BizTimes Milwaukee | January 25, 2016

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NEARING THE PEAK GROWTH EXPECTED IN 2016, BUT END OF ECONOMIC CYCLE LOOMS

ECONOMIC TRENDS 2016 GET A PREVIEW OF THE YEAR AHEAD: STAFFING, REAL ESTATE, MANUFACTURING, BANKING, HEALTH CARE, M&A, TECHNOLOGY, EXPORTING

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January 25 - February 7, 2016 HIGHLIGHT S Now 4 Future murky for Kohl’s, Bon-Ton.

Social Media Strategies

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A ‘like’ can be worth a thousand words…to an employee.

Made in Milwaukee

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Absolute Electronics looks to invest in itself.

The Good Life

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Carving a home out of history.

Breaking Ground

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National Ace Hardware

S TR ATE GIE S Leadership Karen Vernal 39 Family Business David Borst 40 Human Resources Joan Lloyd 41 Management Susan Marshall 42

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BIZ CONNECTIONS S P E C I A L R E P O R T:

COV E R S T ORY

E CONOMIC TR E ND S

Nearing the peak Growth expected in 2016, but end of economic cycle looms

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This comprehensive report includes a macroeconomic forecast from economist Michael Knetter and outlooks for the stock market, manufacturing, exporting, technology, mergers and acquisitions, banking, health care and commercial and residential real estate.

Personnel File SBA Loans Glance at Yesteryear BizTimes Around Town The Last Word

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V I S I T B I Z T I M E S . C O M F O R A D D I T I O N A L S T O R I E S , D A I LY U P D AT E S & E - N E W S L E T T E R S Editorial . . . . . . . . . . . . 414-336-7120 Advertising . . . . . . . . . 414-336-7112 Subscriptions . . . . . . . 414-277-8181 Reprints . . . . . . . . . . . . 414-277-8181

Founded in 1995, BizTimes Milwaukee provides news and operational insights for CEOs, presidents, owners and other top level executives at companies in southeastern Wisconsin (Milwaukee, Waukesha, Ozaukee, Washington, Racine, Kenosha, Walworth and Sheboygan counties).

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BizTimes Milwaukee (ISSN 1095-936X & USPS # 017813) Volume 21, Number 22, January 25 - February 7, 2016. BizTimes Milwaukee is published bi-weekly, except two consecutive weeks in December (the third and fourth weeks of December) by BizTimes Media LLC at 126 N. Jefferson St., Suite 403, Milwaukee, WI 53202-6120, USA. Basic annual subscription rate is $42.00. Single copy price is $3.25. Back issues are $5.00 each. Periodicals postage paid at Milwaukee, WI and additional mailing offices.

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leading edge NOW

Future murky for Kohl’s, Bon-Ton

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recent report in the Wall Street Journal raises big questions about the future of the two national department store chains that are based in the Milwaukee area – Kohl’s Corp. and Boston Store parent Bon-Ton Stores Inc..

The report, which cites unnamed sources, said leaders of Menomonee Falls-based Kohl’s are considering plans to take the company private or break up the company. Kohl’s directors are considering plans to hire an investment bank to advise the company on alternatives, which could include a sale to a private equity firm, the report says. If such a deal were to occur, it could mean major changes for the company.

Kohl’s stock fell 22 percent in 2015.

Kohl’s directors are concerned that the company’s low share price could make it a target for activist investors, the Wall Street Journal report says.

When contacted by BizTimes Milwaukee, a spokesperson for Kohl’s declined to comment on the speculation about the company’s future.

“We are currently in a quiet period and are not able to share any information that has not already been publicly disclosed,” said Kohl’s spokesperson Julia Fennelly.

In November, Kohl’s reported third quarter net income of $120 million, down from $142 million in the third

quarter of 2014. Its quarterly operating income was $308 million, up from $304 million in the same period a year ago.

Revenue was $4.4 billion in the quarter, flat from the third quarter of 2014. Comparable store sales were up 1 percent, compared with a 1.8 percent decrease in the same period last year.

The Wall Street Journal story also says New York-based private equity firm Sycamore Partners, which acquired Charlotte, N.C.-based Belk Inc. in December, has approached Bon-Ton, which has dual headquarters in Milwaukee and York, Pa., about combining Belk with Bon-Ton. Bon-Ton president and chief executive officer Kathryn Bufano was previously president and chief merchandising officer of Belk.

In November, Bon-Ton reported a third quarter net loss of $34 million, compared with a net loss of $11 million in the third quarter of 2014. Quarterly revenue totaled $623.4 million, down from $642.7 million in 2014’s third quarter. Comparable store sales were down 2.6 percent year-over-year.

Bon-Ton has not turned a profit in four years. Retail analyst Mary Ross Gilbert, managing director at Imperial Capital LLC in Los Angeles, said in order for the company to survive, it will need to consolidate.

The Kohl’s Corp. headquarters in Menomonee Falls.

“(Bon-Ton and Belk) have been friendly with each other for some time,” said Gilbert, who is a Bon-Ton analyst.

“Consolidation makes sense, but it would make more sense to do it after (Bon-Ton) restructures its debt rather than pay for it at a premium now.”

Bon-Ton is among several brick-andmortar based retailers struggling with decreased consumer traffic as buyers move toward online shopping. Kohl’s is facing the same challenges.

Across the board, retail has also been struggling because consumers are spending more of their money on experiences, Gilbert said.

“If we’re talking about the better-incomed consumer, they are buying homes and furniture for their homes, autos and

going on trips,” Gilbert said. “There has been a lack of newness in apparel and a transition to leisure.”

Lower gas prices have had a positive impact on sales at lower-end retailers, such as J.C. Penney, Ross Dress for Less and TJ Maxx.

“Kohl’s should be benefiting as well, but J.C. Penney could be taking that away,” Gilbert said.

Kohl’s has 1,166 stores in 49 states, up from 1,163 at the end of the third quarter last year.

Bon-Ton operates 270 department stores in 26 states under the Bon-Ton, Bergner’s, Boston Store, Carson’s, ElderBeerman, Herberger’s and Younkers brands.

——Andrew Weiland and Corrinne Hess

SOCI AL M E D I A S T R AT E G IES

A ‘like’ can be worth a thousand words…to an employee An old adage says, “A picture is worth a thousand words.” Recently, circuit courts have applied this expression to social media activity and found there may be more to a Facebook “like” than a simple click of the mouse button.

These courts have given expansive meaning to a “like” and found employment law protections to lie within this common social media activity.

The most recent development came late last year in the Second Circuit Court of Appeals case of Three D LLC v. NLRB. The Second Circuit considered whether an employer could lawfully terminate employees because they “liked” comments on a Facebook discussion concerning tax deductions allegedly made in error by the employer. The court examined whether this 4

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adverse employment decision violated the National Labor Relations Act. The NLRA prohibits all employers from terminating an employee for participating in concerted, protected activity – that is, doing something with other employees to address workplace terms and conditions.

The Second Circuit upheld the lower court’s decision that the employees’ “likes” were concerted, protected activity under the NLRA and found their discharges based on those “likes” were unlawful.

This decision follows a 2013 Fourth Circuit Court of Appeals decision in Bland v.

Roberts that similarly found a “like” to be protected expression under the First Amendment. Specifically, the court found that

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a sheriff deputy’s “like” of the Facebook page of the sheriff’s opponent in an election was speech protected by law.

The puzzle of social media and employment law regulations is growing more complex by the day. Employers should consult with counsel well-versed in the intricacies of these issues before acting on employee social media activity. What may at first seem like terminable misbehavior could in fact be legally protected expression.

——Jesse Dill (@jesse_dill) is an attorney practicing labor and employment law at Walcheske & Luzi LLC in Brookfield.

leading edge COF F E E BR E A K

POLITIC AL BEAT

Walker suggests state could spend less on roadwork

BY WISPOLITICS.COM, special to BizTimes

In June, you were named president of Mueller Communications. Have you made any changes since assuming the role?

“As our succession plan was long in the making, we began transitioning major clients for this change over the last two years, so those reassignments were well underway when I assumed this role.

Since taking on the role, I have, however, enhanced our internal HR practices, hiring a consultant to update our policies and procedures and add more flexibility to our office environment that appeals to working parents and millennials.”

What was the smartest thing your company did in the past year?

Do you plan to hire any additional staff or make any significant capital investments in your company in the next year?

“We are predicting growth for 2016, so I do anticipate adding to our team.”

“Our industry has several trade associations that host local awards competitions. In the past, we’d spend hours upon hours compiling award nominations to win awards and be honored in a room that was mostly filled with peers or other agency professionals. We know we do top-notch work: our ongoing business and referrals from current clients is a strong indicator of that. Instead of spending the time to show off our work among potential competitors through awards submissions, we took the time and invested it into planning and hosting several annual events for clients and prospects that demonstrate our areas of expertise and our unique niche in the market.”

What’s the hottest trend in your industry?

“More and more companies are realizing how a crisis can take on a life of its own once it reaches the social media space. We are increasingly working with companies who are wisely proactively anticipating what types of crisis situations would be damaging to their business or reputation, and planning ahead so we can swiftly and systematically address it head on if it occurs – sometimes even staging mock crises to give the crisis plan a test run.”

From a business standpoint, who do you look up to?

Do you have a business mantra?

“I enjoy learning more about local stories of business growth and success. I recently heard Nan Gardetto speak about her business philosophy, which is, ‘Hire good people and take care of them, and the business will take care of itself.’ Smart.”

“It can be a challenge to work through crisis situations for a living. At Mueller Communications, we live by ‘do the right thing’ and it has served me well both personally and professionally.”

What will be your company’s main challenges in the next year?

“One of our primary areas of focus is media relations, so as the media and communication landscape evolves, so too must our business. We work very hard to understand who our clients are trying to reach and customize a communications plan for each one. We understand

Gov. Scott Walker suggested in a recent interview the state could simply spend less on roadwork in his next budget, considering his pledge to not raise taxes or fees without an offset and the reluctance of lawmakers to continue bonding.

After a difficult transportation budget last year, budget watchers have suggested the state could hope for an influx of general purpose revenue to pay for a tax cut that would meet Walker’s pledge or to continue transfers to the transportation fund. But barring a surprise uptick in the economy, that appears unlikely.

Continuing to bond is also an option, though lawmakers rejected Walker’s request last year to borrow $1.3 billion for roads. Instead, they approved $500 million, with another $350 million in contingency borrowing the Joint Finance Committee has already approved releasing.

Walker said there is another option.

“Or you adjust what you spend it on, just like everything else in life,” he said during an interview with WisPolitics.com.

Walker noted his 2017-’19 budget is still more than a year out, and revenues could pick up by then. But he said his bottom line on transportation is he won’t support a gas tax or registration fee increase unless there is a tax cut elsewhere, vowing to stick to a pledge he made during his 2014 re-election campaign.

“When you do it under that context, one of the options is – if people don’t want to borrow and they’re not willing to raise the gas tax – is to adjust the plans in terms of how much money is spent on projects going forward,” Walker said.

Walker’s suggestion irritated at least two members of the Joint Finance Committee.

Sen. Luther Olsen, R-Ripon, said he regularly hears complaints from constituents that roads are crumbling.

“Spending less is not an answer,” said Olsen, who has said he would support raising the gas tax.

Olsen said he expects bonding to be a component of the transportation budget next cycle, but he would not support a “total reliance” on borrowing.

Rep. Mary Czaja, R-Irma, also has expressed an openness to raising revenues. She sighed when asked if she would accept more borrowing in the next transportation budget, though she said the guv’s no tax increase pledge has backed lawmakers into a corner.

that different generations and demographics get their information very, very differently and that repetition and consistency of message is the best way to have a lasting impact. In the past, public relations equaled press releases, news conferences, rinse and repeat. The ongoing challenge is to have a uniquely tailored plan for every client and every situation using the most current communication tools.”

Wispolitics.com is a media partner of BizTimes Milwaukee.

What was the best advice you ever received?

Lori Richards President Mueller Communications 1749 N. Prospect Ave., Milwaukee muellercommunications.com Industry: Public relations Employees: 18 Family: Married to J.R.; daughters Sylvia (5) and Juliana (2) w w w.biztimes.com

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“I’ve been so fortunate to have had terrific mentors and role models who have supported me, so it’s hard to isolate just one piece of advice, but one of my favorites is, ‘Never apologize for having high standards. Make others rise to your level; don’t work down to theirs.’”

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BY TH E NU MBERS

2.65

The U.S. economy added 2.65 million jobs in 2015, the second best year of job gains since 1999.

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leading edge ON TH E C ALEN D AR

MADE I N M I LWA U K E E

Absolute Electronics looks to invest in itself

ARTHUR THOMAS (414) 336-7123 | Twitter: @arthur8823 arthur.thomas@biztimes.com

on printed circuit boards for a variety of different customers. The company has the capacity in its 10,000-square-foot Menomonee Falls facility to handle higher volumes, but its niche is with small- to mediumsized runs with quick turnaround. This often includes low volume, high mix production and prototypes delivered in three to five days.

“There’s where we live,” said Rafael Vela, vice president of sales and marketing. “Our company is designed to serve that kind of customer.”

Anne Ward, client service manager at StarTrol, a manufacturer of LED lights for medical and veterinary offices and a customer of Absolute Electronics, said Patel and his team have been great to work with and have great follow through. She said they are taking on some of StarTrol’s additional electrical work.

“They want to make sure what they give us is correct and what we’re looking for,” she said.

Within the last few years, Absolute Electronics has added design services. The addition means the company can now work with anyone from a guy with an idea to some of the region’s original equipment manufacturers.

“For us, it doesn’t really matter if it’s a startup or already a mature customer. We just like to work with any type of customer,” Vela said.

“We are pretty flexible to the customer’s requirements,” Patel added.

