BizTimes Milwaukee | February 5, 2018

FAMILY BUSINESS ISSUE

The next generation sketches a path for growth at R.A. Smith

plus HOW THE FEDERAL TAX LAW IMPACTS YOUR BUSINESS 24 MILLENNIAL EXPERIENCES AFFECT INVESTMENT STRATEGIES 27 SOCIAL IMPACT INCREASINGLY SCRUTINIZED BY INVESTORS 28

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FEB 5 - 18, 2018 » $3.25

THE

MAKE

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BUILD YOUR

NETWO RK G R OW your BUSINESS

RE S E RV E YOU R B O OT H

TODAY! “

AT BIZEXPO YOU WON’T JUST DISCOVER NEW LEADS, YOU’LL Make the Deal.

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With the right combination of powerful business leaders and potential customers, BizExpo will give your company the brand exposure it needs to be a leader in your industry.

The energy is amazing! We have so many people to follow up with

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and have meetings with. It’s a really good experience to see how many business owners are working to grow their business.

-Scale Up – Heather Pechacek

2018

THURSDAY | MAY 31, 2018 | 9AM - 5PM POTAWATOMI HOTEL & C ASIN O B IZTIME S .C O M /BI Z EX PO / 2018 PRESENTED BY:

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4 Leading Edge 4 NOW

BY THE NUMBERS 5 ON THE JOB WITH… 6 COFFEE BREAK 7 QUOTE/UNQUOTE 8 BIZ POLL PUBLIC RECORD 9 IN FOCUS 10 JUMP START 11 BIZ LUNCH

12 News 12 INTRODUCING THE BIZTIMES LEADERSHIP ACADEMY 15 MY TAKE

Real Estate 16 31 Strategies COVER STORY

18

The next generation sketches a path for growth at R.A. Smith

Special Report

PHOTO: ZAK GRUBER - SATURN LOUNGE

BizTimes Milwaukee (ISSN 1095-936X & USPS # 017813) Volume 23, Number 22, February 5, 2018 – February 18, 2018. BizTimes Milwaukee is published bi-weekly, except monthly in January, July and December by BizTimes Media LLC at 126 N. Jefferson St., Suite 403, Milwaukee, WI 53202-6120, USA. Basic annual subscription rate is $42. Single copy price is $3.25. Back issues are $5 each. Periodicals postage paid at Milwaukee, WI and additional mailing offices. POSTMASTER: Send all UAA to CFS. NON-POSTAL AND MILITARY FACILITIES: Send address corrections to BizTimes Milwaukee, 126 N. Jefferson St., Suite 403, Milwaukee, WI 53202-6120. Entire contents copyright 2018 by BizTimes Media LLC. All rights reserved.

Contents

31 LEADERSHIP Jim Lindell 32 FAMILY BUSINESS David Borst 33 A BRIEF CASE

35 Biz Connections 35 PAY IT FORWARD 36 PERSONNEL FILE 37 AROUND TOWN 38 GLANCE AT YESTERYEAR COMMENTARY 39 MY BEST ADVICE

24 Wealth Management

Experts weigh in on how the new tax law will impact individuals and businesses, millennials are investing inherited wealth differently and socially responsible investing is gaining steam.

C R E AT E D TO B E

WISCONSIN’S BANK FOR B U S I N E SS™

414-273-3507 | www.townbank.us

biztimes.com / 3

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BIZTIMES MEDIA – Like us

The Manitowoc Co. moving HQ to Milwaukee

By Arthur Thomas, staff writer The Manitowoc Co. Inc. will move its corporate headquarters from Manitowoc to a 16,000-square-foot space in the One Park Plaza office building at 11270 W. Park Place on Milwaukee’s far northwest side, the company announced.

The designer and maker of mo-

bile telescopic, tower and lattice boom crawler cranes and boom trucks is leasing the space and has already started to transition employees. The company, which sells under the Manitowoc, Grove, Potain and National Crane brand names, expects to be finished with the move by the end of the first

BY THE NUMBERS

Engineers are planning water infrastructure upgrades for Foxconn and its suppliers that could accommodate demand of

12 MILLION

gallons of water per day.

4 / BizTimes Milwaukee FEBRUARY 5, 2018

quarter, pending the completion of renovations.

“Manitowoc’s origin as a Wisconsin-based manufacturer dates to 1902. The state has an impressive roster of global manufacturing businesses with a top-level talent pool, and we are excited about the move of our corporate headquarters. We believe this location will strategically create easier accessibility for our customers, shareholders and employees,” said Barry Pennypacker, president and chief executive officer of The Manitowoc Co. The company is also going to sell its former headquarters at 2400 S. 44th St. in Manitowoc to Investors Community Bank for an undisclosed price. The property is assessed at almost $4.7 million, according to Manitowoc County records. The sale to the Manitowoc-based bank is expected to close by the end of the first quarter.

Fewer than 50 positions will be moving from Manitowoc to Milwaukee, according to Ion Warner, vice president of marketing and investor relations at Manitowoc Co. The company will continue to have some engineering and corporate functions in Manitowoc. Warner declined to say how many positions would remain in the city, but said they would be moving out of the current headquarters facility.

In 2016, Manitowoc Co. announced it would be closing its manufacturing operations in Manitowoc, eliminating 528 positions.

Work from the facility moved to operations in Shady Grove, Pennsylvania. That same year, the company shut down its Manitowoc Cranes plant in Port Washington, which put 80 employees out of work.

Also in 2016, the company spun off its foodservice division into a new publicly traded company called Manitowoc Foodservice, which later changed its name to Welbilt, based in New Port Richey, Florida. That left The Manitowoc Co, with only the crane business. The move came after activist investor Carl Icahn and another major shareholder, San Diego-based Relational Investors, pushed for the separation of the two businesses.

The Manitowoc Co.’s revenue has declined over the past few years, from $3.9 billion in 2014 to $1.6 billion in 2016. Revenue was down 11 percent through the first three quarters of 2017, but the company had narrowed its net loss from $342.4 million to $25.9 million.

The company ranked 658th on the Fortune 1000 list in 2016, but last year dropped off of the list.

Its stock is traded on the New York Stock Exchange under the ticker symbol MTW. n

1

The Rock Snow Park team

LILA ARYAN PHOTOGRAPHY

ON THE JOB WITH…

By Corrinne Hess, staff writer Before the skiers and the tubers arrive at the Rock Snow Park, there is work to be done.

Every day, a team preps the hills with enough snow – usually 2 to 3 feet – using one of company’s 16 computer-controlled snowmaking machines.

The snow is made naturally using water and high pressure air, said Rick Schmitz, who took over snow park operations with his two brothers at The Rock Sports Complex in Franklin in July 2017.

Schmitz Bros. LLC has owned and operated Little Switzerland in Slinger since 2012. The company bought the

Rock Snow Park from Mike Zimmerman, who had transformed the former Crystal Ridge Ski Hill.

When the brothers took over the Rock Snow Park, they invested about $700,000 in snowmaking operations and other changes to attract more families to the park.

Making snow is not cheap. Doing so costs about $2,000 a night, Schmitz said. The investment in the park has paid off. Every weekend, thousands of people visit the park for skiing and tubing.

“This is the only true Alpine ski area in Milwaukee County,” Schmitz said. n

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1 A snowcat, which moves real and man-made snow around to where it needs to be on the hill.

2 Scott McCune operating a snowcat.

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3

4

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The snowcat is too large to move all of the snow, so several employees go onto the slopes and rake the snow.

Snow is made using water and high pressure. This process costs about $2,000 per night.

A fence is put up every afternoon before the tubers arrive so the participants don’t fly too far off the slope.

6 Ryan Raffing, who has worked at the ski hill since it was Crystal Ridge, looks at one of the snowmaking machines. biztimes.com / 5

Leading Edge

Small business loans.

Easy online application.

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Chris Anguil President Anguil Environmental Systems Inc.

8855 N. 55th St., Milwaukee | anguil.com INDUSTRY: Manufacturing and environmental solutions EMPLOYEES: 80

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• As early as Anguil can remember, he has worked for his family’s environmental and energy solutions technology manufacturing company, which was founded by his father, Gene Anguil, in 1978; but he never expected to one day become a second-generation leader. “I worked from a lawn boy to painter to installation crew, but had no real plans to come into the business after college.

Unfortunately, our brother passed away from cancer in 1993 so at the time, it seemed like a good time to come back. My sister (Deb Anguil, chief operating officer) and I both entered the company around that time.”

• Family first, business second. “We always remember that family comes first. My sister and I co-run the company and my father has backed out of the day-to-day operations. It has its challenges, but we try to put our business hats on every day and make decisions. We’re not competing and we feel our personalities and skillsets complement one another’s and we think we are doing a good thing by cleaning air and water for future generations.”

Kevin Lacz is a decorated former US Navy SEAL

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• He is passionate about keeping the Earth clean for future generations.

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WWW. MMAC.ORG/EVENTS.HTML 6 / BizTimes Milwaukee FEBRUARY 5, 2018

• For him, forming a supportive network of employees, management and other business leaders is crucial to operating a company. “You need to realize that you don’t know everything and you can’t do everything on your own.”

“As an outdoorsman myself, I want clean lakes, forests and mountains and to not have to look at the smog that is prevalent in a lot of places in the country. I have five children so, to me, it’s about leaving the Earth a better place than when you found it.”

• He takes his coffee with a little bit of cream and sugar. n

LILA ARYAN PHOTOGRAPHY

C O M P L A C E N C Y

• This year, the company turned 40 and has started involving the family’s third generation. “A lot of companies don’t make it to the second generation and now we have a nephew in the company. There are 12 other grandkids that are younger but there is the potential. As my father said, there could always be a spot (at the company) if they are interested, but I don’t necessarily steer them toward it. I want them to find their own way.”

“ QUOTE

unQUOTE

BECKY FRANKIEWICZ

”

P R E S I D E N T, M A N P O W E R G R O U P N O R T H A M E R I C A Becky Frankiewicz, president of ManpowerGroup North America, recently spoke at the annual Northern Trust Economic Trends breakfast, presented by BizTimes Media, about her outlook for the staffing industry in 2018. n

“We have choices. We can say, ‘My workforce of today isn’t right, isn’t ready, isn’t of the right skill. I’m going to go get a new workforce.’ That’s going to be very difficult. Find adjacencies to the skills that you need in the future and train people that can stretch to reach those adjacencies.”

“Hire for learnability. Sixty-five percent of the jobs that my three daughters will face don’t exist today. The future isn’t about what you know, it isn’t about what you’ve done, it isn’t about your title, it’s about ‘What can you learn?’

Can you learn and adapt and reposition yourself for the future?”

“We are embarking on what we call the skills revolution, this dramatic change or gap between the haves and the have nots of skills – the people who can be successful in the future and the people who are struggling to have the skills to be successful. Our challenge, I believe, in Wisconsin is to future-proof ourselves, to get ahead of the skill change, to make sure that we have the talent ready for this next generation of digital transformation.”

“We can’t just say it’s about re-skilling the workforce. It’s about re-skilling ourselves and making sure we’re all ready to lead in this new digital renaissance.”

“For companies, it’s time now to change from consumers of workforce or labor, to creators of talent.”

MEET

BETTER. EVENTS THAT WORK

©2018 FOREST COUNTY POTAWATOMI COMMUNITY, WISCONSIN

Leading Edge

TAKING CHARGE OF CHANGE Manufacturing Matters! 2018 will take place at the Hyatt Regency in Milwaukee on March 1st, 2018 with preconference programming presented on February 28th.

Keynote Speaker: Matt Fitzgerald Vice President - Product, Rethink Robotics

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BIZ POLL

WMEP, Client Services Specialist schwarzbauer@wmep.org 920.915.2582

A recent survey of BizTimes.com readers.

Are you investing in Bitcoin or any other cryptocurrency?

