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BizTimes Milwaukee (ISSN 1095-936X & USPS # 017813) Volume 23, Number 08, July 10 – 23, 2017. BizTimes Milwaukee is published bi-weekly, except two consecutive weeks in December (the second and third weeks of 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 2017 by BizTimes Media LLC. All rights reserved.
Contents
4 Leading Edge 4 NOW BY THE NUMBERS 5 ON THE JOB WITH… 6 BIZ TRAVELER 7 THE GOOD LIFE 8 QUOTE UNQUOTE 9 GETTING THERE 10 INNOVATIONS 11 JUMP START 12 BIZPOLL WHO’S ON THE BOARD 13 BIZ COMPASS
14 News 16 MADE IN MILWAUKEE
18 Real Estate COVER STORY
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35 Strategies 35 CHRISTINE MCMAHON 36 KAREN VERNAL
Iconic Carmex brand reaches new heights
37 CASE STUDY
39 Biz Connections
Special Report
39 PAY IT FORWARD
In addition to the cover story, includes a preview of the Family & Closely Held Business Summit, with reports about R&R Insurance and keynote speaker and author Tom Deans. Also includes a first-person family business story from BizTimes Milwaukee reporter Arthur Thomas.
42 GLANCE AT YESTERYEAR COMMENTARY 43 MY TOUGHEST CHALLENGE
40 PERSONNEL FILE 41 AROUND TOWN
Family business
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Leading Edge
BIZTIMES MEDIA – Like us
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NOW
Allegiant to serve Mitchell International By Molly Dill and Lauren Anderson, staff writers
Las Vegas-based budget airline Allegiant Air announced it is bringing service to General Mitchell International Airport in Milwaukee, offering direct flights to Phoenix and several destinations in Florida. Allegiant will fly direct routes year-round from Milwaukee to St. Pete-Clearwater International Airport and Punta Gorda Airport (near Fort Myers) beginning Oct. 13; Orlando Sanford International Airport beginning Nov. 16; and Phoenix-Mesa Gateway Airport and Fort Lauderdale-Hollywood
BY THE NUMBERS There are
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beers on tap at Marcus Theatres’ new BistroPlex movie theater complex in Greendale. 4 / BizTimes Milwaukee JULY 10, 2017
International Airport starting Nov. 17. The airline, which specializes in offering routes from small cities, announced a total of 28 new routes, also from Gulfport, Mississippi and Norfolk, Virginia. Allegiant is offering low introductory fares to celebrate the expansion. “We’re so excited to grow our network and add service in Gulfport, Norfolk and Milwaukee,” said Lukas Johnson, senior vice president of commercial at Allegiant. “With the addition of three new cities and a major expansion of service into Phoenix, we’ll be able to offer some great fall travel options, with convenient, nonstop service across the country.” Representatives from Allegiant and Milwaukee County stressed the affordability of the new routes. “This is great news,” Milwaukee County Executive Chris Abele said. “It’s great news for the airport, it’s great news for the county, it’s great news for the state, it’s great news for people who care about affordable flights.” Kim Schaefer, public relations manager for Allegiant, said there is “pent-up” demand in Mil-
waukee for the “ultra-low cost” service to the leisure destinations the airline services. Allegiant anticipates about 170,000 passengers will fly in and out of Milwaukee on the five new routes over the next year. Schaefer said the airline’s low prices make flying affordable for travelers who might otherwise opt to drive or stay home. “We don’t just go into a community and have folks who are already traveling on another carrier change their mind and start to travel with us,” she said. “What we do is we stimulate traffic that might not already exist in a community. So that’s good for us, it’s good for the airport.” Abele said the addition of the five routes will keep more customers flying in and out of General Mitchell rather than other regional airports, including O’Hare International and Chicago Midway International. “We have nothing but affection for our good friends and our neighbor suburbs to the south, but for those of you who live anywhere near Mitchell, you know this is an incredibly convenient and easy airport,” he said. n
ON THE JOB WITH…
1
Vic Thomas AT SUMMERFEST
By Corrinne Hess, staff writer Summerfest is a seamlessly-run operation that festivalgoers often don’t think about as they watch their favorite reggae, blues and rock bands, but for the past 43 years, Thomas and his team have carefully orchestrated every detail. “This is the way we want to operate things,” Thomas said. “A band plays, finishes and another one comes up. You enjoy it and don’t think a thing about it.”
KAT SCHLEICHER PHOTOGRAPHY
In the days leading up to Summerfest, Vic Thomas arrives at Henry Maier Festival Park before 7 a.m., greeting delivery trucks, meeting with production crews and stage managers, and coordinating the last details of the 11-day event. For Thomas, the festival’s associate entertainment director, the meetings don’t end until well after the sun has set.
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1 Crews work on the grounds near the new Summerfest store.
2 Thomas talks with Judd Schwartz, who runs the 360 Dome Virtual Reality Village at Summerfest.
3 Thomas oversees an entertainment staff of 70, which includes production, stage managers, the hospitality department and others.
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Members of Thomas’ entertainment staff make the final preparations the day before Summerfest.
Thomas and audio engineer Harrison Ruhl overlook the BMO Harris Pavilion during preparations for Summerfest.
6 Thomas talks with Taofiki Alabi in the Summerfest production office.
biztimes.com / 5
Leading Edge
@BIZTIMESMEDIA – Real-time news
B I Z T R AV E L E R :
S E AT T L E K ELLY ANDRE W Chief ideas officer, Filament
Kelly Andrew owns Wauwatosa-based online marketing firm Filament. She travels whenever she can for business and leisure, both of which bring her to Seattle annually.
T R A N S P O R TAT I O N : “Alaska, Delta and Southwest airlines offer direct flights from Milwaukee to Seattle daily. Be ready to move more slowly when you hit the streets – Seattle has been ranked fourth-worst for traffic congestion in the nation. If you’re staying in the city, consider using the Link light rail system – with 14 stops between the airport and University of Washington, cheap tickets, and trains running from 5 a.m. to 1 a.m., you can’t go wrong.”
E XC U R S I O N S: “In the downtown area, you’ll want to visit standbys like Pike Place Market, the original Starbucks, and the Chihuly Garden and Glass exhibit (Dale Chihuly is a UW-Madison alum!). If you can get out of downtown, check out the Fremont Troll, Gas Works Park, and spend some time shopping in neighborhoods like Fremont and Ballard.”
T R AV E L T I P : “Looking for the best view of the city? Take a pass on the Space Needle and Columbia Center (tallest building in Seattle) and head instead to Smith Tower. Located just south of downtown in Pioneer Square, this gem is known as Seattle’s original skyscraper. Despite not being the tallest building in Seattle anymore, the newly renovated observation deck at Smith Tower offers an incredible 360-degree view of the city, with a speakeasy-style bar featuring craft cocktails and a light menu.” 6 / BizTimes Milwaukee JULY 10, 2017
ACCO M M O DAT I O N S AND FOOD: “You’ll find dozens of hotels in downtown Seattle and the surrounding neighborhoods, and if you’re open to a true Seattle experience, you’ll want to check out what’s available on Airbnb. You’ll find restaurants throughout the area featuring fresh fish and sushi, Thai, Chinese, Vietnamese, farm-to-table, and more. There are breweries popping up around every corner, so check out some craft beer while you’re in town, too!”
Keeping it in the fairway By Molly Dill, staff writer
J the
Good LIFE
acquin Davidson has been golfing since she was in the seventh grade, when her dad took her out on the links and they found she had a natural talent for it. “I’ve had a pro tell me that I could go pro at one time in my life, but I just don’t golf enough for that,” Davidson said. “I hit them really well; my drive keeps up with the men.” Davidson, president and chief executive officer of consulting firm Davidson Associates, also leads the WERCBench Labs program for the Midwest Energy Research Consortium in Milwaukee. When she’s not advising nonprofits and small businesses, Davidson tries to play 18 holes at least once a month. She favors Brown Deer Golf Course, and often goes
out with TEMPO Milwaukee, the Executive Women’s Golf Association, and her brother-in-law. Her longest drive is about 230 yards, and Davidson’s lowest score is an 89. “I’ve never taken lessons, but I have golfed with pros before in charity tournaments,” she said. Davidson won a charity tournament when she lived in California, and has a pewter platter to show for it. And she said the old adage is true: The golf course is a great place to do business. “It’s relaxing and I think it’s very social,” Davidson said. “It’s a great way to get to speak to somebody. It’s good for business. You get four hours talking to the person you’re riding in the cart with.” n
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BIZTIMES MEDIA – Connect
“ QUOTE
unQUOTE
S H E RY L SA N D B E RG
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C H I EF O PER AT I N G O FFI C ER , FAC EBO O K Sheryl Sandberg, chief operating officer of Facebook, advocated for universal family and bereavement leave in a recent appearance at the Riverside Theater in Milwaukee. In a conversation with Wisconsin author Jane Hamilton, Sandberg discussed her new book, “Option B: Facing Adversity, Building Resilience, and Finding Joy,” co-authored with Adam Grant, which details her journey through grief after the sudden death of her husband, Dave Goldberg, in 2015. n
“I think people were so afraid of saying the wrong thing to me, they didn’t say anything at all. You can’t remind me Dave died. Trust me, I’m on it.”
“This is brutal. And the days will come when you don’t want to get out of bed. Finding people who have had similar experiences is almost always helpful.”
“Lean into the suck.” “When we don’t acknowledge, we pile isolation and silence on top of grief and loss.”
“We need to help people rebuild their self-confidence. Sometimes in a crisis, work is better than home. Because at home, I was waiting for him to walk in that door and at work that didn’t happen.”
8 / BizTimes Milwaukee JULY 10, 2017
SANDBERG PHOTO: KAT SCHLEICHER PHOTOGRAPHY
“You do not have to be someone’s best friend from the first grade to show up.”
C O S B E ’ s 8 th A n n u a l E x e c u t i v e R o u n d t a b l e BREWERS OUTING SPONSORS
GETTING
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Why stay in Milwaukee? “Milwaukee is a city that has its fair share of problems. But it’s never going to get better if we have our positive people continuously leave and never return. There’s a lot that needs to be done in Milwaukee in so many different areas and I try to have a little bit of involvement or conversations or be connected to people in each.”
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Biggest challenges to get current position? “I think first and foremost is not having many people who look like me in the profession because that kind of tells you that maybe either it wasn’t popular among the African-American population or those that tried it out failed. And I didn’t want to be one of those people.”
Why is self-improvement important? “One of my mentors, who was my track coach as well as my accounting teacher (at Brown Deer High School), he was the one that always pushed me.