When the company started, through-hole circuit boards were the norm.

Vela said the rise of smartphones and other consumer electronics has forced the shrinking of components and the use of surface mount technology. The change has presented a challenge for contract manufacturers, but it also created an opportunity. Firms willing to invest in new technology were able to grow and expand, Vela said, while others closed down. He said Absolute looks to be an example of the former, in some cases adding new technology the same quarter a supplier begins offering it.

“The fuel for that is the passion we have for technology in this company,” Vela said.

He added that the growth in technology has continued to push the industry forward. With more companies using sensors, Wi-Fi, LED lights and other ways of improving a device’s performance, many are coming back to Absolute Electronics looking for ways to update their products.

To meet those demands, Patel has kept designs for essentially every job the company has done, allowing his staff to pull out the plans and get to work whenever a company returns with a new request.

Meeting customer demands is extremely important to Patel, as providing a high-quality product can help build a solid reputation, while having issues can cost business. To that end, every board is inspected before leaving the shop.

Having quality suppliers is also important, and Patel says that because of his time spent manufacturing the bare circuit boards, he can

6

JAN

Kishor Patel’s journey to become a business owner started with a challenge.

He was working for a circuit board manufacturer in the 1990s when an engineer lamented the problems he was having getting the boards assembled.

Patel asked the engineer to show him how the assembly was done and after a lesson, the engineer had a challenge for him: 5,000 pieces completed within two weeks.

Patel took on the challenge, completed the job and soon found himself building Absolute Electronics.

“I love challenges,” Patel said.

Founded in 1995, Absolute Electronics is a fullservice contract manufacturer, putting components

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Economic Trends

ABOVE: Circuit boards on a through-hole line are shown at Absolute Electronics.

BELOW: Rafael Vela, vice president of sales and marketing, and owner Kishor Patel, right, are shown with a circuit board on the floor of Absolute Electronics.

BizTimes Milwaukee will host the 2016 Northern Trust Economic Trends Conference on Friday, Jan. 29, from 7:30 to 9:30 a.m. at the Italian Conference Center, 631 E. Chicago St. in Milwaukee. The event, “Bull or Bear? What’s in store for 2016” will cover foreign markets, energy costs, interest rates and other economic factors that will come into play in the year ahead. Speakers are Michael Knetter of the University of Wisconsin Foundation, Peter Gunder of American Family Insurance, Jonas Prising of ManpowerGroup and Todd Zakreski of HUSCO Automotive. Cost is $60. For more information or to register, visit www.biztimes.com/trends.

For a complete listing of all area events, visit the event section of our website.

www.biztimes.com/events

BOOK REVIEW

“More Awesome Than Money” Absolute Electronics W137 N8589 Landover Court, Menomonee Falls Industry: Electronic contract manufacturing Employees: 21 www.absoluteelectronics.net tell right away if his suppliers are giving him quality materials.

Vela was brought in recently and brings knowledge of distribution networks and components. Patel says the addition has already meant at least half a dozen new customers.

The company has also found that in a competitive marketplace, the easy access to its Menomonee Falls location has helped land business.

Ward agreed. Her offices are also in Menomonee Falls and said the location makes it easy to address problems in person.

“We’re here to serve our neighbors,” Vela said, noting some customers are right in the same industrial area, “and the Midwest in general.”

Plans for the future include a continued investment in technology, Vela said, and pursuing certifications to open up possibilities in the medical and military areas.

The latest manufacturing news delivered to your inbox every Monday. Sign up for BizTimes’ Manufacturing Weekly at biztimes.com/subscribe.

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Four New York University students wanted to build a social network that would allow users to control their personal data, instead of surrendering it to big businesses like Facebook. They called it “Diaspora.” In days, they raised $200,000 and reporters, venture capitalists and the digital community were soon monitoring their progress.

Each character in Jim Dwyer’s book has dreams for the future: Max wanted to be a CEO; Ilya was the idealist; Dan coded like a pro; and Rafi tried to keep them all on track. But as the months passed and the money ran out, the foursome started making bad decisions. Dwyer’s story of Diaspora reaches far beyond Silicon Valley to the now urgent issues about the future of the Internet.

“More Awesome than Money” is available at www.800ceoread.com for $13.60.

——Corrinne Hess

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leading edge NONP R O FI T N E W S

THE GOOD LIFE

Impact100 ups its kickoff giving goal

Carving a home out of history

Impact100 Greater Milwaukee, a new nonprofit that focuses on collective giving by a group of women, has increased its initial giving promise to two $100,000 nonprofit grants.

The organization, founded in October, is a local chapter of a national nonprofit in which 100 members each donate $1,100 to earn a vote in which nonprofit receives the total pool of funds. $1,000 of each donation goes toward the grant, and the other $100 helps support the operations of the nonprofit.

The Milwaukee chapter, led by co-presidents Anne Trunzo and Cynthia Harris, originally planned to give one $100,000 grant to a local nonprofit through a competitive application process. But it has surpassed its initial membership goal, and now has more than 200 members. It will give a $100,000 grant to two nonprofits, with small merit grants going to three other finalists.

The board of directors will narrow the grant applications to five finalists in five areas: arts and culture; education; environment; family; and health and wellness. At a meeting in June, members will vote on the winning organizations.

——Molly Dill

When Isral DeBruin, manager of communications and development for Schools That Can Milwaukee, and his wife, Joanna Love, set out in search of their first home, the two knew they wanted to move into one of Milwaukee’s historical keepsakes.

DeBruin and Love, who share a passion for urban renewal, liked the idea of finding something with a lot of potential and history behind it and transforming it to improve a small corner of Milwaukee.

They landed on a Bay View home built in 1914 and in need of significant upgrades. Among the home repair and renovation projects awaiting them were walls to be retouched and painted, hardwood floors to be restored, a furnace that needed replacing, and an exterior wooden pillar that also needed replacing.

While DeBruin and Love have hired contractors to handle some of the more ambitious home repairs, DeBruin has rolled up his own sleeves and gravitated toward renovation projects throughout the two-story house.

Perhaps his most significant do-it-yourself project to date has been the dismantling of a chimney that extended from the home’s first floor up through its roof. DeBruin completed the dismantling largely with the help of Google, where he searched for advice on the tools and process to employ.

In restoring a piece of Milwaukee’s history, DeBruin said he and Love are able to advance Milwaukee in a tangible way. While both have committed their careers to bettering elements of Mil-

ABOVE: The couple refinished the home’s hardwood floors with the help of contractors.

RIGHT: DeBruin and Love waukee – Love is pursuing child psychology – they don’t always see the direct or instant impact of their work.

Their home renovations give them a chance to step back and soak in their progress.

The progress all takes place in real time and “you can see the results of your work immediately,” DeBruin said.

——Erica Breunlin

GE Healthcare

Building Things That Matter It’s our business to help people with the medical devices and services we create; but it’s our compassion that drives us to believe in community service. GE Healthcare employees contribute thousands of volunteer hours every year in southeastern Wisconsin. We’re focused on making personal connections and delivering a brighter outlook for future generations through our involvement in education, health, community building and innovation.

We build things that matter, including a stronger community.

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leading edge O N T HE M ON E Y

BR EA K ING GR OUN D

2016 market outlook

BY SARA WALKER, for BizTimes

At seven years, this economic recovery will be the fourth-longest on record. It has also been one of the weakest. U.S. Gross Domestic Product growth has been about 2.2 percent compared to normal levels of about 3.5 percent.

Investors wonder if the U.S. economy can survive without Federal Reserve-supplied training wheels. The ride will be a bit wobbly, but we are confident.

U.S. consumer strength gives us our confidence. Consumer activity explains about 70 percent of U.S. GDP, and consumers are increasingly employed. The avNATIONAL ACE HARDWARE WiRED Properties and Phelan Development plan to convert the former erage monthly job gain in 2015 was +225,000, and both the National Federation National Ace Hardware building at 1303 N. Fourth St. near Milwaukee’s Park East Corridor into office space of Independent Business small business survey and the ManpowerGroup survey with a bar and lounge on the first floor. There is also a restaurant planned for the property. Rinka Chung Architecture is the designer for the project. of business’ hiring intentions indicate continued strength in hiring in 2016.

——Corrinne Hess Employed consumers are confident. Consumer confidence has been strong despite geopolitical turmoil, El Nino and an interesting domestic political landscape. Household net worth is 20 percent higher today than it was before the Great up about 60 percent. The median performance for all S&P 500 stocks was -5.0 percent.

According to the AAII Investor Sentiment Survey, only 23.6 percent of individual invesRecession. Furthermore, people feel good when gas is below $2 per gallon.

Despite this strength, we believe the U.S. Federal Reserve will only very slowly raise tors are optimistic. The S&P 500 energy sector is trading at a price-to-book value ratio rates. We expect two or three increases throughout 2016. Global turmoil is a factor in of about 1.4, which is below its long-term average of about 2.6. Pockets of opportunity such as these are attractive to us. our outlook.

A cautious approach is warranted. Patient long-term equity investors will be rewardOur emphasis on high-quality short-to-intermediate corporate and municipal seed.

The S&P 500 stock market index has registered positive returns in 67 percent of the curities worked well in 2015, and we remain on that path. Short maturities will provide years since 1928. We like those odds. comfort when we hit potholes of inflation scares in 2016.

The U.S. stock market is not inexpensive, but the devil is in the details. Market lead——Sara Walker, CFA, is senior vice president and senior portfolio manager at ership was narrow in 2015 with the “FANGs” (Facebook, Amazon, Netflix and Google) Associated Bank in Milwaukee.

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ON LIN E POLL

Re: New Year optimism “There’s a lot of work ahead in 2016, but there should be an air of measured optimism as we head into the New Year.”

— John Torinus, Serigraph Inc.

Re: Autonomous vehicle R&D in Wisconsin “A bipartisan bill allowing some use of self-driving cars introduced two years ago in the Wisconsin Legislature didn’t advance, but the time may be right for legislation that could attract investment, jobs and the attention of the automotive world.”

— Tom Still, Wisconsin Technology Council

It will continue to grow:

Re: Business agility “Whether you are an aspiring leader or practicing professional, step outside your comfort zone and improvise. If you feel hesitant, a ComedySportz workshop or another format can help you overcome your fears.”

FBLI YEAR END CELEBRATION The Family Business Legacy Institute recently held its 2015 Year End Celebration at Shully’s Cuisine in Thiensville.

How will the U.S. economy perform in 2016?

It will be flat: 42%

It will fall into a recession:

35% 23%

For additional stories and daily updates, visit our website at...

— David J. Wendland, Hamacher Resource Group

www.biztimes.com

Get the expert attention and advice you need to keep your business moving forward.

FirstMerit Merchant Services As Olivia’s business continues to grow, so does her need for advice from the local merchant service experts at FirstMerit Bank. By knowing and understanding Olivia’s needs, their team can better assist her with fraud and chargeback mitigation, as well as help her business stay PCI compliant. And with access to a 24-hour support desk and online credit card transaction information, Olivia’s business can enjoy many more years of forward momentum.

TO L E A R N MOR E, C O N T A C T : Kevin Leissring, President and CEO, FirstMerit Wisconsin Region, at 414-335-7037 or kevin.leissring@firstmerit.com.

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COURTESY RED ARROW LABS

innovations

A preliminary version of the homepage for the HealthHero application.

A mockup of the application’s data tracking system.

HealthHero app aims to get kids involved in tracking health data

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web application developed by a cohort of Milwaukee innovators aims to get youth involved in tracking their health metrics, and more engaged in STEM subjects.

The mobile-friendly web app, known as HealthHero, uses the concept of gamification to turn tracking adolescent health indicators into a fun and engaging task.

In October, HealthHero beat out 10 other finalists to win the Tournavation competition sponsored by Milwaukee’s The Dohman Company FounMOLLY DILL, managing editor Email: molly.dill@biztimes.com Phone: (414) 336-7144 Twitter: @BizMolly

dation, which called for technology ideas that would improve public health.

The Dohmen Company Foundation is the charitable arm of Milwaukeebased Dohmen Co. It leads Tournavation in partnership with Dohmen’s application and software development arm, Red Arrow Labs, young professional association NEWaukee, the City of Milwaukee, and the Milwaukee Lifecourse Initiative for Healthy Families at United Way of Greater Milwaukee & Waukesha County.

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Tournavation is a crowd-sourced idea generation platform that addresses important issues that face urban communities like Milwaukee.

HealthHero was selected by the competition’s judges as the most viable, scalable and concrete idea, and is now being designed and developed by a team of volunteer IT development professionals led by Red Arrow Labs, with the ultimate goal of producing a software solution for the community.

Nate Conroy and Dan Matthews of STEMHero came up with the idea for HealthHero, which is based on the company’s existing educational tools for tracking energy and water data. STEMHero is housed in the STEM department at MSOE. “Nate and I have worked with students a lot in terms of their own water and energy data,” Matthews said. “(We said) let’s see if this same type of idea really resonates with people. The idea was to help students get involved with the data in their own lives.”

The app is being developed on an open source platform to allow it to be tailored to a variety of different uses, depending on the teacher’s lesson plan, said Aaron Krueger, director of community engagement at Red Arrow. A class could B i zT i m e s M i l w a u k e e

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STEMHero and Red Arrow Labs Milwaukee Innovation: HealthHero www.stemhero.com

conduct an experiment using a blood pressure cuff, for example, and input the data into the app to track and analyze it.

One major goal of the HealthHero app, which is aimed at middle to early high school students, is to get kids engaged in learning about STEM, he said.

Another is to increase students’ connection to their personal health and their influence over it.

“The way the synergy is working a little bit is that STEMHero has really been pioneering the pedagogian structural aspects of this approach to learning,” said Joshua Schultz, director of STEM and Project Lead the Way at MSOE. “How can we get students to consider STEM-type skills by tying the relevance to things you already know?”