Yes:

8% No:

92%

Share your opinion! Visit biztimes.com/bizpoll to cast your vote in the next Biz Poll.

8 / BizTimes Milwaukee FEBRUARY 5, 2018

SOUTHEASTERN WISCONSIN is full of family businesses with long legacies, and each navigates the transition from one generation to the next with its own twist. There are also a handful of area companies that are now public, but the families behind them continue to control many, if not a majority, of shares. In some cases, family members hold shares that give them control over naming directors or increased voting power.

Here’s the percentage of shares family members or trusts hold in area companies, based on each company’s most recent proxy filing with the SEC: • Twin Disc • John H. Batten: 23.6% • Johnson Outdoors Inc. (Class B shareholders select seven board members and receive 10 votes per share when both classes vote on proposals.)

• Johnson Bank: 33.1% Class A, 3.5% Class B • Helen Johnson-Leipold: 17% Class A, 96.4% Class B • H. Fisk Johnson: 9.5% Class A • Koss Corp.

• John C. Koss: 26.99% • Michael J. Koss: 34.19% • John C. Koss, Jr.: 21.53% • Michael J. Koss, Jr.: <1% • Koss Family Trust: 26.88% • A.O. Smith Corp. (Common stock shareholders select four board members, while Class A shareholders select six. Shareholders of common stock receive one-tenth of a vote per share on items considered by both classes.)

• Smith Family Voting Trust: 95.91% Class A, 1.4% common • Bruce Smith: 1.73% Class A, < 1% common • Mark Smith : < 1% Class A, < 1% common • Weyco Group Inc. • Thomas W. Florsheim: 1.91% • Thomas W. Florsheim Jr.: 26.07% • John W. Florsheim: 8.55% • Marcus Corp. (Class B shareholders receive 10 votes per share, while holders of common shares receive one per share.)

• Stephen H. Marcus: < 1% common, 55% Class B • Diane Marcus Gershowitz: < 1% common, 35.9% Class B • Gregory S. Marcus: 2.4% common, 2.6% Class B • Quad/Graphics (Class A shareholders receive one vote per share, while class B shareholders receive 10 votes per share.)

• Joel Quadracci: 3.92% Class A, 3.41% Class B • Kathryn Quadracci Flores: <1% Class A, 1.85% Class B • Christopher Harned (husband of Elizabeth Quadracci Harned): <1% Class A, 1.71% Class B • Quad/Graphics Voting Trust: <1% Class A, 90.53% Class B

inf cus

ARTHUR THOMAS

Mid-season refill ROUGHLY 26,000 TONS OF SALT is unloaded from the Algowood bulk carrier at Port Milwaukee in mid-January. Laker ships continue to bring salt mined in Ontario into the port through February.

From there, upwards of 300 trucks per day deliver it to local and state government facilities throughout southeastern Wisconsin and northern Illinois.

Trucking volumes can increase as public works crews replenish after a round of inclement weather.

Approximately 950,000 tons of salt moved through Port Milwaukee last year, about half of the portâ&#x20AC;&#x2122;s total volume. The salt is sold by Compass Minerals International Inc. and handled by Kinder Morgan Inc. Both companies are port tenants. While the port serves a wide region, the western portion of Wisconsin is served by salt brought up the Mississippi River and the northeast portion of the state gets its salt from the Port of Green Bay. n -Arthur Thomas biztimes.com / 9

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@BIZTIMESMEDIA – Real-time news

SUR NATURAL HEALTH BRANDS LOCATION: Shorewood FOUNDERS: Qasim and Asim Khan FOUNDED: March 2017 PRODUCT: ZYN health drinks WEBSITE: drinkzyn.com EMPLOYEES: Six

EXPERIENCE: Qasim founded revenue cycle management firm Global Focus Partners and previously worked in investment banking at Robert W. Baird & Co. Inc.; Asim also works at GFP, and previously was managing director at private equity firm Mason Wells.

Brothers launch health drink startup

By Molly Dill, staff writer

10 / BizTimes Milwaukee FEBRUARY 5, 2018

LILA ARYAN PHOTOGRAPHY

GOAL: Develop a portfolio of all-natural products, including food, health and beauty items.

Asim and Qasim Khan recently launched SUR Natural Health Brands.

A SHOREWOOD-BASED startup established in March, SUR Natural Health Brands LLC, has released a new line of health drinks called ZYN. The beverages contain curcumin and piperine, which founders Qasim and Asim Khan say have anti-inflammatory and antioxidant properties. Curcumin is found in turmeric and piperine helps the body absorb the ingredient, the company says.

“One of the knocks here as curcumin has trended is the absorbability,” Qasim said. “We put black pepper extract (piperine) into our drink to increase the bioavailability of curcumin into our body.”

The brothers started to develop ZYN after a trip back to visit their native Pakistan in November 2016.

“We were in Pakistan with our parents. We were originally from there and visiting family.

Our father has been a diabetic for close to 40 years now and on one of the days, he was having severe diabetic nerve pain,” Qasim said.

Their aunt made a paste from turmeric and olive oil and spread it on his foot. Soon, the pain had subsided and he was able to resume normal activities.

“The ‘aha’ moment for us was, we had been

consuming all-natural ingredients for our daily diets as well as healing,” Qasim said. “Why don’t we bring ancient, time-tested wisdom from around the world to the modern consumer?”

ZYN drinks come in four flavors: lemon ginger, mango lychee, mixed berry and pomegranate cranberry. Made with all-natural ingredients, each drink has 20 calories, 4 grams of sugar and 200 milligrams of curcumin.

The beverages are sold in 16-ounce bottles on the company’s website and at grocers Good Harvest Market, Outpost Natural Foods, Sendik’s Fine Foods and Sugar Beet. The company also has plans to sell the drinks in corporate cafeterias and elsewhere in the Midwest.

“Turmeric has been thrown around as a cureall recently for a lot of things, but the benefit and all the research is around curcumin,” Qasim said.

“We also wanted to make a healthy drink that was enjoyable by the majority of the palates.”

SUR has its products made by a contract manufacturer in California, but hopes to bring production to Milwaukee someday, Asim said.

An investment banker and private equity investor by training, the Khan brothers always wanted to work together, they said. The pair has been self-funding the business. n

1

Lunch

Biz

LAKE PARK BISTRO

A D D R E S S: 3133 E. Newberry Blvd., Milwaukee CUISINE: Traditional French fare C H E F: John Raymond M O O D: Classic and elegant PRICING: Lunch entrees, $14-31; Dinner entrees, $16-55; Brunch entrees, $14-25

Nestled in a park pavilion on a bluff, the restaurant’s location on Milwaukee’s East Side lends itself to stunning views of Lake Michigan. That, paired with the classic French fare from chef de cuisine John Raymond and his team, has won Lake Park Bistro a loyal customer base.

“The beauty of the restaurant is the view overlooking the bluff and the lake,” Ibar said. “That’s the No. 1 thing. And then you have the French classics. Very popular are bistro steak, oeuf mollet, (baked French) onion soup.”

With white tablecloths lining its tables, the restaurant offers high-quality “traditional service” and a relaxed environment, Ibar said.

In addition to being a lunch spot destination, Lake Park Bistro often draws diners for various special occasions, Ibar said.

“Birthdays, anniversaries, any occasion – it’s where you celebrate,” he said.

The dining area seats about 200. Parking is free and there is no dress code. 

ALEX SCHNEIDER

Didier Ibar, general manager of Lake Park Bistro, says he has the best view in town.

1 2 3

2 3 The Oeuf Mollet Avec Champignons – sauteed mushrooms with a fried, soft boiled egg, frisée lettuce and black truffle vinaigrette – is a popular item on Lake Park Bistro’s lunch menu.

The bar is a popular spot at Lake Park Bistro. Those looking for a quicker dining experience at the bar can be in and out within an hour, Ibar said. The restaurant also boasts Milwaukee’s only all-French wine list. Prices for a glass of wine start as low as $5.

The Steak Frites du Bistro is a grilled hanger steak with “bistro” fries and the choice of parsley butter, Roquefort butter, red wine shallot butter sauce or Béarnaise. biztimes.com / 11

BizNews FEATURE STORY BizTimes Leadership Academy executive director Joseph Weitzer with BizTimes publisher Dan Meyer.

BizTimes to launch Leadership Academy Names Joseph Weitzer executive director

By Andrew Weiland, staff writer

Bold Leaders. Bright Ideas.

Apply Today.

Accepting nominations for the 14th annual

Ideal Bravo! Entrepreneur nominees are individuals who demonstrate the best traits of entrepreneurship, including willingness to take risk, drive, perseverance, and more! Ideal I.Q. (innovation quotient) nominees are companies who develop innovative products or services, or those with notably unique and innovative processes, operational structures and/or market strategies.

To submit your nomination visit www.biztimes.com/bravo Past Bravo! Lifetime Achievement award winners have included: Carol Schneider, George and Julie Mosher, Gary Grunau, Michael Cudahy, Sheldon Lubar, Fritz and Debra Usinger, Stephen Marcus, George Dalton, Robert Kern and Harry Quadracci Past IQ award winners have included: Braise Restaurant Supported Agriculture, Classmunity, Color Ink Inc., Dynamic Solutions, Worldwide LLC, HaloVino, Lynch & Associates â&#x20AC;&#x201C; Engineering Consultants LLC, OnKĂ&#x2013;l, Stormwater Solutions Engineering LLC and True Process Inc. Presented By:

12 / BizTimes Milwaukee FEBRUARY 5, 2018

Sponsored By:

IN SUPPORT of the increasing demand for high-quality leadership development that manifests performance, BizTimes Media announces the launch of its Leadership Academy, which will be led

by Joseph Weitzer, who has joined BizTimes as the executive director of the academy.

Influenced in structure by highly successful model programs, the BizTimes Leadership Academy is designed to take leaders to the next level of performance.

Perhaps the greatest challenge to long-term business success is the increasing demand for talent.

With Wisconsin’s unemployment rate at 3 percent, the increasing number of baby boomer retirees, and the associated loss of technical skills and institutional knowledge, employers will face strong headwinds as they seek to meet business growth expectations.

While there will be a constant

need to attract talent into the pipeline, many organizations are recognizing the value of investing in their current workforce, and in particular, are seeking ways to accelerate the learning curve

“Leadership development is one of the greatest challenges companies face,” said BizTimes Milwaukee publisher Dan Meyer.

“Our goal is to provide a premier, high-quality and transformative ex-

“Our goal is to provide a premier, high-quality and transformative experience to current and highperforming future leaders.” and enhance the performance of leaders. These organizations recognize the importance of leaders in sustaining business growth, attracting and retaining talent, and leading and supporting initiatives that transform status quo to high performance.

perience to current and high-performing future leaders.”

The leadership academy is the brainchild of Meyer, who assessed the impact of similar programs in Chicago and Baton Rouge over the past two years. To ensure continuity in delivering a high-quality,

responsive and thought-provoking experience, Weitzer was brought aboard to lead the Leadership Academy. Weitzer is the managing partner and senior strategist of Germantown-based Soulful Leadership Consulting Network.

Previously, he spent nine years as dean of the Center for Business Performance Solutions at Waukesha County Technical College.

Over the past 10 years, he has personally worked with more than 40 businesses and organizations.

Weitzer provides assistance in technical support and leadership, focusing on strategic discussions and organizational planning; succession planning; executive/ leadership development and coaching; process improvement; and employee engagement and performance.

“Weitzer brings a wealth of relevant knowledge, leadership experience, and a track record

Insuring Businesses For Generations.

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BizNews

of facilitating highly effective leadership development,” Meyer said. “His disciplined approach is informed by his work on motivation and human performance, and his career path has afforded him opportunities to develop and apply knowledge in progressive leadership roles held in manufacturing, health care, government, food service, education and business service sectors. His leadership programs have resulted in successful outcomes for hundreds of regional leaders over the past 20 years.”

