduce turnover and absenteeism and boost your bottom line By MICHAEL GOSSIE

n-site running track. On-site fitness center. On-site health clinic. On-site personal trainers. It sounds like an Olympic training facility, huh? Think again. “As an employer, it’s important to make health a priority,” says Steve Bayans, vice president at Discover

HEALTHY BUSINESS: Discover Financial Services’ Phoenix facility includes a fitness center, health clinic, running track, personal trainers, exercise classes, fun runs and occasional workplace “stretch breaks.” PHOTO BY MIKE MERTES, AZ BIG MEDIA

AB | September- October 2016

Financial Services, whose Phoenix facility boasts all the amenities mentioned above. “If employees see the company making health a priority, hopefully, they make health a priority. And since we’ve launched our wellness initiatives, we’ve seen attrition decrease and attendance increase.”

Steve Bayans

Doris Savron

Naomi Cramer

Jennifer Ward

Jim Darnell

Greg Wells

years,” says Greg Wells, vice president of human resources and employee development, Blue Cross Blue Shield of Arizona. “In recent years, we’ve accelerated our efforts. Like other companies, we face rising healthcare costs. A large portion of the rising costs are avoidable and are due to lifestyle choices. A culture of health requires accountability of both the employer and the employee. From subsidizing healthier food in our cafeteria to tying behavior modification programs

to incentive pay to getting our executives involved in leading (fun and competitive) employee health challenges, wellness is an integral part of being a great place to work.” Beyond wellness initiatives and on-site clinics, Jim Darnell, vice president of business development and sales, Vera Whole Health, says he’s seen companies let their employees leave any time of day to go work out for an hour vs. a traditional lunch break, pay for gym memberships, take out unhealthy vending machines and replace them with healthy options and other innovative initiatives. “I believe we are on the edge of this becoming more normal than unusual as employers innovate to create a healthy environment in the workplace,” Darnell says. The bottom line With illness-related absenteeism costing employers $225 billion annually in lost productivity, there is a strong business case for taking action to improve employee health and well-being, according to Doris Savron, executive dean of the College of Health Professions at University of Phoenix. “America’s competitiveness relies on better health for its citizens,” said Marc DeCourcey, senior vice president of the U.S. Chamber of Commerce Foundation. “The money we spend on poor health depresses wages, reduces profits and diverts money from other investments, further accelerating poor health outcomes.” But tying good health and good business is not necessarily a positive approach from a human resources standpoint. “One of the most challenging issues in HR is a lack

What can you do? What advice do experts have for a company looking to implement wellness initiatives? Naomi Cramer, senior vice president and chief human resources officer, Banner Health: “Create an employee-focused program that clearly answers the ‘What’s in it for me?’ questions and then focus on the business impact/value of that work. I would continue to broaden the definition of well-being as the next generations evolve into the workforce. “ Jim Darnell, vice president of business development and sales, Vera Whole Health: It depends on the goal of the company.

Some companies say the value on investment (VOI) is worth the expense to recruit quality candidates even if there is not a return on investment (ROI), or they just want to do something, even if only a small percentage participate. On the other hand, if launching wellness is to create lower healthcare costs with an ROI, the company should look for vendors with a track record of driving high engagement levels and ROI measured against claims, not soft costs.” Jennifer Ward, SPHR, SHRMSCP, attorney with the Arizona Regional Office of Mountain States Employers Council: “Focus on employee wants

and needs. For example, employees who don’t embrace technology won’t use wearable activity trackers. Most employee populations are diverse, with different ages, genders and fitness levels. Offer a variety of wellness options to include more employees rather than trying to design a single solution.” Greg Wells, vice president of human resources and employee development, Blue Cross Blue Shield of Arizona: “Start with the leadership team. When leaders from around the organization understand the “why” behind wellness and agree on a focus, change can happen quickly.”

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AZSHRM According to the 2014 Society for Human Resource Management (SHRM) Strategic Benefits Survey, employers report that their workplace wellness initiatives resulted in a 72 percent overall reduction in healthcare costs. But beyond lower healthcare costs, companies that make an effort to encourage their employees to live a healthy lifestyle are seeing a positive impact on recruitment efforts and a healthier bottom line. “Improved employee wellness can help reduce medical insurance claims and premiums,” says Jennifer Ward, SPHR, SHRM-SCP, an attorney with the Arizona Regional Office of Mountain States Employers Council (MSEC). “MSEC’s most recent Health & Welfare Survey of Arizona members showed that they spent an average of $7,604 per covered employee on medical costs. An effective wellness program can generate savings in that area.”

What’s happening? According to a 2015 SHRM Foundation executive briefing, research shows that the health status of employees directly influences their work behavior, attendance and on-the-job performance. Therefore, improving employee well-being will result in a more productive workforce. So, what are companies doing? “Programs that incorporate the latest technology and make wellness convenient are growing in popularity,” Ward says. “Some employers are offering wearable activity trackers and using them to create incentives for employees to get active and encourage each other. Others are bringing classes into the workplace (like MSEC’s Office Yoga program.)” Experts say wellness takes on a different meaning and wellness initiatives take on different shapes in every organization. “We have been cultivating a culture of health for

5 ways to cut healthcare costs According to a SHRM Foundation study, these are the five vehicles for strategically driving highperforming health and work behavior outcomes, thus containing healthcare costs: • Create an organizational culture that promotes health and wellness. • Ensure polices enhance employee health and productivity. • Offer incentives that motivate employees to engage in healthy practices. • Create wellness programming that includes customized employeecentric health programs. • Integrate HR functions with employee wellness and work-life quality initiatives.

AB | September- October 2016

AZSHRM

of employee engagement, which can stem from the perception that the company only values employees for their effect on the bottom line,” Ward says. “A wellness program that meets employee needs can contribute to a culture that emphasizes individual employee value.” The “Healthy Workforce” panel at the University of Phoenix’s Health Means Business Forum identified three ways businesses can best incorporate a culture of healthy living and promote wellness initiatives within their organization: • Secure leadership buy-in, including showing the numbers that support taking action steps toward a healthier workforce. • Find ways to encourage workforce health. • Take inventory of what is happening in the organization and pick one thing to build upon while understanding that it can take several years to build a viable program. “If an organization embraces wellness in all its forms, it provides ways to diversify benefits in many low cost/ no cost ways, which differentiates one organization from another,” according to Naomi Cramer, senior vice president and chief human resources officer at Banner Health. “Millennials and the younger generations are drawn to organizations that embrace such a broad definition of wellness. Ultimately, you become a preferred workplace when the competition for great employees might be fierce.” 82

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What’s next? Whatever shape a company’s wellness initiatives takes, Wells believes wellness will force employees and employers to be more accountable in the future. “The company must offers programs, tools and resources to help employees, but employees must be responsible for learning about what is available, taking advantage of them and working toward better health,” he says. As the world continue to evolve outside of the workplace, experts expect wellness in the workplace to evolve and change with the world outside the cubicle. “As technology continues to erode the boundaries between work and private life, I believe people are looking for more creative ways to maintain a balanced and healthy life,” Cramer says. “In some progressive companies, wellness is part of their everyday interactions. It expands beyond health, it moves more actively into the community, financial, social and career aspects that holistically matter to an individual in different ways.” But experts insist the value of a healthy workplace cannot be understated. “A healthy economy thrives and grows when its population is healthy, and business leaders have an immense opportunity to promote health in their organizations and positively impact the intrinsic link between good health and good business,” Savron says.

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AZSHRM

The

transformation of HR

What are the issues and trends that are changing the way human resource professionals do business?