INNING SPONSORS Associated Bank Godfrey & Kahn Central Office Systems National Exchange Bank & Trust Creative Business Interiors Sikich Delta Dental SVA Certified Public Accountants MMAC’s FREE Executive Roundtable programs help top-level executives share best practices and address their unique issues. Learn more at mmac.org/roundtable.html
“At the end of the day, you want to be a role model for those that come after you, whether it was someone who was in the middle school at the time or my little brother or little cousins.”
Organization involvement: “I really truly believe that we as human beings are put on Earth to serve others. Giving of my time, utilizing of my skillset in order to help mold or encourage or place someone else into a position where they can succeed, and being a part of (National Association of Black Accountants), that’s something I’m able to do quite easily.”
Favorite restaurant? “My favorite restaurant is not really a real restaurant, but I studied abroad in Mexico and … I love eating tacos off the street cart on the corner.”
What are you reading? “The Mentor Leader” by Tony Dungy.
Here to help local businesses put tomorrow’s plan in motion today.
SYDNEY NELSON AGE: 25 HOMETOWN: Milwaukee EDUCATION: Bachelor’s and master’s, University of Wisconsin-Whitewater PREVIOUS POSITION: Internal auditor, CNH Industrial CURRENT POSITION: Internal auditor, Rockwell Automation Inc.
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Leading Edge
INN
BIZTIMES MEDIA – Like us
VAT I
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Reduce, reuse, recycle and drink up THE CONCEPT behind Milwaukee-based Containers Up LLC emerged as a solution to a pressing need for its founders. Tom Daugherty and Lyle Stoflet wanted a place to hold a party, but didn’t want it to be in their homes. Never those to shy away from building the “weird and unusual,” they created their own party hub out of a 20-by-8-foot shipping container. “We make weird stuff all the time,” Stoflet said. Unusual as it may have been, the mobile party bar was a big hit and friends began asking to borrow it. From there, a business was born. That was last year. Now, Stoflet and Daugherty, along with Milwaukee attorney Steve Glaser, run Containers Up, a growing business based in the central city, in which they convert—or “upcycle”—old shipping containers into mobile party venues for rent or sale. The process is fairly simple: taking a 20-by-8-foot shipping container—typically purchased online—cutting out one or both of the 20-foot sides, replacing the sides with awnings and installing a full-service bar or other amenities. The company partners with Milwaukee-based furniture company Gear Grove to produce its product. Stoflet, Daugherty and Glaser all pitch in with the welding and fabrication. The business offers three
Containers Up LLC Milwaukee
INNOVATION: Mobile party bar and custom containers FOUNDERS: Tom Daugherty and Lyle Stoflet FOUNDED: 2016 containersup.com 10 / BizTimes Milwaukee JULY 10, 2017
types of mobile venues, with plans for more in the works. Current offerings include a walk-up bar, a bar with integrated seating, and another model that serves as a retail space, with a workstation to allow customers to sell products. The containers, which are transported on a flatbed truck, can be purchased, or they can be rented for about $1,200 per day. The renter provides the food and beverages. Containers Up has found a particular niche in the street festival scene and at trade shows—including Brew City Cigar Festival, Mama Tried Motorcycle Show and Cedarburg Strawberry Festival—as it fills the need for a pop-up venue without the investment in brick and mortar. Glaser, an attorney who represents business owners, said he initially joined Containers Up thinking he would bring a certain level-headedness to the business. “Tom and Lyle are the kind of guys that don’t say ‘no,’” Glaser said. “And I’m the kind of guy, because of my job, who is trained to say no. I was going to come in and help them focus … but it kind of happened the other way.” Now, he’s right alongside his business partners, dreaming about the many directions the business could take. Hunting shacks, ice shanties, man caves, home extensions, beer gardens, children’s birthday parties—Glaser can rattle off a lengthy list of possibilities. The business also sees a lot of potential in tailgating and Glaser said he’s exploring the idea of heated flooring to extend the business’ peak season into the fall, when the Green Bay Packers and Wisconsin Badgers football teams play. While Glaser initially considered Stoflet and Daugherty’s business idea to be a little “crazy,” he soon saw the potential behind it. Before
Containers Up mobile bars and pop-up retail kiosks were recently on display for a party at Swing Park on North Water Street. The customizable container can be used for a variety of purposes, including pop-up marketing kiosks, temporary office space, merchandise storefronts and trade show booths.
joining, he even ran the idea past his children, who are in their 20s, and got the stamp of approval. “Their reaction was, ‘That would be great,’” Glaser said. “We’ve gotten great responses from everyone we’ve talked to about it. And given the resurgence in street life in Milwaukee—with the Third Ward and Fifth Ward— we just felt it had an audience.” “It’s one of those ah-ha, ‘Why didn’t I think of that?’ kind of ideas,” he added. Containers Up is currently focused on the southeastern Wisconsin market, but sees potential for expansion to Madison and Chicago. Meanwhile, the owners are committed to being a steady tenant in the central city at its production facility, located at 4720 N. 27th St. Containers Up also works to use raw materials from other local businesses and tries to employ city residents. Glaser is a believer in the entrepreneurial potential of Milwaukee. All some businesses need, he said, is a venue to get their product out there.
“You hear about the brain drain and how Wisconsin isn’t a great place for entrepreneurs,” Glaser said. “I don’t buy that. I don’t buy that at all … We hope to enable Milwaukee to be more vibrant—whether it be the artisan food place, new butcher places, breweries, distilleries—all these great manufacturers and retailers in Wisconsin. We hope to be able to give them a venue for what they do and have some fun along the way, while also letting people enjoy Milwaukee’s summers.” n
LAUREN ANDERSON Reporter
P / 414-336-7121 E / lauren.anderson@biztimes.com T / @Biz_Lauren
ZIZZL LLC LOCATION: Milwaukee FOUNDER: Raymond Seaver, Jr. FOUNDED: 2016 SERVICE: Payroll and employee benefits WEBSITE: zizzl.com EMPLOYEES: 8 GOAL: Grow the company to 500 employees in 10 years.
CI DESIGN INC.
EXPERIENCE: Seaver helped build another startup, bswift, which was acquired by Aetna for $400 million.
zizzl is entrepreneur’s newest benefits company By Molly Dill, staff writer
For Raymond Seaver, Jr., starting a company is not a new experience. He has started a series of companies over the years related to employee benefits and health insurance. So when he saw it made sense to combine payroll services with employee benefits administration, he started a new company. zizzl, formed in October 2016, has eight employees at its Ward4 offices in Milwaukee and several clients signed on for its centralized service. “That onboarding experience is normally heavily weighted toward employee benefits, but you’re also getting them set up so you can pay them. When you terminate somebody, you need to make sure that information gets to the employee benefits providers,” Seaver said. Seaver was inspired by Silicon Valley “unicorn” company Zenefits, and there are other competitors in the space, but none in this market. Seaver is targeting small and mid-market companies in southeastern Wisconsin, and says zizzl is differentiated by its best-in-class execution. “We tend to be more focused on a turnkey
solution versus just providing a software,” he said. “We actually provide the software, but we also offer the processes behind it. Having services and expertise behind it really does separate you.” One of those services is the Ask Emma tool, which asks employees about their health care needs and then compares their expected outof-pocket costs for several plans. Seaver helped develop the tool at a previous startup, bswift; that company was acquired by Aetna in 2014 for about $400 million. zizzl earns revenue through the traditional benefits commissions, and also through a per-employee, per-month fee for its payroll services. Seaver has funded the growth of the business himself. And he has ambitious plans to grow the company to 500 employees over the next 10 years, while also helping clients and other startups create jobs. “Although it took us 15 years to grow (bswift) to that level, we are confident zizzl will get there within 10,” Seaver said. n biztimes.com / 11
Leading Edge
Who’s on the Board?
BIZ POLL Will Foxconn Technology Group build a plant in southeastern Wisconsin?
YES:
NO:
49%
51% FISERV INC.
Yabuki
• Glenn Renwick, chairman of Fiserv, executive chairman of The Progressive Corp. • Alison Davis, advisor to Fifth Era • John Kim, president of New York Life Insurance Co. • Dennis Lynch, chairman of Cardtronics Inc. • Denis O’Leary, former managing partner of Encore Financial Partners Inc.
• Kim Robak, partner at Mueller Robak LLC • J.D. Sherman, president and chief operating officer of HubSpot • Doyle Simons, president and chief executive officer of Weyerhaeuser Co. • Jeffery Yabuki, president and CEO of Fiserv
CELEBRATING A RECORD-BREAKING 50TH ANNIVERSARY CAMPAIGN FOR THE
Thanks to our Campaign sponsor:
Congratulations to our UPAF 50th Anniversary Co-Chairs: Betsy Brenner
Community Volunteer
Linda GorensLevey Partner General Capital Group
Alex Kramer
Market Leader The Private Client Reserve U.S. Bank
With their generous donations to the UPAF 50th Anniversary Campaign, the employees of these companies are making an impact on our community. To you, UPAF and its Member Groups say “Bravo!”
The performing arts do matter! It’s simple. The performing arts make Greater Milwaukee a better place to live, work, learn and play. To learn more about UPAF or to donate online, visit www.UPAF.org. ©2017 United Performing Arts Fund, Milwaukee, Wisconsin. All rights reserved.
12 / BizTimes Milwaukee JULY 10, 2017
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BIZ COMPASS
what lessons
1
HAVE YOU LEARNED BY
ENGAGING WITH YOUNGER STAFF MEMBERS?
1 JULIE BISSONNETTE
executive director, Newcastle Place
“Today’s young professionals prefer not to be categorized as ‘millennials.’ They are motivated, hardworking and strive for the ideal work/life balance. I am constantly gaining knowledge about technology efficiencies from our younger team members. Their knowledge of evolving trends and digital enhancements is valued in our industry.”
SNYDER 2 HOWARD
executive director, Northwest Side Community Development Corp.
3
“I’ve worked with people older and younger than I am—lately, a lot younger. Today’s NWSCDC staff is young, but just as smart as any other group I’ve had. If you treat them like kids, they’ll make kid mistakes. If you treat and coach them like professionals, performance is high-quality.”
3 MIKE KOLLMANSBERGER
board chairman, Greater Milwaukee Association of Realtors
“Younger staffers encourage you to consider different ways of doing business. Instead of using the same old methods, their fresh perspective makes you think outside the box and consider new techniques. When you’re continuously evaluating how things could be done differently, it keeps you sharp.”
2
DILLAVOU 4 CHAD
4
director of global distribution development & technology, Rite-Hite Co. LLC
“Interacting with our millennial employees, specifically through our sales training program, gives me valuable insights into their communication patterns and work style. It has definitely made me understand the importance of digital communication technology and the need to integrate it into our process and practices.”
5 TED SALGADO
co-founder and principal, Reserve Advisors Inc.