“Being named as the executive director to lead such an important initiative for the Milwaukee business community is humbling,” Weitzer said. “And the opportunity to be a part of a team with a focused vision and passion for supporting the business community of the region is very exciting.”

The Leadership Academy was developed specifically for business

owners, senior level leaders, next level rising stars and entrepreneurs to enhance leadership skills and provide methods and tools that can be used to improve performance and accountability within the organization.

The Leadership Academy will meet five times over two months – including two full days, three half days and individualized coaching totaling more than 30 hours of leadership support – and offers several unique features that, together, achieve results. An initial self-discovery assessment is used to provide context for an initial executive coaching session that debriefs results and seeks to ensure alignment between personal goals and program objectives.

Sessions will cover relevant topics in meaningful ways, and may include: differentiating and engaging a multigenerational workforce; emotional intelligence

and the leader’s differentiator; improving employee engagement and building high-performing teams; the role of leadership in company culture; and the leader’s role in recruitment and employee retention.

“While there will be guest speakers and brief periods of lecture, a hands-on, interactive approach to learning will typically dominate the learning structure.

Throughout the program, participants will have opportunities to demonstrate learning, present, work in teams, and will have homework between sessions,” Weitzer said.

“Part of BizTimes’ mission is to help the region’s business community become more knowledgeable, successful, and support their growth,” Meyer said. “The Leadership Academy is one way to achieve that goal by providing a learning experience like no other,

designed specifically to address the growing needs of our leaders to lead and bring out the very best in their teams. This helps our community, our region and our state.”

The Leadership Academy is specifically designed to support C-level executive leaders and owners, who may apply directly or nominate a member of their leadership team. The cost of $4,900 ($4,200 if nomination/application is received by March 1) includes all assessments, including the Leadership Perspective Assessment, StrengthsFinder assessment and book, all materials, meals, receptions, personalized coaching and parking. Cohort sizes will not exceed 32 participants.

More information about the inaugural BizTimes Leadership Academy (which will begin in May) and application forms can be found at biztimesleadershipacademy.com. n

Presents:

Thank You!

To our sponsors, attendees and presenters of the 2018 Northern Trust Economic Trends breakfast

17 th Annual

2018

Title Sponsor: 14 / BizTimes Milwaukee FEBRUARY 5, 2018

Featured Presenters Included: • Michael Knetter Ph.D., Economist, President & CEO, University of Wisconsin Foundation • Becky Frankiewicz, President, ManpowerGroup North America • Brian Kobylinski, CEO, Jason Industries, Inc. • Nick Turkal, President & CEO, Aurora Health Care

Sponsor:

Supporting Sponsor:

MY TA K E

Walker’s plan to stabilize Obamacare’s Wisconsin marketplace

Gov. Scott Walker recently announced a new plan to hold down rising premiums in the state’s Affordable Care Act marketplace. He also called for support of preexisting condition legislation and requested a permanent waiver to support the state’s prescription drug program for seniors. Democrats, like state Rep. Dana Wachs, a candidate for governor, called it an election-year stunt. n

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NEED FOR ACTION “There are hardworking people across our state who are experiencing massive health care premium increases under Obamacare, and that’s unacceptable.”

“I’ve got news for you, Gov. Walker. We remember. Wisconsin remembers. We aren’t going to let you off the hook just because you changed your tune seven years into your administration.”

TIMING OF THE PROPOSAL “Since Washington has failed to act on fixing major issues with our health care system, we need to do what we can at the state level to stabilize our own health care market and make health care more attainable for people across our state.”

“Stabilizing the marketplace is important. Protecting people with pre-existing conditions was important, but Walker had the opportunity to do this time and time again and didn’t.”

A Shakespearean Political Thriller

ELEMENTS OF THE PL AN “I’m calling on the Senate to pass the Assembly’s preexisting condition reform to help protect those with preexisting conditions in the health insurance market and for a permanent extension in the SeniorCare prescription drug program, which provides vital assistance for many of Wisconsin’s seniors.

“Walker’s plans to stabilize the Obamacare marketplace in Wisconsin with cash payments to insurance companies and a move to protect people with pre-existing conditions are nothing more than political stunts. He doesn’t support Obamacare, expanding health care access or folks with pre-existing conditions. As a career politician, he cares about how he’s polling.”

February 1 - 25, 2018

Shakespeare and company are brought to life in this play of high stakes and political intrigue, delivering a highly-charged theatrical event.

255 S Water St | Milwaukee, WI 53204 | 414.278.0765 | nextact.org biztimes.com / 15

Real Estate

@BIZTIMESMEDIA – Real-time news

The Contour, an 80-unit apartment building at 2214 N. Prospect Ave., will be one of the newest residential buildings on the East Side.

Milwaukee’s East Side is growing up

When Milwaukee Film announced in June it had entered into a 31-year lease to operate the Oriental Theatre on Milwaukee’s East Side, some hoped the news would save the so-called dying neighborhood.

But for the business owners,

developers and homeowners inhabiting the East Side, the ongoing rumors that the neighborhood has somehow died or is even on life support have been perplexing.

Over the past five years, the East Side has been transforming.

The neighborhood has lost some of its mainstay bars, including Judge’s Irish Pub, Hotel Foster and G-Daddy’s BBC. But new dining and entertainment options have opened, including Good City Brewing, Yoga Six Milwaukee, The Waxwing, FreshFin Poké and Izzy Hops Swig & Nosh.

Most recently, the city’s first cat café, Sip & Purr, 2021 E. Ivanhoe Place and AXE MKE, 1924 E. Kenilworth Place, one of two ax-throwing bars opening this year in Milwaukee, were announced in the neighborhood.

When AXE MKE opens, residents and visitors will have a mini golf bar (Nine Below), a bowling alley (Landmark Lanes) and an ax-throwing bar within a oneblock radius.

“The perception has been the area caters to college students, but the student population is really the northwest quadrant of the

JON ELLIOTT OF MKE DRONES LLC

BIRD’S EYE VIEW: S.C. JOHNSON & SON INC.

16 / BizTimes Milwaukee FEBRUARY 5, 2018

S.C. JOHNSON & SON INC.’S GLOBAL HEADQUARTERS in Racine includes the Frank Lloyd Wright-designed Administration Building and Research Tower, which opened in 1939 and 1950, respectively.

Over the past 79 years, the complex has attracted tourists, architects and Wright enthusiasts from around the world, according to the company.

The S.C. Johnson Administration Building includes 43 miles of Pyrex glass tubing. The building’s features include the “Great Workroom,” more than half an acre of open workspace, and the circular “bird cage” elevators that run from the basement to the penthouse level and offer a panoramic view of the interior.

S.C. Johnson completed a renovation of the Frank Lloyd Wright buildings in 2015.

The company also announced in 2015 it would begin a $50 million to $80 million renovation to modernize its global headquarters campus in spring 2016. The project was expected to take approximately two years to complete.

S.C. Johnson spokespeople would not comment on the status of the renovation project.

East Side,” said Tim Gokhman, director at New Land Enterprises LLP, which owns several buildings on the East Side. “There are many single-family homes with relatively high values and many multi-family homes and families. For a long time, North Avenue just catered to the college crowd. It was silly to have seven bars on the same street with the same business model.”

An announcement is expected this month about the former Rosati’s Pizza Sports Pub space, 2238 N. Farwell Ave., which has been vacant since March.

“Other than Milwaukee Film, it will be the most exciting announcement of them all,” said Gokhman, who owns the Rosati’s building.

Gokhman would not elaborate on the plans for the space.

Kristin Godfrey, executive director of the East Side Business Improvement District, said the East Side is changing and making a comeback.

“The East Side doesn’t have to work on being cool. We are cool,” Godfrey said. “We’ve been cool for 90 years. We have our ups and downs and like anything, there is turnover. People might get the perception that it is not what it used to be, but it is evolving.”

Godfrey said there has been a concerted effort on the part of business owners and property owners to turn the East Side in a different direction and even turn down leases if tenants are not the right fit.

Gokhman told a national cell phone retailer he was not interested in leasing space to it because it did not fit in with the East Side neighborhood.

“I’m from Chicago and I compare the East Side to Bucktown,” Godfrey said. “It’s the place in the city where people want to hang out. Downtown has the businesses people need. We have so much space for everything people love.”

In recent years, developers including Gokhman and Robert Joseph, of Joseph Property Development LLC, have begun building larger luxury apartment buildings closer to North Avenue, drawing a different demographic to the

neighborhood.

Joseph redeveloped the former Prospect Mall in 2014 into the Overlook on Prospect, 2217 N. Prospect Ave., which includes 52 apartments. Across the street, he is developing The Contour, an 80-unit apartment building, replacing a parking lot and Qdoba Mexican Eats restaurant. Rinka Chung Architecture Inc. designed the building.

In 2015, Joseph developed the Edge on North at 2310 N. Oakland Ave., at the former Pizza Man restaurant site.

Joseph lived on the East Side from 1992 to 2012 and said he still considers it home.

“It has all the character and history of what makes a near-downtown neighborhood exciting,” Joseph said. “It makes it very easy to make a commitment through my development to the neighborhood.”

New Land Enterprises is building a 153-unit, 13-story residential tower at 1832 and 1840 N. Farwell Ave. The project will be complete in September.

Milwaukee chef and restaurateur Justin Carlisle is planning to open a casual dining restaurant on the first floor of the tower.

“I think some national retailers have had tunnel vision, but we understand the housing and know that this neighborhood is up-andcoming,” Gokhman said. “Whole Foods understood. Urban Outfitters understood. We just needed to have some old uses turn over to make way for the new ones.” n

UGLY BUILDING: TOSA CAR DEALERSHIPS

With retail, a hotel and apartments being developed on 69 acres formerly covered with abandoned warehouse space, the Mayfair Collection at Highway 45 and West Burleigh Street in Wauwatosa has become a success story for the city.

The Mayfair Collection developer, Chicago-based HSA Commercial Real Estate Inc., is also doing a smaller retail project across the street, at the former Schwaab Inc. stamp factory building at 11415 W. Burleigh St. But Wauwatosa has been unable to shed the abandoned car dealerships at 11221-11333 W. Burleigh St. The 5.7-acre property, adjacent to the Schwaab building, was purchased in 2011 by Ohio-based electronics retailer Micro Center Sales Corp.

On Dec. 6, 2016, the city issued an order to Micro Center to raze and remove the buildings within 30 days, said Karl Schreiber, Wauwatosa’s building and safety manager.

As of press time, Schreiber said Micro Center was working to gain compliance with the city.

CORRINNE HESS Reporter

P / 414-336-7116 E / corri.hess@biztimes.com T / @CorriHess

biztimes.com / 17

STORY COVER

The next generation sketches a path for growth at R.A. Smith

BY ARTHUR THOMAS, staff writer When Richard “Ricky” Smith Jr. graduated from Northwestern University, he had his mind set on going into investment banking, not on joining his dad’s civil engineering firm, R.A. Smith Inc. The problem was Ricky graduated in 2001, and the tech bubble-induced economic downturn made finding a job in his chosen field difficult. Rick Smith, the founder of Brookfield-based R.A. Smith, had worried investment banking might prove to be a volatile field and encouraged Ricky to major in engineering in addition to economics.

Ricky followed his father’s advice, but even as the job search stretched on for months, he was reluctant to join the firm. Hoping to lure Ricky in to the company, Rick made his son a job offer – only to have him turn it down.

It wasn’t until 15 years later, after Ricky had become president and a minority owner of R.A. Smith, that Rick found out why his son rejected the offer.

R.A. Smith’s business serves a variety of different markets, broadly divided by whether they serve public- or private-sector clients. The job offer was to work in municipal services on the public-sector side of the business, but Ricky wanted to return to the land development work he did during the summers while he was in school.

A few weeks after Ricky turned down the offer, Rick was walking through the offices when he saw his son being interviewed in a conference room.