While students may learn about interesting science topics such as space travel, the health tracking app brings science closer to home with topics such as how the

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amount of sleep a student gets could impact his or her blood pressure, Schultz said.

The pilot version of HealthHero collects data on an individual student’s sleep habits and alertness levels, Krueger said. The app asks the student to record how many hours she slept the previous night, and then how alert she feels throughout the day. The student can track the data over time using charts and graphs in the application.

“The variables really depend on what’s being taught and what experiments are being run,” Krueger said. “Teachers can use that data to then say, ‘Well, you see how you had a higher level of alertness… it’s because you were more rested.’”

Red Arrow and its developer team expect to have the app completed by the end of this month, at which time the app will be piloted in Milwaukee Public Schools and through Boys & Girls Clubs of Greater Milwaukee programming. Marquette University students will track the effectiveness of the app in student outcomes, Krueger said. The final version is expected to be ready following the completion of the pilot in the spring.

Boys & Girls Clubs will serve as a steward of the application in order to make it available to the whole Milwaukee community as a public health tool, he said.

“We wanted to make an impact in the community and apply technology to public health concerns,” Krueger said. n Get news headlines from around the state delivered to your inbox first thing Monday through Friday. Sign up for Morning Headlines at biztimes.com/subscribe.

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Grand Avenue Mall

New owners may be local, but revitalizing Grand Avenue won’t be easy

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hen the news came one week before Christmas that the Shops of Grand Avenue had been sold, there was almost a palpable sigh of relief that the new owners were local.

This marked the first CORRINNE HESS P: (414) 336-7116 E: corri.hess@biztimes.com Twitter: @CorriHess

time in a decade that some of the people that own the mall would actually reside in the same city as the mall.

Once considered the jewel of downtown, the troubled Grand Avenue has fallen prey to the same fate as many urban malls across the country. Now plagued with low occupancy and lowend tenants, the 293,596-square-foot enclosed mall at 275 W. Wisconsin Ave., is 12

virtually empty on nights and weekends.

Tony Janowiec, principal at Milwaukee-based Interstate Parking, wanted to buy the mall two years ago, but was beat out in an online auction by Brooklynbased real estate investor Alex Levin, who bought it for $16.5 million.

A year later, Janowiec put together a buyer team that includes local developer Chuck Biller and purchased the Grand Avenue from Levin for $24.5 million.

The only out-of-state member of the new ownership group is Minneapolis-based Hempel Cos., which is run by Janowiec’s college buddy, Joshua Krsnak.

So far, we don’t know a lot of concrete details about the new ownership group’s plans for the Grand Avenue, other than a Ross Dress for Less is in negotiations to lease 25,000 square feet.

Janowiec is also planning to move his own offices to the mall and will occupy B i zT i m e s M i l w a u k e e

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about 6,000 square feet.

Krsnak has significant commercial real estate experience. His firm sold a 26-story, 394,000-square-foot office tower in downtown Minneapolis in November that was 48 percent occupied when he purchased it four years ago, and 99 percent full when it sold.

Janowiec’s company ran the parking for that building and his Minneapolis office was located there.

While excitement is still running high for the new owners of the Grand Avenue in Milwaukee, some local real estate professionals who have watched the mall exchange hands over the years fear the latest buyers are facing an uphill battle.

Shopping patterns in general have changed. Green Street Advisors, a real estate and REIT analytics firm, predicts that within the next 10 years, 15 percent of malls will fail or be converted into

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non-retail space.

There is also history to contend with.

When Levine purchased the mall in 2014, he declared the strategy for the mall would be mixed-use. But he made few changes.

The new owners are thinking along the same lines. They’ve said they would like to partner with an educational institution or a corporation that could occupy space in a mixed-use redevelopment of the Shops of Grand Avenue.

“You’ve got to change the genetic make-up of the mall and bring in more complementary uses, versus trying to put in six Subways,” Krsnak said. “We’ve got to stop trying to keep it exactly the same way it’s always been, because then, we just get what we’ve always got.”

But will a major redevelopment of Grand Avenue actually work?

“They stand as good a chance as anyone since Northwestern Mutual bought

that place 30 years ago,” said Milwaukee Alderman Robert Bauman, who represents the downtown area.

“To be successful, you need access to parking, people and good retail choices,” Bauman said. “They’ve got the parking, the people part is improving, now they need the choices – that’s the hard part, there is not a whole lot of choices in that mall right now.”

The “people part” has been improving.

When the Mandel Group started building housing in the Westown neighborhood a decade ago, there were only 215 households there. Today, there are 435 new residential units planned or recently built in the area. The Posner Building at West Wisconsin and North Plankinton avenues was converted into 105 apartments, The Buckler at 401 W. Michigan St. has 207 units, Bear Development LLC is converting two office buildings into a 49-unit loft apartment complex at 700 W. Michigan St., and The Germania Building, 135 W. Wells St., will be converted into 74 apartments.

Peter Glaser, vice president of CBRE, said today versus two years ago, the mall stands a much better chance of succeeding – largely because of the residential that has been, or will be, added to the Westown neighborhood.

Typically, for a regional shopping center to succeed, it needs 100,000 people living in the immediate area. However, a downtown mall is different because of the daytime traffic, Glaser said.

“When we look forward a year from now, I think we’ll see the mall has made some progress,” Glaser said. “There has been a huge development wave going on downtown, and that is going to be good for Grand Avenue.”

Lyle Landowski, partner at Colliers International|Wisconsin, thinks having a local owner in place with emotional ties to Milwaukee will be beneficial to the mall, but believes the Grand Avenue’s best shot at survival would be using it for something other than retail.

Russ Sagmoen, who heads the retail group at Colliers, agrees.

“I think a great use would be a corporate headquarters or something that is service-based, instead of soft goods,” Sagmoen said. “It’s going to very challenging to land a large retail anchor – although everyone is hoping for a success.”

Tom Treder, a partner with Commercial Property Associates Inc., says the stigma of recent closures by retailers at the mall and the physical limitations of the property itself – including access points and the outdated building layout – will present challenges for the new owners.

“The mall needs a catalytic anchor to kick off a redevelopment at the property, which I am not sure will happen in the short term,” Treder said. “I am very hopeful that the new local ownership group will come in with fresh ideas and take a long-term approach to solve what has become one of the most challenging projects in southeast Wisconsin.”

The new owners have said they plan on exploring partnerships with local colleges and universities. They pointed to Rochester, Minn., which revamped

the Galleria Mall about five years ago and turned it into The Shops at University Square. That mall is now located underneath the University of Minnesota Rochester and is connected by skywalks to local hotels.

Having a steady stream of income from the Grand Avenue parking structure is going to prevent hasty decisions about the mall’s redevelopment, Krsnak said.

Whatever is decided, Krsnak said we’ll see a lot of progress in 2016, although he cautioned real estate moves slow, so even if the tenants were lined up today, it would take many months for their presence at the mall to come to fruition.

“Over the last 10 years there has been an out-of-state owner and when you are off-site, it’s out of mind,” Krsnak said.

“We’ll be at the mall every single day, and we’ll be paying attention.” n Get the latest commercial real estate news delivered to your inbox every Wednesday.

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NEARING THE PEAK GROWTH EXPECTED IN 2016, BUT END OF ECONOMIC CYCLE LOOMS

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BY ANDREW WEILAND, staff writer

lthough the U.S. economy has been in an expansion cycle for more than six years, many business leaders have complained that the economic recovery has been too weak. The average annual change in the nation’s gross domestic product has been only 2.2 percent since 2009. Economic expansions in the ’80s and ’90s were considerably more robust.

Nevertheless, one can’t deny that the nation has enjoyed a lengthy, sustained recovery from the Great Recession. The U.S. has had 70 consecutive months of private sector job growth, including the addition of nearly 6 million jobs over the past two years. In December, the U.S. economy added 292,000 jobs.

The U.S. unemployment rate, which peaked at 10 percent in 2009, is now down to 5 percent.

The housing market has rebounded from its Great Recession collapse and the commercial real estate market is hot, as construction cranes are up around the metro Milwaukee area.

Consumer spending is strong, boosted by lower gas prices.

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Economists are predicting another year of growth in 2016, and most are predicting about 2.5 percent U.S. GDP growth for the year.

But just how much longer will the economic expansion continue? Of course it won’t last forever, and some signs of a slowdown are emerging.

The U.S. stock markets had a rough year in 2015 and are off to an awful start to 2016. The Dow Jones Industrial Average was down 2.2 percent in 2015 and the S&P 500 ended the year down 0.7 percent. It was the worst year for those indices since 2008.

The manufacturing sector, still a major part of the southeastern Wisconsin economy, is struggling. The Milwaukee-area PMI index has been in negative territory for nine months and several plant closings have been announced in the region lately. Manufacturers that do business overseas have been hurt by the strong U.S. dollar and weaker foreign economies.

While low oil prices are helping consumers at the gas pump, they have devastated the mining and energy industries.

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Michael Knetter, Ph.D., an economist and president of the University of Wisconsin Foundation, said he thinks the U.S. economy is nearing the peak of this economic cycle.

“If this were a nine-inning game, I would say we appear to be in the eighth inning of the game,” Knetter said. “However, it is a close game and it just might go extra innings… growth is slowing for a variety of reasons, as we are nearing full employment and there is no strong upward pressure on prices. Our recovery from the financial crisis was very modest and the ‘landing’ for growth may be very soft as a result. We also need to keep in mind that as the growth in labor supply has slowed down, the natural rate of real GDP growth is closer to zero and it is easier for the economy to meet the technical definition of ‘recession,’ which is two quarters of negative growth.”

BizTimes Milwaukee recently conducted its annual macroeconomic interview with Knetter in advance of remarks he will give on Jan. 29 at the Northern Trust Economic Trends Breakfast presented by BizTimes Media.

The following are excerpts from that interview.

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BIZTIMES: The U.S. economy has been in a long growth period since 2009. But many business leaders have complained for years that it has been too weak. What’s your general take on the economic recovery?

K N E T T E R

M I C H A E L

President and CEO, University of Wisconsin Foundation

KNETTER:

Past dean, University of Wisconsin School of Business

“Economic recoveries since the 1990s have tended to exhibit slower growth rates than the recoveries of the 1970s and ’80s. Those earlier recessions were accompanied by abrupt supply shocks, whereas the more recent recessions often had significant financial dimensions. Compared to other nations, the U.S. has emerged reasonably well from the latest financial crisis. Given the substantial reduction in wealth experienced by households, it was fanciful to think private spending on consumption or investment could drive a rapid recovery.”

Former senior staff economist for former presidents George H.W. Bush and Bill Clinton

BIZTIMES: Will the U.S. economic recovery continue in 2016, or is it running out of steam? What can we expect from GDP in 2016?

KNETTER:

“I think it is both of the above: I believe the recovery will continue, but at an even slower rate. The Fed has begun tightening, the strong dollar is already creating competitive headwinds for producers, and the labor market is nearing full employment, although it is possible the participation rate could move back up and, thereby, add to growth potential. GDP seems likely to inch upward, maybe 2 percent.”

BIZTIMES: As you mentioned, the Fed finally raised interest rates recently, for the first time in nine years. Was that a good move?

Do you anticipate more interest rate increases in 2016? How will the interest rate boost impact the economy?

KNETTER:

“We needed to leave the zero interest rate world at some point, and it is hard to argue with the first rate change made by the Fed. Because it was widely anticipated, it had little impact on the economy overall. I expect a couple more 25 (or maybe even a 50) basis point increases in the year ahead. In an election year, it seems unlikely that the Fed would tighten so much as to cause a contraction, so the timing and magnitude of any further rate action will be flexible. This will increase the cost of capital and potentially strengthen the dol16

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lar even further, depending on how other central banks react. Hence, the rate increases should begin to slow the growth in U.S. spending for most households and businesses, although people living off their savings will appreciate the higher incomes that may result for them.”

BIZTIMES: Manufacturing is a vital sector in southeastern Wisconsin and it appears to be struggling. Several major plant closings have been announced in recent months.

The local PMI index has been in negative territory for nine consecutive months.

What are the headwinds facing manufacturing and can they be overcome?

KNETTER:

“The stronger dollar is a headwind for all tradable goods producers in the U.S. It often takes six to nine months for currency appreciation to begin to erode competitive positions, and that seems to be in full force now. Because Wisconsin has an unusually high fraction of jobs in manufacturing, this is a bigger issue for our state economy.

A period of competitive pressure such as this can lead firms to take stock of how and where they do things, making plant closings and relocations much more likely.

I am hopeful that the worst is now over.”

BIZTIMES: Gas prices haven’t been this low in years. That is clearly causing problems for some manufacturers, but shouldn’t that provide a boost to consumers?

KNETTER:

“The collapse of energy prices probably had a negative impact on growth last year, as it caused a sharp reduction in investment spending for some of the newly

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emerging energy sectors. The sustained low cost of energy combined with a mild winter should now begin to allow for more discretionary spending or saving by consumers.”

BIZTIMES: As you said earlier, the strong dollar is a headwind for manufacturers. But is there an upside to having a strong dollar?

KNETTER:

“In general, a strong dollar is good for consumers (imports are cheaper in dollar terms and domestic producers have to be more careful about price increases) and bad for producers (import competition is stiffer). For households that are only consumers, such as retirees, the strong dollar is mostly a good thing. For those who are both workers and consumers, it is probably a wash.

“It is worth noting that the strong currency is usually a signal of a relatively strong underlying economy. A currency strengthens when others want to acquire it, so it is a reflection that foreign firms and households find U.S. assets attractive. That is a good thing…but it has some second order adverse consequences noted above.”

BIZTIMES: The unemployment rate can’t get much lower, can it? Will the labor participation rate finally pick up?