5
“Our younger staff at Reserve Advisors has an incredible group ethic of enthusiasm for volunteering and community service in and outside the office. We find their commitment to service inspiring, energizing and something for every generation to emulate.” n biztimes.com / 13
BizNews
@BIZTIMESMEDIA – Real-time news
Catering company will move from Wauwatosa to West Allis to expand By Corrinne Hess, staff writer JUST SEVEN YEARS AGO, Dan Nowak was processing retirement accounts for a large Milwaukee bank and doing some cooking on the side for friends and family. Today, his business, Tall Guy and a Grill Catering LLC, has outgrown its East Tosa space at 7227 W. North Ave., prompting a move to West Allis. Nowak recently purchased a 4,800-square-foot retail office building at 6733-6735 W. Lincoln Ave., with plans to renovate and expand the company. The larger space will enable the group to add three new full-time employees and up to seven part-time positions. “We’ve been (in Wauwatosa) for four years and couldn’t find a spot big enough,” Nowak said. “East Tosa has been a hot spot for a while. But from our standpoint, we don’t need to be in a retail space. Catering is more like manuTall Guy owner Dan Nowak and catering manager Veronica O’Donnell.
14 / BizTimes Milwaukee JULY 10, 2017
facturing.” Nowak wasn’t intending to purchase a building, but said the space was perfect for his needs because it offers a good amount of storage and room for delivery trucks to get in and out. The building has four units; Tall Guy will combine two, using about 2,700 square feet and giving the company enough space for an office, a commercial kitchen and a tasting room for clients. The remaining space will be leased, Nowak said. A real estate affiliate of Tall Guy and A Grill received a $40,000 economic development loan from the West Allis Community Development Block Grant Program to assist in purchasing the property on Lincoln Avenue. The city worked with Equitable Bank and Wisconsin Business Development Finance Corp. to obtain
SBA-backed financing. The goal of the loan was to create the three fulltime positions over the next three years, said Patrick Schloss, manager of community development for the City of West Allis. Another benefit to giving Nowak the loan is the property will now be owned by city residents, Schloss said. Dan and his wife, Amanda, live in West Allis. “When you meet them, you can feel their enthusiasm for their product and the business,” said West Allis Mayor Dan Devine. “They have a very good reputation, and we’re excited to continue adding to the food scene in West Allis.” In recent years, West Allis has welcomed several new restaurants, including The Farmer’s Wife, 6533 W. Mitchell St., and the reopened Crawdaddy’s, 9427 W. Greenfield Ave. The city’s first craft brewery, Westallion Brewing Co., 1825 S.
72nd St., opened in April. Nowak has always been drawn to the restaurant business. A cook, bartender and server through college, Nowak continued working part-time in the business even after landing a job in the financial field when he graduated from the University of Wisconsin-Milwaukee in 2004. In 2009, while working at BMO Harris Bank, Nowak launched Tall Guy and a Grill in his home, renting a commercial test kitchen near General Mitchell International Airport. Nowak cooked for friends and family while Amanda managed the events. “We got a lot of referrals from friends and family, and it began to snowball,” Nowak said. “We got to a breaking point where we either needed to stop, or I needed to quit my full-time job.”
That is what he did in July 2013, when Tall Guy and a Grill became Nowak’s full-time gig. He has also hired a catering manager, executive chef and a handful of part-time people. This year, the company is on track to cater more than 65 weddings and another 100 events. It caters lunch daily for area businesses. Moving into the new space means not having to turn away business, which was beginning to happen in Wauwatosa. “I would like to say we’ll be in West Allis by September, but realistically, it’s probably October,” he said. “We’re just excited to have some room to grow.” n
The Tall Guy team setting up for a wedding earlier this year at Rustic Manor 1848 in Hartland.
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BizNews
BIZTIMES – Connect
Great Lakes Distillery deals with growing competition WHEN BIZTIMES MILWAUKEE put Guy Rehorst on the magazine’s cover in 2013, he was seen as a pioneer in the craft distillery market. As the founder of Great Lakes Distillery LLC, Rehorst had navigated a web of barriers to entry and managed to establish its own tasting room, while also shipping to half the country. Bill Owens, president of the American Distilling Institute, described him at the time as a role model for new entrants to the industry. Whether they were following Rehorst’s lead or just the market in general, the level of competition has increased in recent years. “Pick pretty much any major city in the U.S. and five years ago, they probably didn’t have a distillery,” Rehorst said. “Now, just about every major city in this country has at least one, two, possibly three distilleries, so the market is getting more crowded.” In Wisconsin alone, since the 2013 story ran there have been 19 permits issued for liquor manufac-
ARTHUR THOMAS Reporter
P / 414-336-7123 E / arthur.thomas@biztimes.com T / @arthur8823
16 / BizTimes Milwaukee JULY 10, 2017
turers and another six for rectifiers, who blend spirits together. In 2013, Great Lakes accounted for 8.5 percent of taxable liters produced by Wisconsin manufacturers or rectifiers. By 2016, that figure had fallen to 7.4 percent, even as the company increased its volume of taxable liters by 23 percent. Rehorst said spirits in general have been on the rise and while craft beers remain strong, the beer market overall has lost out to spirits. “The converse of the problem of more distilleries is more people are aware of small distilleries,” he said. “We’re seeing a lot more interest from consumers, they’re drinking more things (and) they’re drinking different things.” Great Lakes continues to grow, increasing production from 60,000 bottles in 2013 to 80,000 bottles last year. As more barrels start the aging process, space is becoming limited. The distillery does rent some space offsite for packaging, but Rehorst said he has had talks with his landlord about using a building directly west of the current location, as well. The distillery is on pace for a 10 percent increase in volume this year, even as competition increases, Rehorst said. “It’s tougher competing outside of the state and I think we’re at a point where there’s probably a few markets we’ll pull back from just because maybe the return hasn’t been there,” he said. The focus will instead shift to local markets and toward building the brand. Rehorst hired Todd
Guy Rehorst at Great Lakes Distillery in Milwaukee.
GREAT LAKES DISTILLERY LLC 616 W. Virginia St., Milwaukee
INDUSTRY: Craft distilling EMPLOYEES: 9 full-time, 8 part-time greatlakesdistillery.com
Wolff in March to serve as marketing director. Wolff, who has a graphic design and marketing background, said he hopes to help Great Lakes embrace a “drink with your eyes” mentality that helps its products stand out among the competition. He said the distillery’s Good Land orange liqueur, which comes in a green bottle and has an intensely designed label, is among the initial examples. “Those types of things kind of catch your eye first; that’s the first thing that has to happen,” Wolff said. The marketing work will be taking place over the next year or two and Wolff is hoping to develop a consistent brand image and message, while also leaving room for individual products to have their own messaging. Educating consumers will also remain a focal point. “Our marketing since day one, as limited as it was … has always been about educating the consumer,” Rehorst said. “Our products are not inexpensive, so they’re not a very good impulse buy, so the best marketing we can do is get people to try it.” The taste many consumers have right now is for whiskeys, which have grown in popularity over the
past several years. Rehorst said Great Lakes will be releasing two new whiskeys over the next year that will be available on an ongoing basis. The distillery has had special limited releases of some whiskeys and has made its Kinnickinnic Whiskey from a blend of sourced bourbon and its own rye and malt whiskeys for years. The new releases will be entirely made by Great Lakes. “I think we’ll keep making (Kinnickinnic) because frankly it sells really well and its sales are still growing,” Rehorst said. He also plans to continue releasing collaborations with area craft brewers. It started with the Pumpkin Spirit, released annually with Lakefront Brewery. Rehorst said that was one of the first in the country. “If you look around the country, there’s quite a few distilleries working with breweries now,” he said. Great Lakes’ latest collaboration was with Milwaukee Brewing Co., using the barrels from the brewery’s “Admiral” Stache porter to finish off Kinnickinnic Whiskey. Rehorst said that won’t be the last offering. “We’ve still got a few secret surprises back in our storage that we’ll break out over the next couple years,” he said. n
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Mandel Group is currently building the six-story DoMUS apartment building along the Milwaukee River in the Third Ward. It features two penthouse floors with oversized floor plans intended to attract empty nesters.
High housing costs limit options for many
DATA RELEASED IN LATE JUNE by the First American Real House Price Index revealed the Milwaukee area now leads the nation in declining affordability of homeownership. The index measures the price changes of single-family properties throughout the U.S., adjusted for the impact of income and interest rate changes on consumer house-buying power over time. The Milwaukee area’s housing affordability fell 17.9 percent in
the past 12 months, which is being attributed to the low supply of homes listed for sale. That can lead to price increases. Wisconsin as a whole didn’t fare much better. It is one of the five states with the greatest year-over-year increase in the Real House Price Index, with a 14.6 percent jump overall. With housing prices out of reach for some living in the Milwaukee area, the alternative would be renting an apartment. However, the picture there is just as concerning. The National Low Income Housing Coalition released its 2017 “Out of Reach” report in June, which found the national housing wage, or the amount of money a person has to make per hour to be able to afford a home, is $21.21 per hour for a two-bedroom rental, nearly three times higher than the federal (and Wisconsin’s) minimum wage of $7.25 per hour. The housing wage for a one-bedroom rental is a national average of $17.14 per hour, or about 2.4 times higher than the federal minimum wage. The report found that six of the
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AFTER LEASING the recognizable pink Henry Manschot mansion on East Wells Street in downtown Milwaukee’s East Town neighborhood for 16 years, Nicole Schwark, owner of East Town Spa, has purchased the 143-year-old building and the adjacent building to the east, at 724-726 E. Wells St. Schwark wasn’t planning on buying the property, but when she learned the building was for sale, she pulled the financing together for the $800,000 purchase in just 14 days so she wouldn’t lose her space. “It was the most stressful time in my life,” she said. “I had hives all over my body.” The buildings, which are connected by an underground tunnel and share utilities, came as a package deal. Schwark, who has been gradually expanding her salon into the entire mansion since she began leasing the building, plans on keeping the 724-726 property, which is two rental units, as is for now. Schwark also owns a second property. She and her husband purchased Reagan & Ruby Salon, 915 E. Brady St., nine years ago when they decided to expand the salon.