“I went over to HR and I said, ‘What the heck is he doing here?’” Rick recounted.

It turned out the land development side of the business was looking for help and gave Ricky a call.

He took them up on the offer, but never told his father why he turned down the first offer.

“I never knew until today that he didn’t want to work in municipal services,” Rick said, adding Ricky could have told him he’d join the company but wanted to work in another division. “He never did.

18 / BizTimes Milwaukee FEBRUARY 5, 2018

RICHARD A. SMITH

PHOTO: ZAK GRUBER - SATURN LOUNGE

RICHARD (RICKY) A. SMITH JR.

biztimes.com / 19

STORY COVER Instead, he just turned me down and I’m thinking, ‘Why would he do that?’”

Even after Ricky joined the company, he still had his eye on investment banking. His plan was to spend two years at R.A. Smith and then return to graduate school to pursue an MBA. But when he started working on a large mall development in Pittsburgh, he took a liking to the magnitude of the work and the ability to interact with clients.

“I really started to enjoy what I was doing,” Ricky said. “I enjoyed the people I worked with. I enjoyed the environment here.”

Rick assumed his son would still follow through with his graduate school plans, but every time he brought it up, Ricky said he was too tied up in his work to leave.

“I’m thinking, ‘Well, he’s stubborn enough that he’s going to go back,’” Rick said. “He just became so engulfed in work that it became his passion, which is what you want when you see somebody working in a firm. You want to see them that passionate.”

Fifteen years later, Ricky’s passion for R.A. Smith’s work is evident as he talks about the future. He took over as company president on Jan. 1.

The company is projecting $26 million in revenue this year, an 11 percent increase over 2017. It has grown to have eight offices in four states and 200 employees, with plans to add 20 to 40 more this year. Ricky has visions of the company growing even larger, and talks about the number of employees growing into the thousands.

“There’s nothing stopping us from continuing to expand both nationally and hopefully, eventually, internationally,” he said.

International offices and thousands of employees is a long way from the 10-person company Rick took over in 1978. He was working at an engineering firm, Robinson & Associates. When the owner decided to dissolve the company, Rick and a co-worker, Richard Kohler, planned to buy it and go into business together.

Rick was 28 at the time and still paying off school debts. Kohler was in his 50s and had previously run his own consulting firm. The plan was for Rick to focus on the technical aspects while Kohler handled the business side. When Kohler backed out, Rick figured he would drop out, too, but Kohler convinced Rick to go through with the deal and soon after, R.A. Smith was created.

“At the time, I really had no concept of what I was getting into. I was very naïve,” Rick said.

He wanted to build the company around finding new ways of solving problems and on the tenets of quality, stability and innovation. The idea was that everyone would value quality and as a smaller firm, R.A. Smith could push the envelope while seeking to reduce employee turnover.

“My goal was not to earn money, it was to do engineering,” Rick said. “I felt that if you maintained those three principles in life, the financial end of it is going to take care of itself.”

20 / BizTimes Milwaukee FEBRUARY 5, 2018

He credited his education at Marquette University for helping him develop his principles and said that’s why he remains committed to the university today. He may be best known as the “Jump Around Guy” at MU men’s basketball games, but he and the company are also involved in academics on campus and a Marquette Warriors flag flies outside the R.A. Smith headquarters.

Chad Fedler, executive vice president of Sun Prairie-based retail developer Prairie Development Ltd., said R.A. Smith’s quality work is one reason he’s continued to work with the firm on the Prairie Lakes development in Sun Prairie since 2005.

“That’s saying something. If they were not good at what they do and not good people, I would not still be doing business with them,” Fedler said.

“They do damn good work.”

Jeff Chase, Brookfield city engineer, said he has worked with many of the same people from R.A. Smith over the years and the firm often comes up in the city’s qualifications-based selection.

“You don’t exist in the municipal engineering world if you’re not doing

—————————— EY, E ARN MON WA S NOT TO L ERING.” A E O IN G G Y “M DO E N IT WA S TO — Rick Smith —————————— quality work,” Chase said.

“If you screwed something up for the City of Brookfield, you probably wouldn’t have a second chance.”

R.A. Smith’s initial work focused on the public sector, including wastewater treatment plants that took advantage of federal funding to upgrade to secondary treatment levels. Rick’s wife Joan served as the bookkeeper and the family put off vacations for years as Rick poured himself into the business.

He marketed the company to municipalities based on his three principles, but also realized he needed to develop the right talent within the organization.

“Our product, our resource, is intellectual property and in the professional service industry, intellectual property is provided by people,” Rick said.

He sought to hire people who were not only qualified, but also shared his passion for pushing the envelope and finding creative solutions.

“Engineers love that. Give them a problem and they’ll work 24 hours a day to resolve it; you just can’t let it go,” he said.

Kim Egan, West Milwaukee village administrator, said the village has had a long relationship with R.A. Smith and the company’s creativity has been on display as the municipality works to develop smaller parcels that, in some cases, have environmental challenges.

“They’ve always figured out a way to get these developments on the parcel,” she said.

Fedler said that creativity comes from having people with experience.

While he couldn’t pay top dollar, Rick pitched the company as a place where employees could have a stable career and grow with the firm. He set a target of adding one or two people per year, but also grew with five acquisitions over the years. Recruiting became easier as the company developed a reputation and the firm added services as they became more vital to the business.

“I never wanted to reduce staff and that was a big factor for engineers,” Rick said. “They had been used to corporate America, where firms would hire up and then reduce and then hire up and then reduce depending on the economy.”

“I was able to maintain that philosophy until the Great Recession of 2009 and that was probably my lowest point in my life, where I then had to do the same with the business here,” he said.

The company had grown to have more than 200 employees and Rick had to cut the staff by more than 30 percent. But that low point did have a silver lining, as it reinforced to Rick the importance of the firm staying independent.

“I was willing to do more in the recession than I think most businesses would have been willing to do to hang on, regardless of what it cost the firm,” he said. “If we hadn’t been in this situation where we were in control of our own destiny, what could have happened?”

As R.A. Smith has grown, the idea of the company losing its independence became more of a possibility. Rick said over the past decade, he’s been approached one or two times each year by people interested in acquiring the firm or merging.

Those meetings and the lessons from the Great Recession prompted Rick, when R.A. Smith started its last strategic planning process about three years ago, to announce he would keep the company independent. One result of the process, which involved around 20 of the company’s top executives, was that Rick announced he would step aside as president within the next one to three years and Ricky would likely be his successor.

By the time the decision was made, Ricky had become head of R.A. Smith’s land development services division and it had grown from the smallest division in the company to the largest. The division’s projects have included the Green Bay Packers’ Titletown District and the $800 million redevelopment of the Westfield Century City mall in California.

Ricky’s two-year plan to return to graduate school after joining the company turned into a desire to become a project manager, instead. He went to California to take the professional engineer exam because he could do it sooner there than he could in Wisconsin. After passing, he continued to become more and more involved in projects before being named a project manager in 2007.

At the time, Ricky was the youngest project manager in the company and was working on Fedler’s Prairie Lakes development.

Rick wasn’t sure how Ricky would react when

Richard A. Smith Jr. (Ricky) AGE: 38 SCHOOL:

Northwestern University MAJOR:

Bachelor’s degree in civil engineering and economics INTERESTING FACT:

Ricky loves to travel and has visited 23 countries, including Iceland, Democratic People’s Republic of Korea (North Korea), Iran, Myanmar, Oman and Sri Lanka.

Richard A. Smith AGE: 67 SCHOOL:

Marquette University MAJOR:

Bachelor’s and master’s degrees in civil engineering INTERESTING FACT:

Rick personally writes a card for each employee when he or she has a life event (getting married, having a child, death in the immediate family). They are heartfelt, personalized messages, not just a signature.

PHOTOS: ZAK GRUBER - SATURN LOUNGE

he first approached him about becoming president, but he was excited about the idea.

“I was always interested in management and I think I always knew that at the end of the day, I wanted to run the business,” Ricky said.

The strategic planning process had set the course, but the Smiths still had to execute on the transition. Rick and Ricky both went through counseling and hired an industrial psychologist and other consultants to talk with them about the transition. Starting early in 2017, the two began meeting regularly to discuss the move and introduce Ricky to other elements of the business management, like insurance, benefits and banking.

The change was publicly announced in August and become official at the start of the year, but Rick said internal communication kept staff apprised throughout the process.

“I’ve stepped over my boundaries a couple of times,” said Rick, who is staying on as chief executive officer. “He’s let me know it, but it’s working out well.”

There were a couple of signs over the past few years that Rick said made him feel like he made the right decision. It started with management embracing it, but the real test came when it was announced to the entire company.

“Nobody left. We didn’t lose anybody,” Rick said. “I thought there was going to be fallout. I thought there was going to be some management and some other mid-level people who would say ‘We’re not sure about this.’”

Some senior members of the team have even sought to console Rick, acknowledging it might be difficult to let go of something he spent decades building, but also encouraging him not to interfere.

“Not only are they happy with the decision, but they’re encouraging me to spend less time in the office,” Rick said with a laugh. “I don’t know how to take that.”

The process actually brought the two generations closer together, although Rick said he has never really separated his home and work life.

Joan continues to remain involved, signing checks and reviewing payable and expense accounts after division and department heads approve them. Rick often comes home to a dining room table filled with stacks of paper and questions from his wife about the business.

Ricky also comes over for dinner often, so even when Rick tries to change the subject away from the firm, he’s outnumbered.

“Part of it is I lost credibility,” Rick said, explaining that after putting long hours in during the early years, he promised to retire at 55, and then at 59, 62 and 65. Now at 67, he’s stepped aside as president, but Rick thinks his wife and son are skeptical he’ll actually retire.

Ricky agreed with his father; there are no boundaries between personal and business for the Smiths.

“It’s one and the same,” Ricky said. “It’s just part of being involved in a family business and it’s something I’ve learned to deal with and I’m happy to accept.”

biztimes.com / 21

STORY COVER

LEFT: Rick Smith RIGHT: Rick and R.A. Smith employee John Mills.

As the leadership transition grew closer, Rick could see his son was getting more energized by the idea instead of apprehensive or concerned.

Ricky was also becoming more vocal about his views on the business, reminding his father not to interfere with him, pledging to grow the company and suggesting to Rick that he might have grown more conservative as the years went on.

Ricky’s plans for growth are ambitious — more offices around the country, employee counts measured in the thousands — but he’s also well aware of how Rick built the business into what it is today.

“My father has built this amazing foundation,” Ricky said. “Founding a company based on innovation, stability, quality, the system is in place … there’s no need to change any of those principles.”

As Rick built the company, his principles and actions were at times a response to shortcomings he saw from larger firms. He felt they had a tendency to go with standard solutions instead of looking for a more cost-effective, creative approach. Their focus on process and profitability could get in the way of letting engineers do their best work and feel fulfilled in what they’re doing.

Now, as Ricky takes over with an eye toward growth, he’s faced with navigating the tension between what’s made R.A. Smith successful and the steps needed to take things to another level.

“The challenge is that it takes a different skillset and a different mentality to take a company from 200 people to let’s say 2,000 people or 20,000 people,” Ricky said.

The private sector side of the business can more easily grow anywhere around the country, so the strategy is to look for opportunities where clients want to go and where there is talent available, Ricky said.

Fedler said it is a “a great move” for the younger Smith to take over as president, noting that while Rick built a strong business with a focus on public 22 / BizTimes Milwaukee FEBRUARY 5, 2018

sector work, Ricky has an opportunity to develop even more on the private side.

“It’s nice having that perspective,” Fedler said.

“He can see it not only from the engineering side, but from the business side.”

On the public sector side, proximity is everything and the strategy is to radiate out from Brookfield, Ricky said.