AB | September- October 2016

By MICHAEL GOSSIE

T Jodi Bohr

Larry Hofer

Stephanie Quincy

Kevin Salcido

Jeffrey W. Toppel

he legalization of marijuana, technology, telecommuting, employee pay disclosure, whitecollar overtiem, the war for talent. There are countless issues and trends that are changing the way human resource professionals do their jobs. Az Business assembled experts in the HR arena for a roundtable discussion on what business leaders can expect and how business leaders should react to changes that are coming in human resources. The roundtable panelists are: • Jodi Bohr, shareholder, Gallagher & Kennedy • Larry Hofer, regional vice president-human resources, Cox Communications • Stephanie Quincy, partner, Quarles & Brady LLP • Kevin Salcido, vice president of human resources and chief human resources officer, ASU • Jeffrey W. Toppel, attorney at law, Jackson Lewis P.C. AZ BUSINESS: What trend or issue can we expect will have the biggest impact on human resources? BOHR: The biggest human resources issue in 2017 will be largely decided by the election. One push gaining momentum this year is for employers to offer paid sick and medical leave to employees. The Family And Medical Insurance Leave (FAMILY) Act – recently presented to members of the U.S. Congress – takes on this issue and, if successful, will place yet another cost on employers. HOFER: I believe there are several trends that will greatly impact the workplace, including: • Millennials, which constitute the largest percent of the workforce, will assume managerial positions as Baby Boomers exit the workforce. Are Millennials fit to lead? If not, how can HR help develop Millennials with the skills needed to lead? • Companies outsource, offshore or automate jobs or tasks is resulting in less people. Can HR be counted upon to retrain

existing workforce or risk downsizing? • As a result of the first two — increased Millennials and reduced number of (full-time employees) — part-time or contract work will increase. Are companies equipped to deal with a fluid workforce that is less loyal and committed to organizations? What about workplace, progression and compensation and benefits flexibility? • People analytics — more data driven HR decision making, using ROI to determine how HR programs impact on business performance, workforce analytics to predict workforce trends and target top talent. • HR is expected/demanded to be a business partner by client groups. That means more time to spend strategizing about leadership and talent, solving business issues and achieving annual business targets and less on traditional HR services and support like training, payroll and other transactional services. QUINCY: There is more and more attention on equal pay for equal work for women. We hear it on the presidential campaign trail — interestingly from both Hillary Clinton and Ivanka Trump. There have been Supreme Court cases (Lilly Ledbetter v. Goodyear Tire and Rubber Co.), corrections by Congress (the Lilly Ledbetter Act), and lots of follow-up litigation. Recently, the Equal Employment Opportunity Commission is looking at a more proactive approach. It announced that it will require employers to provide significant pay data to the EEOC. The agency’s goal is to have at its fingertips what employers are paying employees who hold the same or very similar positions and see how it varies by gender (as well as race, national origin, etc.). Employers are just beginning to look at this data and determine what proactive changes to make, if any, and how to make AB | September- October 2016

AZSHRM those changes. This area will be a huge area for lawsuits for years including class actions and multi-plaintiff litigation. SALCIDO: The continued trends towards globalization and the ongoing occupational displacement caused by technology will continue to impact HR. There are some who think these trends can be reversed – but those people are wrong. We are firmly entrenched now in the knowledge economy, which means that those with no post-secondary education will be left further and further behind. It also means that competition will only increase for well-educated and well-prepared candidates. TOPPEL: Technology will continue to have a major impact on all aspects of the employment relationship in the coming years. It will be interesting to see how the agencies that enforce employment laws – many of which were enacted years and years before the advent of much of this technology – respond to these technological developments. This is particularly significant in a presidential election year. The outcome of November’s elections (presidential and Congress) will determine whether we will continue to see the pro-employee aggressive enforcement that we have grown accustomed to from the federal labor and employment agencies over the past seven-plus years. AB: What should the human resources industry’s legislative priority be for next year? BOHR: Arizona employers and employees continue to watch the cost of health insurance skyrocket. Arizona could intervene on a transparency level to ensure that consumers can figure

out, easily, what providers are in what health plan network and whether services are covered. The state could also do a better job incentivizing businesses to provide (Healthcare Alternative Systems) to their employees. QUINCY: The world has changed dramatically, but the law has not — at least with regard to the workforce of the future. Businesses like UBER and LYFT have huge competitive advantages by treating the vast majority of their workforce as independent contractors rather than employees, and therefore avoid paying workers’ compensation insurance, FICA and FUTA, overtime pay and other benefits such as health insurance, vacation, and sick pay. While UBER has been sued repeatedly on this treatment (and generally has not fared well), courts have never been adept at handling the broad and systemic change necessary for this type of shift. Human resources advocates are already working at the federal, state and even local levels to effectuate legislative change to address these new issues. Businesses with competitive advantages by seemingly disregarding the laws in this area have their very existences at stake and businesses following the laws are disadvantaged by being saddled with higher labor costs. This cries out for legislative action. SALCIDO: I think the priority should be little-to-no legislative activity. HR people have been consumed with implementing the ACA and now we are contending with changes to the Fair Labor Standards Act (FLSA) salary threshold. In higher education, we devote a great deal of time and effort to Title IX compliance. I am not saying that these are misguided priorities. I fundamentally support these changes. But they are coming hard on the heels of each other and HR – and their organizations – need time to catch our breath. TOPPEL: The human resources industry must continue to monitor the smattering of state employment legislation that is cropping up in a number of critical areas, such as paid leave and immigration. As we saw with the enactment of the Legal Arizona Workers Act several years ago, when Congress is unwillingly or unable to address certain issues, state legislatures are often quick to step up. However, a patchwork of state laws creates significant administrative challenges for multi-state employers. The potential upside is that states, such as Arizona, that do not highly regulate the employment relationship may be more attractive to larger employers. AB: What are the biggest legal issues facing the human resources industry? BOHR: Employers need to be ready to comply with the new Department of Labor overtime regulations and the EEOC EEO-1’s reporting requirements on pay. DOL and EEOC are gearing up for audits to ensure compliance in these areas, among others. Employers should also be prepared to address transgender issues in the workplace as these

Arizona employers and employees continue to watch the cost of health insurance skyrocket

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AZSHRM

It is important to keep in mind that Arizona’s medical marijuana legislation —which was the result of a voter initiative —has among the strongest antidiscrimination provisions in the country.

AB | September- October 2016

issues become highlighted by the EEOC and courts. QUINCY: The biggest legal issues continue to be from wage and hour compliance. More and more of these lawsuits are filed each year either from: 1) The misclassifcation of workers as ineligible for overtime when they actually should be getting paid time-and-a-half for hours worked over 40; or 2) not correctly calculating and paying overtime. These lawsuits are usually filed as collective action (similar to a class action) and are very expensive. What seems like only a few dollars per employee or violation snowballs quickly. Employers must ensure that their employees are properly classified and paid. The new regulations from the Department of Labor increasing the amount a salaried employee must make to be considered exempt (more than doubling to $47,476 on December 1, 2016) will push employers to paying more of their workforce on an hourly basis. Human resources personnel must ensure that employees are accurately recording their hours — and managers are not subtly or not so subtly pressuring them to work off the clock. AB: What should companies be doing to prepare for the the potential legalization of marijuana? HOFER: Legalized marijuana is certainly a hotly discussed topic. Legalizing marijuana may increase the number of candidates who cannot pass pre-employment and random drug tests, as well as adding to turnover rates. Another issue for employers is the possibility of lawsuits if employees feel they have been discriminated against, especially for medical marijuana users. Employers can help themselves by being prepared in three areas: • Employers may need to revamp their HR policies that can include treating marijuana like prescription drugs and providing reasonable accommodations for marijuana use in the workplace. • Employers should look at their substance abuse policies to be certain it clearly states that

employees are barred from working while under the influence of any controlled substance or any drug, including marijuana, that could impair their performance. • Companies could be asked to adopt broader testing protocols and acquire more sophisticated drug screens. Because marijuana stays in the body longer than other drugs, it can be difficult to ascertain whether an employee is actually impaired or not. This will drive the cost of screening. SALCIDO: I think every employer should have a strong fitness for duty program to ensure that employees are not impaired at work. What people do in their off time has never been much interest to me — unless they work in safety sensitive positions. TOPPEL: The prospect that Arizona could join the handful of states that have legalized the use of recreational marijuana is an interesting one that will undoubtedly have an impact on employers — if and when it actually happens. It is important to keep in mind that Arizona’s medical marijuana legislation — which was the result of a voter initiative — has among the strongest antidiscrimination provisions in the country. This is one of the rare areas in which Arizona law is more proemployee than California’s pioneering medical marijuana legislation. Of course, unlike medicinal marijuana users, users of recreational marijuana will almost certainly not have any workplace protections. Employers should take steps to review their drug testing policies to make sure the policies comply with Arizona’s drug testing statute, which provides employers important protections from litigation. AB: How is telecommuting impacting the workplace? TOPPEL: In many industries, technology has made telecommuting almost too easy. As a result, employees in those industries expect the opportunity to telecommute. While there are obvious benefits to allowing telecommuting, such as lowered office costs and the