KNETTER:

“I do not see unemployment going much lower than current levels. It is likely that the strong labor market will eventually lead to higher participation rates again.”

BIZTIMES: As the baby boomers move into retire-

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ment, do you anticipate a labor shortage? How will that impact the economy?

Will we finally see more improvement in household incomes?

KNETTER:

“As the number of retirees per worker increases, it should increase the demand for domestic labor. Retirees tend to spend more on services which cannot be supplied by imports. Absent more open immigration policies, this should put upward pressure on wages, which would indeed help household incomes. But remember,

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improve Wisconsin’s economy?

KNETTER:

“There is no magic bullet that can change the course of our economy very easily.

Former football coach Bill Parcells was fond of saying of his teams: ‘We are what we are.’ And a football team is much easier to change than a state economy, with its given endowment of natural and human resources. I believe that the most important thing public policy can do is help create an environment where desirable firms want to locate and workers want to build

“ It is likely that the strong labor market will eventually lead to higher participation rates again.” the flip side is that that wage pressure will mean retirees need to pay more for their services. We should all hope that our workforce of the future is up to the challenge of supporting a high ratio of dependents. It will not be easy, especially if we postpone decisions to shore up programs like social security by beginning to gradually increase the retirement age.”

BIZTIMES: Why is the U.S. economy doing so much better than other economies around the globe? Can our economy sustain growth without greater economic strength overseas?

KNETTER:

“Our economic institutions and culture are better equipped to deal with change, in my opinion. Adjusting to the financial crisis required lots of change and we were able to deal with that more effectively. Foreign economies certainly have an impact on us, but we are capable of growth regardless.”

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BIZTIMES: If you could, what would you tell the governor and the state Legislature to do to

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a life, recognizing that people have different tastes. Because productive people have different tastes, it is important to be open and tolerant of various points of view.

“My advice to our elected officials would thus be a simple and modest one: To engage in more civil and thoughtful discourse about public policy. Divisiveness in politics signals a high degree of uncertainty about our direction and uncertainty is a big impediment to attracting new firms or workers.

“I’m fortunate to travel the country in my work and people uniformly view the citizens of Wisconsin as an optimistic, friendly and community-oriented lot.

Why is there such a big gap between our image of Wisconsin citizens and the image of our politics today? Our success as a state will be defined by our ability to forge partnerships and work together even when we do not agree on everything. This is not just an obligation of our elected officials, but a responsibility we all share.”

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We bring practical, real-world experience to help evaluate all options, take advantage of planning opportunities, and overcome the legal and business pitfalls related to M&A, tax, and other asset management strategies.

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S P O N S O R :

Engineers work to filter out noise when trying to accurately measure signals. Northern Trust believes investors will need to really focus on separating signal from noise in 2016. Evolving monetary policy, uneven global growth, less liquid financial markets and geopolitical concerns will lead to increased market volatility in 2016. Having said that, our theme of “separating signal from noise” is meant to indicate that we expect a lot more noise about the prospects rather than actual fundamental changes in the economic or monetary policy outlook.

There are two key themes driving our views for 2016. First, we believe the major economies are in a “growth channel” – with a breakout to either the upside or downside unlikely. Upside growth is capped by debt and demographics, while the downside risk appears manageable as there is little excess in the real economy. It is this excess that typically leads to inflation, tighter monetary policy, and an eventual recession. A second theme entering 2016 is our expectation of “lower and slower” monetary policy. Weak global trade and unsynchronized growth should keep global monetary policy accommodative and interest rates structurally low. This should not prove disruptive to the financial markets and supports equity valuations.

We enter 2016 with a moderate overweight to risk assets with tactical tilt toward U.S. dollar assets and away from emerging markets and natural resources. We expect economic developments to be more of a driver of asset class returns than monetary policy.

After seven years of providing extraordinary monetary stimulus, the Fed has started the normalization process with its rate hike on December 16. Unlike past raising cycles, we expect this to be a long and potentially uneven process. While the financial crisis created an atmosphere of cooperation amongst the central banks, the normalization process will be an individual affair.

Although different central banks have modestly different objectives, a desired level of inflation is a common thread.

Our risk cases have been fairly consistent over the last several months – concern about the prospects for Chinese growth, fallout from the U.S. dollar strength and a flubbed Fed liftoff. The Federal Reserve provided clarity to a liftoff with the 0.25% rate hike on December 16 accompanied by an outlook that has been well-received by the markets. There is still a long way to go on the path to interest rate normalization.

The most consequential election of 2016 is likely in the United States, where the November presidential election may provide a chance to unify the executive and legislative branches.

Geopolitical risks are likely to remain elevated in 2016 as plunging oil prices have raised fiscal uncertainties and Middle East unrest continues to fuel geopolitical concerns.

As we begin the year, we look forward to hearing from this year’s Economic Trends panelists to gain their perspectives on the business and economic prospects for 2016 and separate the signal from the noise!

Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of investment management, asset and fund administration, banking solutions and fiduciary services for corporations, institutions and affluent individuals worldwide. Northern Trust is based in Chicago and has offices in 19 U.S. states, Washington, D.C., and 20 international locations in North America, Europe, the Middle East and the Asia-Pacific region. As of September 30, 2015, Northern Trust had assets under custody of US$6 trillion, and assets under investment management of US$887 billion. For more than 125 years, Northern Trust has earned distinction as an industry leader in combining exceptional service and expertise with innovative products and technology. For more information, visit www.northerntrust.com, follow us on Twitter @NorthernTrust, visit us at 5 26 E. Wisconsin Ave. in Milwaukee or call 414-905-7800.

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Concordia University Wisconsin’s School of Business Administration is proud to once more be a major sponsor of BizTimes Media’s Economic Trends Breakfast. Ranked #1 again as the Largest MBA Program in the Milwaukee area by an area business publication, Concordia’s MBA Program provides a collaborative culture of entrepreneurship and innovation.

The program boasts 13 concentrations, including Healthcare Management, Sustainability, Corporate Communication, Sport & Entertainment Business, International Business, and Risk Management. You can study on-campus, online, abroad or at one of our 13 centers. With nearly 40 percent of its students coming from other nations, Concordia’s program is one of the most diverse in the region. The world is in need of more leaders who are prepared to make a change! When seeking your MBA, look to a program that has a primary goal of preparing students to lead with purpose and to spark sustainable impact.

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As one of Wisconsin’s leading business law firms, and proudly headquartered here in Milwaukee, our team of business, employment and litigation attorneys is uniquely positioned to help local businesses and their owners navigate their legal challenges every day. We bring real-world experience and understanding, and a results oriented mindset, to help clients succeed.

Aligned with the breadth of the Midwest’s thriving industries, we advise an array of companies including specialty manufacturers, distributors, real estate and construction firms, food and beverage producers, and B2B service providers. And when the time is right, we would be delighted to talk to you about your needs.

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As the marketplace experiences changes every year, the insights from the Economic Trends presenters are helpful as we all plan for the year ahead. Wipfli is proud to be a sponsor of this exceptional event again this year.

Although the economy has improved in recent years, it continues to present various challenges to businesses across the nation. To combat those challenges, businesses need to navigate new regulations, manage their risks and costs, and optimize processes in order to succeed.

As a trusted advisor to thousands of businesses in Wisconsin and across the country, Wipfli LLP understands the challenges you face. Our team of CPAs and consultants will focus on your goals and needs to create customized solutions that help your business thrive today and tomorrow.

For more information, visit www.wipfli.com or call me at 414.431.9300. Best wishes for a successful 2016!

BOB COTTINGHAM Southern Region Partner-in-Charge, Wipfli LLP

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HARNESSING DIGITAL DISRUPTION WILL DRIVE INNOVATION ACROSS INDUSTRIES

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December McKinsey Global Institute report estimated digitization impacts 98 percent of the U.S. economy and could add some $2.2 trillion to the annual GDP by 2025.

Peter Gunder, chief business development officer at American Family Insurance, is keenly aware of the significance of that statistic.

Madison-based American Family, which offers property, casualty and auto insurance in 19 states, has developed a culture focused on agile innovation and has partnered with several other inventive companies to accelerate its digitization efforts. Partners include Microsoft, Google’s Nest, and a video doorbell startup called Ring.

Some of the Internet of Things products on the market could have a major impact on the insurance industry, potentially mak-

22

BY MOLLY DILL, staff writer

ing homes and vehicles safer and reducing the number of claims, said Gunder, who will present on the company’s innovative culture at the Northern Trust Economic Trends Conference presented by BizTimes Media on Jan. 29.

“We have a strong belief that the broader Internet of Things arena, of which the smart home is a subset, will meaningfully influence the insurance industry over time,” Gunder said.

American Family’s partnership with Nest, for example, includes offering smart smoke and carbon monoxide detectors to homeowners to increase safety and potentially reduce claims.

“We and other insurers are likely going to be providing incentives for customers to have healthier and safer lives because everybody wins,” he said.

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Ring’s video doorbell system, which offers video alerts that can be accessed remotely via a mobile device, could cut down on the number of break-ins and deGUNDER ter theft, he said. That kind of innovative technology has created a new value proposition for American Family’s customers.

“Our job is to inspire, protect and restore people’s dreams,” Gunder said. “That’s our absolute belief and therefore, keeping our customers safer is what we’re all about. What I call ubiquitous computing allows that to happen more easily than many years ago.”

The ongoing development of semi-autonomous vehicles by companies including

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Apple and Google also has been a trend on American Family’s radar as it relates to vehicle safety and insurance liability, he said.

“It’s a complex and yet to be clearly defined answer as to where the insurance products and services come from,” Gunder said.

Making innovation a part of a company’s culture is key to success, in any industry, he said. Engaging with startups through accelerator programs and with the talent coming out of area universities could be a starting point to driving a more inventive culture.

And keeping customers at the center of the business – letting their needs and desires dictate the innovation – is important, Gunder said.

“Not listening to customers’ needs is a recipe for decay,” he said. n

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UPBEAT JOB MARKET EXPECTED IN 2016

BY CORRINNE HESS, staff writer

S

outheastern Wisconsin employers are expected to hire at a healthy pace in the first quarter of 2016, according to the latest data from Milwaukee-based ManpowerGroup.

Among Milwaukee-area employers surveyed in the most recent Manpower Employment Outlook Survey, 24 percent plan to hire more employees during the first quarter, while 5 percent plan to reduce payrolls and 71 percent expect to maintain current staff levels. That yields a positive net employment outlook of 19 percent for the area.

Building on presentations delivered at the World Economic Forum’s 2016 meeting in Davos, Switzerland, Jonas Prising, chairman and chief executive officer of ManpowerGroup, will share insights into key labor and business trends im-

pacting the future world of work at the Northern Trust Economic Trends Conference presented by BizTimes Media on Jan. 29.

“The world of work is in the midst of a structural transition on par with the Industrial Revolution, at an unprecedented pace and scale,” Prising said. “Forces like technology, changing demographics, and globalization are accelerating rapidly, making old ways of working obsolete and giving rise to new models of employment. As this new age of work emerges, talent is the clear driver of business success, and will determine winners and losers in a global market.”

Prising was named ManpowerGroup chairman in December 2015 and CEO in May 2014. ManpowerGroup serves more

than 400,000 clients and employs 3.4 million people across 80 countries and territories.

Prising is a recognized expert on the labor market and PRISING world of work trends.

At the Economic Trends event, he will address how Manpower Group sees individual and employer needs changing in terms of talent sources, work models and people practices, and how he sees talent management evolving in the workforce of the future.

For the Milwaukee area, 2016 job prospects appear best in manufacturing, transportation and utilities, wholesale and

retail trade, information, professional and business services, education and health services, leisure and hospitality and other services, according to the Manpower Employer Outlook Survey.

The numbers are similar statewide, with 24 percent of Wisconsin employers planning to hire more employees during the first quarter, while 8 percent expect to reduce payrolls, 66 percent expect to maintain their current workforce and 2 percent were unsure of their hiring plans. That yields a net employment outlook of 16 percent for the state.

Nationally, of the more than 11,000 employers surveyed, 20 percent expect to add to their workforce and 6 percent expect a decline in their payrolls during the first quarter of 2016. n

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DESPITE MARKET HEADWINDS, INNOVATION IS WITHIN MANUFACTURERS’ CONTROL

BY ARTHUR THOMAS, staff writer

N

ews in the manufacturing sector in recent months has been filled with conversations about the challenges companies face, including low commodity prices, slow growth in China and emerging markets, and the strong dollar. Todd Zakreski, president of Waukesha-based automotive parts manufacturer Husco Automotive, thinks manufacturers would be best served by focusing on what they can control.

Zakreski thinks that will mean an emphasis on innovation in a company’s product and its processes.

“You can’t separate those two,” said Zakreski, who will be a presenter at the Northern Trust Economic Trends Conference presented by BizTimes Media on Jan. 29.

It also means thinking about how to best serve customers today, while preparing for what customers will want in the future. Zakreski is uniquely aware of that need, with

vehicle manufacturers still making investments in internal combustion engines while also pouring money into the powertrains of the future.

“The industry is going to change,” Zakreski said, suggesting there might be more changes in the automotive industry in the next 10 years than there were in the past 50.

Companies that are not looking at making decisions to improve in both the shortand long-term are putting themselves in a precarious position, Zakreski said. Among the automotive industry examples he gave were the impact of self-driving cars on seats, doors without door handles and shifting attitudes among millennials toward car buying.

“You better be connected with what your customers are thinking,” he added.

“And even your customers’ customers.”

At Husco, that means taking steps into

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people means a loss of jobs, Zakreski said it should be thought of as a shift toward jobs focused on fabrication, electrical, hydraulics or other areas.

“Those create better, higher-paying jobs,” he said.