That explains why R.A. Smith just opened an office in Mount Pleasant to help a handful of Racine and Kenosha county

—————————— E VE ING, I BELI R WA S SAY E TH TS N FA E Y LI M C OUR “ LIKE E C ARE OF K TA A ND E S W M IF LE THAT ’S PROB LE P O E P E S LV AT SUCCES A N D WE SO E EA SIER TH F LI IR E TH M AKE h — Ricky Smit W.” WILL FOLLO —————————— clients deal with Foxconn Technology Group-related growth. The company has also added staff to its Appleton office and hired a project engineer to start a municipal practice in Madison.

To maintain the principles and culture that have built the company, Ricky said it will remain important to hire the right people and then give them the independence to do good work. At the same time, the company will have to build “incredibly strong communication channels” to keep everyone informed and on the same page.

“There are a lot of large engineering firms out there in the marketplace who get a lot of work simply because they’re big,” Ricky said. “It’s sort of like being big breeds success, and a lot of their work

product is not great and a lot of their communication is not great, because they have become so corporate and process-oriented and so profit-oriented.

Like my father was saying, I believe that if we take care of our clients and we solve people’s problems and make their life easier that success will follow.”

As he begins a new chapter for himself and the company, Ricky falls back on his experiences as a world traveler who has been to two dozen countries, including Iceland, the Democratic People’s Republic of Korea (North Korea), Iran, Myanmar, Oman and Sri Lanka.

“I love to experience the world because for me, it takes away, one, the fear of the unknown and it gives me the courage to say, ‘Wow, I can do that,’” he said.

It’s a message he’s also sending to the rest of the company. Ricky said one young engineer in the firm has a dream of opening an office in Singapore and his message to her is that “anything is possible as long as you stay focused and you work towards it.”

Traveling has also taught Ricky to appreciate the differences between people and cultures, which is also serving him well in his new role.

“Just as you have differences between cultures, you have differences here. Transportation engineers are a totally different person than the land development engineers,” said Ricky, who has worked in land development. “We think the transportation engineers are very rigid and inflexible and the transportation engineers think that we’re all crazy, that we don’t abide by any kind of rules, but it’s learning to appreciate those differences and learning to understand the perspectives that we bring to the table.”

Ricky said he’s able to appreciate his father’s background and outlook, and why certain processes were put in place to grow the company from 10 to 200 people.

“At the same time as I’m able to appreciate that, I recognize that some of those things need to be changed in order to take the company from 200 to 2,000 or 4,000 or beyond,” he said. n

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Unwinding the individual and business impacts of the federal tax law

By Molly Dill, staff writer When the federal Tax Cuts and Jobs Act was passed into law on Dec. 22, it created some big changes for businesses and individuals. Tax professionals and business owners are still determining how some of the new rules will play out.

“We heard…that it was intended to simplify the tax code, and it did not simplify the tax code at all,” said Mark Kmiecik, shareholder at Davis & Kuelthau. “If it did anything, it left more questions than answers in terms of some of the implications it’s going to have, for example at the state level.”

KMIECIK Rates have gone down for individuals in the highest tax bracket, said Fred Sitzberger, founder and chief executive officer of Brookfield-based Sitzberger & Co. S.C. The seven tax brackets have been changed, with rates coming down overall until 2025, and employers SITZBERGER are to implement the new tax withholding tables this month.

“It’s not going to be a big change,” he said. “Probably $50, $75, $100 a paycheck.”

One of the biggest individual changes is a significant increase in the standard deduction, to 24 / BizTimes Milwaukee FEBRUARY 5, 2018

$12,000 for single taxpayers and $24,000 for married taxpayers filing jointly.

“Probably 85 percent of the population is going to take a standard deduction,” Kmiecik said.

“People who are paying mortgage interest and/ or investment interest, if they are no longer itemizing those deductions, if they are using the standard deduction, they no longer receive a tax benefit for those deductions,” said John Petrie, director of investment advisory and principal for wealth management firm Aspiriant in Milwaukee. “By not having that itemized tax deduction, falling back instead on the standard deduction, it makes PETRIE those loans more expensive.”

Investors who have loans should now be considering whether to put any excess cash toward their loans, or toward their investment strategy, he said.

“If they’re real conservative investors, to me it becomes a no-brainer that they should throw more money at their mortgage,” Petrie said. “Collectively, I think that most people will truly see a tax cut, so the fact that they won’t be itemizing deductions because they’ll be taking standard deductions, I don’t see that as a bad thing.”

The personal exemption has been tossed.

But the child credit has increased to $2,000,

Sitzberger said. Alimony is no longer a deduction.

And the alternative minimum tax is retained for high earners.

State and local income taxes deductions are limited to $10,000 for both single and married filers.

The home equity interest deduction has been eliminated, so the overall indebtedness on a home is limited to $750,000, Sitzberger said.

“Most of my clients have $200, $300, $350,000 loans so it doesn’t really affect a lot of people,” he said. “The rules were written so a vast amount of the working people would not be negatively affected.”

The itemized deduction of up to 50 percent of adjusted gross income on charitable contributions to public charities has increased to 60 percent.

Individuals may choose to reconsider their charitable giving, since it would be less advantageous to donate with a standard deduction, Petrie said. They could double up their giving in one year to meet the threshold for itemizing, and then take the standard deduction the following year.

“A lot of people say, ‘Oh, it’s really going to hurt the charitable contributions,’ but most of my clients, they would contribute the money whether it was deductible or not deductible,” Sitzberger said.

Business owners also have a few new rules to evaluate.

The biggest and most talked about change is the corporate tax rate reduction from 35 percent to 21 percent.

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“I think it would allow a business owner, instead of paying this additional tax, to be able to invest in plant and equipment, hire more employees,” Sitzberger said.

At the same time, a much lower one-time repatriation tax of 15.5 percent for liquid assets and 8 percent for illiquid assets is being imposed on overseas earnings, which aims to incentivize companies to bring their cash back to the U.S. “In the last two weeks or so, you’ve seen corporations raise wages, you’ve seen companies bring money back into the United States… so the initial indications of this are positive,” said Joseph Tierney, president and shareholder at Milwaukee-based TIERNEY Davis & Kuelthau S.C. With the decrease in the corporate tax rate, some companies that set up as a pass-through entity may consider electing to be taxed as a corporation, Tierney said.

“It’s the question that I’m receiving from clients more frequently based on this new act,” Kmiecik

said, particularly for business owners in a tax bracket that is taxed at a higher rate than the 21 percent corporate rate.

The qualified business income deduction provision was meant to address this topic, he said.

It provides tax-favored treatment of business income from pass-through entities, allowing a deduction of 20 percent of qualified business income if the taxable income is over a certain threshold.

For some pass-through companies, particularly manufacturers, the new deduction may be advantageous.

“Investors in pass-through entities, S corps, LLCs, etc., these pass-through entities, they may be entitled to a new 20 percent deduction on qualified business income that gets generated by these entities,” Petrie said. “Qualified business income, generally speaking, I think of it in terms of manufacturing income. Income that’s not from professional services.”

“The entire thing is to go ahead and recreate the manufacturing base and create jobs for America,” Sitzberger said.

Also of interest to businesses, the Section 179 expensing deduction has increased from

$500,000 to $1 million. The phase-out threshold for Section 179 deductions has increased from $2 million to $2.5 million, and the first year “bonus depreciation deduction” increased from 50 percent to 100 percent.

The corporate alternative minimum tax has been repealed. Deductions for business-related entertainment, such as sporting event tickets, also has been spiked, but businesses will be able to deduct 50 percent of qualified meals.

Deductions for business interest expenses have been limited to 30 percent for adjusted taxable income, except for small businesses with gross receipts of less than $15 million for the past three years.

As planners begin parsing them out, Kmiecik warned there’s no telling whether all of these adjustments will be upheld for the long term.

“The first thing that really struck me is how quickly Congress was able to push through this complex, enormous piece of legislation,” he said.

“Republicans were able to do this in seven weeks.

What happens if the Democrats in 2021 take office? We need to plan for today, but keep in mind what could happen down the road.” n

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Jerry David uses Prescient Financial Solutions as a marketing name for doing business as representatives of Northwestern Mutual.

Prescient Financial Solutions is not a registered investment adviser, broker-dealer, insurance agency or federal savings bank.

Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company, Milwaukee, WI (NM) (life and disability insurance, annuities, and life insurance with long-term care benefits) and its subsidiaries. Jerry David is a Representative of Northwestern Mutual Wealth Management Company® (NMWMC) , Milwaukee, WI (fiduciary and fee-based financial planning services), a subsidiary of NM and federal savings bank. All NMWMC products and services are offered only by properly credentialed Representatives who operate from agency offices of NMWMC. Representative is an Insurance Agent of NM and a Registered Representative of Northwestern Mutual Investment Services, LLC (NMIS) (securities), a subsidiary of NM, broker-dealer, registered investment adviser and member FINRA and SIPC. Prescient Financial Solutions does not provide tax advice.

414.203.6016 | www.pfs.nm.com 26 / BizTimes Milwaukee FEBRUARY 5, 2018

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WEALTH MANAGEMENT & ESTATE PLANNING

Millennial experiences affect investment strategies

By Molly Dill, staff writer Over the next 40 years, North American baby boomers are expected to pass an estimated $30 trillion in assets down to their children, many of whom are in the millennial generation, according to Accenture PLC. As that staggering level of intergenerational wealth transfer begins, financial advisors are observing how millennials are choosing to invest.

Alex Kramer, Milwaukee market leader and senior vice president at U.S. Bank Private Wealth Management, spent a good portion of 2017 studying wealth transfer, and said the wave has not yet started to crest.

“The demographics say that it’s going to happen, KRAMER but when I think about the transfer in our own client base, it’s still between traditionalists and boomers,” Kramer said.

He also found there’s a dichotomy between affluent and less wealthy millennials. Some are saddled with crushing college debt, and some have the means not to have any. That can change someone’s investment attitude.

“Their overall financial profiles are dramatically different,” Kramer said. “We saw that in the

research and we see that in our own clients.”

Wealthier millennials are more likely to own a house, have lower levels of student debt and invest in the stock market, he said.

Less affluent millennials, on the other hand, have seen two recessions in their formative years that in some cases meant their parents were in danger of losing their jobs or had difficulty paying bills. They have more debt and are more conservative in their investments.

“Importantly, it’s less about their age and it’s more about the circumstances that they grew up in,” Kramer said. “That’s a little bit of an un-American perspective. It’s almost like some of them don’t feel like they’ve got a chance. If you compare them to Gen Xers, for example, Gen Xers were kind of the first generation to delay house buying, so it’s a little hard to say whether it’s truly unique or if this is more a trend now.”

Kramer said U.S. Bank works to educate less affluent investors about the results of holding assets in cash over the long-term, and the merits of investing in stocks.

“We want people to be educated on the risk and rewards of long-term investing,” he said. “An all-cash portfolio is unlikely to keep up with inflation over time. Young investors definitely need to be aware of the trade they could be making if they

don’t participate in riskier assets.”

Steve Johnson, regional president for northern states at BMO Wealth Management, also closely studies the investing habits of different generations.

Since many millennials exit college with student loan debt, and many of them entered the workforce during the Great RecesJOHNSON sion, they tend to be more cautious, according to a BMO Wealth Management study from October. Many are weighted to exchange traded funds and mutual funds, rather than stocks, Johnson said.

“The job market was a little touchy in 2007 and 2008, wages were probably not where they are today just because companies were coming back, so there was a lot of pressure in the job market,” Johnson said. “Because of that, we feel they’ve been more conservative when it comes to investing.”

Millennials also tend to make decisions collaboratively via social media, rather than through introspection, which can impact their investment choices, he said.

Their saving habits also differ, he said, with many renting apartments longer and buying homes later. They save money not necessarily for retirement, but for a honeymoon, a car loan or a vacation, the survey showed.

“They’re really looking at things more in the immediate than in the future,” Johnson said.