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AZSHRM promotion of increased employee morale, there are also significant risks. As a starting point, employers should prepare a written telecommuting policy that clearly sets forth guidelines and expectations. In implementing a telecommuting policy, employers must be aware of their obligations under various laws, such as the Americans with Disabilities Act and Fair Labor Standards Act. Additionally, employers must also consider technology issues (it all comes back to technology) and ensure their employees have the necessary security to protect the company’s — and potentially customer’s — sensitive information. HOFER: I am a big fan of telecommuting so I think there are many pros: • Employees can still work during emergencies, which keeps the organization running in case of inclement weather or other circumstances. • Employees like telecommuting. By offering the option, employees are happier, less stressed and more satisfied. • Higher productivity can come from having fewer distractions. Using services like Cox Home Life, employees can check in on their home and pets, know when their kids come home from school, etc. This gives employees piece of mind during the work day so they can be focused. • Improved retention rate for employees due to employees having a better ability to achieve work/life balance. Higher retention also lowers total recruiting costs. • Allowing telecommuting can give employers a wider geographic reach, especially for hard-to-fill roles. • Reduced relocation expense since relocation is no longer necessary. • More savings associated with capital expenditure (office space, equipment, utilities, maintenance, etc.). • Here are a few cons: • Tougher to track hours worked. Not sure if employees waste time or overreport hours when there is no one to actively supervise their workday. • Fear of loss of connection with other colleagues from lack of in-person interactions. • Telecommuting is not for everyone. Ensuring telecommuting employees aren’t left out or overlooked can be a challenge. AB: What can companies do to become more successful when it comes to recruiting talented workers? HOFER: There are a number of things companies can do: • Make the connections early – recruit for summer internships in high school or college. Provide a job offer before a graduate returns to school. • Leverage existing workforce to be recruiters. The best hires are from employee referrals. • Recruit within. Train and groom your existing employees for new jobs. • Cultivate a positive employment brand and develop a corporate social responsibility image. • Make your workplace fun, flexible and innovative — see Google, Starbucks, Zappos, etc.). SALCIDO: Pay attention to the basics. Realize that in a tightening job market, talent is no longer fungible. Make sure 92

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you treat candidates and new recruits the way you would like to be treated. Provide a safe and welcoming and highly functioning workplace. People like to play on a winning team and they like to be around ethical leaders. They will figure out right away if your organization cuts corners in customer service or in its treatment of staff. AB: How do you see the employment outlook in Arizona over the next several years? HOFER: Experts believe Arizona will add an additional 100,000 jobs over the next couple of year. Tourism is expected to lead job growth in Arizona, followed by employment in hospitality, construction, education and health services. TOPPEL: I think Arizona’s lack of significant employment legislation and regulation provides a welcome reprieve for employers that may be used to a much more highly regulated environment, such as those in California or in the northeast. I also believe that companies in a vast array of industries are continuing to recognize that Arizona is an attractive location to which they can recruit a highly skilled workforce looking for a balanced lifestyle. As a result, I think the employment outlook will continue to be bright for the near future.

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ARIZONA TECHNOLOGY COUNCIL

ARIZONA’S TECH SECTOR IS

BOOMING

rizona’s economy is shifting from being strictly tourism- and real estate-centric as technology emerges to become one of the state’s main drivers. The year 2016 has been especially important to the state’s growth as more companies see Arizona as a promising destination to do business. These technology companies recognize the favorable cost of living, our educators’ focus on innovation and support from a protech government as top factors for starting up or relocating here. CompTIA’s “Cyberstates 2016” reports there are more Steven G. Zylstra than 135,000 tech Technology industry jobs in Arizona. This means 61 of every 1,000 private sector workers in Arizona are employed by high-tech firms. On a national level, Phoenix is ranked third for tech job growth among large markets in CBRE’s 2015 annual “Scoring Tech Talent” report. Arizona’s affordable living can’t be denied, with Phoenix and Tucson ranked as more favorable places

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to live compared with other high-paying and highcost cities such as Boston and San Jose. Analysts at Glassdoor determined a software engineer’s “real adjusted salary” by comparing the median base salary to a resident’s cost of living in different cities around the nation. Phoenix and Tucson both made the Top 25 highest-paying city list. Companies are encouraged by the fact that engineers are choosing Arizona over traditional tech hubs, but they also consider the growth in science, technology, engineering and math (STEM) education as a major factor in producing the next wave of homegrown tech talent. U.S. News & World Report ranked Arizona State University No. 1 among the “Most Innovative Schools” in America for 2016. That was ahead of second-place Stanford University. And at the high school level, the Top 10 list of the 2016 Best STEM High Schools included BASIS Scottsdale and BASIS Tucson North. Through tremendous effort by the Office of the Arizona Governor, Greater Phoenix Economic Council (GPEC), Sun Corridor Inc. in Tucson and the Arizona Commerce Authority (ACA), the state also has become a hot spot for innovators and entrepreneurs. For example, ACA named two software, three biotech and an aerospace company as its Arizona Innovation Challenge winners in the spring.

Celebrate innovation What: The Governor’s Celebration of Innovation (GCOI) is the Arizona Technology Council’s (AZTC) annual awards gala in partnership with the Arizona Commerce Authority (ACA). The event honors technology leaders and innovators from across the state. The event attracts more than 850 attendees each year for a night of

networking, food and entertainment. 2016 marks the 13th year of this prestigious event. For 2016, the event will consist of a theatre style awards program followed by specialty desserts and live music after the awards. The event will also feature the Technology Showcase, with more than 50 Arizona companies exhibiting. These

The bi-annual business plan competition provides $3 million in grants a year to the most qualified, innovative startups and early-stage companies. In PwC’s 2016 Aerospace Manufacturing Attractiveness Rankings, Arizona jumped to first place with improvements in the state’s industry rank (No. 6) and operating costs (No. 12), as well as high scores in property and unemployment tax (No. 8). It also benefited from the tax methodology changes, with high scores in property tax (No. 6) and unemployment tax (No. 3). This all bodes well for the state’s manufacturing sector, which includes major semiconductor companies such as Intel and Microchip Technology. In the “space” sector of aerospace, Orbital ATK, Iridium, Paragon Space Development, World View Enterprises, KinetX Aerospace and Honeywell Aerospace are making major contributions. The OSIRIS-REx spacecraft, under NASA’s New Frontiers program and led by The University of Arizona with navigation by KinetX Aerospace, was scheduled to launch as soon as Sept. 8 on a mission to the asteroid Bennu. If successful, this will be the first time a spacecraft from Earth lands on an asteroid and brings

companies consist of award finalists, sponsors and AZTC partners. When: Thursday, Nov. 10, 2016 from 4 p.m.-8 p.m. Where: Phoenix Convention Center’s West Building Information: aztechcouncil.org

back a sample of its surface material to our planet. While there is still work to do, even the venture capital front has some positive news. Dow Jones Ventures Source recently reported the state’s venture capital total for the first half of 2016 topped $171.8 million — 36 percent ahead of the same period last year. Phoenix also is a growing center for cyber solutions for the national and international epidemic of cyberwarfare, intellectual property theft, identity theft and data breach. The Arizona Technology Council is working with numerous leaders from public and private sectors, including elected officials and corporate CEOs, along with the city of Phoenix and other cities in the region to get “Cyber Security Valley” off the ground. This is just a snapshot of the growth and excitement currently underway in Arizona’s technology sector. With its higher than average salaries and continued wealth created by innovators, the industry is critical for the future for the state’s technological and economic goals. Steven G. Zylstra is president and CEO of the Arizona Technology Council, where he is responsible for strategy, operations and accomplishment of policy development.

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tech The

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Industry leaders and economic developers boost Arizona’s brand and reputation for innovation in software and optics

By JESSE A. MILLARD

f you grew up in Arizona, the Five C’s of Arizona — copper, cattle, cotton, citrus and climate — have been drilled into your head as the first mainstays of Arizona’s economy since elementary school. Arizona’s economic base has morphed over the years, transitioning into a more knowledge-based economy. In the 1990s, an economic analysis of the state’s main industries Arizona found itself as home to two technology-based high-wage industries: software development and optics and photonics. “To Arizona’s surprise, one of the 11 clusters driving Arizona’s economy was software,” says Steven G. Zylstra, president and CEO of the Arizona Technology Council. “And this was sort of a big surprise to a lot of people.” People were starting software firms out of their garages, or as off-shoots from larger companies operating in Arizona. The state’s optics and photonics industry has been here since the 1950s and 1960s. The industry grew due to Southern Arizona’s dark skies, large concentrations of telescopes in the state and the

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world-renowned University of Arizona College of Optical Sciences, Zylstra says. For years, many legacy sectors have been getting into emerging technologies. It’s hard to have any piece of hardware that doesn’t utilize some form of software, and just about everything — from your cellphone to medical imaging devices — rely on optics. These national trends, relying on emerging tech, have driven Arizona’s technology industry growth, especially in software, says Chris Camacho, president and CEO of the Greater Phoenix Economic Council. Arizona also excels in talent production. ASU has one of the largest engineering schools, with more than 5,000 students in its computer information systems programs, Camacho notes. A large portion of Grand Canyon University’s student base is on STEMrelated career paths, he notes. “This concept of sheer production of talent is not only drawing companies from outside the market, but also supplying organic growth for our current industry,” Camacho says.