seven occupations projected to add the greatest number of jobs by 2024 provide a median wage that is not sufficient to afford a modest one-bedroom rental home. The housing wage needed for a two-bedroom apartment in Wisconsin is $16.11 an hour, according to the report, which puts the state at 31st in the nation. In the Milwaukee area, the housing wage is $17.83 an hour. The study assumes that a two-bedroom apartment in Wisconsin is $838 per month. In order to afford a two-bedroom, $838 per month apartment without paying more than the recommended 30 percent of annual income on housing, a household must earn $33,501 annually. The average renter’s wage in the state is $12.89 per hour ($26,811 per year), according to the report. For a two-bedroom apartment that is $1,680 a month, which is the price many of the new units being built in Milwaukee and the surrounding suburbs are going for, a household must earn $67,000. Wyman Winston, executive director of the Wisconsin Housing and Economic Development Authority, said the report is distorted, because Wisconsin residents have lower incomes, even with the lower cost of housing compared to other states. “Throughout Wisconsin, there are only two counties (Winnebago and Jackson) that allow for one full-time worker to afford a two-bedroom apartment priced at the area Fair Market Rent at the average hourly wage for the area,” Winston said, adding that while most of the state’s metro areas are gaining in population and the rents are rising to reflect that, non-metro areas where population has declined have not readjusted. “The cost of housing still has not come down enough (in most cases) to match the mean hourly wages for those people that choose to rent instead of buy,” Winston said. Robert Monnat, partner and chief operating officer of The Mandel Group, one of the leading apartment developers in Milwaukee, said newly-constructed mar-
ket-rate apartments have become so expensive to build, because of land costs and building materials, that they can’t be completed without a corresponding increase in rents. Some developers recently have scaled back projects or dropped them altogether because incomes, particularly those of the millennials at which many projects have been targeted, have not kept up with rent demands. The Mandel Group about three years ago began focusing its projects on empty nesters, who have more disposable income. Monnat said housing assistance programs, such as the U.S. Department of Housing and Urban Development’s Section 8, have contributed low-cost financing, tax-exempt financing, or other financial incentives to developers to entice them to develop and operate rental housing at more modest rents. Today, the low-income housing tax credit, a federal program, and a tax-exempt financing program run by WHEDA in which developers incorporate 20 percent low- to moderate-income apartments within their market-rate projects are also options, Monnat said. “While both programs are well conceived, the numbers available don’t nearly meet the demand,” Monnat said. “Overall, it’s fair to say that policy hasn’t kept up with needs. And the peculiarities of the two largest age cohorts—baby boomers and millennials—have very different wants and limitations.”n
DEVELOPMENT PROPOSED AT FORMER HAMBURGER MARY’S SITE Milwaukee-based New Land Enterprises LLP is planning a six-story mixed-use development at the former Hamburger Mary’s restaurant site in Milwaukee’s Bay View neighborhood. The $21 million, 183,450-square-foot project, which would be located at the corner of Kinnickinnic Avenue and Bay Street, includes 144 market-rate apartments and approximately 14,500 square feet of first-floor retail space.
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STORY COVER
ICONIC CARMEX BRAND REACHES NEW HEIGHTS BY ARTHUR THOMAS, staff writer Franklin-based Carma Laboratories Inc. continues to use formulas based on the same concepts Alfred Woelbing developed when he began selling Carmex lip balm as a way to support his family 80 years ago. But the company is now facing choices about where to take the brand as it has reached new heights in recent years. Growth began to pick up in the late 1980s when the company expanded beyond its classic jar to tubes, and then in the late ’90s, it added lip balm sticks. Carma reached another level altogether when the company began closing gaps in its distribution and increased its focus on innovation. It was a few years into the latest wave of growth when Carma Laboratories president and co-owner Paul Woelbing realized he was reaching the limits of what has business skills could do for the company. “I’m good for a company up to a certain number of million
dollars and that sort of instinct and ideas will get you there, but when you get to be big, you start to need systems and more thick skin, there’s a variety of skills that I didn’t have,” Woelbing said. “For me personally, it started going off the rails, I just was not enjoying myself and I’d come to work feeling overwhelmed.” He turned to the company’s lawyer and his brother Eric, a co-owner. “I’m doing a disservice to the company,” he told them. “I need help.” Woelbing suggested turning over much of the day-to-day decision-making to Rich Simonson, now the company’s chief operating officer. He felt Simonson had always been organized, honest, straightforward and understanding of the importance of recognizing people for good work. “For some odd reason, he looked in my direction and said, ‘We’d like an automotive engineer to lead our (Consumer Packaged Goods) company,’” said Simonson, who joined the company
ABOVE:
Carma Laboratories president and co-owner Paul Woelbing. biztimes.com / 21
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in 2011, adding there were some comical and frank conversations about where he felt his strengths lay as he stepped into his new role. Many family business owners may find it difficult to look to the outside world for help, but Woelbing said going beyond the family tree is what has spurred Carmex to new heights and allowed a company with 160 employees in Franklin, Wisconsin to produce 80 million units a year and take on some of the largest consumer product companies in the world. “To be perfectly honest, it’s a process; you don’t just one day sort of turn it over,” Woelbing said of learning to trust other people to run the business. “We are still working through a little of that. I would say we’re well along the path.”
An 80-year journey
Paul Woelbing’s grandfather, Alfred, did things by himself for years until his son Don, Paul and Eric’s father, joined him in the 1970s. Alfred had worked as a cosmetics buyer in Milwaukee until losing his job in the Great Depression. He eventually decided to begin selling a lip balm he was already making for personal use, taking it to phar-
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Jars of Carmex lip balm are filled on the production line and are cooled before a cap is put on.
macies within a day’s drive of Milwaukee. The name Carmex didn’t really have any particular meaning to it, Woelbing said, adding his grandfather chose yellow as a company color because he liked it and thought it would stand out on store shelves. Alfred Woelbing went from store to store trying to find interested buyers. If he made a sale, great; if not, he left some Carmex with the pharmacy anyway. If it didn’t sell, they could just throw it away. If it did, he included a postcard with his address to make it easy for them to order more. When Don joined the company, he used his mechanical inclination to help improve production, while Alfred focused on sales and the business. “It was a good blend of skills,” Paul Woelbing said. When the business was located at North 68th and West State streets in Wauwatosa, the Woelbings were making 12-quart batches. Today, the company makes 1,000-gallon batches. Eric Woelbing joined the company right after high school, but Paul took a different journey. His interest in art led him to be an art teacher in Philadelphia and New York City. He eventually felt drawn back to Milwaukee and took a job teaching in Whitefish Bay. “My brother came in, it was just the next logical step for him,” Paul said. “I loved going to school and I loved art, so I did that for 10 years, got it out of my
22 / BizTimes Milwaukee JULY 10, 2017
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Jars of Carmex head to packaging after a cap is put on. system and learned a different view of the world.” In 1991, as the company was beginning to grow, Alfred asked Paul to help him with some of Carma’s paperwork. Checks were still written by hand, invoices were on triplicates and the company had no computer at that point, so Paul would teach in the mornings and help at Carma in the afternoon. “It just kind of grew from there,” he said. Today, Eric is retired from daily operations but remains actively involved as a member of the company’s board. Alfred passed away in 2001 after working well into his 90s and Don’s death in 2009 left the company in the hands of Paul, 61, and Eric, 55. Unlike some third-generation companies, Carma Laboratories doesn’t have a sprawling family tree with multiple stakes in the business. Don was an only child and Paul has no children of his own, leaving the next generation to Eric’s two children. His son, Jayme, has a degree from Milwaukee Institute of Art and Design and works for the company in packaging and displays. His daughter, Ashley, is pursuing a business degree from Alverno College and works part-time in the Carma offices.
Trusting smart people
About 10 years ago, a salesman approached Paul about helping Carma grow. Paul was skeptical and said the company was doing fine. The
man tried again, telling Paul that Carma needed his help. Paul pointed out the company had been growing reliably at 8 percent per year and was comfortable. The man responded that the market had grown at 17 percent the previous year. “I said, ‘That’s interesting,’” Paul recalled. He took the idea to his brother and dad. The issue was Carmex was sold to retailers like Walmart through wholesalers, leaving gaps in distribution. The solution was to sell direct to the retailers to fill in the holes. “Honestly, it was very scary for the family, who had done everything themselves, to invite a stranger in to come and look into your personal life, your business,” Paul said. Closing gaps helped boost sales, but there are only so many holes you can fill before things begin to plateau. Woelbing said the company had to begin transitioning from thinking of itself as a manufacturer to thinking of Carmex as a brand. “And if I’m a brand, you have much deeper philosophical questions than, ‘What kind of machinery do I have?’” Woelbing said. “That’s when you have to bring in, to be blunt, people smarter than you and more talented than you who can take you in that direction.” biztimes.com / 23
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The last several years have been marked by bringing on professional management staff, including people like Simonson; Jona Mancuso, vice president of marketing; and Keith Edgett, vice president of research and development. Simonson said through the recruitment process and knowing a Carma employee, he felt he could trust the company and enjoy working with its leadership. He was also looking forward to joining a company with a global brand. “There’s something kind of exciting and cool and to some degree sexy about working for a company the world knows,” he said. When Woelbing turned things over to Simonson a few years later, the task was to implement structure and improvements around the company’s products, people and processes. Woelbing said he is still in the office every day and is acutely aware of
ship team lives those,” Simonson said. Simonson said he was surprised when he joined Carma and found out the phone directory was organized by first name, a small example of the family atmosphere. “There’s a sense of stewardship here,” Woelbing said. “Honestly, my brother and I own the company and we could sell the company and we could get enough money to probably retire for the rest of our lives, but this is sort of who we are; this business is our legacy, my grandfather, my dad. There’s a sense of stewardship over the brand; the people who work here, the employees, they care a lot. For us to just walk away from it, that’s not fair.” Mancuso also said Woelbing hires entrepreneurial people who have allowed the company to dream big. “Anybody who walks in the door is expected to run this like it’s your little piece of the business,” she said. “When you hire someone who is an entrepreneur, the sky is the limit.”
Big competition
Having big dreams is important for Carma, especially considering the competition Carmex is up against. Market leading products like Burt’s Bees and ChapStick are just individual parts of multibillion-dollar companies The Clorox Co. and Pfizer Inc., respectively, while newer entrants
“WE COULD SELL THE COMPANY AND WE COULD GET ENOUGH MONEY TO PROBABLY RETIRE FOR THE REST OF OUR LIVES, BUT THIS IS SORT OF WHO WE ARE; THIS BUSINESS IS OUR LEGACY, MY GRANDFATHER, MY DAD.”