“They’re going to live a little life first and then they’ll start thinking about the long-term plans of buying a house.”

Michael Rodenbaugh, founder of Delafield-based Boardwalk Financial Strategies Inc., said the millennials he’s advised tend to be aggressive.

RODENBAUGH “Depending on how you define the millennial generation, the oldest would have been in college during the bursting of the tech bubble and only in their late 20s when the Great Recession hit,” he said. “Having not yet amassed a fortune by that age, most probably didn’t directly suffer the extreme losses their parents did. On the contrary, most of their investing lifetime has coincided with a bull market of incredible magnitude and duration.”

Rodenbaugh pointed out millennials also take risks in other areas, since they “seem more interested in entrepreneurial pursuits, or at least getting in on the ground floor of a company with growth potential, which could also be considered risk-taking.” n biztimes.com / 27

Special Report WEALTH MANAGEMENT & ESTATE PLANNING

Companies’ social impact increasingly scrutinized by investors

By Molly Dill, staff writer Last month, BlackRock Inc., the world’s largest asset manager, sent a letter to CEOs of the world’s largest public companies putting them on notice: they need to go beyond profits and do good for all of their stakeholders to gain its favor.

“Society is demanding that companies, both public and private, serve a social purpose. To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society,” wrote BlackRock CEO Laurence Fink.

These investment strategies are sometimes called socially responsible investment; sustainable, responsible and impact investing;

and environmental, social and governance investing.

Whatever you call it, investing a portfolio with an eye toward environmentally responsible, morally reputable and well-led companies is gaining in popularity.

According to the Forum for Sustainable and Responsible Investment, sustainable, responsible and impact investing grew by about 33 percent from 2014 to 2016, to $8.7 trillion. That’s about one-fifth of all funds under professional management in the U.S. SRI investing is nothing new, said Adam Peck, founder and chief investment officer at Riverwater Partners LLC in Milwaukee. But it is

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a relatively rare strategy in the Milwaukee area.

“Really, technically, it started in the 18th century when both Quakers and Methodists laid out clear guidelines about the type of companies their followers should invest in,” Peck said.

“It really started PECK to pick up steam in the 1970s with the anti-apartheid movement. The next big jump was really the financial crisis, I think.”

That recent increase may have been driven, in part, by the fact that millennials grew up with stocks crashing around them during the Great Recession, Peck said. Millennials and women have shown the most interest in ESG investing.

Traditionally, industries not included in SRI investing are tobacco, alcohol, firearm and other “sin stocks.” Among the companies sought out for SRI investment are those that are conserving energy, set sustainability goals, recycle materials and hire diverse leadership.

Consumers are more aware of the purchases they’re making because of these sorts of issues, which has helped increase the awareness and demand for related strategies, said Gregory Wait, president at Germantown-based WAIT Falcons Rock Investment Counsel LLC, a fee-forservice investment consulting firm.

And crafting the strategies often includes shareholder advocacy like what BlackRock did, pressuring big companies to become better SRI investments.

Dana Investment Advisors Inc.

in Waukesha, which has three ESG strategies, developed the first one in response to a request from a group of nuns who wanted to invest their pensions in companies that reflected their values, said Lydia Miller, senior vice president and portfolio specialist.

Consumers have demanded companies shift to more healthy, organic and sustainable MILLER food products; use less water; emit less carbon; and take a stand on social issues. These issues are not just about altruism, but have had material impacts on companies’ bottom lines, litigation risk and reputations, Miller pointed out.

Many SRI strategies have outperformed traditional approaches.

Dana’s Social ESG Equity Strategy, as of Dec. 31, had delivered 9.07 percent returns, versus the benchmark of 5.6 percent, since its inception on Jan. 31, 2000.

“It’s not just that you’re doing well from an ESG standpoint, but it has to be a stock that’s attractive to us fundamentally, as well,” Miller said.

“There’s a common misperception that you have to sacrifice performance when you’re investing on an ESG basis. It’s 100 percent not true,” Peck said.

Wait started noticing an uptick in SRI investors over the past three or four years. Money managers have started using the strategies as risk mitigators, in addition to investment strategies.

About 80 percent of Falcons Rock clients have at least a portion of their portfolio in SRI investments, he said.

“Our research has found that portfolios can earn an equal or better rate of return with equal or less risk, while at the same time helping to make the world a better place,” Wait said. n

Faces of Family Business

SPONSORED CONTENT

WHEN AND HOW DID THE BUSINESS GET STARTED? I started David J. Frank Landscape on Milwaukee’s East Side in 1959 at 11 years old, offering gardening services to neighbors. By the age of 12, my brother worked for me in addition to a group of school and neighborhood friends and I was caring for 30 homes. I believe I was probably the only one at school who could boast a Federal ID number and business insurance. The business grew to a client base of several hundred and nearly six decades later, the David J. Frank Landscape Contracting, Inc. legacy is well established throughout green industry circles both state and nationwide.

WHAT IS YOUR PRIMARY PRODUCT OR SERVICE? Our landscape services include residential, commercial, institutional and public clients. Services include, but are not limited to, design/build, maintenance, lawn care, Interiorscape, snow & ice, irrigation, tree care, specialty, holiday décor, lighting and more.

WHAT FAMILY MEMBERS ARE CURRENTLY INVOLVED IN THE BUSINESS? My son David is President/CFO, my wife Jane is VP of Marketing, my nephew Paul is VP of Construction, my nephew Brad is Snow and Ice Manager, daughter-in-law Yuliya is Interiorscape and Holiday décor manager and sister-in-law Robin handles payroll.

WHAT VALUES OR PRINCIPLES GUIDE YOUR BUSINESS? From its inception my business was based on hard work and good service. As a new company there was an ongoing emphasis on learning and developing good horticultural practices. Those principles still hold true today.

WHAT’S THE BIGGEST CHALLENGE THE BUSINESS HAS FACED OVER THE YEARS AND HOW DID YOU MEET IT? With nearly 60 years, we have been through a few challenges! I think getting through the six year recession was most challenging…we punctuated taking good care of our clients and staff and lived with lower margins for quite a few years.

WHAT IS THE BIGGEST LESSON YOU HAVE LEARNED WORKING IN A FAMILY BUSINESS? It is important that all family members commit to having one set of standards. Family members need to set a good example, as they are held to a higher standard in the eyes of employees.

David J. Frank, Chairman/CEO and David R. Frank, President/CFO

DAVID J. FRANK LANDSCAPE CONTRACTING, INC. N120 W21350 Freistadt Rd. | Germantown, WI 53022 (262) 255-4888 | davidjfrank.com

WHAT DOES IT TAKE TO SUCCESSFULLY TRANSITION THE LEADERSHIP OF YOUR COMPANY FROM ONE GENERATION TO THE NEXT? This year, my oldest son, David Robert Frank (DRF) stepped into the role of President/CFO. DRF, from early on, had an interest in finance. Upon graduation, DRF called, telling me of his decision to join the company and continue the Frank family business. Of course, I was thrilled! DRF has been in a comprehensive training program over the last five years to acquire the knowledge and skills needed to provide leadership for the future. One key element of the program has been to assemble a strong Management Team.

Several of our managers are company veterans; therefore, many of our supervisors and crew leaders are preparing through our Next Generation program, to step in when they approach retirement. Just like our management staff, DRF is preparing to fulfill not only his responsibilities as President, but selectively add many of mine as I near retirement. Our Next Generation program was initiated in 2016 with a new HR module. My visions for the future are bright because we are prepared!

Faces of Family Business

SPONSORED CONTENT

WHEN AND HOW DID THE BUSINESS GET STARTED? Staff One, Ltd was started in 1988 by Tara’s parents, John and Sandy Grady. John had recently sold off his half of a prior staffing firm and Sandy came from a strong background in Human Resources where she owned her own HR consulting firm. They decided to get married, have Tara, and start a business all in the same year!

WHAT IS YOUR PRIMARY PRODUCT OR SERVICE? Staff One, Ltd.’s product is a full service recruiting firm, but our service is building relationships and working closely with our clients and employees. We are big enough to take on large partnerships but small enough to show each one that we care. Our main focuses are HealthCare, Light industrial, Skilled Trades, and Manufacturing. We have also recently created a Professional/Technical division and have recruiters that focus solely on that.

WHAT FAMILY MEMBERS ARE CURRENTLY INVOLVED IN THE BUSINESS? Tara and Nick Froemming are the current owners of Staff One, Ltd. after purchasing the company from Tara’s parents, John and Sandy in July of 2017.

WHAT VALUES OR PRINCIPLES GUIDE YOUR BUSINESS? We believe the key to long-term success in our industry is securing personal relationships built on trust and integrity, as well as cost effectiveness and efficiency. It is extremely important to us that not only are our clients happy with our service but also our employees. We are only as successful as the people that work for us so we truly focus on creating an environment that breeds success for all parties involved. Our Clients and Employees have longevity that you don’t normally see in the industry we work in which we believe is a testament to our values and principles.

WHAT’S THE BIGGEST CHALLENGE THE BUSINESS HAS FACED OVER THE YEARS AND HOW DID YOU MEET IT? As with any Staffing Firm, the economy and its strength play’s a major role. We have been lucky enough to create strong partnerships in industries that have been able to withstand recessions or dips to the market. Another hurdle we face is the competitiveness of this industry. There are hundreds of firms that someone could pick to work with and there are openings all over. Due to this, we need to set ourselves apart by showing Clients and Employees that Staff One, Ltd. cares about them (and we do)! Our Clients and Employees, internal and external, often tell us we excel at treating them with respect and they feel valued, which we believe gives us an advantage in this industry. We have also seen a 25% increase in sales since taking over last year which can present certain challenges, albeit good ones! We will continue to grow but we will do it smart and with the same values that have allowed us to be successful.

Tara Froemming and Nick Froemming

STAFF ONE, LTD 7201 W. Greenfield Ave. | West Allis, WI 53051 (414) 302-9170 | staffoneltd.com

WHAT IS THE BIGGEST LESSON YOU HAVE LEARNED WORKING IN A FAMILY BUSINESS? There is normally not a ton of black and white decisions.

We have a lot gray areas with our staff and our clients. We evaluate each decision with what we think is best for everyone and if we figure out a better decision could have been made, we learn from it and do it better the next time. This is a journey that is going to have ups and downs and we have to try and do it with a smile on our faces. Luckily, we are both really easy going, and love to have fun every day. Owning a small business is totally different from working at a large corporate company. You have more wiggle room to be flexible and understanding of employees and clients. We are truly compassionate just like my parents always were.

Strategies LEADERSHIP

Little decisions, big results Be aware of their potential impact

“Some of the most significant effects in our personal and business lives are not the result of strategic plans and longrange goals, but the aggregate result of little decisions made on a daily basis.”

— name

I have long been a fan of strategic planning and a fan of the poem “Invictus” by William Ernest Henley, with the famous closing line, “I am the master of my fate, I am the captain of my soul.”

It was only recently that I recognized that some of the most significant effects in our personal and business lives are not the result of strategic plans and long-range goals, but the aggregate result of little decisions made on a daily basis.

What led me to this realization? It became apparent when I read the obituary of a friend and realized how her decisions had affected my life.

Our family has always vacationed Up North.

My parents enjoyed fishing and relaxing in northern Wisconsin. We kept the same tradition with our children. To this day, when we ask our kids for their favorite memories, they inevitably return to the cabin on the lake. With the background for this narrative, now I return to the friend who passed away...

I read Nora’s obituary, and it said that she and her husband, Roy, honeymooned on a lake in Wisconsin where she fell in love with cabins, lakes and fishing. Both of them loved it so much, they bought a resort in northwest Wisconsin.

Nora, her husband and my parents were members of the same church in Chicago. Since my dad was a big fisherman, Roy suggested that our family vacation at their resort because the fishing on the lake was phenomenal. Vacationing at their resort represented a significant change for our family. At the time, we had always vacationed with another family with kids of similar ages in the Boulder Junction area. Testing out this new lake meant an end to the joint vacations we had with the other family and brought us to this new lake in northwest Wisconsin.