AZ TECH

Software From Zylstra’s recollection, software is one of Arizona’s key industries that bootstrapped itself into existence. There were people in Arizona who were working at larger companies and started to write their own software, Zylstra recalls, and there were other folks who wanted to live here and they worked in software. As software has become a key component for any business’ success and a key component to successfully and efficiently utilizing hardware, Arizona has had its fair share of software companies starting and operating here, Zylstra says. With a base ecosystem in place, economic developers like Camacho and

Bob Breault

Chris Camacho

Clate Mask

Hamid Shojaee 104

Thomas L. Koch

Alex Rodriguez

Steven G. Zylstra

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the folks at GPEC started to focus on convincing more software firms to call Arizona home. Camacho says there’s been a national shift in which intellectual property is initially created in California. When those firms developing the intellectual property look to grow their business, they turn to places like Arizona to go to scale. Companies like Uber, Yelp and Weebly have set up offices in Phoenix when they were looking to grow outside of their California offices, Camacho says. The state’s low cost of business, access to affordable living for employees and the state’s reduced regulations make it ideal for expansion compared with California, Camacho explains. Not to mention the state’s talent availability, as many parts in the country struggle to fill engineering positions. “Most people think of Denver and Austin as great software and IT hubs, but actually Phoenix has a larger depth and breadth of software talent in the market,” Camacho says. Just ask the companies themselves. Infusionsoft CEO and Co-Founder Clate Mask says Arizona has great talent, a great business environment and a great entrepreneur community that has helped his firm grow from an idea into a $100 million software and small business service company with 600 employees.

Optics and photonics The optics and photonics industry is deeply embedded in many different technologies, says Thomas L. Koch, Ph.D., dead of the College of Optical Sciences at the University of Arizona. Many folks only think of optics in terms of imaging systems — things with lenses — but they don’t think about the Internet, integrated circuit industries and beyond, Koch says. “In a lot of ways, it’s hard to get your arms around how broad optics is and how impactful it is,” he adds. But the industry is here and it’s been working hard to boost the state’s economy. The College of Optical Sciences has been working closely with the optics industry, giving students opportunities to work with local firms on projects and working on federal research projects, Koch says. The school’s students don’t have a hard

Top tech companies

ccording to the National Optical Astronomy Observatory, these are five of the biggest optics companies in Arizona, in no particular order. •

Raytheon Systems Company

•

Arizona Optical Systems

•

Photometric’s

•

NP Photonics

•

4D Technology

According to the Arizona Technology Council, these are five of the biggest software companies in Arizona, in no particular order. Largest Software firms: •

Infusionsoft

•

JDA Software Group Inc.

•

WebPT

•

Insight Enterprises Inc.

•

Computer Guidance Corp.

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AZ TECH time finding work, either. But the optics and photonics industry hasn’t really been at the forefront of conversation. Dr. Bob Breault has been the optics industry’s chief evangelist in Arizona for 24 years. Breault is president of the Arizona Optics Industry Association, which is one of the only industry associations whose members work completely on a volunteer basis, Breault mentions. In the early days of the industry, Arizona’s prominent aerospace and astronomy industries fueled optics in Arizona. The Tucson area has even been called “Optics Valley,” a play off of Silicon Valley. Breault says when the UA’s College of Optical Sciences is called the best in the world, it isn’t bragging, it’s a well-known fact. Even though optics has been a major player for many years in Arizona, it has been under the radar without much support, Breault says, noting that the 1990s were the prime years for optics. The Arizona Optics Industry Association has been meeting regularly since its 1992 inception, but there hasn’t been much conversation between the industry and the state’s foundations, banks, state infrastructure and convention centers. The optics industry has been dying to have a world-wide convention in Tucson, but Breault says the Tucson Convention Center isn’t big enough to support one. “You need this interface,” Breault says. “Over the last eight years or so, (the optics industry) has had no interface with organized foundations.”

Shifting tide But that’s starting to change. The Arizona Optics Industry Association recently signed a collaborative agreement with the Arizona Technology Council to form an Arizona Optics Industry Committee to reinvigorate the state’s industry. “We believe by joining forces, we’ll be in a strong position to help take the optics industry to the next era of impact and success,” says Alex Rodriguez, vice president of Arizona Technology Counicl’s Southern Arizona branch. The partnership plans to bring everyone to the table — government officials and key stake holders in the optics industry — to help promote the industry and let it flourish, Rodriguez says.

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The partnership will also establish a clear view for how big of an economic impact the industry has on the state, as well as examine the state’s workforce availability for the next generation of optics, he says. That all sounds great, but where’s the money? Whether you’re in software or optics, everyone seems to agree on one thing: where is the risk capital? In an email statement, Axosoft Founder Hamid Shojaee states there isn’t anything preventing software firms from succeeding in Arizona, but “that’s not to say that more capital investment in tech companies wouldn’t help.” Even though there are prominent venture capital firms like Desert Angels and the state has its fair share of millionaires and billionaires, Zylstra says many startups are having to look out of state for capital. Every vibrant tech community has successful entrepreneurs acting as angel investors, helping boost the next generation of startups, Zylstra says. “We’re pretty youthful in that regards, so it takes time for that kind of thing to happen, but reinvestment from the successful companies is going to be necessary to take Arizona to the next level in technology,” he says. When firms have to look outside of their home state for capital, their investors like to have them close by, which means companies might end up leaving Arizona, which has happened. Camacho says that is changing. Firms like Infusionsoft and WebPT received outside capital and they’re both operating successfully here in Arizona. Despite lack of access to capital, groups like the Arizona Technology Council, GPEC, the Arizona Commerce Authority and more have been working to keep and turn Arizona into a tech hotspot. The success of many initially small firms like Axosoft, Infusionsoft and WebPT are just a couple examples of the state’s thriving technology industry. “As the larger companies have successful exits, you’ll continue to see more of them not only start here, but stay here and grow here,” Camacho says.

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ONE STEP

BEYOND

BEYON ARIZONA BOLDLY GROWS INTO A COMPETITIVE DEEP SPACE EXPLORATION DESTINATION

By ERIN DAVIS

pace: the final frontier. These are the voyages of local Arizona aerospace enterprises. If you think for a minute that Arizona enterprises don’t measure up to “The Enterprise,” think again. We may not have Spock, Kirk or warp drive, but what Arizona does have is an impressive list of some of the most progressive aerospace contributions in the nation. From commercial and private sectors, alongside extremely competitive planetary and astronomy university programs, this desert state is an oasis for aerospace innovation. Missions to Mars and interplanetary asteroids and complex satellite, orbit and navigation systems are only part of what have made Arizona a top contender in deep-space exploration and preparation.

Boldly going … When considering “deep space exploration,” one may be tempted to visualize a monolithic bunker smack dab in a desolate Arizona desert, complete with docking station where an Enterprise or X-Wing fighter is in some impressive state of construction. Although that may be a reality for Arizona in a decade or three, our current aerospace contributions focus on the infrastructure and inter-workings of deep-space missions. Where we skyrocket (pun intended) is in providing the essentials — life support, thermal control and habitat design; without which, those shiny rockets would not have a payload the public can get excited about. 108

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Perhaps Grant Anderson, president and CEO of Paragon, explains it best when saying, “Warp drive is sexier than life support.” Paragon, striving to be No. 1 in life-support systems, has and continues to affect many of the design elements of spacecrafts, and although they may not be sexy, they’re essential. “We make sure life support isn’t an afterthought,” Anderson explains. In a study Paragon conducted for the proposed, but now in limbo, “Inspiration Mars,” Paragon was instrumental in conceptualizing habitat architectures that were both maintainable and redundant — not an easy feat, according to Anderson. As far as current life support projects, Paragon is working on a NASA-awarded contract for a patented lonomer-membrane Water Processor (IWP) that will soon be tested on the International Space Station (ISS). This particular application is designed to increase the ISS water supply, reduce costly water deliveries from Earth and can be used for high-efficiency (up to 98 percent) water recovery for future deep space missions.