— Paul Woelbing
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the shadow his presence can cast. “I have to be careful because sometimes I’ll enter the room … sometimes people will have one eye looking at me and one eye looking at Rich and really, Rich is in charge of the company,” Woelbing said, noting that while he’ll take small ideas to individual team members, anything of significance goes through Simonson first. But Mancuso was quick to give Woelbing credit for the overall tone he sets for the company. “For the record, Paul still passes out our paychecks,” she said. Simonson said Woelbing has a tendency to be humble. Paul and Eric’s values, which he described as integrity, family, community and appreciating customers, flow throughout the company. “It’s refreshing to work in an organization that doesn’t just have those posted on the wall. Our owner-
Carma Laboratories sells 80 million units of Carmex a year. 24 / BizTimes Milwaukee JULY 10, 2017
like Eos have had the backing of celebrities like Kim Kardashian. “I think we’re a small brand with really big aspirations,” Mancuso said. Small, of course, is a relative term. Carmex is sold in 36 countries around the world. It’s one of the top lip balm brands in the United Kingdom and is among the fastest-growing in South Korea. But the company just does not have the same resources as the competition. Increased shipments of Burt’s Bees helped push the Clorox segment that includes the brand’s U.S. sales to $990 million last year. That segment also includes brands like Hidden Valley, K.C. Masterpiece and Brita. As a whole, Clorox spent $141 million on research and development and $587 million on advertising in 2016. Drug maker Pfizer had $52.8 billion in revenue last year, and spent $7.9 billion on R&D and $3.2 billion on advertising. While it would not disclose its revenue figures, Carma said it sells 80 million units of Carmex products annually.
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Located in Franklin, Carma Laboratories has 160 employees.
“ I THINK THAT EVERYONE HERE WORKS REALLY HARD BECAUSE WE ARE THE CHALLENGER BRAND, BUT WE DO ASPIRE TO KEEP UP WITH THOSE BIGGER COMPETITORS.” — Jona Mancuso
26 / BizTimes Milwaukee JULY 10, 2017
“We drink a lot of coffee,” Mancuso joked. “I think that everyone here works really hard because we are the challenger brand, but we do aspire to keep up with those bigger competitors.” She said there are advantages to being smaller, pointing out Carmex can be more nimble and responsive to retailers and customers. The company is also extremely focused on lip care, unlike the competitor companies, which have consumer products spread across many categories. “The challenge is we have to do more with less in terms of resources,” Woelbing said. “But that forces us to be more creative.” Carma has evolved over the past decade to become a completely different company, adding more data, resources and people than the Woelbings even recognized they needed 10 years ago. “When it was just me, my dad, my brother and my grandfather we came in, there were orders, we made Carmex, we pushed it out the door and 30 days later, their money showed up,” Woelbing said. But even after all of the changes, resources are still limited. “If you have boatloads of money, it’s easy to buy advertising and it’s easy to try new things,” Woelbing said. “We have to think really hard about how we allocate our resources.” That doesn’t mean the company has to shy away from big platforms. Football fans may have noticed Carmex was a presenting sponsor of last year’s Wisconsin-Louisiana State University game at Lambeau Field. Mancuso pointed out the game
coincided with the launch of a new brand logo. “It also felt like an organic opportunity for us to really elevate our brand profile in the state of Wisconsin,” she said. “We’re a small, family-owned local manufacturer and a lot of people don’t know that we’re in Franklin, Wisconsin.”
An eye on the future
With limited resources and big competitors, the stakes can be very high. Woelbing is committed to not rushing into new product lines just because they are trendy. He pointed out that when Burt’s Bees began to grow in popularity, the rush was to claim products were natural. Carmex took a slower course, searching out natural products that in the end were more moisturizing and had a luxurious feel. “We have to be very thoughtful,” he said. The company is working to expand into categories beyond lip care, but Mancuso said it is yet to be determined exactly what those products will be. She said the recent introduction of a cold sore treatment is an example of an adjacent category where Carma may have opportunities. “Those are the types of things we’re exploring right now,” she said. “You don’t want to disappoint the end user; the brand is too valuable.” Production and distribution have followed a similar path to the development of the Carmex brand, highlighted by the addition of professional staff and thoughtful decision making. “We’re really good at making lip balm, but we have to be smart,” Woelbing said, noting that every different form, flavor and country come with slightly different requirements and it is easy to
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Carma Laboratories produces more than 200,000 sticks of lip balm on a typical day.
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have a proliferation of products. Mancuso praised Simonson for helping Carma improve its efficiency. “As a business leader, he really understands manufacturing and is really focused on finding efficiencies in every single department,” she said. There are still some larger inefficiencies that remain. Carma’s main production facility is around 44,000 square feet and is the product of several additions over the years, making it difficult to flow
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product in a smooth path through the facility. The company’s distribution facility is located about a half-mile away, meaning the product has to be trucked over for additional processing before it is distributed. Woelbing acknowledged the current system can be a little disjointed. The Woelbings do own a vacant parcel just east of the distribution center that could be the site of a future facility. “Ultimately, we’d like to do a flow-through factory,” Woelbing said. “If we had unlimited cash, I’d say let’s do it right now, but since we don’t, let’s do a meaningful thing; let’s really think about what we want (and) where we want to go.” Simonson said Carmex has the luxury of investments previously made in production, which help make his job in operations easier. Addressing issues like increasing complexity in production or distribution are easier and the challenge for the company is to think bigger than just making internal improvements. “Now we’re starting to get into some more interesting brand evolution work,” he said. “The strength of the company is our brand, not our manufacturing capability.” n
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Special Report FAMILY BUSINESS
Trust the next generation to find its own way, even if it’s a different path
By Arthur Thomas, staff writer
WHEN THE ENTREPRENEURIAL BUG HITS most kids, they’re likely to set up a lemonade stand in their front yard and draw on the goodwill of neighbors to fill their piggy bank one quarter at a time. But if you grow up on a two-lane state highway with a 45 mph speed limit, the foot traffic is going to be pretty limited and it is going to take a long time to sell even one glass. There are other options of course, especially when your family runs a 60-acre perennial farm just a mile away. My grandpa, Harry Radtke, used to let me help him with work, paying me a dollar an hour and taking occasional breaks to play catch. At one point, I set up a stand outside the office and began selling herbs to customers on my own. I’m pretty sure it was a one-sided arrangement in which the business put all the costs into growing the plants and somehow, I kept all the revenue from the sales. I grew up on that Germantown farm, formally known as W. & E. Radtke Inc. but often just referred to in our family as “the greenhouse.” Summers, in particular, meant swimming in irrigation ponds, exploring fields and playing on soil piles. Some employees still tell me stories about finding my toys on the planting line. The business is run by my mom, Liesl Thomas, and my uncle, George Radtke, with help from their sister Rhonda Weber and my grandma. The company is a market leader in Wisconsin and northern Illinois. If you’ve seen hostas, daylilies, ornamental grasses or thousands of other varieties of perennials at commercial developments throughout the area, there’s a good chance the plants came from their business. My family has been at this for a long time. The current business traces its roots back to the late 1920s and the family’s heritage of farming dates back to 1852. My mom and uncle are the third generation to run W. & E. Radtke, but they are approaching their 60s and the fourth isn’t angling to take things over. I’m part of that generation, with my cousins Lianne and John, who, like me, have established careers in other industries. I don’t remember the exact point when I decided I wouldn’t be joining the family business. Part of the decision was probably made when I realized my high school ability to get good grades on papers completed at the last minute could potentially translate to journalism. It became more of a reality when I started getting
ent, they are looking at other options, although the industry doesn’t exactly leave them many good choices. Constant turnover in staff makes an employee stock ownership plan difficult to follow and efforts to develop potential buyers in management have also been problematic. Perennials occupy a unique space in the green industry and being exclusively wholesale growers in Wisconsin limits the pool of potential strategic buyers. My decision to not join the business was never really made, it just kind of happened, and my mom and I had never really talked about it. Given the challenges she faces now, I asked her while we were having a beer recently if she would have done anything differently. To her credit, she didn’t ask for a do-over. She said it was probably when my journalism career began to gain traction that she realized I wouldn’t be following in her footsteps. I’d spent my summers in college working on the farm; first in the field, then making deliveries, and then in the office, handling customer calls and routing drivers. The industry is extremely seasonal. Most of the year is spent gearing up for an eight-week stretch in spring and early summer when work days can easily stretch into the 12- to 14-hour range for six or seven days a week. That environment can be high stress, but it also comes with a rush of adrenaline when things go well. My mom said her approach was to encourage me and give me opportunities to be involved in the business, but not to mandate it. In a business with a yearly gamble on the weather and such intense time requirements, she said
internships and gaining some traction in the field. Landing my first job and moving into a management role probably helped cement it. There are, of course, several options for family businesses when it comes to the next generation. Parents can make it clear from an early age their children are expected to follow in their footsteps or they can push the next generation away, forcing their children to find their own way. My parents took a middle ground approach, giving me opportunities to be involved but never mandating my choice for me. I can’t say I ever felt the weight of family history pushing me in any direction, nor did I feel any direct pressure to change my career path. I have a very distinct memory of a car ride with my grandpa where this approach was made clear. We were driving south on Highway 145, having just turned off Mequon Road. I don’t remember what prompted it, but he told me I didn’t have to follow him, my mom or my uncle into the family business. “You can be anything you want to,” he said, adding I just had to do my best at it. The horticultural industry isn’t exactly a highly lucrative business and there is plenty of risk involved. All it takes are a few stretches of sub-zero days in winter with little snow cover and large portions of the crop will fail to make it through. Likewise, a few bad weather days at the wrong time can torpedo demand. It also doesn’t take working too many chilly, rainy days in the spring to make you focus a little harder in school. It was more coincidence than anything else that I started taking college seriously the semester my grandpa passed away. Stories of family business succession planning are often told from two perspectives. There are the case studies of things going right—an orderly transition from one generation to the next. Then there are the stories of thing going horribly wrong, with businesses crumbling and disputes sometimes finding their way into the court system. My mom and uncle are somewhere in between those Harry Radtke on his tractor. two points. With no heir appar-
biztimes.com / 29
you have to love the industry to be in it; you can’t be forced into it. I suppose that’s true in most family businesses, but it rings especially true in this situation. My uncle had known he was going to follow in my grandpa’s footsteps, so he got a horticulture degree from the University of Minnesota. While he was away at school, my grandpa asked my mom to help out. She had designs on being
Above: The wholesale perennial nursery at which Arthur Thomas grew up working and playing. Left: Arthur Thomas takes a break from selling plants with his grandmother at her church’s Fourth of July picnic.