Sure enough, as Roy had mentioned, the fishing was phenomenal. Shortly after that, my mom and dad were able to buy a small cabin on the lake.

We have lost and rebuilt the cabin due to a forest fire, and it has become the second home for many in our family.

As I read Nora’s obituary, it dawned on me that if Nora and Roy never vacationed in the Northwoods and fell in love with the lakes and fishing, we most likely would not have a family presence on that lake to this very day. Now it’s very true that my folks could have found a different lake and there could have been an entirely different past, present and future for all of our family.

The essential point is that Nora and Roy’s decision affected our family’s vacations for many years and will do so in the future.

As I reflected on this idea, I began to look at other parts of my life and recognized that they, too, had been influenced by smaller decisions in the past that I would not have recognized.

What is the significance for us today in our personal and business lives? We need to make all decisions in light of the potential impact they can have. The profitability of your company three and five years from now may not be influenced by the strategic plan you have created as much as by the people you hired several years earlier. The characteristics and skillsets those individuals brought to your organization may be the most significant influencers to achieve your future profitability.

In that light, look at your current position in life and determine what decisions in the past helped bring you to this point in time. It just may highlight areas where similar decisions are needed this very day.

Through the loss of a friend, I have recognized another gift from her. Thanks, Nora and Roy. n

JIM LINDELL Jim Lindell is a CPA, a chartered global management accountant and a certified speaking professional. He is president of Dousman-based Thorsten Consulting Group Inc. and chairs two groups for TEC/Vistage Wisconsin. biztimes.com / 31

Strategies FAMILY BUSINESS

The reasons not to own a family business Know the potential downside up front There are many good reasons why a person should start up a family business: be closer with the family, build a legacy, assist the next generation with a career path, etc.

However, we must also examine the other side – the dark side, or the reasons people should not start a family business. Sometimes when we examine that side of things, the path becomes more clear.

OWNING A FAMILY BUSINESS IS NOT A GETRICH-QUICK SCHEME. While there are some positive tax and wealth building ramifications, the failure rate of family businesses, especially being passed from one generation to the next, should cause anyone to pause and reconsider. The businesses I have seen work most successfully are those that did not try to build a family business, but it happened anyway. Laying the foundation for a good, solid business is the first and most important step.

OWNING A FAMILY BUSINESS IS NOT EASY. There are perks – pride – that come with saying you own a business. But for the vast majority of business owners I meet with and speak to, there is a downside. Divorce and substance abuse are two significant things I have seen in working with families. Even the marriages that stay together have reported major challenges as the business 32 / BizTimes Milwaukee FEBRUARY 5, 2018

saps time and requires presence. The substance abuse tends to come in later generations as they have access to money and a certain lifestyle. Time is the scarcest commodity for a family businessperson. Your life partner and others in the family must understand that your time will be rare.

OWNING A FAMILY BUSINESS MEANS YOU MAY HAVE DECIDED ON ANOTHER’S CAREER PATH. The pressure on the next generation is already set in stone before they come out of the womb. For many business owners, there is an expectation that the next generation will want the business and be capable of running it. This is not always true. Further, can you temper your emotions and drive to have the next generation fulfill your dream? Is that fair to them? And what happens if the next generation can’t run the business due to their lack of skills? That is not their fault!

Be prepared to train the next generation and let them walk away with no hurt feelings if your business choice is not their business choice.

BUSINESS FAILURE COULD TARNISH YOUR FAMILY LEGACY. Having your name on the door means your name is connected with the business, for both good and bad. An issue which affects the business can impact and tarnish the family name and reputation. A global example of this was one of the largest family businesses in the world, Takata Corp. It experienced an airbag failure which both brought down the company and the family.

While no family goes into business with the expectation of it leading to ruin, it can happen and the legacy and name will take generations to recover – if ever.

CHANCES OF FAILURE ARE HIGH. According to Jim Baka, chair of the Family Business Legacy Institute here in southeastern Wisconsin: “The absolute No. 1 reason for not owning a family business is the fact that the vast majority of fami-

ly businesses fail, and so do the relationships (fail) between family members. For most families, this outcome is the most painful situation that could ever be imagined.” This ominous foreshadowing should be scary enough for most people, but the truth is, it is unlikely to stop most from proceeding with their endgame. Having served as a regent for several major family-owned firms before starting the FBLI, Baka comes with some authority. Yet he works to help these same family-owned ventures, as their success is so important to the health of the economy. With the changing tax code favorable to startups and family-owned enterprises, this help could not come at a better time.

While the reasons not to own or start a family business are daunting, the facts are we need them! n

DAVID BORST David Borst, Ed.D., is executive director and chief operating officer of the Family Business Legacy Institute, a regional resource hub for family businesses. He can be reached at david@fbli-usa.com.

Strategies A BRIEF CASE

How do I get my employees to have a greater sense of ownership in the company?

Terry Rowinski President and chief executive officer Health Payment Systems Inc. “Perception of an organization’s culture changes in an instant. A random tweet, a customer complaint, a change to an employee policy or a leadership change can all be disruptive, often leading to the challenge that one’s culture, for good or bad, has been forever changed.

“Creating and maintaining a culture that will last – where employees truly live ownership for their organization and their own work within it – is not an elusive goal. It is, however, often underachieved due to an organization’s tendency to focus more on what it does and how it’s doing it, instead of on the reason for existing in the first place.

“We have always placed a high value on engagement with our employees, our business partners and our investors. We regularly measure it, study it, discuss it and we work hard to enhance it.

“As we have grown and changed over the years, we have maintained our ‘why’ as our true north and each team member measures his or her actions against this. It’s amazing to participate in a discussion and to realize that our action does not fit our ‘why.’ As a result, we have changed course and walked away from an idea or potential relationship.

“If you desire to create a culture of a truly engaged and passionate team, focus them on your ‘why’ and fixate on it together, so you can all collaboratively bring value to the marketplace.”

Laura Hanoski Owner and managing member Premier Medical Staffing Services LLC “That feeling of having a greater sense of ownership of your role at an organization and inside the company is more than signing a piece of paper.

It involves accountability, respect and opportunities to create feelings of empowerment, independence and trust. Sixteen years ago, my husband, Mark, and I signed many pieces of paper to start our own health care staffing firm, Premier Medical Staffing Services. We wanted to improve the ways health care professionals and providers could make a difference. There was accountability to provide quality staffing and exceed expectations.

Taking ownership of these goals provided us with success.

“Our company’s successes are due to providing our employees the opportunities to be independent, while knowing they believe in the company’s goals and mission. Having employees take ownership allows management and employees opportunities to create and execute new strategies.

This enables them to achieve success while helping their clients, employees and community.

“I asked my employees’ perspective on how management helps them feel a great sense of ownership. Their top responses include: Given opportunities to negotiate contracts; create and implement incentive programs for staff; hold themselves accountable; lead brainstorms to solve challenges; receive professional development; ability to create and implement training procedures for new employees; and lead community engagement activities.”

Joseph Taylor Chief executive officer Penrod Software LLC “As a whole, Penrod likes its employees to take ownership of all projects and clients we work with.

Penrod works with some of the greatest clients in the world, and those clients are relying on us to transform their business.

“One thing Penrod does to ensure that employees have a great sense of ownership is allowing them to be their authentic selves. Part of our culture code is to be silly and own it. From allowing employees to come in dressed up as their favorite character or our ‘Use your best judgment’ policy, we trust our employees will make the right decisions when it’s needed.

“We also know that just because a role is not right for someone, it doesn’t mean there is not a different role that is right for them. We understand that hiring smart, talented people is the best way to succeed and sometimes not everything is for everyone. Failure is not only OK at times; it might even lead to a better path. We meet with employees one-on-one every week to track success, and receive and give feedback to ensure success.

“We also go out of our way to have daily company shout-outs highlighting the successes of our employees. At any point, anyone is free to ‘shout-out’ anyone else in the company for their amazing work.”

biztimes.com / 33

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BizConnections PAY IT FORWARD

Dave Vetta champions Milwaukee’s performing arts scene Dave Vetta Milwaukee region advisory board chair First Business Bank Nonprofit served: United Performing Arts Fund Service: Campaign co-chair Last year’s campaign, which coincided with the organization’s 50th anniversary, brought in more than $12.2 million. The 2018 campaign goal has not yet been announced.

Two newer areas of focus during this year’s campaign, Vetta said, are raising awareness in Waukesha County of UPAF’s impact and drawing attention to the importance of connecting veterans’ families to the arts.

With UPAF’s outreach programs reaching more than 100,000 children, Vetta also sees it as a worthy cause from a longterm workforce development standpoint. Students who participate in the arts are the kinds of future employees the state needs to retain, he said.

“This is a little bit selfish from a business standpoint, but those kids end up being very creative, motivated, innovative workers,” he said. “They’re capable, they’re confident. They have a lot of versatility. And particularly in Wisconsin, with the need for workforce, the arts can help with that particular need.” n

LAUREN ANDERSON Reporter

P / 414-336-7121 E / lauren.anderson@biztimes.com T / @Biz_Lauren

LILA ARYAN PHOTOGRAPHY

AT ONE POINT, Dave Vetta considered performing arts to be a luxury – a nice thing for a community to have, but not vital.

“Over the last couple of decades, I have learned that it is not a nice-to-have, but a musthave,” he said.

It’s with that conviction that Vetta, Milwaukee region advisory board chair at First Business Bank, has dedicated his spare time to working with United Performing Arts Fund, an umbrella nonprofit that raises funds on behalf of southeastern Wisconsin performing arts organizations.

Being away from Milwaukee while living in Columbus, Ohio for 15 years illustrated for Vetta the importance of having a thriving arts scene.

“They did not have a collective organization like UPAF and, as a result, I saw organizations deteriorate and arts funds and causes disappear,” Vetta said. “It wasn’t a healthy environment for the arts.”

When he and his family returned to Milwaukee 12 years ago and saw UPAF’s approach to sustaining the performing arts – with its funds benefiting organizations like Milwaukee Symphony Orchestra, First Stage, Skylight Music Theatre, Milwaukee Repertory Theater, Milwaukee Ballet and Florentine Opera Co. – Vetta knew it was something he needed to support.

After years of working with the organization, Vetta is one of three co-chairs to head up UPAF’s 2018 campaign, soliciting donations from individuals, companies and foundations on behalf of the organization.

biztimes.com / 35

BizConnections PERSONNEL FILE BANKING & FINANCE

MANUFACTURING

Waukesha State Bank, Waukesha Waukesha State Bank has promoted Jane Murphy to bank manager.

member of the management team. Bembenek is a secondgeneration roofing professional with more than 17 years of experience in the waterproofing and roofing disciplines.

DEVELOPMENT BUILDING & CONSTRUCTION

raSmith, Brookfield raSmith has promoted David Cleary to director of land development services.

MSI General Corp., Oconomowoc MSI General Corp., Oconomowoc, has named Bert Zenker a senior architect. Zenker has more than 20 years of experience at MSI General.

HUMAN RESOURCES

MRA-The Management Association, Waukesha

BUILDING & CONSTRUCTION

McGuire Contractors Inc., Sussex McGuire Contractors Inc. has hired Robert Goehner as vice president of construction.

Goehner has more than 40 years of experience in the construction industry.

BUILDING & CONSTRUCTION

Interstate Roof Systems Consultants Inc., New Berlin

Garrett

MRA-The Management Association has promoted Deidre Garrett to director of HR services and Kimberly Kent-Slattery to manager of roundtables.

INSURANCE

Badger Mutual Insurance, Milwaukee Badger Mutual Insurance has promoted Dan Nigro to executive vice president.