Arizona academia and asteroids While a Mars mission simmers on the back burner, other deep-space endeavors are underway — perhaps most notably the OSIRIS-Rex mission. Spearheaded by the University of Arizona under the leadership of professor and principal investigator Dante Lauretta, spacecraft OSIRIS-Rex will travel to the near-Earth

ND asteroid Bennu the beginning of September. The $800-million dollar project (not including the launch vehicle) is a collaborative mission that includes commercial aerospace involvement with companies like Lockheed, who built the spacecraft, and KinetX Aerospace, directing navigation. “This will be the first mission to bring back enough asteroid material to examine thoroughly,” says Tim Swindle, University of Arizona director of the Lunar and Planetary Laboratory (LPL). The material Swindle refers to will be extracted from a 500-meter asteroid just inside the Earth’s orbit. Bennu is particularly lucrative as a study subject, as it’s suspected to have the kind of organic molecules that seeded Earth when life was starting. In addition to collecting samples (slated to return somewhere around 2023), OSIRIS-Rex will transport an infrared spectrometer. This technological contribution comes from another Arizona academic institution — Arizona State University. Dr. Phil Christensen, regents professor of Geological Sciences, Arizona State University was commissioned to build the apparatus to scan the surface of Bennu for minerals. No stranger to sneaking a peak at celestial sights, ASU is also responsible for THEMIS, a camera capable of producing visible and infrared wavelengths. THEMIS made its debut on Mars on October 2001. “We have built five instruments for five different NASA missions,” Christensen says, “and we currently send communication to

Grant Anderson

Phil Christensen

Shawn Linam

Rick Kettner

Taber MacCallum

Kjell Stakkestad

satellites that take 100 images of Mars daily.” ASU has also submitted a proposal to build an infrared camera for Europa. Jupiter’s small moon, close in size to our own, is an exciting prospect for exploration because of its liquidwater ocean hiding under a thick layer of ice. All systems are a go While advances in the academic realm rise, so do developments in orbit, navigation and Tim Swindle communications systems. KinetX Aerospace has been a heavy hitter in in all three. “We were the longest-running subcontractor on the IRIDIUM project,” says Kjell Stakkestad, president and CEO, KinetX Aerospace. Not only did KinetX help develop and implement the IRIDIUM ground system, they also created software for the 66-satellite communication system. In navigational pursuits, KinetX has 700 years of combined space navigation experience, including spacecraft missions to Mercury and Pluto. “We are the first commercial company to orbit Mercury,” Stakkestad says. While KinetX continues to expand on an impressive AB | September- October 2016

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navigational foundation, another Arizona company is making strides in propulsion and cargo delivery to the ISS. Orbital ATK has supported missions like “Deep Space One,” the first interplanetary spacecraft to utilize solar electric propulsion; and “Dawn,” that just celebrated a nine-year exploration orbiting two interplanetary bodies in the main asteroid belt between Mars and Jupiter. Tempe-based Qwaltec, a systems engineering, mission readiness and technical-training company, is a valuable asset to sister commercial space companies in terms of deep-space exploration preparation. “They bring us in before a launch,” explains Qwaltec Co-founder and CEO Shawn Linam. “What we do applies to any space system. Most of our business is satellites, but we apply the same application to human space flight systems, training actual crews and preparing for the mission by doing things like writing procedures, running risk assessments and establishing mission rules.”

The Force is with us For Further Information Contact: Michael DiGrazia, CIMA®, CFP®0 Institutional Consultant Senior Retirement Plan Consultant UBS Institutional Consulting Group UBS Financial Services, Inc. 2555 E. Camelback Rd., Suite 600 Phoenix, AZ 85016 (602) 957-5133 michael.digrazia@ubs.com

T URNASMART PHONEI NT O

AMOBI LETI MECLOCK NOW WI T HGE OF E NCI NG

Now back to that space-docking station in the middle of the dessert. While there can be no promise of a glimpse of a Millennium Falcon under construction, if you look at the right spot in Tucson, you may see a high-altitude Stratollite balloon on its way to hover essentially on top of the Earth’s atmosphere. World View, which also set the human stratospheric ballooning altitude record with the “StratEx” (Stratospheric Exploration) mission, has successfully tapped into the market for luxury experiences with a space-exploration twist. “When we began to explore this idea, the timing was right, particularly in relation to Baby Boomers. They want experiences,” explains World View Chief Technology Officer Taber MacCallum. World View goes beyond the half-trillion dollar luxury experiences market, however, by utilizing Stratollites as a means of transporting commercial payloads such as sensors, telescopes, communications arrays and more.

What comes next?

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With all the navigating, orbiting, innovating, strategizing and conceptualizing taking place in Arizona’s aerospace industry, what can we look forward to in further deep-space exploration advancement? “In the end it’s a political will,” MacCallum says, “I’m biased, but I think it’s tragic not to have a human deep space exploration mission that is on the books and adequately funded. We can also do a lot with the funding NASA has, if we do it differently.” “Arizona is one of the leaders in the nation,” Christensen says, “Between UA — which has one of the best astronomy programs and planetary science programs — and ASU — as one of a handful of universities that can build instruments on campus — I bet Arizona is poised to be in the Top 5 for space exploration and space science.” “I’m always excited about the possibilities, but they don’t always come along,” Swindle says, “You never know which ones will come along for you. “

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2016

Innovation is the central issue in economic prosperity. â&#x20AC;&#x201C; Michael E. Porter

The 130 senior business leaders of the Southern Arizona Leadership Council (SALC) agree. SALC is committed to driving growth in biosciences as we work to build the innovation economy across our region and state. Our broad collaboration with groups and community leaders statewide is pivotal in our quest to build and sustain a prosperous future for Arizona. SALC recognizes the following key partners for outstanding achievements in 2016:

salc.org

ARIZONA BIOINDUSTRY ASSOCIATION

How healthy is

the bio industry? While investment and legislative challenges remain, Arizona’s bioscience sector is changing the world one innovation at a time

By AZ BUSINESS

I Where Arizona’s jobs are Financial and business: 608,000+ Bioscience and healthcare: 320,000+ High-tech and IT: 152,000+ Source: Arizona Commerce Authority

magine a world without cancer. Envision a day when we can prevent Alzheimer’s disease. What if we could discover new ways to prevent disease and develop new treatments to make the sick well again? Imagine a day when we deliver innovations that will make life better for people on Arizona and around the world and teach a new generation to achieve even more than we can hope to do today. These are just a few of the visions that Arizona’s bioscience industry works to realize every day. Together, these talented researchers, entrepreneurs and educators have dedicated their lives and their careers to making life better. “Bio” means life. If you are alive, then at some time in your life, the work of Arizona’s bioscience industry will make life better for you.

Making life better Stretching from Flagstaff’s higher elevations to the valleys below, bioscience and healthcare in Arizona are thriving industries, treating patients and conducting groundbreaking research that will change the world. Arizona research institutions, industries and clinical care facilities collaborate in unique ways to create new products and improve care and outcomes. New life science innovations improve the human condition, and in many cases are helping to reduce the total cost of care at a time when the cost of delivering quality 116

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healthcare is at the top of state, national and international policy agendas.

Making our economy stronger The bioscience and healthcare industries exist to help us live longer and improve our quality of life. They are also one of our most powerful economic drivers in Arizona. In 2015, Banner Health became the largest non-government employer in the state. Nearly 1,300 biotech firms combine to a total of more than 24,000 bioscience specific jobs. When including our hospitals, combined total of more than 1,400 bioscience firms, represent more than 100,400 jobs. Expanding the combined sector to include the complete bioscience and healthcare sectors, total employment in 2015 — based on Arizona Commerce Authority estimates — exceeded 320,000 jobs in Arizona. During the economic recovery of 2009-2014, bioscience and hospital jobs in Arizona increased 14.8 percent, nearly double the rate of Arizona as a whole. From 2002 to 2014, Arizona bioscience jobs increased by 49 percent, adding more than 36,700 jobs. The U.S. posted a 13.7 percent gain in bio jobs during this span. According to the Arizona Commerce Authority, Arizona’s healthcare employers are growing faster than their national counterparts and faster than other types of Arizona businesses. In 2015, healthcare

Arizona Bioscience Week From Sept. 18-24, Arizona Bioscience Week features a wide range of public and private events designed to showcase to allow attendees to connect and engage across the spectrum from discovery to development to delivery. The lineup for Arizona Bioscience Week includes a growing list of opportunities for people here in Arizona and visitors from around the country to connect and engage with Arizona’s life science innovators including:

employers in Arizona added more than 11,000 jobs, a rate of 3.4 percent. That’s faster than either healthcare employers nationwide (3.2 percent) or Arizona employers as a whole (2.5 percent). State academic institutions accounted for nearly $400 million in bioscience-related research and development expenditures in 2014 and National Institutes of Health (NIH) funding to these and other non-academic institutions totaled $150.6 million in 2015. Arizona inventors have had 1,751 patents issued in bioscience-related classes since 2012, primarily in medical and surgical devices, but also in drugs and pharmaceuticals, microbiology and genetics and in biochemistry.