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a large animal veterinarian, but life events have a way of changing plans. It wasn’t lost on me as I talked to Paul Woelbing, president and co-owner of Carma Laboratories Inc., for this issue’s cover story that he spent 10 years teaching art before joining his family business. Life has a way of letting things work out the way they are supposed to. The reality is the land currently occupied by the greenhouse may be destined for some other use in the future. Previous locations for the family business have met similar fates, one making way for part of Capitol Court, the others for houses in Glendale and near North 17th Street and West Concordia Avenue. It would be hard to see that happen. Just as I clearly remember the car conversation with my grandpa, I also remember him teaching me to drive a tractor. We went way out to the far reaches of the field and when he knew I could handle it, he hopped off the back without telling me, leaving me to find my own way. As we kept talking, my mom made it clear she’d like to see the business continue in some fashion, but if it doesn’t happen, so be it. As for me, she said knowing I’m doing something I enjoy makes her happy every time she sees my byline in print. n
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Special Report FAMILY BUSINESS
Riesch family leads R&R Insurance to 42 years of steady growth
By Lauren Anderson, staff writer
WHEN KEN RIESCH SOMEDAY CLOSES out his long career as owner and president of Waukesha-based insurance agency R&R Insurance Services Inc., he doesn’t want anyone to notice. He would rather the business carry on and continue to grow steadily, just as it has for the past four decades. But when he does, Ken will leave the business in familiar hands—those of his children, Jack Riesch, Bryon Riesch and Stephanie Riesch-Knapp. All have followed in their father’s footsteps as employees of the family business. “As an owner, my goal from a business standpoint is to, at some point, leave R&R Insurance and have no one really know that I’m not working anymore, which meant that we wanted to have the kids in a position where they really were 100 percent capable of managing the company—not only for our customers’ sake,
but also for the insurance companies that we do business with,” Ken said. Ken and Jack Riesch will present at the Family & Closely Held Business Summit, hosted by BizTimes Media on Wednesday, July 12, from 7 a.m. to 11:30 a.m. at Potawatomi Hotel & Casino. R&R Insurance was founded in December 1975 by a group of five men, who purchased a small agency in North Prairie. Included in that group were Ken Riesch, his brother Dexter Riesch, and their father, Otis Riesch. Within a few years, the other two owners had sold their stock back to the agency for various reasons. R&R, by default, had become a family business. When Otis Riesch died in 1987, Dexter and Ken became sole owners. Three years later, Dexter also passed away. “Those were some tough years from a family standpoint,” Ken reflected. “That left me being the only owner of any stock in R&R Insurance.”
JACK RIESCH
KEN RIESCH
By the time Ken had assumed full ownership, the business had grown substantially. R&R moved three times within North Prairie before moving to Brookfield and eventually landing at 1581 E. Racine Ave., Waukesha, which remains
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its home office today. When R&R moved to Waukesha, the business was at about $4.2 million in revenue, or commission income. It’s steadily grown and, today, that number is about $35 million. The business has also expanded geographically, with offices in Menomonee Falls, West Bend, Beaver Dam, Madison and Oconomowoc. By the end of 2019, R&R has a revenue goal of $42 million. Ken attributes much of the growth to its strategic investment in people. “We invest a tremendous amount of money back into the agency in resources,” Ken said. “If you think of a manufacturer, a manufacturer is going to invest in tooling, hard equipment and physical assets. Our investment is in people … We have continued to hire the best and brightest people we can find in the insurance business.” Some of those people have included his children. Jack Riesch is executive vice president of R&R, Bryon Riesch is project manager and Stephanie Riesch-Knapp is senior benefits consultant. While they all ultimately ended up in the family business, they first worked elsewhere, getting their feet wet in the insurance business—Jack at CNA Financial Corp., Stephanie
at West Bend Mutual Insurance Co. and Bryon at Northwestern Mutual Life Insurance Co. “The kids spent at a minimum three, and maybe as much as five years, working outside of the agency,” Ken said. “So when it came time for their next moves, I think they thought their dad was relatively successful and they should try to get involved with this business. And it’s worked. It’s not been easy, but it’s worked.” Today, Ken owns 100 percent of R&R’s voting stock, while his three children are equal owners of the remaining stock. “Some business owners don’t have kids that want to follow in the footsteps of their mom or dad, so in some respects, I’ve been very fortunate,” Ken said. Still, it presents a challenging—and looming—question: Who will take over the voting stock? The family is still working through that decision, he said. “Those are tough issues to have conversations around,” Ken said. Meanwhile, the family has experienced its share of hardships over the years. In 1998, an accident left Bryon, then a 19-year-old freshman at Marquette University, paralyzed from the chest down. In 2014, Ken’s son Michael died after a battle with esophageal cancer.
Difficult challenges for any family to weather, these events have also brought a certain resiliency to the family business. “Every one of those happenings, every one of those tragedies, makes you reflect differently about the business and think differently about the future of the business,” Ken said. “It’s not sad; it isn’t woe-is-me. It’s life. And family businesses go through these trials and tribulations big time. Where we excel is in how to handle them in common sense ways. If you can get through the tragedy, you do have a lot of strength to move forward with. It does bring the family closer together.” While his children play key roles in the business, he’s quick to acknowledge the important role of bringing in outside perspectives, as well. “You will never hear me say, ‘The Rieschs run R&R Insurance,’” Ken said. “We always have had a significant management team that helped run and manage R&R Insurance. One of the reasons we’ve been able to grow is we’ve been able to hire people that are probably a lot smarter than we are, the Rieschs, but we’re really willing to invest in those types of people.” “Our people are our greatest assets,” he added. “Without our people, we wouldn’t be where we are today.” n
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Special Report FAMILY BUSINESS
Having the awkward conversation Deans encourages openness about family wealth By Molly Dill, staff writer
Deans
IT CAN BE AWKWARD to start a conversation with family members about transitioning wealth to the next generation. But for family business owners, it’s a necessity. Tom Deans is out to help, and he’s provided leaders a few questions to ask to get the ball rolling in his book, “Willing Wisdom: 7 Questions Successful Families Ask.” Deans will be the keynote speaker at the Family & Closely Held Business Summit presented by BizTimes Media on Wednesday, July 12, from 7 to 11:30 a.m. at Potawatomi Hotel & Casino in Milwaukee. “125 million American adults do not have a will, which is roughly 50 percent of all adults,” Deans said, adding about half of those with wills have badly outdated documents. “80 percent of those people who do have a will do not share them. “Consequently, people are learning about what they are inheriting when it’s too late. Because they almost always have questions. Those conversations are irretrievable. They can’t be had.”
No one likes to talk about death, but Deans says starting early and “inviting your family to your death,” as an open discussion and document is the best way to transition the wealth, while making intentions clear. A will should be a personal document and a person’s greatest written legacy, he said. “There’s lots of superstition in this whole subject, which is really kind of odd because you’re dealing with business owners who are typically smarter than the average bear,” he said. Some family leaders worry starting the conversation will open up a can of worms and family dynamics will spiral out of control, especially if there are multiple children who are receiving unequal shares. “The problem never goes away, and we know this because the amount of estate litigation is on the rise,” Deans said. “It’s tearing families apart. So much of this could be avoided by a family writing a $1,000 will as opposed to spending hundreds of thousands of dollars in court fees.” Among the questions Deans encourages
“The amount of estate litigation is on the rise. It’s tearing families apart. So much of this could be avoided by a family writing a $1,000 will as opposed to spending hundreds of thousands of dollars in court fees.” —Tom Deans
biztimes.com / 33
According to Deans, about $2 billion will be inherited in the U.S. each day over the next 10 years, as the financially successful baby-boom generation ages. . families to ask: “What word best describes our family? Share a family story that helps explain the word you selected.” And “How would an inheritance advance your dreams for yourself, your family and your community?” According to Deans, about $2 billion will be inherited in the U.S. each day over the next 10 years, as the financially successful baby-boom generation ages. And many families that have amassed wealth have a family business to pass on. That can be complicated in and of itself. “In the absence of an estate plan, there is no business succession plan,” Deans said. “We know that the state of affairs of estate planning is absolutely appalling.”