Nigro previously held the position of

Interstate Roof Systems Consultants Inc. has hired Adam Bembenek as senior project manager and

2018 GIVING GUIDE

Kent-Slattery

senior vice president of IT and marketing.

Industrial Controls Co. Inc., Sussex Industrial Controls Co. Inc. has hired Rocky Maglio as regional sales manager.

INSURANCE

Integrated Risk Solutions, Waukesha Integrated Risk Solutions has promoted Carrie Legg to vice president of transportationproduction and market relations.

MANUFACTURING

Hastings Air Energy Control, New Berlin Hastings Air Energy Control has hired Jessica Hendricks, CPA, as staff accountant.

IT SERVICES

CCB Technology, Racine CCB Technology has named Steve Scherer vice president of sales, overseeing both the inside sales and field account executive teams.

LEGAL

DeWitt Ross & Stevens S.C., Brookfield DeWitt Ross & Stevens S.C. and its affiliate DeWitt Mackall Crounse & Moore S.C. promoted attorney Olivia Kelley to partner. Kelley, of DeWittâ&#x20AC;&#x2122;s metro Milwaukee office, practices in the areas of litigation, business, real estate, tax and e-discovery.

NONPROFIT

SaintA, Milwaukee SaintA has promoted Regina Branch to youth services program manager. The promotion is part of the expansion of the SaintA youth transitioning to adulthood program, which provides resources to young people aging out of foster care.

PROFESSIONAL SERVICES

QPS Employment Group, Brookfield, QPS Employment Group has promoted Jeri Meyers to executive vice president of sales.

Meyers has been with QPS since July of 1996.

ACENTRO B C D: A HISPANO F T E R B R E MILWAUKEE AST CPHONE: A N(414)C E384-3700 R DIAGNOSIS

CARDINAL STRITCH UNIVERSITY

WEB: centrohispanomke.org PHONE: (414) 977-1780 WEB: abcdbreastcancersupport.org The Council for the Spanish Speaking, Inc. advocates on behalf of Latinos and theBreast sociallyCancer and economically challenged. offers programs ABCD: After Diagnosis nurtures hopeItand restores in education,inhousing humanbyservices to improve life for confidence all thoseand affected breast cancer.

We quality provideoffree, families, children, youth, and aging; promotes racial and personalized information andthe one-to-one supportcultural, to patients, families linguistic understanding; and community planning and development and friends affected by breast cancer, from the newly diagnosed to supportive of socialand andon economic equity. those in treatment into survivorship.

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AROUND TOWN

Milwaukee Urban League Equal Opportunity Day Luncheon Milwaukee Urban League recently hosted its annual Equal Opportunity Day Luncheon at the Pfister Hotel in downtown Milwaukee. The eventâ&#x20AC;&#x2122;s keynote speaker was Fox News contributor Juan Williams.

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DENNIS SHIELDS and ROSE SMYRSKI , both of the University of Wisconsin-Platteville.

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MICHELLE CROCKETT of the Wisconsin Department of Health Services and JULIOUS HULBERT of Milwaukee Urban League.

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PAUL BERGER and OMAR BRAVO, both of ChristSt. Peter Lutheran School, and JUSTIN MORALEZ of the American Federation for Children.

4.

VINITIA STRONG-MCDONALD and JILL WIESS , both of Associated Bank.

5.

NAKIA SPENCER of MillerCoors and RHONDA MCLIN, retired.

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PATRICK CHATMAN of Oliver Wendell Holmes School, BRYANNA , a student at Oliver Wendell Holmes School, and RACHEL WAGONER of Oliver Wendell Holmes School.

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CONNOR MCBRIDE and SAL CARRANZA , both of Enterprise.

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KEYANA TABATABAEI of We Energies and VINCE SIMS of Associated Bank.

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DORRIS MADISON, JOYCE HALL and RETHA SIMONS , all retired.

Photos by Maredithe Meyer

Waukesha County Business Alliance Key Industries 2018

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Waukesha County Business Alliance held its annual Key Industries event at Country Springs Hotel & Conference Center in Pewaukee.

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10. KATHY PRICE of Novo Group Inc. and GARY SWICK of SWICKtech.

11. NATALIE FORWARD of Novo Group, JOHN SCHMITZ of Citizens Bank and KELLY RENZ of Novo Group.

12. GUS HERNANDEZ of Johnson Financial Group and KEITH BAISDEN of Town Bank.

13. ALAN TRASK and TERRI MATTHEW, both of Advanced Disposal.

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14. LORNA SCHAFER of RF Technologies and JOYCE GORMAN of Lauber Business Partners.

15. BOB BELL of First Business Bank and TOM DEMUTH of Irgens.

16. MARY MOASE and MATT SELLERS , both of Moldmakers Leasing & Investment Partnership.

17. ROBERT NOVAK, VIKTOR BRENNER, DAWN VOIGT and CAROL FONTANEZ , all of Waukesha County Technical College.

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18. JOE REIMER of Sussex IM and NICOLE VAN PEURSEM of Sikich LLP. Photos by Maredithe Meyer biztimes.com / 37

BizConnections VOLUME 23, NUMBER 22 | FEB 5, 2018

GLANCE AT YESTERYEAR

126 N. Jefferson St., Suite 403, Milwaukee, WI 53202-6120 PHONE: 414-277-8181 FAX: 414-277-8191 WEBSITE: www.biztimes.com CIRCULATION: 414-336-7100 | circulation@biztimes.com ADVERTISING: 414-336-7112 | ads@biztimes.com EDITORIAL: 414-336-7120 | andrew.weiland@biztimes.com REPRINTS: 414-336-7128 | reprints@biztimes.com PUBLISHER / OWNER Dan Meyer dan.meyer@biztimes.com

SALES & MARKETING

DIRECTOR OF OPERATIONS Mary Ernst mary.ernst@biztimes.com

EDITORIAL EDITOR Andrew Weiland andrew.weiland@biztimes.com MANAGING EDITOR Molly Dill molly.dill@biztimes.com REPORTER Lauren Anderson lauren.anderson@biztimes.com REPORTER Corrinne Hess corri.hess@biztimes.com REPORTER Maredithe Meyer maredithe.meyer@biztimes.com REPORTER Arthur Thomas arthur.thomas@biztimes.com

— This photo is from the Milwaukee Public Museum’s Photo Archives collection.

COMMENTARY

Soul searching after Amazon snub When Amazon.com Inc. announced its much anticipated “shortlist” for the location of its second headquarters (what it’s calling HQ2), there was little surprise that Milwaukee wasn’t on it.

In all, 238 cities and jurisdictions, including Milwaukee, submitted proposals to the company.

The fact that Milwaukee did not make Amazon’s list of 20 finalists and the fact that nobody really thought Milwaukee ever had a chance say something about the city and region, and it isn’t good.

Amazon took a look at the Milwaukee area and determined there are at least 20 other places where it would rather be. Several on its list are much bigger than Milwaukee, including New York, Chicago and Los Angeles, but some are comparable peers, like Indianapolis, Nashville, Columbus, Ohio and Pittsburgh.

Losing the bid for the Amazon HQ2 certainly isn’t the end of the world, but state and local 38 / BizTimes Milwaukee FEBRUARY 5, 2018

leaders need to examine why Milwaukee didn’t even make the list of finalists and figure out how to address our weaknesses.

The Amazon RFP said it was looking for a “stable and business-friendly environment and tax structure.” It asked respondents to “identify incentive programs available.”

Gov. Scott Walker and Republicans in the Legislature have been very aggressive about making Wisconsin business friendly. They’ve lowered taxes, reduced regulations and made Wisconsin a right-to-work state. Last year, Wisconsin was ranked the 10th best state for business by Chief Executive magazine. The state has certainly been willing to provide incentives to attract companies, as evidenced by the huge Foxconn Technology Group deal.

But all of that wasn’t enough to impress Amazon. Something’s missing.

Amazon’s RFP said it was looking for “locations with the potential to attract and retain strong technical talent.”

Talent is a huge issue. Milwaukee is not a major tech industry center, so it doesn’t have a lot of tech talent. Madison is considered a strong tech center, anchored by Verona’s Epic Systems Corp., but that region is smaller than what Amazon was seeking.

ACCOUNT EXECUTIVE Molly Lawrence molly.lawrence@biztimes.com ACCOUNT EXECUTIVE David Pinkus david.pinkus@biztimes.com ACCOUNT EXECUTIVE Maggie Pinnt maggie.pinnt@biztimes.com ACCOUNT EXECUTIVE Christie Ubl christie.ubl@biztimes.com SALES INTERN Amanda Bruening amanda.bruening@biztimes.com SALES INTERN Tess Romans tess.romans@biztimes.com

ADMINISTRATION ADMINISTRATIVE COORDINATOR Sue Herzog sue.herzog@biztimes.com

Jones Island This photo, taken circa 1937 by James Conklin, shows sewage tanks for reception of raw sewage at the sewage disposal plant on Jones Island. The island, an industrialized peninsula at the meeting of three rivers in the Milwaukee harbor created in 1857, is still home to the Milwaukee Metropolitan Sewerage District’s primary wastewater treatment plant, as well as Port Milwaukee and other municipal services.

DIRECTOR OF SALES Linda Crawford linda.crawford@biztimes.com

PRODUCTION & DESIGN GRAPHIC DESIGNER Alex Schneider alex.schneider@biztimes.com

Independent & Locally Owned

ART DIRECTOR Shelly Tabor shelly.tabor@biztimes.com

— Founded 1995 —

Under Walker, Wisconsin has been aggressive in supporting manufacturing companies, its traditional base, but tech companies are the future and other regions are doing a better job developing that sector.

To attract businesses that could locate anywhere, like Amazon, and to grow the businesses we already have, we need talent.

It’s no coincidence that most of the cities on Amazon’s shortlist have major universities.

Columbus has Ohio State University, Pittsburgh has Carnegie Mellon and the University of Pittsburgh.

Wisconsin is running ads in Chicago to try to convince millennials to move here. A better approach would be to invest more in the University of Wisconsin-Milwaukee to make it a great university that attracts bright minds and produces top talent that can either work for area companies or start their own businesses. n

ANDREW WEILAND EDITOR

P / 414-336-7120 E / andrew.weiland@biztimes.com T / @AndrewWeiland

MY BEST ADVICE

do anything you don' t believe ”

LILA ARYAN PHOTOGRAPHY

“ Don' t

MUR ALI NATAR AJAN Senior vice president and chief information officer West Bend Mutual Insurance Co. West Bend Industry: Insurance thesilverlining.com Employees: 1,246

“THE BEST ONE IS ALWAYS THE HARD ONE, but the one I live by is two things. No. 1, ‘Be authentic’ is probably the best one I can think of, because you can’t act your way out of this.

You have to be authentic, true to who you are.

Sometimes people play the game or pretend to do certain things to please the boss, but that’s not who they are.

“I have not asked for any job I cannot do, I have not lied to advance myself. I believe in trust. That is my leadership style and that’s the only way I know how to do it.

“The other thing is, ‘Don’t do anything you don’t believe.’ My job is to have a vision, a strategy for the department. To make a change for the company. If I don’t believe in what that value is, how am I going to get the rest of my department to follow my lead?

“It’s more than a job. We are trying to make a difference.”

AGE: 45 PROFESSIONAL EXPERIENCE: Natarajan holds an MBA and a master’s in information systems from Bradley University, and a bachelor’s in science and technology from BITS Pilani. Before joining West Bend, he spent 20 years at RLI Insurance Co., where he worked most recently as vice president of IT. Other roles at RLI included assistant vice president of strategic information services, director of underwriting solutions and technical architect.

Natarajan began his career in software consulting.

IN THE NEWS: Natarajan was hired as CIO in May. In his new role, he is responsible for driving business transformation, enabled by technology.

He said he plans to do that by keeping a pulse on business demands and customer needs, and focusing on solving customers’ problems. n

biztimes.com / 39

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