The need for a workforce with a more advanced skillset is increasingly an issue for companies, and Zakreski said business leaders are starting to see efforts to bridge the gap in available talent pay off. He cautioned that “it’s still pretty early” and long developed cultural norms pushing students toward four-year programs and away from technical schools won’t disappear overnight.

Adding to the challenge is the fact that plant closures often receive plenty of headlines. He noted closures happen in all industries and manufacturers need to convince people the skills they need to work in the industry are transferable to other jobs. n

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other areas of the powertrain and developing products to support the next generation powertrain.

He said the process side of innovation will see more ZAKRESKI automation of factories, which Zakreski said is necessary to compete with low-cost countries.

Husco leaders have decided in many cases to do the work of automating production in-house. Zakreski said much of the equipment can be pretty sophisticated and involves a lot of hydraulics, although he acknowledged that for a company with a more straightforward setup, it may make sense to look elsewhere.

While the growth in automation to some

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MMAC MEMBERS LESS BULLISH THAN A YEAR AGO

BY BRET MAYBORNE, for BizTimes

usiness growth is forecast in 2016 by most Milwaukee area employers, but the results of the annual Business Outlook Survey conducted by the Metropolitan Milwaukee Association of Commerce suggest a measure of caution.

Of the businesses surveyed, 75 percent expect sales increases in 2016, 65 percent predict profit gains and 51 percent expect employment growth for their local operations. Those survey results show less optimism than a year ago, when 83 percent predicted sales increases, 76 percent predicted profit gains and 63 percent expected employment growth in 2015.

Expectations toward sales, profits and employment remain at relatively healthy levels from a historical perspective but are down notably from forecasts at the beginning of 2015. This would suggest that metro area businesses are more tempered in their outlook toward local business activity in the coming year.

While 75 percent of those surveyed expect increases in real sales levels in 2016, 9 percent predict sales declines and the remaining 17 percent see no change.

Non-manufacturers and large employers are more likely to see real sales gains for 2016. Seventy-nine percent of non-manufacturers surveyed predict sales growth in 2016, versus 67 percent among manufacturers. By company size, 82 percent of larger employers (100 or more employees) forecast 2016 sales gains, while 69 percent of smaller employers see such gains.

For capital spending plans, 39 percent of all companies surveyed forecast a rise in capital expenditures for 2016. Twentyfour percent see capital spending declines and 37 percent expect no change. The percentage predicting increases is down from the 47 percent who opened 2015 expecting capital spending gains.

EMPLOYMENT EXPECTATIONS FOR 2016 Job totals in the metro area are finishing up their fifth consecutive year of annual growth. 2015’s 1 percent increase, although modest, has pushed employment totals close to pre-recession highs. For 2016, more than half (51 percent) of the

ROBERT CICCHETTI -SHUTTERSTOCK.COM

B

Downtown Milwaukee

businesses surveyed by the MMAC expect job gains in their local operations. Only 11 percent forecast a 2016 employment decline, while 39 percent see no change.

Employment expectations for 2016 as a whole are similar among manufacturers and non-manufacturers. Fifty-two percent of non-manufacturers predict job increases in 2016, while 49 percent of manufacturers see employment gains.

Wage and salary expectations rose over those expressed three months ago, but remain in the tight range expressed in the past five years. Over the next 12 months, the average change in per person employee wages and salaries is forecast to rise 2.5 percent – higher than the 2.1 percent annualized increase predicted in 2015’s fourth quarter – but down marginally from the 2.6 percent rise forecast one year ago.

Consumer price inflation nationally was under 1 percent throughout 2015. Inflationary pressures are likely to remain low, with a majority of companies (58 percent) seeing price inflation in the 0 to 2 percent range.

Thirty-seven percent expect price increases of 3 to 5 percent, while only 5 percent predict price gains of 6 percent or higher. w w w.biztimes.com

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FIRST QUARTER EXPECTATIONS A slow start to 2016 is forecast by area businesses, with first-quarter expectations falling below that expressed for the year as a whole. For 2016’s first quarter, 63 percent of those surveyed expect real sales gains (versus 2015’s first quarter), 13 percent see declines and 24 percent expect no change. The percentage predicting a quarterly sales increase matches the 63 percent who forecast fourth-quarter gains three months ago but falls short of the 75 percent surveyed who see real sales gains throughout 2016 as a whole.

First-quarter sales expectations among manufacturers are generally weak.

Less than half of those surveyed (47 percent) expect first-quarter sales increases compared to year-ago levels. Conversely, 71 percent of non-manufacturers see real sales gains in 2016’s first quarter.

Profit expectations rebounded from a weak fourth-quarter forecast. Sixty percent of businesses see higher profits for the first quarter (versus year-ago levels), up from the 48 percent who forecast fourth-quarter 2015 profit gains.

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Currently, only 12 percent of those surveyed see first-quarter profit declines, while 27 percent see no change.

Among all businesses surveyed, 40 percent predict first-quarter job gains for their local operations (versus 2015’s first quarter), while 14 percent predict job declines.

The largest number, 46 percent, see no change. The percentage predicting employment increases fell from the 50 percent who saw job gains three months ago and marks the lowest job expectation in nine quarters.

By industry, 44 percent of non-manufacturers see employment increases in 2016’s first quarter (over year-ago levels) versus 33 percent among manufacturers surveyed. Smaller and larger employers have similar levels of optimism – 41 percent of large employers and 40 percent of small employers see first-quarter job increases.

The Business Outlook Survey, conducted by the MMAC, contains responses from 114 Milwaukee-area firms, both large and small, employing more than 46,600 people. n Bret Mayborne is the economic research director at the Metropolitan Milwaukee Association of Commerce.

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STOCK MARKET HAS BEEN BEARISH

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he Dow Jones Industrial Average’s long winning streak ended in 2015, and it is off to a rough start in 2016.

The Dow fell 2.23 percent in 2015, its first negative year since 2008, which was in the midst of the Great Recession.

The Standard & Poor’s 500 index dipped 0.73 percent in 2015, ending three consecutive years of double-digit gains.

Investors spooked by concerns about China’s economy drove the stock market downward as 2016 began. The Dow fell more than 1,000 points during the first week of the year, its worst ever start to a new year.

Locally, stocks reflected the broader market’s struggles in 2015. Of the publicly-traded firms based in southeastern Wisconsin, only 13 saw their stock price increase, while 26 saw their stock price decrease.

The biggest local stock gainer in 2015 was Milwaukee-based water heater manufacturer A.O. Smith Corp. The company’s stock price rose 36 percent in 2015, to $76.61.

In its third quarter report, the most recent quarterly report available at press time, the company reported net income of $73.6 million, a 45 percent increase from its 2014 third quarter net income of $50.6 million. Revenue totaled $625.1 million in the third quarter, up 7.5 percent from $581.6 million in the third quarter of 2014.

The company attributed the increase to higher product prices in North America, an increase in U.S. sales of Lochinvar brand products and commercial water heaters, and ongoing demand for its products from Chinese consumers.

“Our organic growth continued to outshine the industrial landscape,” said Ajita Rajendra, chairman and chief executive officer of A.O. Smith. “Sales for the first nine months (of 2015) in China were up 15 percent in local currency, and we expect to maintain that growth rate for the full year. Our North American business continued to perform at a high level…Our commercial water heater and boiler volumes continued to grow as a 26

BY ANDREW WEILAND, staff writer

result of continued new construction activities in our commercial end markets.”

Brookfield-based financial services technology developer Fiserv Inc. had the second-best stock performance of area companies in 2015. Its stock rose 29 percent, to $91.46, during the year.

The company’s third quarter net income of $218 million was down 9.6 percent compared to the third quarter of 2014, but its operating income for the quarter was up 8.6 percent, to $342 million.

“We’ve had two really great years in a row, kind of two record years,” said Fiserv president and CEO Jeffery Yabuki. The company had net income of $754 million in 2014, and net income of $523 million for the first nine months of 2015.

Kenosha-based tool equipment manufacturer Snap-on Inc. saw its stock price rise 25 percent in 2015, to $171.43. Its third quarter net income was up 12.7 percent, to $119.9 million, and its revenue for the quarter was up 1.9 percent, to $821.5 million.

Milwaukee-based staffing firm ManpowerGroup Inc. saw its stock price rise 24 percent in 2015, to $84.29. The company reported net earnings of $295.3 million for the first nine months of 2015, down from $310.4 million the year before.

But the local stock price losers far outnumbered the gainers in 2015.

Milwaukee-based mining equipment manufacturer Joy Global Inc. had the worst performing stock of all the publicly-traded companies in southeastern Wisconsin in 2015. The company’s stock fell 73 percent during the year, from $46.52 at the end of 2014 to $12.61 at the end of 2015.

Joy Global has been hurt by the collapse of commodity markets, which has devastated the mining industry.

In 2015, Joy Global reported a net loss of $1.2 billion and its revenue fell 15.8 percent, from $3.8 billion in 2014 to $3.2 billion in 2015. The company said its fourth quarter bookings were down 21 percent, to $617 million.

“During 2015, global commodity markets declined further as supply surpluses ................. STOCKS continued on page 34 B i zT i m e s M i l w a u k e e

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BIZTIMES STOCK INDEX - 2015 Ticker

Company Name

AOS

A. O. Smith Corp.

FISV

Fiserv Inc.

SNA

Snap-on Inc.

MAN

ManpowerGroup Inc.

ARIS

ARI Network Services Inc.

KOSS BKMU WBB WSBF

12/31/2014 Price

12/31/2015 Price

Change

56.41

76.61

36%

70.97

91.46

29%

136.74

171.43

25%

68.17

84.29

24%

3.78

4.50

19%

Koss Corp.

1.75

1.99

14%

Bank Mutual Corp.

6.86

7.80

14%

Westbury Bancorp Inc.

16.40

18.00

10%

Waterstone Financial Inc.

13.15

14.10

7%

SXT

Sensient Technologies Corp.

60.34

62.82

4%

MCS

Marcus Corp.

18.51

18.97

2%

DOC

Physicians Realty Trust

JMG*

Journal Media Group Inc.

BMI PLOW

16.60

16.86

2%

12.00*

12.02

0%*

Badger Meter Inc.

59.35

58.59

-1%

Douglas Dynamics Inc.

21.43

21.07

-2%

WEC

WEC Energy Group Inc.

52.74

51.31

-3%

MTG

MGIC Investment Corp.

9.32

8.83

-5%

ROK

Rockwell Automation Inc.

111.20

102.61

-8%

WEYS

Weyco Group Inc.

29.67

26.76

-10%

ATU

Actuant Corp.

27.24

23.96

-12%

BGG

Briggs & Stratton Corp.

20.42

17.30

-15%

BRC

Brady Corp.

27.34

22.98

-16%

JCI

Johnson Controls Inc.

48.34

39.49

-18%

KSS

Kohl's Corp.

61.04

47.63

-22%

ESNC

EnSync Inc.

0.51

0.38

-25%

APAM

Artisan Partners Asset Management Inc.

50.53

36.06

-29%

JOUT

Johnson Outdoors Inc.

31.20

21.89

-30%

HOG

Harley-Davidson Inc.

65.91

45.39

-31%

STRT

Strattec Security Corp.

82.58

56.49

-32%

MOD

Modine Manufacturing Co.

13.60

9.05

-33%

RXN

Rexnord Corp.

28.21

18.12

-36%

GNRC

Generac Holdings Inc.

46.76

29.77

-36%

TWIN

Twin Disc Inc.

19.86

10.52

-47%

QUAD

Quad/Graphics Inc.

22.96

9.30

-59%

RRTS

Roadrunner Transportation Systems Inc.

23.35

9.43

-60%

CNXR

Connecture Inc.

9.01

3.61

-60%

JASN

Jason Industries Inc.

9.85

3.78

-62%

BONT

Bon-Ton Stores Inc.

7.41

2.10

-72%

JOY

Joy Global Inc.

46.52

12.61

-73%

*JMG opened at $12 on 3/23/15, its first trade date.

All data taken from Factset Research Systems and compiled by Robert W. Baird & Co. Inc.

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BIZTRACKER QUARTERLY UPDATE: A look at the statistics that affect your market Private sector job growth in Wisconsin

$ Value of SBA loans approved for SE Wis.

Unemployment rate

(fiscal year ends in September)

(not seasonally adjusted)

Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. SOURCE: U.S. SMALL BUSINESS ADMINISTRATION

Southeastern Wisconsin commercial real estate vacancy rates

SOURCE: XCELIGENT

Metro Milwaukee new car registrations

Number of homes sold in metro Milwaukee

SOURCE: GREATER MILWAUKEE ASSOCIATION OF REALTORS

Milwaukee area PMI

SOURCE: WISCONSIN DEPT. OF WORKFORCE DEVELOPMENT

Greater Milwaukee single family and duplex building permits

SOURCE: MTD MARKETING SERVICES LLC

Mitchell International Airport passengers

(any number more than 50 indicates growth)

SOURCE: WISCONSIN DEPT. OF TRANSPORTATION

SOURCE: ISM-MILWAUKEE REPORT ON MANUFACTURING

SOURCE: MITCHELL INTERNATIONAL AIRPORT

B覺zT覺mes Media Presents:

Up-to-date, in-depth economic data for key industries

BizTimes.com/BizTracker

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DESPITE STRONG DOLLAR, TIME TO THINK EXPORT STRATEGY Plan ahead while others resist omeday, your company will have a valuation event. In many respects, this valuation is a statement of how well you’ve done for yourself, your employees, your family and your community. The only person who’s going to drive a valuation strategy is you.

BURNETT By now, most New Year’s resolutions have been made and broken. For a business owner, making a resolution to make 2016 the year to create a valuation strategy is one to keep.