Biggest challenge is investment The biggest challenge for Arizona’s bioscience sector continues to be access to the financial resources needed to grow the sector and the companies that will deliver these lifesaving and life changing innovations. A State of Arizona investment of $500 million in university research infrastructure in 2003 has yielded and seven-to-one return on investment. Yet, when bills were proposed in 2015 to double down and spur future growth, they never even got a

hearing in committee. The Technology Research Initiative Fund (part of Prop. 301) has resulted in almost $1 billion to our universities since 2001 to fund research and education projects. This has made a tremendous impact. However, all funding under Prop. 301 ends in 2020. If this funding or something like it is not initiated before then, the impact on K-20 education and our university research programs will be devastating. While Arizona has seen a strong increase in venture capital invested in bioscience-related companies in recent years, much of it comes from outside of the state. Life science leaders must travel outside of Arizona in search of the capital needed to grow. Time and resources that should be invested in growing these businesses and moving innovation forward faster are diverted to traveling far and wide in search of growth capital. Local investment is key to addressing this challenge. With more than $1 trillion in potentially investable personal assets across Arizona’s population and a recovering state economy, Arizona has the opportunity to solve its innovation capital problem. It will be up to Arizona’s life science innovators to make the case for seizing this opportunity. The well has run dry on Arizona’s

The Cavendish Global Impact Forum: Cavendish Global uniquely provides leading family offices, their foundations and sovereign wealth funds to connect with life science innovators. Cavendish hosts these meetings at the epicenters of innovation. Past meetings have been held at the United Nations, at Oxford University, in Palm Beach, at Cleveland Clinic and in San Diego. Cavendish comes to Phoenix so its community can learn what is happening here in Arizona. The AZBio Awards: Arizona’s life science and leadership community will come together with the Cavendish community and visitors from around the country to celebrate life-science innovation and innovators at the AZBio Awards on the evening of Sept. 21 at the Phoenix Convention Center. Highlights of the evening will include honoring Dr. George Poste with the AZBio Pioneer Award for Lifetime Achievement and a celebration of the achievements of leading researchers, educators and innovative companies. The Student Discovery Zone: Tomorrow’s life science and healthcare breakthroughs will be discovered, developed and delivered by today’s students. The Student Discovery Zone showcases the work of fifty students from Arizona high schools, community colleges and universities at the Phoenix Convention Center on Sept. 21. White Hat Investors: The White Hat Life Science Investor Conference is a collaboration between the bioscience industry associations across the Rocky Mountain Southwest. White Hat showcases investment opportunities in the areas of diagnostics, therapeutics, medical devices and health information technology. Learn more: azbio.org AB | September- October 2016

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AZ BIO Angel Investor Tax Credit Fund. Once a major incentive to encourage Arizona investors to invest locally, it is currently unfunded and a lost opportunity. Arizona’s R&D Tax Credits are also one of our key incentives and have been key to both business attraction and business growth. While the R&D Tax Credit program continues to support research and development, it has not kept up with the growth of Arizona’s biotech and high-tech industries. The annual allocation of funds is often exhausted early in the year, leaving some companies lacking the incentives that they relied upon since the cupboard is now bare. It will be up to Arizona’s life science and high-tech leaders to make the case for addressing these challenges to fuel the continued rapid growth of Arizona’s innovation sectors.

Leadership, vision, strategy and execution The beginnings of Arizona’s bioscience and healthcare industries go back to the years before Arizona became a state in 1912. Our universities focused their research on how to grow crops and preserve resources in our arid environment. Our hospitals were focused on providing care for our diverse population and the visitors who traveled to Arizona to improve their health. Interestingly, more than 100 years later, that is still the case. But in the last 100-plus years, the industry has expanded to do more and be more. Companies including W.L.Gore and Medtronic came to Arizona and stayed to grow into industry anchors. Ventana Medical Systems was born in Tucson when Dr. Thomas Grogan needed to find a new diagnostic solution because patients were waiting and traditional methods were too slow. Ventana would later be purchased by Roche for $3.4 billion and stayed in Tucson, serving as the key industry anchor for Southern Arizona’s biotech community. Abraxis BioSciences had an idea for a revolutionary new cancer treatment. The company was acquired by Celgene in 2010 for $2.9 billion. Today, Celgene’s Abraxane® is making life better for cancer patients around the world and it is manufactured here in Arizona. Each of these companies — and others like them — have grown to become industry leaders, but there was little to tie them all together. That changed in the 2002 when the Arizona Bioscience Roadmap began and 118

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public and private funding combined to create new institutes focused on leveraging the power of the newly mapped human genome. The International Genomics Consortium (IGC) and the Translational Genomics Research Institute (TGen) would make their home on the new Phoenix Biomedical Campus, not far from the already world-renowned Barrow Neurological Institute. Resources provided by the State of Arizona led to the creation of new research assets at all three state universities, including the Biodesign Institute at ASU, BIO5 at the University of Arizona and the Applied Research and Development building at NAU. The plan, developed by Battelle and commissioned by the Flinn Foundation, was initially launched as a 10-year strategy in 2002. Over the Roadmap’s first decade, Arizona emerged as one of the fastest-growing states in the biosciences, with substantial expansion in jobs and firms, new university research facilities, the arrival of major private research institutions and the creation of incubators and accelerators to help start-up companies. As the first decade ended, the Roadmap was updated through 2025. The updated Roadmap emphasizes improving health outcomes and advancing the biosciences through commercialization, entrepreneurship, creating a critical mass of firms and the development of talent, in addition to building up the state’s research infrastructure and increasing annual research revenues. The Roadmap’s recommendations are guided by Arizona’s Bioscience Roadmap Steering Committee, which includes more than 100 statewide bioscience champions in research, academia, government and public policy who come together on a regular basis to measure where we are and share what we are doing to move Arizona further forward toward achieving the Roadmap goals.

Moving from emerging leader to top tier The Arizona Bioindustry Association (AZBio) has one overriding vision — for Arizona to be a top-tier bioscience state. Arizona has made tremendous progress over the last 15 years by moving up from the bottom tiers to Tier II for firms and Tier III for investment and employment.

Bioscience investment Here is the amount of venture capital invested in bioscience companies from 2012-2015 (states with 5 million-7 million people: Arizona: $217 Million Colorado: $1.1 Billion Source: Arizona Commerce Authority

Not surprisingly, levels of investment and employment are strongly connected. Cashstarved companies are less likely to create jobs. To make the transition from a top emerging bioscience state to a top-tier bioscience state will require Arizona to activate its “collaborative gene” and for leaders in government and all industries to work together to address our challenges and seize our opportunities. State leaders and economic developers must spread the word so that more Arizonans at every level are inspired to take part, so they can benefit from the high-paying jobs, life-saving and life-changing innovations and economic vitality that the bioscience and healthcare industries can create for Arizonans today and for generations to come. This supplement contains the stories of just some of the leaders who are guiding bioscience in Arizona and will drive us forward. You will also learn about opportunities this month where you can connect with them, engage in conversations and become part of something that makes a lasting impact. Read on.

AZ BIO

2016 AZBio Pioneer Award for Lifetime Achievement

Dr. George Poste

Chief scientist, Complex Adaptive Systems Initiative (CASI), regents professor and Del E. Webb chair in health innovation, Arizona State University

n September 21, Arizona’s life science and business community will come together to honor Dr. George Poste with the AZBio Pioneer Award for Life Time Achievement. From roles in academia, industry and government, with expertise in disciplines as diverse as molecular biology, pharmaceutical development and biosecurity, Poste is a modernday Renaissance man. “I am the quintessential kid in a candy shop when it comes to any facet of science or technology,” Poste says. “Every single day, I come across something that makes me say, ‘Wow.’” One of the most respected life science leaders in the world, Poste leverages his experience developed over a lifetime of exploration and discovery to connect and engage experts from across ASU and around the world in research on synthetic biology, ubiquitous sensing and healthcare informatics for personalized medicine. He has published more than 350 research papers and edited 14 books on pharmaceutical technologies and oncology. He has received honorary degrees in science, law and medicine for his research contributions and was honored in 1999 by Queen Elizabeth II as a Commander of the British Empire for his contributions to international healthcare and security. Poste also serves on the board of directors of Monsanto, Exelixis, Caris Life Sciences and the Scientific Advisory Board of Burrill and Company and Synthetic Genomics. From 1992 to 1999, he was chief science and technology officer and president of R&D for SmithKline Beecham, where he revolutionized the approach to discovery of new drugs by implementing genomics technology and was associated with the registration of 31 drug, vaccine and diagnostic products. Poste has been credited as the industrial scientist who introduced genomics to the pharmaceutical and biotechnology industry. With a goal to create a different kind of research institution by integrating the most dynamic components of science, including biology, engineering and computing, Poste founded the Biodesign Institute at AASU and served as director from 2003 to 2009. The

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Institute’s organizational structure and physical environment were designed to stimulate discoveries and translate these into new drugs, diagnostic products, medical devices and other developments that improve human health and advance national security. In creating this Institute, Poste designed and built 400,000 square feet of new facilities, achieved cumulative research funding of $300 million and recruited more than 60 faculty, including three members of the National Academies of Science and Engineering. The Biodesign Institute is master-planned as four interconnected buildings comprising nearly 800,000 square feet. Buildings A and B were built during Dr. Poste’s tenure as director and house more than 600 faculty, staff and students. A new Biodesign Building C began construction in June and is scheduled to be completed in June 2018, bringing a total of 535,000 square feet of state-of-the-art research space to the 14acre site. Poste has received a number of awards, including Scientist of the Year by R&D Magazine, the Einstein Award from the Global Business Leadership Council in 2006 and the Scrip Lifetime Achievement Award in 2009.