Deans cautioned that business owners and affluent families shouldn’t facilitate this conversation or the division of assets without a third party’s assistance. A wealth advisor, accountant and lawyer could all help facilitate a family meeting to discuss wills, powers of attorney, shareholder agreements, living wills and last wishes. Most family members are curious about how a family came to amass wealth, what the parents’ expectations are for the children, and how the children would use the money, Deans said. “The ultimate meeting is a three-generation family meeting,” he said. “The really smart dynastic families are using family meetings to actually look backwards and tell the stories.” n
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Strategies SALES
Strategic account management Accelerating revenues, profit and client retention Expanding business with existing customers is the most successful and cost-effective way to grow revenue and profit. “The Benchmark Report on Top Performance in Strategic Account Management” study conducted by the RAIN Group confirms that sales professionals who successfully engage in strategic account management were: »» 3.1 times more likely to grow revenue 20 percent or more with their existing clients. »» 3.4 times more likely to increase profit by 20 percent or more with strategic accounts. »» 4.5 times more likely to experience significant year-over-year client satisfaction improvement. The RAIN Group’s 2013 study “What Sales Winners Do Differently” confirms that while 75 percent of clients make strategic purchases, only 14 percent are the result of a discovery initiated by a sales professional. What this means is strategic account management, while talked about at many companies, is not fully implemented as a new business development or client retention strategy. While there are several competencies strategic selling professionals possess, three distinguish a strategic account manager from a traditional sales professional: 1) Develops trust with executive decision-makers SAMs have better business acumen and ask better strategic questions than the average sales
professional. They know the shortest path to an engagement is gaining the key decision-maker’s endorsement and they speak “executive-speak.” Conversations are well-planned, purposeful and succinct. It’s not unusual during an initial client meeting for a SAM to develop a high level of rapport and trust, which leads to them gaining strategic and political insider information. These insights allow them to better navigate the buying process and win more. 2) Brings new ideas that advance the client’s strategic goals Seventy-six percent of SAMs identify new solutions for their clients, versus only 47 percent for the average sales professional. They connect unrelated pieces of information and work collaboratively with internal subject matter experts to create ideas that enhance client value. They are confident and competent, see what is unseen, and create opportunities where others see brick walls. To be successful, SAMs need enterprise-wide support. Buy-in and alignment from all departments must be defined, and coordination of the “hand-off” between one department and the next is tested and tweaked. Too often, when operational execution falls short of the promised expectations, SAMs shift roles, and reluctantly become project managers who shepherd orders through the system to ensure that deadlines are honored and the company reputation is protected. They know that loyal clients buy more frequently at higher rates and have shorter sales cycles, so they do whatever is needed to preserve their commitments. 3) Drives quantifiable results for the client and the company SAMs are strategic and results-driven. They play to win and want to make a meaningful difference for their clients. According to research conducted by Frederick Reichheld of Bain & Co. (inventor of the net promoter system), increasing client retention rates by 5 percent increases profits by 25 to 95 percent. Higher client retention happens when
higher value is received. SAMs engage in a systematic approach to idea generation with clients. They facilitate regular business review and planning conversations with their top 20 clients, bring fresh ideas to the conversation and identify new ways to help their clients achieve their strategic goals. Most sales professionals do not have an effective strategic account planning tool, nor have they been trained in how to engage in strategic conversations with top-level leaders. Yet the average salesperson believes he or she should be generating “an average of 60 percent more revenue from their strategic accounts” according to the RAIN Group study. With statistics showing it is 22 percent less costly to sell an existing client than to bring on a new client, and 60 to 70 percent of existing clients will buy from a current provider, leaders need to empower their sales team with the tools, knowledge and strategies to become a SAM. In doing so, new business opportunities and client retention numbers will improve, while reducing the cost of new business acquisition, generating better top and bottom line performance. n
CHRISTINE McMAHON Christine McMahon provides strategic sales and leadership coaching and training. She is the co-founder of the Leadership Institute at Waukesha County Technical College’s Center for Business Performance Solutions, and can be reached at (844) 369-2133 or ccm@christinemcmahon.com. biztimes.com / 35
Strategies FAMILY BUSINESS
Prepare to work with family members Clarify roles, responsibilities and expectations
“This is what we are about. We plant the seeds that one day will grow. We water seeds already planted, knowing that they hold future promise.” —Archbishop Oscar Romero Prayer
When my brother, Bill, graduated from college, my father hired him into the business. While Dad was not the owner of the company, he was its sales manager. Dad was a World War II veteran, having served as a navigator in the U.S. Army Air Forces. I loved Dad’s generosity, passion and determination. He was also demanding and directive as a father. I can only imagine what it might have been like to work with him. My brother managed to successfully navigate the inherent challenges in their relationship. By the time Dad retired, my brother had advanced into a leadership role and eventually became the president of the company. His “boss” 36 / BizTimes Milwaukee JULY 10, 2017
became a proud father again. In the history of family relationships in business, it is only in recent years that there has been an exploration of the dynamics that occur when you mix the roles of father, brother, son, daughter and mother with the roles of boss and employee. Working together in business is uncharted territory for family members. The unintended tension and stress that can result can cause irreparable damage to personal relationships. Two important actions to take when family members work together are: 1. Clarify roles, responsibilities and expectations. 2. Create agreements about how family members will work together. Clarifying roles, responsibilities and expectations This isn’t particularly easy even when people are not related to one another! However, when one family member (perhaps a son) reports to another (father) it is critical that the boss (father) is able to clearly articulate the responsibilities of the job. He needs to communicate expectations and channels for accountability. As father and son, they will have an established communication pattern. It is important that both assess whether or not their father/son patterns will serve them inside a business. They may need to intentionally create a new way of talking and listening to one another in order to be effective. We encourage an “active listening” process family members utilize in their communication with one another. “This is what I heard you say. Is there anything I have missed?” This strategy can initially be awkward for both, yet over time it creates a level of understanding that will strengthen their relationship and effectiveness in the business. Establishing guiding principles: Agreement on behaviors within the workplace In working with members of a family-owned and -operated business, we look to facilitate con-
versation to create guiding principles. Examples created by families include: »» We will use our first names within the business setting. »» We will avoid business conversation outside of the business. »» When we have a difference of opinion, we will invite conversation with a commitment to listen to one another for understanding. »» Inside and outside of business, we will support one another. »» Once a decision is made, we will “carry the flag.” In order for guiding principles to “live” within the family business, there needs to be regular self-assessment and collective assessment. We encourage our clients to use a 5-point (1=low; 5=high) scale for each of the guiding principles. They will benefit from sharing their self-assessment, as well as the collective assessment, and invite a conversation about what they might need to do differently moving forward. Recognizing and honoring the difference in business and family roles and creating guiding principles can provide more enjoyment in both. n
KAREN VERNAL Karen Vernal is the president of Vernal Management Consultants LLC, a Milwaukee-based leadership and organizational firm. For more information, visit www.vernalmgmt.com.
Strategies A BRIEF CASE
How can I hold employees accountable but offer flexible hours and work locations?
Fred D’Amato President WFA Staffing Group “Recent Gallup surveys consistently have found that flexible scheduling and work-fromhome opportunities play a major role in an employee’s decision to take or leave a job. That being said, flexibility within the workplace is by its nature something that is earned, whether by track record, years of experience, or proven results within a field. This includes flexible hours and/ or work schedule, an employee working remotely, or a sales representative working a territory— in essence, managing their business within a business. Our account executives and recruiters provide cell numbers to candidates and clients to allow for contact both during and many times after business hours when working from home. In any case, trust and results are obviously critical factors. “Even within a traditional 8-to-5 office schedule, there are options to offer some flexibility. At WFA, we find great value in staying open on Saturday mornings to allow convenience for candidates and companies busy during traditional business hours. This also provides an opportunity, as we allow employees the option to ‘flex’ their one Saturday per month hours to time off during the week as needed for family and personal commitments. In addition, by offering PTO time versus a traditional vacation schedule, this allows each employee to manage his or her time as needed, whether with family, health, vacation or children’s schedules.”
Manoj Nair Chief strategy officer Swarming Technology “Swarming Technology believes in the concept of working through people. This involves continual teaching, recognition of both group and individual achievements, development of our community and culture, and inclusion of people in the development of processes. As a company, we always strive to cultivate the expertise and passion of our team to create a culture that inspires it to meet and exceed our commitment to our customers. “This approach empowers our associates to take ownership of the projects they are involved in and assumes their responsibility to deliver the project on time and meet the commitment. We also tailored our bonus program to reward efficient delivery, high quality and exceptional customer support of our customers. “The ability for our associates to deliver on our customer commitments from anywhere enables us to provide flexibility with work hours and location. We have a very collaborative and inviting work environment with many tools to facilitate unified communication between clients and associates. Tools like Slack, Google Hangout, Join.me and Skype not only facilitate communication, but also provide the ability to share screens and a unified, collaborative experience.”
Sandra Nix President and CEO Connected Technology Solutions “About 10 percent of our team members work remotely from home offices around the country, and many at our home office have staggered start and end times or other flexible schedule options. Regardless of location or schedule, team members are all accountable to each other and ultimately to providing the best quality product and service to our clients. Our team members who work remotely attend meetings via GoToMeeting or Skype, are included on email strings and are treated as much a part of our process and teams as office or production workers—and they frequently visit the home office to do some ‘brain bumping’ with co-workers. “As a company, we measure everything and hold all team members accountable for results. That means we have thoughtful and detailed processes in place and work hard on creating effective communication channels. “We do a lot of work in communal digital environments—a shared network, Google docs and cloud-based solutions. This allows everyone access to the most up-to-date and current information and also provides us a way to work both collaboratively and simultaneously so all our team members are heard, understood and together move us toward predetermined, shared goals. “Accountability at CTS is viewed as a bilateral, specific process that binds together members of our teams, all moving toward a mutually beneficial outcome.” n biztimes.com / 37
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BizConnections PAY IT FORWARD
Olivieri lends time and talents to build strong Hispanic community José Olivieri
LILA ARYAN PHOTOGRAPHY
Partner Michael Best & Friedrich LLP Nonprofit served: United Community Center Service: Board president
JOSE OLIVIERI recognizes the advantages life has afforded him. He attended Carroll University, went on to graduate from Marquette University Law School, and has since enjoyed a long career as a lawyer in Milwaukee. Olivieri also recognizes that with those successes comes a responsibility to give back to the community and ensure those opportunities are made available to others. A partner with Milwaukee-based Michael Best & Friedrich LLP, Olivieri has served on numerous boards to that end— the Greater Milwaukee Foundation, the University of Wisconsin System board of regents, the Milwaukee Public Library Foundation and Carroll University’s board of trustees, to name a few—and has lent his professional expertise to provide pro bono legal services for those in need. But Olivieri says it’s his sustained service on the United Community Center board that’s proven most rewarding over the past three decades—the last two of which he has served as president. “I’ve seen it grow from a very small entity to a very large entity, with impact in a lot of different areas,” he said. “It’s been really fulfilling.” During Olivieri’s tenure with the UCC, the organization has seen significant expansion, both in its physical footprint and the services offered. When Olivieri joined the board in the mid-1980s, there was no school, elderly program or Latino Arts organization.
Today, they’re among UCC’s flagship services, along with homebuyer counseling services, substance abuse treatment programs and fitness programs. From attending board meetings to conferring with executive leadership to staying current on the organization’s developments, Olivieri said the time investment of serving on both the UCC board and in his other appointments is significant. But he sees the reward. “I find it satisfying,” he said. “I enjoy the people I work with. I can see the fruits of the work. All of that motivates you to continue to work. I’ve always felt that being involved in the community is important … Seeing how the Hispanic community has grown so dramatically in Milwaukee— and a lot of the challenges that are faced, but also a lot of the opportunities—I see the opportunity to continue to enhance the experience of people here in the community. And I see this as part of the work to accomplish that.” Olivieri was recently awarded the 2017 Robert H. Friebert Social Justice Award from the Jewish Community Relations Council of the Milwaukee Jewish Federation for his leadership in the Hispanic and broader community. n
LAUREN ANDERSON Reporter
P / 414-336-7121 E / lauren.anderson@biztimes.com T / @Biz_Lauren
biztimes.com / 39
BizConnections PERSONNEL FILE ARCHITECTURE
BUSINESS DEVELOPMENT
Korb + Associates Architects Milwaukee
TEAM Inc., Germantown
Johnathan Bartol has been hired as an architectural designer.
HEALTH CARE
Fulmer Dentistry, Paddock Lake Kochelek
BANKING & FINANCE
PNC Bank, Milwaukee
Fulmer Dentistry, has named Dr. Kaleigh Fulmer as its new associate dentist.
Peterson
Association management firm TEAM Inc. has hired Katie Kochelek as director of marketing and Brenda Peterson as account manager.
DESIGN
Creative Business Interiors, Milwaukee Corrao
MANUFACTURING elected principals with GRAEF. Fisco has worked for GRAEF for more than 16 years. Vogel has been with the company for 17 years.
Flasch
White
Brianna Flasch has been hired as an interior designer and Elizabeth White was recently hired as a furniture project manager.
Dental Associates, Milwaukee
BANKING & FINANCE
DESIGN
Wealth & Risk Management Services LCC, Milwaukee
Corporate Design Interiors, Waukesha
Josiah Penniman, a recent graduate of Crown College, has joined the Financial Solutions Group at Wealth & Risk Management Services LLC as a financial services professional.
Allison Page has joined Corporate Design Interiors as marketing coordinator. Page joins the CDI Team with more than six years of marketing experience, most recently at a Kimball dealership.
BUSINESS DEVELOPMENT
ENGINEERING
TopLine Results Corp., Pewaukee
GRAEF, Milwaukee
Melanie R. Varin has been named chief operating officer and consultant for TopLine Results Corp. Varin will helm the company’s business process consulting practice. For more than 25 years, Varin has led sales and marketing teams for organizations like GE Healthcare and Eastman Kodak.