The pillars of such a strategy address what investors look for as the four key valuation drivers: »» Return on capital »» Cost of capital »» Growth rate »» Duration of growth One great thing to bake into your strategy, even if you’re a job shop, is to use 2016 as a planning year around the global component of your valuation strategy.

Because of the strong dollar, most of your competition will be looking the other way. Like any new venture, going international takes time. You will be able to get a year’s jump on your competitors by starting before the dollar normalizes.

Plus, the financial and expertise resources will be far easier to utilize with reduced demand. Yes, there is new stuff to learn.

But as experienced exporter Paul Byrne, vice president and general manager of Building Specialties Corporation for Menomonee Falls-based Bradley Corp. points out, “You already know 80 percent of it, and almost all the rest you only need to learn the first time.”

Why is going international a key component in a valuation strategy?

“Valuation is a forward-looking process,” said Tim Muehler, a forensic and 28

valuation services principal at accounting and consulting firm CliftonLarsonAllen. “Tapping into the opportunities abroad can often provide significant growth in both revenues and earnings.

Such growth typically translates into a higher value for your business.”

Investors have two fundamental concerns: will current revenues be sustained; and what is the opportunity for growth?

Statistics from the United States International Trade Commission showed that companies who export grow faster, and during domestic economic downturns have more resilient revenues than their non-exporting peers. The U.S. typically goes through cycles of expansion, then contraction. For domestic only companies, revenues are impacted by these cycles. However, companies that sell internationally have much stronger and more resilient growth curves, shown by the impact on businesses in the last recession.

The chart here shows companies who exported during the five-year period that included the recession grew, on average, 37 percent, while companies who did not export actually shrank by 7 percent – and those were the companies that were still around in 2010!

Selling into multiple economies significantly raises the likelihood that growth will be stronger and more predictable looking forward. Hence, a company that could export its products or services, or even its expertise, can position itself to be a more valuable enterprise. For a job shop, your revenues depend upon your customer base. An investor will be more impressed if you can show a customer acquisition strategy that includes a healthy proportion of customers who export.

Their business will be more predictable, as will the orders they send to you.

Additionally, the data shows companies that export tend to have much higher per-employee productivity, and they can pay workers more and thus get the better B i zT i m e s M i l w a u k e e

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workforce, creating even more competitive advantage.

Finally is the size of the market outside the U.S. The international marketplace represents 86 percent of global spending power, and 95 percent of consumers now live outside the U.S. From an investor’s perspective, it represents a big opportunity for growth.

For an investor with expertise in exporting, discovering a company that

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doesn’t export – but could – is found money. Such a company can be a bargain to buy, and then turn into a growth machine by going international. As a company owner, you want to take advantage of that opportunity before the investor comes knocking. n Bill Burnett is the director of export services for the Milwaukee 7. He can be reached at (414) 287-4118 or via email at bburnett@mke7.com.

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HEALTHY LOAN DEMAND, RISING INTEREST RATES EXPECTED TO BENEFIT BANKS IN 2016

I

BY MOLLY DILL, staff writer

ncreased consumer confidence in 2015 led to robust demand for almost every kind of bank loan, and 2016 should be no different, said Rose Oswald Poels, president and chief executive officer of the Wisconsin Bankers OSWALD POELS Association. That’s good news for bank profits this year.

“I think you’ll see that continued optimism going into 2016 as well from consumers, so we expect continued strong, healthy loan demand in 2016,” Oswald Poels said.

“You just saw consumers feeling that the economy both nationally and in Wisconsin had both rebounded and stabilized.”

Given the outlook for the overall U.S. economy, the banking industry is expected to have a modestly positive HUFFMAN year, said Joel Huffman, senior investment director at U.S. Bank in Milwaukee. Consumers have paid off some debt, employment is growing and wages are expected to increase, and consumers are expected to have more to

spend as a result. Loan demand and interest rates are trending upward.

Methodical growth in the gross domestic product and the labor force participation rate will help the economy continue to do well in 2016, said GOLLER Chris Goller, regional president for Wisconsin at PNC Financial Services Group Inc. “Typically, banks in a rising interest rate environment do a little bit better, and in a falling interest rate environment they

do a little bit worse,” he said. “I would say we probably will see bank profits improve a little bit.”

Loan losses are also expected to decrease this year.

“We see credit quality as being pretty strong – we don’t see a lot of borrowers struggling dramatically, so you feel pretty good about the banking industry as you go into 2016,” Goller said.

If there’s a point of concern in the economy, it’s the manufacturing sector’s recent weakening, Huffman said.

The recent contraction in the Milwaukee-area manufacturing sector could reduce commercial loan demand, but

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Nominations still being Accepted The Cystic Fibrosis Foundation (CFF) will be honoring Milwaukee’s Finest young professionals, who show exemplary leadership, are active in their community, and have excelled in their profession or business. The honorees will receive many benefits including the personal satisfaction of helping to save the lives of children and adults with cystic fibrosis (CF) – a life-threatening disease.

The CFF’s 5th Annual Milwaukee’s Finest campaign begins with an honoree kick-off reception where the 2016 honorees and their respective nominators will be introduced. Honorees will also receive a fundraising packet, and will be assigned a CF ambassador and fundraising mentors. Throughout the campaign one-on-one meetings, conference calls and networking events will take place. The campaign culminates with a ceremony where honorees are recognized and celebrated!

Please visit our event webpage: wisconsin.cff.org/finest to read testimonials from past honorees, to submit a nomination or application and to learn more about this unique and very important initiative!

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The Josephs – Park Bank customers since 1993 Bonnie, Leon, Robert and Jake in the lobby of the Overlook on Prospect

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the difference is likely to be made up by another industry that is experiencing growth, Oswald Poels said.

With the Federal Reserve raising interest rates at a gradual pace this year and banks bumping up short-term rates, it’s likely banks will see an increased profit on interest income.

“Certainly increased interest rates do help ease a little bit of banks’ net interest margins, so it does help,” Oswald Poels said.

Increased interest rates can also spur people to make decisions, such as applying for a loan before rates get any higher, Goller said.

“There’s certainly capital in banks that are willing to lend,” he said. “I think (loan demand) will be strong in 2016. I think it might even pick up. You’ve got a couple different stories going on here, and I would say a little bit of weakness in certain pockets, but on par I feel optimism about loan demand; I feel optimism about what we’re seeing.”

A factor that could weigh on banks’ profits is the continued expense pressure in the areas of technology, cybersecurity and compliance, Oswald Poels said. Most banks are investing heavily in updating their technology to meet consumer demand, putting in place cybersecurity measures to protect customers’ data, and keeping up-to-date with compliance measures as part of the ongoing implementation of the Dodd-Frank financial reform law.

“Consumers want to be able to bank on any device they have. We certainly have spent a lot of money beefing up both physical and electronic security to pro-

tect customers’ data,” Oswald Poels said.

“Many banks are slowly pushing out EMV chip cards, so there’s many more that plan for a 2016 release of an EMV card.”

Among the technological innovations coming to market are biometric applications, such as fingerprint authentication, voice command, retina scanning and other quick customer identification measures. Brookfield-based financial services technology developer Fiserv Inc. this year plans to release a palm-vein reader technology from Fujitsu into its DNA core account processing platform.

“It uses a light to read the vein structure on your palms,” said Jaime Dominguez, director of retail banking and channels strategy in bank solutions at Fiserv. “When you go up to the teller line, rather than having to take out your DOMINGUEZ card, swiping it, putting in your pin … all you’re doing is putting your hand over the palm reader.”

Bank mergers and acquisitions are also expected to continue at a steady pace in 2016. There were 12 bank mergers announced in Wisconsin in 2015, and Oswald Poels predicts the same number in 2016.

“The underlying trend of bank mergers will most likely continue in a broad sense just because it’s been a tough banking environment,” Huffman said. “There’s been pressure to keep costs low and (with) the increased regulation, companies are interested in managing that.” n

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MERGERS AND ACQUISITIONS ACTIVITY EXPECTED TO PICK UP SPEED IN 2016

BY MOLLY DILL, staff writer

M

erger and acquisition activity was strong in 2015, and experts predict it will remain so – and maybe even accelerate – in 2016.

“There’s still buyers out there looking for deals,” said FOX Vicki Fox, managing director at Eisen Fox & Co. LLC in Milwaukee. “Even though interest rates have ticked up a little bit, money is still basically free,” making it easy to finance deals.

According to business for sale marketplace site BizBuySell, 17 of its listings were

sold in the Milwaukee-Waukesha-West Allis market in 2015 at a median sale price of $625,500. The businesses sold had a median revenue of $600,000 and cash flow of $174,991. Buyers paid an average of 0.77 times revenue and 2.91 times cash flow.

While the number of Milwaukee area businesses sold on the site is down 29.2 percent from 2014, the median sale price is up by 292.8 percent, according to a BizBuySell analysis. Six of the transactions were in the service sector, while five were in non-restaurant retail and four were in manufacturing.

“I think 2015, for us, it was a record year as far as number of deals closed,”

said Ann Hanna, managing director at Schenck M&A Solutions in Milwaukee.

And 2016 is likely to remain robust in volume, Hanna said. Financial performance was a little soft to close HANNA 2015, but that hasn’t seemed to impact deal flow or the number of sellers coming to market.

“Most people are seeing this as just temporary softness and that it’s not an indicator of an imminent recession,” Hanna said.

In fact, some expect deal activity to accelerate in 2016.

“2015 was a boom year,” said Steve Barth, partner and co-chair of the Transactional & Securities Practice at Foley & Lardner in BARTH Milwaukee. “It was as good as they get in our business. Deal volume has just really never been higher that I can remember in my 32 years.”

Barth said deal flow has been getting heavier, so 2016 is likely to surpass 2015 in deal volume. Valuations are good,

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BIZBUYSELL RECENTLY SOLD LISTINGS Business Type

Number

Median Sale Price

Retail - Restaurant

1

$325,000

$325,000

1.00

$600,000

0.54

$70,000

4.64

Retail - Other

5

$130,000

$150,000

0.87

$356,000

0.37

$110,000

1.18

Service

6

$712,750

$847,500

0.81

$979,868

0.67

$240,272

2.88

Manufacturing

4

$1,500,000

$1,500,000

0.85

$1,201,193

1.11

$460,264

2.94

Other

1 17

$625,500

$695,000

0.85

$600,000

0.77

$174,991

2.91

-29.2%

292.8%

208.9%

1.5%

22.6%

86.0%

99.4%

31.4%

All Business Types Year-over-year change

buyers are plenty, it’s relatively easy to get debt financing and companies have strong balance sheets, he said. Meanwhile, the easiest way to generate growth in the current economic environment is through acquisition.

“If they’re going to get into high single or even double-digit growth, most of them (strategic buyers) are doing it through acquisition,” Barth said. “The more manufacturing companies are contracting, the more they are looking to grow through acquisition. It’s kind of their only way out of the box.”

The fact that it has been a seller’s market for several years and softness is creeping into certain industries has some sellers interested in pulling the trigger, Fox said. Manufacturers, in particular, have seen their backlogs begin to dwindle and would like to get to market now just in case orders start dropping off.

“They don’t want to miss this window.

They might have missed the window five or six years ago, and they don’t want to miss it again,” Fox said. “You never know

Median Asking Price

Avg. Sale/Ask Ratio

what will happen in a year. The market’s still there to exit at a good valuation.”

For owners who don’t want to go through another business cycle before selling, there’s probably only another year or two to get out, Hanna said.

“If you just look at business cycles, everyone’s sitting here and saying ‘Ok, our last business cycle was 2008-2009, and what is it, 2016 now? It’s a matter of time,’” she said. “I think there’s a handful of people saying, ‘Gosh, I don’t want to go through another business cycle.’”

Eisen Fox has seven sell-side deals working to get a letter of intent signed this month alone. The firm expects to have a busier year than in 2015, based on that pace. It completed three deals last year.

Overall valuations haven’t changed significantly, but the structure of deals has shifted since the Great Recession, from 50 percent cash to 80 percent cash, Fox said.

“Private equity groups are trying to sell everything they can right now because the market’s so good,” Fox said.

On the flip side, private equity firms

Median Revenue

Avg. Multiple of Revenue

are also swamped with the number of deals they’re looking at on the buy-side, Hanna said.

“I do have private equity (buyers) who are bowing out of deals just because of capacity issues,” she said. “They’re starting to see more and more deals, because more sellers are coming to market.”

“Private equity firms are really flush with cash and they need to start generating returns and investing that cash on behalf of their limited partners so they are chasing deals and chasing them hard,” Barth said.

Buyers of late are more frequently private investors and fundless sponsors, who then raise a fund to make the purchase, Hanna said. The ability to raise these kinds of funds could result from individuals looking to invest outside the tumultuous stock market.

“We are seeing a lot of rollups,” she said. “People go into one industry and buy up companies all within an industry to make one big company. There’s strategic (buyers) doing rollups and it just, I think,

Banking & Finance

Median Cash Flow

Avg. Multiple of Cash Flow

speaks to the general activity out there.”

On the other hand, Barth has seen more share buybacks and spinoffs as companies focus in on growth segments.

“It seems like the economy goes through … conglomeration phases and deconglomeration phases and I think we’re going through a deconglomeration phase,” he said.

Because of the large number of interested parties for each deal, buyers are paying a premium right now, Hanna said.

“We are into the go-go crazy frothy market days where if you’re not in double digit (multiples), you’re not playing,” Barth said. “It’s fun for sellers, not too fun for buyers.”

Technology, health care, telecommunication and business services are all seeing heavy M&A activity, Hanna said.

Alternative energy, as well as medical device and technology deals, are especially hot right now, Barth said. Both said manufacturing deal flow hasn’t slowed down despite any softness the industry is experiencing. n

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ARENA GROUND BREAKING WILL HIGHLIGHT 2016

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ith firm dates now set for design and construction of the new arena for the Milwaukee Bucks in downtown Milwaukee, the project will begin taking shape in 2016, although the new facility won’t be complete until 2018.