AZ BIO

2016 AZBio

Fast Lane Awards F

or emerging life science leaders, the road from discovery to delivery is particularly challenging as they navigate the research, funding and commercialization pathways simultaneously. It takes perseverance, focus and the ability to navigate a difficult course. Each year, AZBio selects three companies that are stepping up the pace and calls them Fast Lane Companies. Here are their stories.

Beacon Biomedical Inc.

If early detection saves lives, then why — with all the billions of dollars being spent on patient education and awareness as to the life-saving benefits of routine cancer screening — are we seeing hundreds of thousands of people still dying each year from cancer? That question was the genesis behind Beacon Biomedical. Research has shown that 65 percent of all the deaths in the U.S. associated with breast and colorectal cancers are associated with the one out of three men and women who are not compliant with recommended cancer screening. As for lung cancer, more than 90 percent of all deaths in the U.S. are associated with long-term smokers and ex-smokers. These are the people on which Beacon Biomedical is focusing. Beacon Biomedical tests will screen people to determine if they need to have more extensive tests and procedures and will promote compliance with and support access to life-saving cancer screening procedures for breast (mammography), colorectal (colonoscopy) and lung (low dose CT scans) cancers. Over the last 18 months, Beacon Biomedical has grown its company from two founders and a great idea on how to save lives to ramping things up at a rapid pace. The company secured its patented biomarker and device technologies for cancer screening and successfully replicated and confirmed the findings of independent researchers on its patented Cripto-1 technology and its ability to detect colorectal cancer with 95 percent accuracy using a small quantity of blood. Beacon Biomedical also established successful collaborative efforts with multiple manufacturers in the diagnostic space and leading researchers at both Boston and Howard universities. On the funding front, Beacon Biomedical was awarded a NIH Phase I SBIR grant and was a winner of the Arizona Innovation Challenge. Both grants will support the research, development and the commercialization of the company’s BeScreened™-CRC test — an easy, accurate and affordable blood-based test for colorectal 122

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cancer and its early detection. The company recently moved to a new home at the Center for Center for Entrepreneurial Innovation at GateWay Community College, giving the growing team more space for R&D and a CLIA laboratory. This fall, Beacon Biomedical expects to launch its first commercial product: A laboratory developed test for colorectal cancer that can be read by a healthcare provider in less than five minutes.

SalutarisMD Age-related Macular Degeneration (AMD) is the leading cause of vision loss in industrialized countries. The macula provides sharp, central vision. It is the most sensitive part of the retina. Macular degeneration is classified as either “dry” or “wet.” Dry AMD progresses slowly, whereas Wet AMD may progress quickly and is responsible for 90 percent of cases of severe vision loss associated with AMD. Wet AMD has a profound impact on quality of life and imposes a considerable financial burden on healthcare systems. There is a compelling need for new therapies that improve visual outcomes and lower the burden of care. To meet this need, SalutarisMD is developing a minimally invasive ophthalmic technology for the treatment of Wet AMD. It has been a year of accomplishments for SalutarisMD. In March 2015, SalutarisMD received a strategic investment from HOYA Corporation of Japan, a major multi-national interventional ophthalmology company with a $15.6 billion market cap. That investment enabled the company to grow internally and prepare for commercialization. Over the past 18 months, SalutarisMD has received a 510(k) regulatory approval on its first device, hired an in-house engineering team to develop its commercial device, completed a clinical trial at Moorfields Eye Hospital in London and implemented an ISO 13485 quality system. SalutarisMD was recently recommended for ISO 13485 certification. In the next six months, SalutarisMD will submit a 510(k) for a second device and a technical file for clearance in the EU market. These R&D milestones position the company for nearterm regulatory submissions, followed shortly thereafter by early adopter commercialization.

Systems Imagination, Inc. We have the technology to collect massive amounts of healthcare data on patients. Using that data effectively is one

2016 Michael A. Cusanovich Bioscience Educator of the Year Marni Landry, BS, M.Ed Paradise Valley High School CREST

F of the greatest opportunities for improving the human condition. Systems Imagination, Inc. (SII) is a privately held big data analytics company that offers Ultra High Definition Translational Medicine services and Bioinformatics On Demand™ to accelerate the discovery and evolution of scientific knowledge. SII’s Big Data to Knowledge (BD2K) solution uses a proprietary knowledge computing platform and expert analytical services to enable clients to translate big data into useful scientific knowledge with unprecedented speed and precision. Over the past 18 months, Chris Yoo and the team at SII have built systems that accelerate the real-world application of genomics and other cutting-edge technologies from life sciences research and computational techniques to clinical utility. SII has recruited top talent with backgrounds in IT, healthcare and life sciences research. Together, they are leveraging industry relationships to develop partnerships with companies across the translational medicine ecosystem. Recognizing the need for more than technology, Yoo and co-founder Spyro Mousses have built SII from an intellectual concept in 2014 into a vibrant company of more than a dozen PhD level bioinformaticists, computer scientists and life science and computer technology workers in Arizona. SII has established multi-year, multi-million-dollar customer agreements with Top 10 pharmaceutical companies, created a new category of service offering (Bioinformatics On Demand™), incubated and launched a stealth biotechnology company, filed game-changing patents in translational medicine and computational biology and attracted angel investment that builds the biotech industry in Arizona. SII is now in the process of bringing angel-network organizations to build more effective funding mechanisms, starting with a structure modeled after Sand Hill Angel’s network so that more Arizona companies can move forward faster, too This past summer, SII followed through on its commitment to encourage STEM activities for local high schools by hosting 10 high school students as interns, having them complete projects on computational biology and scientific content work, as well as bringing on board ASU bioinformatics students for exciting intern projects.

or the last 14 years as a life science teacher at Paradise Valley High School (PVHS), Marni Landry has inspired students to explore the life sciences. In addition to her work in the classroom, Landry authored the curriculum for and teaches a four-year bioscience sequence in the Center for Research, Engineering, Science, and Technology (CREST) program at PVHS. She uses her vast experience in the classroom combined with a B.S. in biology from Arizona State University and a M.Ed. from the University of Phoenix to translate complex concepts onto real life applications that encourage her students to explore the world around them and strive to make life better in the future. As a leader in the teaching community, Landry serves on the Paradise Valley Technology Cadre, designing and delivering professional development to staff. She is a member of the National Science Teachers Association, a lifetime member and committee chair of the Arizona Science Teachers Association, and a contributing partner in the President’s 100K in 10 Initiative (training 100,000 highly qualified STEM teachers in 10 years). Together with a team of educators, university professors and industry representatives, Landry worked to update and rewrite the Arizona CTE Bioscience Standards to ensure that students are prepared to enter the life science workforce. She also serves on the CTE Bioscience curriculum consortium. Continually striving to deliver a quality educational experience, Landry’s accomplishments include a fellowship through the U.S. Department of State as an exchange teacher in Morocco, Nobel Top 10 Teacher of the Year, Flinn Educator of Distinction, Arizona Outstanding HOSA Advisor, Arizona High School Science Teacher of the Year and The Presidential Award for Excellence in Math and Science Teaching. Students in the CREST bioscience program have been welltrained in laboratory technique, content matter and research skills and have served in prestigious internships such as the Summer Helios Internship at T-Gen, Barrow’s Neurological Institute, ASU’s Nuclear Magnetic Resonance Lab, ASU’s Biodesign Biomimicry Lab, University of Arizona’s National Institute of Health High School Research Program and University of Arizona’s Agricultural Extension Service. “It is a privilege to teach with Marni,” shared Michelle Landreville, who teaches with Landry in the PVHS CREST program. “She raises the bar for students and directly impacts bioscience outcomes in Arizona.” AB | September- October 2016