40 / BizTimes Milwaukee JULY 10, 2017
Fisco
Vogel
Steve Fisco, senior civil engineer and project manager, and Mike Vogel, leader of the sports and recreation group and senior structural engineer, have been
Brilowski
Anthony Ferraro has been hired as chief business development officer at Engender Corp. He will be responsible for continued growth in the power systems and OEM off-highway markets for IEA LLC; the data center and facilities markets for Silver Linings Systems LLC; and metal fabrication markets for ArcRon LLC.
NONPROFIT & VOLUNTEER
HEALTH CARE
Robinson
Joe Corrao has been promoted to vice president for treasury management banking at PNC Bank. Corrao has more than 20 years of banking experience. Nicholas Robinson was also promoted to vice president, business banking. He has more than 12 years of banking experience.
Engender Corp., Kenosha,
Sielaff
Pam Brilowski has joined Dental Associates as a corporate trainer. Brilowski has 20 years of dental hygiene and leadership experience. Alexandra Sielaff, Ph.D., has joined the organization as director of instructional development. Sielaff has more than 25 years of experience in higher education at Marquette University, Milwaukee School of Engineering, Mount Mary University and Waukesha County Technical College.
HOSPITALITY
Marcus Hotels & Resorts, Milwaukee Sean Burke has been appointed the new corporate director of operations for SafeHouse Restaurants in Milwaukee and Chicago. With more than 20 years of experience, Burke will oversee all operations for both SafeHouse locations, owned by Marcus Hotels & Resorts.
Submit new hire and promotion announcements to: biztimes.com/personnel
Program of Academic Exchange, Milwaukee Program of Academic Exchange, a nonprofit international student exchange program, has hired Jeffrey Jarmes to implement and oversee the organization’s operations in southeastern Wisconsin. Jarmes will work with local host families and high schools to bring high school students to the area to study for an academic year.
RETAIL
Brew City Brand, Milwaukee Melissa Daniels has been named purchasing manager of Brew City Brand. She has been with the company for six years, starting first as a customer service rep.
STAFFING
SourcePoint Staffing, Brookfield Brad Snelson has been promoted to vice president, sales and recruiting at SourcePoint Staffing. Snelson has been with SourcePoint for 10 years, and has 23 years of experience in the staffing industry.
AROUND TOWN Greater Milwaukee Foundation annual meeting The Greater Milwaukee Foundation recently held its annual meeting and civic awards presentation at the Marcus Center for the Performing Arts in downtown Milwaukee.
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1.
REBECCA STONER of ACTS Housing, KRISTI LUZAR of the Urban Economic Development Association of Wisconsin and MICHAEL GOSMAN of ACTS Housing.
2.
ROB BLAIR and MEGHAN KINSELLA of J.P. Morgan.
3.
JEFF MARTINKA of Neighborhood House, ROSELYN SMOLEJ-HILL of the Milwaukee Public Museum, and MARGARET HOWLAND of the Historic Milwaukee board of directors.
4.
NANCY FLORES of Voces de la Frontera with ALEX ERDMANN, RYAN GRAY, CHIJIOKE AGWOEME and JOSHUA TAYLOR , all of MKE Fellows.
5.
NIKIYA DODD of Children’s Hospital of Wisconsin and CHRISTY BROWN of Girl Scouts of Wisconsin Southeast. Photos by Lauren Anderson
UPAF’s 50th anniversary campaign finale The United Performing Arts Fund recently celebrated its 50th anniversary campaign finale at Potawatomi Hotel & Casino in Milwaukee.
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KAYLIN and MATT SCHUELER, both of American Transmission Co.
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MARION FRANK, SARAH HUNT-FRANK and JEFF FRANK, all of First Stage.
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JENNIFER SANCHEZ, AMANDA STAHMANN, MEGAN WEIL and CYNTHIA BENTLEY, all of Life Navigators.
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PATRICK HORNE of Northwestern Mutual, ROGER SMITH of A.O. Smith Corp. and MELISSA HORNE of Northwestern Mutual
10. PATRICK MURPHY, MARK NIEHAUS, and ANDY NUNEMAKER , all of the Milwaukee Symphony Orchestra. Photos by Lauren Anderson
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BizConnections VOLUME 23, NUMBER 8 | JULY 10, 2017
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 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 Arthur Thomas arthur.thomas@biztimes.com INTERN REPORTER Maredithe Meyer maredithe.meyer@biztimes.com
Northwest Territory parade This photo, taken in 1937 by W.D. Kline, shows “pioneers” celebrating the 150th anniversary of the Northwest Territory’s creation passing by the Milwaukee Public Library and Milwaukee Public Museum at 814 W. Wisconsin Ave. The library and the museum shared the building from its 1898 opening until the museum moved to its own building on West Wells Street in the mid-1960s. The library is still housed in the building today. —This photo is from the Milwaukee Public Museum’s Photo Archives collection.
Southridge Mall needs another refresh FIVE YEARS AGO, Southridge Mall in Greendale was on a roll. Its owner, Indianapolis-based Simon Property Group L.P., did a dramatic makeover of the mall in 2012. The project included redesigned entrances, updated outdoor signage and landscaping, a transformation of the food court, new seating, redesigned railings with contemporary glasswork, new carpet and flooring, and redesigned common areas. Every surface of the mall, built in 1970, was improved with cosmetic upgrades. But the biggest improvement was the addition of a Macy’s department store at the south end of the mall, in the former Younkers space. The Younkers store closed in 2000 and the space had only been partially occupied at times, with stores like Linens ’n Things and Steve & Barry’s that came and went. The addition of Macy’s, combined with the makeover of the mall, was a huge deal for Southridge. Today, the retail industry is going through a transformation, largely driven by the impact of Amazon.com, and Southridge is facing a huge challenge. The mall is going to lose two of its 42 / BizTimes Milwaukee JULY 10, 2017
anchors. Sears recently announced it will close its store at the mall and earlier this year, Kohl’s announced it will close its Southridge store and move it to the 84South development along I-894 in Greenfield. That will leave two big vacancies at Southridge. Its remaining anchors are Macy’s, JCPenney and Boston Store. Macy’s and JCPenney remain profitable, but are both closing more than 100 stores this year. The Bon-Ton Stores Inc., the parent company of Boston Store, has not turned an annual profit since 2010. S&P Global Market Intelligence recently named Bon-Ton one of 10 retail companies most at risk to file for bankruptcy. How long will its store at Southridge remain open? Meanwhile, new retail developments like 84South in Greenfield and Drexel Town Square in Oak Creek are offering new competition to Southridge. Those projects offer a mix of retail, residential and restaurants to attract shoppers. It’s a different approach than a traditional enclosed mall like Southridge. To fill its soon-to-be empty anchor store spaces and compete with newer developments, Simon will have to reinvent Southridge, even more dramatically than five years ago. Like many other malls facing similar challenges,
SALES & MARKETING DIRECTOR OF SALES Linda Crawford linda.crawford@biztimes.com 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
ADMINISTRATION ADMINISTRATIVE COORDINATOR Sue Herzog sue.herzog@biztimes.com MARKETING & EVENTS INTERN Eileen Demet eileen.demet@biztimes.com
PRODUCTION & DESIGN
Independent & Locally Owned
GRAPHIC DESIGNER Alex Schneider alex.schneider@biztimes.com ART DIRECTOR Shelly Tabor shelly.tabor@biztimes.com
— Founded 1995 —
Southridge needs to become an entertainment destination, not just a place to go shop. A good first step is the recent opening of Marcus Theatres’ new eight-screen BistroPlex movie theater, just outside of Southridge. BistroPlex is a new concept for Marcus. It is heavy on food and beverage offerings. The place has the feel of a restaurant with movies on the side. That Marcus is trying a concept like this shows that it, too, needs to innovate. With movies on demand and huge flat screen TVs common in many American homes, movie theaters, just like shopping malls, need to find new ways to attract consumers. Concepts Simon should try at Southridge include: a hotel, a bowling alley, a fitness center, maybe even an ice skating rink. More restaurants like Buca di Beppo, which opened at the mall in 2014, and the Explorium Brewpub that opened there early this year, would also be good.
ANDREW WEILAND EDITOR
P / 414-336-7120 E / andrew.weiland@biztimes.com T / @AndrewWeiland
my
TOUGHEST
Challenge
TINA CHANG Position: Owner and chief executive officer Company: SysLogic Inc. What it does: SysLogic is a Brookfield-based information systems consulting and services firm dedicated to helping companies improve efficiency and reduce costs by optimizing processes and technology solutions. Career: Chang is the chairman and chief executive officer of SysLogic. She previously worked as a business analyst and consultant at Andersen Consulting, where she assisted Fortune 1000 companies. Chang and Joe Schultz left Andersen to found SysLogic in 1995. She bought him out in 2003.
THE CHALLENGE “As a startup, the first time we went to the table and actually bid on a half-million-dollar project, as owners in their 20-somethings, and were completely shut down without a fair trial.” Chang co-founded SysLogic when she was 24 and then-partner Joe Schultz was 27; their youth worked against them for several years. “It was a large corporation here in town, a Fortune 1000 corporation, that had a very specific software development need. Half a million dollars for us was huge at the time.” SysLogic’s owners approached the firm to ask why they didn’t make it past the first round, and the company said it was because they were young and inexperienced. THE RESOLUTION In actuality, Chang was surrounded by more experienced employees and should have demonstrated that to the client. “Shame on me for not presenting a different, diverse mix of what we look like. Instead of building the team for what strengths we thought we could bring to the table in how to present, it was absolutely turning the lens differently to say perception matters at this stage of the game for us.” Presentation and tenacity are important out of the gate when presenting to large companies.
LILA ARYAN PHOTOGRAPHY
THE TAKEAWAY At its next presentation, SysLogic made sure it didn’t face a credibility issue. Its owners networked in the industry and with potential customers, and provided customer testimonials to prospective clients. Since she couldn’t change her age, Chang embraced it as a strength, demonstrating that she was up-to-date on the latest, leading edge technology. And SysLogic did get that company’s business, nine years later. Chang credits it to persistence and staying ahead of the game. “I kept in touch with the people we had met. I made sure that through the years I brought mutual value touchpoints. I made sure that I continued to read about the domain of their business so I understood it as best I could.” “It’s really about how do you get smarter and fine-tune your pitch, but then also, how do you recognize and play up your strengths and/or your team realities. I also said to myself several times, ‘I cannot wait to be 40.’ From a business perspective, I get more excited with every year of experience, maturity that I get to put on my resume.” n biztimes.com / 43
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