The controversial $500 million project dominated most of the conversation in the city and beyond last year. A development agreement between the city and the NBA franchise is now in place listing March 1 as the deadline for the Bucks to submit detailed design plans, and June 1 as the deadline for construction to start.

The arena is planned for a site just north of the BMO Harris Bradley Center.

The arena will be the centerpiece of a 25-acre, mixed-use district that the Bucks owners plan to develop. The first phase of the arena district development includes the new 690,000-square-foot, six-story arena, a practice facility for the team and a “live block” public plaza on Fourth Street between Highland and Juneau avenues.

While the new arena will be the largest project that breaks ground in the region this year, it certainly isn’t the only major development under construction in the area. Several large projects that were under construction in 2015 have not been completed yet.

One of the major buildings, however, that will be wrapped up by March 1, is 833 East, the 17-story, $101.5 million, 358,017-square-foot office tower being built by Irgens at 833 E. Michigan St. downtown. Tenants in the building will include the corporate offices for Johnson Controls Inc.’s automotive spinoff, Adient, and law firm Godfrey & Kahn.

OFFICE Irgens is also building a 155,000square-foot office building in the Milwaukee County Research Park in Wauwatosa.

Zywave will be the anchor tenant in the building.

The Northwestern Mutual Tower and Commons office building will still be under construction this year. The $450 million, 32-story, 1.1 million-square-foot corporate headquarters is expected to be

complete in 2017; however, it is already transforming downtown.

The company will also break ground this year on a $100 million, 33-story parking and apartment tower adjacent to the office building, on the block northwest of East Mason Street and North Van Buren Street. The tower will include 308 highend apartment units and 16 penthouse units, and an eight-story parking garage and 14,000 square feet of retail space on the first floor.

“I think it was a huge psychological shot in the arm for people that Northwestern Mutual made a commitment first with their new headquarters and then with their multi-family tower,” said Lyle Landowski, partner at Colliers International|Wisconsin.

Overall, the region’s office market ended 2015 with a vacancy rate of 18.4 percent and absorbed 231,849 square feet of space, according to data from Xceligent.

“2015 was a spectacular year for tenants, landlords and brokers. There was a lot of pent-up demand, lots of moving, renewing of contracts and people changing locations,” said Jack Jacobson, principal, NAI MLG. “We look at what we’re doing and what our competitors are doing and we are cautiously optimistic that 2016 will be a good year, but it’s early.”

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BY CORRINNE HESS, staff writer

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RETAIL Construction on the second phase of The Mayfair Collection project in Wauwatosa, which will be anchored by a Whole Foods Market and a Homewood Suites Hotel, will continue this year.

Chicago-based HSA Commercial Real Estate, the developer for The Mayfair Collection project, which is located northeast of Highway 45 and Burleigh Street, has partnered with Fiduciary Real Estate Development Inc. to include 1,050 luxury residences in the project.

Irgens is working on The Corridor, a 66-acre mixed-use development at the Ruby Farm site in Brookfield that will include the state’s first Life Time fitness club. The project will also include a Dick’s Sporting Goods store and Wisconsin’s w w w.biztimes.com

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The 833 East tower is scheduled to open March 1.

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led to prices of most major commodities falling well over 25 percent, which adversely impacted our booking rate,” said Ted Doheny, president and CEO of Joy Global. “Despite these unprecedented times in mining, we remain steadfast in driving our growth strategies and prudently managing our balance sheet.”

In November, Joy Global announced it will close its Orchard Street plant in Milwaukee and move its motor manufacturing work to Longview, Texas, beginning

this month. About 50 employees will lose their jobs as a result of the move.

Boston Store parent company The Bon-Ton Stores Inc., which has headquarters in Milwaukee and York, Pa., saw its stock price fall 72 percent in 2015, to $2.10. The company reported a net loss of $34 million in the most recent quarter and has not turned an annual profit since 2010.

Bon-Ton recently announced plans to close its Elder-Beerman stores in Lima, Ohio and Huntington, W.Va. and its BonTon store in Syracuse, N.Y. “Looking ahead, we are not an-

first Portillo’s, which are expected to open this summer.

Von Maur Inc. purchased 1.6 acres in The Corners development in fall 2015, and construction on the long-awaited retail and apartment development at I-94, Bluemound Road and Barker Road in the Town of Brookfield will continue this year.

There is only one, 2-acre parcel left in the Drexel Town Square mixed-use development in Oak Creek. Water Street Brewery and Meijer have already opened there.

Expect to see significant progress on the other retail tenants including a Chick-filA restaurant and BelAir Cantina.

Cobalt Partners is working on two multi-use projects. The first, White Stone Station in Menomonee Falls, is on 65 acres west of Highway 41/45 and Pilgrim Road.

Its anchor, Costco, opened in November.

This year, construction will be finished on small retail stores and restaurants.

Cobalt’s other major project is in Greenfield, at a 40-acre site at I-894 and South 84th Street. It includes more than 300,000 square feet of retail shops and restaurants, as well as a possible hotel and 350 market rate apartments. Steinhafels will relocate within the development and close its nearby store at 8400 W. Layton Ave.

ticipating major changes in the retail environment in the near term,” said Bon-Ton president and CEO Kathryn Bufano. “Accordingly, we are pursuing a number of avenues to drive additional process improvements and further reduce expenses.”

Another noteworthy local decliner was Sussex-based commercial printer Quad/Graphics Inc., which saw its stock price fall 59 percent in 2015, to $9.30.

Quad reported a net loss of $552.2 million in its most recent quarter. In November, the company announced a $100

million cost savings plan, which included plans to close plants in Loveland, Colo.; Enfield, Conn.; Augusta, Ga.; and East Greenville, Ga. “By the end of (2015), we will have closed 31 plants since the July 2010 World Color acquisition,” said Joel Quadracci, chairman, president and CEO. Quad has been consolidating its operations, which has resulted in the company moving more jobs to Wisconsin.

Last fall, Quad leaders said they plan to create 500 jobs in Wisconsin during the next few years. n

INDUSTRIAL Unless a company is willing to build, finding a large industrial space in southeastern Wisconsin is close to impossible, according to James T. Barry III, president of Milwaukee-based The Barry Co. Xceligent data backs him up. The vacancy rate for the industrial market was 4.6 percent in the fourth quarter of 2015, with some areas, such as Washington County, reporting 1.4 percent vacancy in the fourth quarter. The region absorbed 5.9 million

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The Kimpton Hotel in Milwaukee's Historic Third Ward will open this year.

square feet of industrial space in 2015.

Barry believes that trend will continue through 2016, barring a macroeconomic catastrophe.

“Even though there have been a number of new industrial developments, there have not been enough for supply to meet demand,” said Barry, whose company handled the largest industrial space sale in the region in 2015, involving the 1 million-square-foot Milwaukee Post Office.

“There are not many buildings that size,” Barry said. “We will probably be seeing more sales of multiple buildings.

Trying to find 100,000 square feet is challenging. A lot of the larger inventory has already been taken off the market.”

New products will begin hitting the market in spring, with nearly 1.9 million square feet of speculative buildings and another 1 million square feet planned, according to a report released by Cushman & Wakefield.

The market is already responding, with Liberty’s 171,000-square-foot spec building in Oak Creek and Wangard’s 60,000-square-foot spec building in West Allis already fully leased.

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By mid-2016, 313 more hotel rooms will be added to the area in and near downtown Milwaukee, with the 158-room Kimpton Hotel at the northeast corner of Broadway and Chicago Street in the Historic Third Ward and the 155-suite SpringHill Suites at the corner of Fourth and Wells streets both scheduled to open this year.

A 200-room Westin Hotel just west of the new 17-story 833 East office building will also likely break ground in 2016, and three other hotel projects are planned downtown: a 94-room Hilton Homewood Suites in the Button Block building, a Cambria Hotel & Suites near The Shops of Grand Avenue and a hotel planned in the First Financial Centre building at 700 N. Water St. Construction is also expected on a hotel in the Drexel Town Square project in Oak Creek.

“Overall, 2015 was a good year for the commercial real estate market, and I think we’re going to see more of the same in 2016,” Landowski said. “I’m encouraged by the risks people are taking and the new development that is happening.” n

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A home for sale in Milwaukee’s Bay View neighborhood.

HOUSING MARKET EXPECTED TO BE EVEN STRONGER IN 2016

T

he southeastern Wisconsin residential real estate market saw a 10.5 percent increase in sales in 2015 compared to 2014, and experts expect an even stronger housing market this year.

Early predictions pegged 2015 finishing about 9.8 percent ahead of 2014, but with buyers still interested through December, the market saw 19,611 total sales last year, compared to 17,749 in 2014, according to the Greater Milwaukee Association of Realtors.

“2015 was characterized by increasing sales, slightly increasing prices and really tight inventory, especially in the fourth quarter,” said Mike Ruzicka, president of GMAR. In 2014, brokers were happy to see the market changing from a recessionary one filled with distressed properties to one filled with first-time home buyers, people 36

looking for a larger home and empty nesters moving into a new home or condo.

2015 saw a continuation of that, which also meant tight inventory, Ruzicka said.

By the end of 2015, the housing market was down to four months of inventory (the time it would take to sell all of the homes on the market at a given time).

“I think 2016 is going to have more sales – 5 to 6 percent stronger than last year,” Ruzicka said. “We could have even more if we had new construction. This is the third year of real economic recovery.

People are starting to make money again and they are feeling better about making a move up.”

Irvine, Calif.-based data analytics company CoreLogic predicts home prices will increase by 5.4 percent in the Milwaukee area in 2016. The company uses several economic variables to come up with B i zT i m e s M i l w a u k e e

n

its predictions, including state-level forecasts and the number of owner-occupied households in each state. Many factors, including strong demand and tight supply, are contributing to the long-sustained boom in prices, according to CoreLogic.

The hottest areas of southeastern Wisconsin will continue to follow the school districts. After spending a few years in an apartment, first-time home buyers are thinking about having a family and the first thing they often think about is the school district, Ruzicka said.

The Elmbrook, New Berlin, Mequon and Franklin school systems are all wellregarded, but the homes also come with a high price. The average sales price in Brookfield was $315,994 in 2015. It was $247,214 in New Berlin, $415,948 in Mequon and $236,486 in Franklin.

By comparison, the average sale price

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BY CORRINNE HESS, staff writer

in Milwaukee County, which includes Franklin, was $160,223 in 2015.

“First-time home buyers are driven by quality schools, but pricing is key,” Ruzicka said. “MPS has its challenges, but they’ve made significant strides. The good schools are really good. Overall, wherever people choose, the market is pretty affordable compared to other areas of the country.”

As the Great Recession becomes further removed from peoples’ minds, their confidence continues to be restored and those who were sitting on the fence will either enter the housing market or upgrade their homes, said Kevin Donnell, president of First Weber Inc. “I believe 2016 will be an equally strong year (as 2015),” Donnell said.

“We’ve already seen a lot of buyer interest starting in January.” n

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HEALTH CARE TRAJECTORY IN WISCONSIN POSITIVE AMID SYSTEMIC CHANGES

I

n health care, particularly in Wisconsin, it’s impossible to look ahead to 2016 without recounting high points of 2015: »» The UW Extension reported that patients traveling to Wisconsin for our high-quality health care added $3 billion to the state’s economy and supported some 6,400 jobs here. »» A study by the University of Wisconsin-Whitewater tabbed Wisconsin as having the third-most efficient health care system in the country, delivering a strong ROI for employers’ health care dollars. »» The respected National Committee for Quality Assurance gave seven Wisconsin-based, provider-owned health

BY ERIC BORGERDING, special to BizTimes

insurance plans its highest ratings, making Wisconsin one of NCQA’s top-performing states. »» The highly regarded Agency for Healthcare Research and Quality ranked Wisconsin as having the second-highest quality health care in the nation.

Wisconsin has been at or near the top of the AHRQ rankings since 2005.

Bottom line: Wisconsin’s hospitals and health systems remain on a positive trajectory and are well-positioned for the systemic changes gripping the health care system.

Looking ahead, 2016 will see continuing evolution in how health care is paid for and, as a result, how health care is deliv-

ered. The latest example begins this April when Medicare starts paying larger hospitals a single “all-in’’ fee for a knee or hip replacement. Known as a “bundled payment,” it means being paid once for an entire “episode” of care rather than each time a service within that episode is renBORGERDING dered. Further, the final bundle amount will be adjusted for the quality of care given – better outcome means higher payment, and vice versa. In other words, hospitals are bearing more of the risk (and reward) that has typically been the realm of insurance companies.

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Shifting risk and moving payment from volume to value is driving greater efficiency, better outcomes and massive reconfiguration of how health care systems are structured, aligned, resourced and staffed.

Given Wisconsin’s longstanding commitment to high-quality outcomes and highvalue care (see previous), these are reforms Wisconsin can leverage to our advantage.

2016 also marks the third year of Obamacare and, by most measures, insurance coverage has expanded across the country since its inception. In Wisconsin, there’s been an estimated 19 to 32 percent reduction in the number of uninsured, including some 180,000 people obtaining insurance on the exchange. While this is positive, there are problems on the horizon. Nearly 90 percent of those with exchange coverage in Wisconsin receive a large (and costly) federal subsidy that pays most of their premiums (insurance companies also receive a subsidy to keep premiums lower). Costs are adding up fast, and at the same time, some large insurance companies are threatening to pull out of the exchanges. These developments may boost efforts to repeal and replace Obamacare, but unwinding what is rapidly becoming a new entitlement will be easier said than done, and carries with it massive implications for employers, insurance companies, health care providers and taxpayers… all in an election year.