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AZ BIO

2016 Arizona Bioscience Leader of the Year

2016 Arizona Bioscience Researcher of the Year Stephen Johnston, PhD Director of the Center for Innovations in Medicine, ASU Biodesign Institute Professor, College of Liberal Arts and Sciences, School of Life Sciences, ASU

Mara G. Aspinall President and CEO, HealthCatalysts Executive chairman, GenePeeks

iomedical diagnostics are changing healthcare as we know it. Based upon their unique genetic profiles, treatments are being created and personalized for people living with life-threatening diseases. Most importantly, biomedical diagnostics are helping medical experts catch diseases early, when people have the best chance to win the fight. But biomedical diagnostics are some of the least understood and most undervalued resources in healthcare. Mara Aspinall is on a mission to change that. A biotech industry executive and healthcare pioneer, Aspinall is president and CEO of HealthCatalysts, a firm dedicated to the growth of new healthcare companies. Aspinall is also executive chairman of GenePeeks, a computational genomics company creating a paradigm shift in genetic testing and personalized medicine. GenePeeks’ proprietary technology can identify the risk of passing on complex disease to progeny pre-conception through data mining the maternal and paternal genomes. Aspinall is the former president and CEO of Ventana Medical Systems, a division of Roche. During her tenure, Ventana grew substantially and established itself as the leading oncology companion diagnostics company. Aspinall previously spent 12 years as president of Genzyme Genetics and Genzyme Pharmaceuticals. Genzyme set the standard for quality in the diagnostics industry, leading the market in prenatal and cancer testing. Genzyme was sold to LabCorp for $1 billion. Aspinall serves as a member of the boards of Safeguard Scientifics, Abcam plc, Blue Cross Blue Shield Arizona, Castle Biosciences and the Arizona Bioindustry Association. Committed to Arizona businesses, Aspinall is also an active board member of the Southern Arizona Leadership Council and Sun Corridor. Passionate about educating the healthcare community on the importance of diagnostics and personalized medicine, Aspinall co-founded the International School of Biomedical Diagnostics at ASU, the first school dedicated entirely to diagnostics as an independent discipline. Understanding the critical role access to capital plays in the innovation process, Aspinall co-founded and chairs the Arizona Biosciences Board, a CEO group focused on improving opportunities for innovation-based technology companies in the state.

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f we can’t cure cancer, why not just prevent it? That’s the “crazy” question that Stephen Albert Johnston has been asking – and exploring – for nearly a decade. While others have asked why Johnston would pursue such an audacious path, Johnston’s answer is, “Why not?” His determination to discover a universal, prophylactic vaccine for cancer has found him in the throes of Phase Two dog trials, during which he and his team will enroll some 700 subjects and test what could ultimately become an inexpensive vaccine that has the potential to prevent most cancer. Those who know Johnston understand that he’s impatient with incremental goals. His vision for the cancer vaccine comes from his commitment to creating diagnostics, tools and treatments that are available and accessible to all nations. Already, Johnston has made tracks. On his journey to hit an oncological “home run,” he has identified 21 antigens that are common to all breast tumors. These are the elements that will be used to create the universal vaccine. If the vaccine works, the immune system would target these antigens and destroy the very first malignant cell before it multiplies and produces a tumor. His Biodesign Center for Innovations in Medicine at ASU has the big goal of developing “innovative solutions to fundamental problems in biomedicine.” In the true spirit of Biodesign, he brings together a group of interdisciplinary scientists who first identify a problem, analyze the basis of the related issues, and then come up with an inventive solution. One inventive solution already at play is the development of immunosignatures, a diagnostic based on hundreds of thousands of peptides synthesized directly on silicon wafers. To make this happen, he adopted a process similar to Intel’s photolithography, but instead of making integrated circuits, they use batch peptide chemistry. The spinout company he created with Neal Woodbury, HealthTell, has sites at the Chandler Innovations Incubator in Arizona and in San Ramon, California. HealthTell was named “one of the five Bay Area companies to watch” in 2015. In 2016, the company completed a $26 million Series B financing. Johnston has published more than 150 journal articles, has more than 20 patents and has attracted more than $85 million in grant support, including large programs from DARPA, NIAID and NHLBI.

AZ BIO

2016 Arizona Bioscience Company of the Year

2016 AZBio Public Service Award Rep. Kyrsten Sinema D-AZ 9th District, U.S. House of Representatives

elemedicine provides access to care for people where and when they need it most by enabling medical consultations between healthcare professionals, facilitating patient visits and bringing together specialists and specialties that may be a few miles away or even on the other side of the world. GlobalMed is the worldwide leader in healthcare delivery systems. Founded in 2002, GlobalMed’s mission is to transform healthcare delivery systems that improve access and quality of care while eliminating unnecessary costs. Simply stated, the company vision is “quality, timely care for all.” GlobalMed solutions are deployed in more than 55 countries, enabling healthcare providers around the world to conduct more than 3.5 million telehealth visits with patients annually. Partnering with medical groups, healthcare enterprises and government agencies around the world has led to the company’s unparalleled expertise in designing sustainable, integrated connected health programs. The GlobalMed ecosystem gives healthcare providers the ability to view critical patient data anywhere, on almost any device via Internet access, allowing real-time patient assessment and collaboration for best-in-class patient care. Based in Scottsdale, GlobalMed has developed telemedicine technologies to help healthcare providers enhance patient care. Today, as a global leader in the design, delivery and support of the medical technology that enables telehealth solutions, GlobalMed offers a variety of telemedicine products including cameras, peripherals, scopes, software and mobile medical stations. GlobalMed’s integrated solutions — including telemedicine stations, examination cameras, connected medical devices and software — allow for the collaboration of healthcare professionals at remote locations by providing real time or store-and-forward of both visible and non-visible light images, high definition video and an underlying interface that allows the clinician to capture pertinent data. The Arizona Bioscience Company of the Year award is bestowed on the for-profit bioscience company whose Arizona-based operations did the most to transform the world during the last 12 months. Here’s how GlobalMed is transforming the world: • GlobalMed has set up a telemedicine base in Africa in an effort to impact the growing health problems on that continent. The company now provides telemedicine solutions on all seven continents. • On the battlefield, GlobalMed works with military operations and security agencies in the U.S. and around the world to support the care of soldiers on land and at sea. • People living in rural communities often must travel to urban centers to access specialty care. GlobalMed’s systems provide the ability for medical professionals in rural health centers to bring in specialty consults via telehealth systems, even in ICU centers.

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avigating the nation’s capital takes patience, the ability to build coalitions and a deep understanding of how the law of the land affects the people that members of Congress are elected to serve. Not all laws are perfect. What worked in the beginning may need to be changed or updated. What’s broken needs to be fixed and what’s working needs to be protected. When it comes to the opportunities life science innovation can create and challenges of moving this innovation across the spectrum from discovery to development to delivery and ultimately making a difference in the lives of the people who need it most, the office of Rep. Kyrsten Sinema is one of the best places to start a conversation. Sinema is a longtime supporter of Arizona’s life science community, beginning in her days as a member of the Arizona Legislature — first in the in the Arizona House of Representatives and later the Senate. She was elected to U.S. House of Representatives in 2012 and again 2014. Sinema is a champion for funding research at our National Institutes of Health (NIH) and for ensuring that the Food and Drug Administration (FDA) has the resources it needs to ensure that safe and effective treatments get to the marketplace and to people who need them. For entrepreneurs, Sinema has worked to increase access to capital as a leading voice on efforts to build upon the JOBS Act. On May 23, 2016, the House passed H.R.4139, sponsored by Congresswoman Sinema. The Fostering Innovation Act of 2015 extends the Sarbanes-Oxley (SOX) Section 404(b) exemption included in the JOBS Act for an additional five years for a small subset of emerging growth companies with annual average revenue of less than $50 million and less than $700 million in public float. This change helps to ease the financial burden of SOX on emerging growth companies that are accessing the public markets. The measure has now moved on to the Senate for review and approval. In 2014 and 2015, Sinema worked tirelessly on repeal of the Medical Device Excise Tax, which was creating hurdles for bringing new innovations to market by diverting dollars from research and development. As a leader in a bi-partisan coalition, she was instrumental in getting this burdensome tax on innovation suspended for the years 2016 and 2017. She continues to work with leaders on both sides of the aisle for a permanent repeal.