There are potent forces converging to rapidly redraw the health care landscape, and no one can be sure what the next 12 months will bring. But of one thing we can be certain – health care is one of Wisconsin’s greatest assets. High-quality, high-value health care has become synonymous with Wisconsin and is one of the reasons we are on solid ground as health care changes around us. n Eric Borgerding is president and chief executive officer of the Wisconsin Hospital Association.

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MISSION Easter Seals Southeast Wisconsin provides exceptional services to ensure that all people with disabilities or special needs and their families have equal opportunities to live, learn, work and play in their communities.

Connecting Individuals with Disabilities to a World of Possibilities

2222 S. 114th Street West Allis, WI 53227 (414) 449-4444 eastersealswise.com GOALS facebook.com/eastersealswise @ESSoutheastWI

To change the way the world defines, views and treats disabilities so that every person can achieve their full potential. To provide exceptional services to ensure that all people with disabilities or special needs and their families have equal opportunities to live, learn, work, play and engage in their communities.

220 $10,412,379 1934

TOTAL EMPLOYEES: REVENUE:

YEAR ESTABLISHED:

Live: Hands-on, comprehensive, vital services and support to help people reach their full potential—regardless of challenges, needs or disabilities.

SERVICE AREA Easter Seals Southeast Wisconsin serves six counties: Milwaukee, Waukesha, Washington, Ozaukee, Kenosha and Racine.

Learn: Programs designed to help children and adults learn—and often re-learn—basic functions, master skills needed to develop and thrive, and be sharp and active as they age.

FUNDING SOURCES

Work: A range of training, placement and related services that help people prepare for the workforce—because meaningful work is often the key to overcoming challenges and having a good life.

FUNDRAISING/EVENTS We hold two annual fundraising events that offer opportunities for individuals and corporations to get connected: • Walk With Me – Wednesday, June 29th at the Milwaukee County Zoo. A family event to walk together to raise funds and awareness for individuals with disabilities. Be a corporate sponsor or form a walk team. Registration begins in January at www.walkwithme.org/milwaukee • Autism Awareness Month – April. Through this cause marketing campaign, you can align your business with Easter Seals to help spread the word and raise needed funds to provide scholarships to families that are on the therapy waiting list for early intervention support services.

Play: Fun, healthy programs for children and adults and caregivers to relax, connect with friends and engage in constructive activities—all so necessary to living the best life possible.

 Program Fees .................................... 62%  Government Contracts ........................ 18%  Commercial Sales ................................ 9%  Donations ........................................... 7%  Other Income ...................................... 4%

Act: Our vibrant community of friends and supporters stands with those who face challenges by volunteering, advocating, donating and participating in events that inspire us all and sustain our cause.

Dale Van Dam (Chair) ★ Peggy Niemer (Vice Chair) ★

Robert Glowacki

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Michelle Schaefer COO

Frank Windt

Schenck Business Solutions

Robert Ranus

Sue Pierman

Pierman Communications

Daniel O’Callaghan

Retired, Roundy’s

Harley-Davidson Motor Co.

Jim McMullen (Secretary) ★

David Glazer

Tom Gagliano

Nancy Creuziger (Treasurer) ★

Bill Hughes

Jean Schramka

Roger Schaus

Sara Walker

Tari Emerson

ManpowerGroup

Retired, Generac

2016 GIVING GUIDE | www.biztimes.com/giving

Take advantage of the opportunity for your organization to be seen by the Region’s Business and Philanthropic Leaders all year long.

★ DENOTES EXECUTIVE LEADERSHIP

Kenwood & Wells, LLC PNC Bank

CEO

Easter Seals knows the personal impact your gifts make is of great importance to you. There are many ways to make a difference: Volunteer or leadership at the Board level; corporate volunteer days; tailored event sponsorships; individual gifts; in-kind gifts; or through your United Way Giving Campaign. A bequest gift allows you to combine your personal financial objectives with your charitable giving goals to establish a lasting legacy.

BOARD OF DIRECTORS M3 Insurance Solutions

David Glazer Real Estate, LLC Patina Solutions Associated Bank

Your involvement in this annual publication includes an in-depth profile, plus several advertising elements in BizTimes Milwaukee magazine, BizTimes Nonprofit Weekly enewsletter and BizTimes.com.

GIVING OPPORTUNITIES

VOLUNTEER OPPORTUNITIES Our dedicated volunteers play an essential role in positively impacting the lives of those that we serve. We have a variety of opportunities throughout the week and weekend to fit your availability and interests. Learn how you can make a difference through volunteering at www.eastersealswise.com.

EXECUTIVE LEADERSHIP

Publication Date: November 14, 2016

Jeff Squire

ProHealth Care

Tom Kelly

Kelmann Restoration

Morgan Stanley Massage Envy

www.eastersealswise.com

Charter Steel

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strategies Servant leadership and emotional intelligence have arrived Will be key part of Philadelphia Eagles’ search for new coach

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recent headline from NBC Sports: “After Chip Kelly, Eagles looking for coach with ‘emotional intelligence.’”

No, your eyes are not deceiving you!

The Philadelphia Eagles football team owner, Jeff Lurie, announced during a press conference that the next coach he hires for the team will value emotional intelligence.

Football players may want to be led, but they also want to be valued, or their affection and attention will last as long as the good fortune it takes to win on a regular basis, the article about the Eagles’ coaching search said.

This statement could be said of any of us. We want to be valued. We want to be “seen.” Leaders who demonstrate emotional intelligence and business cultures that value emotional intelligence combined with a model of servant leadership are increasingly demonstrating greater success.

Emotional intelligence and servant leadership have been making their way slowly into the mainstream of our business communities. It has not been an easy journey. There are still some who will ridicule and dismiss them, choosing instead intimidation and authoritarianism, usually motivated by fear. Emotional intelligence and servant leadership present another way.

Barsade and O’Neill, authors of an article in the January-February 2016 edition of the Harvard Business Review titled: “Manage Your Emotional Culture” have found that “emotional culture influences employee satisfaction, burnout, teamwork, and even ‘hard’ measures such as financial performance and absenteeism.

So when managers ignore or fail to understand it, they’re glossing over a vital component of what makes organizations tick, and their companies suffer as a result.”

Emotional intelligence is the ability to be aware of, understand and manage one’s emotions, and have the capacity to recognize, understand and influence the emotions of others. When utilized for good, it is manifested in servant leadership. Like

emotional intelligence, we are hearing the servant leadership model being touted in many for-profit organizations, as well as not-for-profit organizations.

Recently, I listened to a recording of a leader talking about what it means to him to be a servant leader, and what led him into the servant leadership model.

Joe is a senior leader in a prominent billion dollar construction company. This is a company that has embraced servant

a man much like himself, with a wife and two young children. He realized the people who reported to him had hopes and dreams like he did; they had families and struggles, and they had the desire to do good work. He began to think of himself as a leader who was called to serve others rather than control others. He began to have conversations with his direct reports about their aspirations. He invited their participation in the work process,

“ If leadership serves only the leader, it will fail. Ego satisfaction, financial gain, and status can all be valuable tools for a leader, but if they become the only motivations, they will eventually destroy a leader. Only when service for a common good is the primary purpose are you truly leaders.”

— Sheila Murray Bethel, “Making a Difference: 12 Qualities That Make You a Leader.”

leadership and emotional intelligence. In his presentation, he shared his story of growth and transformation, from a “command and control” leader to a servant leader. He developed his “macho-ism” over the years. Within the construction industry, that has been an accepted style of leadership, and within his previous work environment, it was expected. Joe enjoyed the bravado. He enjoyed the illusion of power…and then two significant events shifted his experience and his belief system about true leadership.

When his boss threatened his job if he did not travel out of town on the first day of school for his six-year-old son, Joe realized that the way he was being intimidated was exactly what he had been doing with those who reported to him. He vowed to change that.

The second event was witnessing the tragic death of an employee on a job site; w w w.biztimes.com

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and he was introduced to the principles of servant leadership.

There are leaders who are emotionally intelligent…who are not servant leaders.

We may recognize them in the political discourse during the next number of weeks.

However, all servant leaders have

KA R EN VER NA L LEADERSHIP highly developed emotional intelligence.

Servant leaders: »» Desire to serve others. »» Have a deep sense of self-awareness. »» Listen intently to others. »» Strive to understand and empathize with others. »» Forgive mistakes. »» Commit to the growth of others. »» Build community.

Emotional intelligence and servant leadership have traveled parallel paths during the past decade. They have survived harsh criticism and rejection. They are finally receiving the recognition and appreciation they deserve. They have found their way into education, health care, manufacturing, finance, the military….and yes, even into sports.

What philosophy of leadership do you aspire to? How is it working for you? n Karen Vernal is the president of Vernal Management Consultants LLC, a Milwaukee-based leadership and organizational firm dedicated to “igniting the spirits and skills of leaders.” The company is one of two firms in the nation to be certified in emotional intelligence through the Institute of Health and Human Potential. For more information, visit www.vernalmgmt.com.

BIZ BR IEFS

Johnson Controls spinoff to be called Adient The Johnson Controls Inc. automotive seating and interiors business set to be spun off will be known as Adient after it becomes a new publicly traded company in October, the company announced.

Adient is a “made up word” but there is a Latin interpretation that translates to accepting and advancing a situation or a stimulus, said Bruce McDonald, current vice chairman of Johnson Controls and future chairman and chief executive officer of Adient.

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B i zT i m e s M i l w a u k e e

Adient expects to disclose detailed financial information in late March or early April. The company’s common stock will be traded on the New York Stock Exchange under the ticker symbol ADNT. The first day of trading is expected to be Oct. 3.

The corporate offices for Johnson Controls Inc.’s automotive spinoff will occupy the 11th floor of the office building that Irgens is building at 833 E. Michigan St. in downtown Milwaukee.

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strategies

Why family businesses matter They are all around us

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arnegie, Rockefeller and Vanderbilt. We have all heard the names before. What each of these men built, besides a company, was a legacy. Their interests, other than their families, varied from education, to art and music, to beauty.

These men are long gone, but their legacies remain. This is just one reason a family business is so important – it builds a legacy, not just for the family generations to come, but for all of us to eternity.

Statistics vary, but somewhere around 85 percent of all businesses in this country are, or started out as, family businesses.

You can’t drive the streets of Milwaukee today without seeing a plumbing company called Joe Smith (fill in your choice of name) & Sons. Or the auto group with the family name listed prominently on the billboard. That is a significant amount of our nation’s gross national product, and thus, just another reason why family businesses matter – not only to the family, but to all of us. After all, those family businesses hire plenty of the rest of us and that fuels the economy and employment rates.

Another reason family businesses matter is because they are trustworthy. Most consumers report that they would rather go to a family business over any other type of business. The reason given is integrity.

There is a perception that family businesses are simply more honest. Family

Finally, family businesses have staying power. While it is true that passing a business on to the next generation is difficult, ever more difficult and less likely with each passing generation, those businesses

“ Most consumers report that they would rather go to a family business over any other type of business.” business owners, it is thought, do not wish to sully their names with bad business practices. After all, when your name goes on the door, there is a different level of expectation that you have and you maintain a different level of care. It should be no surprise that many of the goods we hold in highest esteem are related to a family name – Prada, Gucci, Ford as examples.

that do survive have tremendous longevity – decades, if not centuries. They tend to be good citizens, giving back to the community from whence they came, and communities tend to reward one of their own. In Milwaukee in particular, this can run across ethnic and cultural lines, which helps to build the family name along with the business.

DAVID B O R S T FAMILY BUSINESS

Still not convinced on the importance of a family firm? Next time you go to a restaurant, choose a food item in the grocery store or purchase an important item, note the likelihood that this item comes from a family business. I like my Sargento cheese served with Gardetto’s, while waiting for the grill to cook up my Usinger’s hot dogs, all while sitting on my Steinhafel’s sofa.

Have I made my point? And, I like those dogs wrapped with Patrick Cudahy bacon! n Dr. David Borst is executive director and chief operating officer of the Family Business Legacy Institute, a hub for all things family business related. He can be heard every Saturday at 6:20 a.m. on WTMJ radio’s “All Business.”

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strategies

What is an internal HR consultant?

And how do I work with one?

Dear Joan: “I’ve recently moved to a new company and I’m a manager with a fairly large staff. Most of my experience is in manufacturing and now I’m working in a service business. In the past, my dealings with human resources have been mostly grievance related and disciplinary actions for personnel problems.

They helped with the hiring and firing and things like performance reviews.

“In this new company, I have an ‘HR consultant,’ but she is employed by the company – not an outside consultant.

She works with our division. My question is about her role. I’m not quite sure how I’m supposed to be working with her. She wants to sit in on some of my staff meetings, and wants to meet with me to talk about my staff. I’m not sure how to take that. Is it because I’m new, or because my boss doesn’t trust what I’m doing? It feels a little like she is

overstepping her job.

“She reports to corporate HR and has my division as her ‘customer.’ I’m worried about confidentiality and also about how much she should be involved in my decisions. Could you tell me what this role is supposed to be? I don’t want to appear defensive. She seems competent enough, but how much do I tell her?”

Answer: The HR consultant role has evolved over the past 10 years. It has been adopted by many companies, but the transformation from administrator to consultant varies by company and corporate culture.

Historically, the philosophy among managers was, “I’ll get the job done, HR can do the people stuff.” But without ownership and involvement in the “people stuff ” the results aren’t as good.

As managers evolved their leadership acuw w w.biztimes.com

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JOAN LLOYD HUMAN RESOURCES men, they – rightfully – began to get more involved in the people business. And as laws and regulations increased, and employees became more sophisticated, leaders needed expertise to help them. And the HR consultant role was born.

I’ve worked with many HR consultants, and I also created and teach a course for HR consultants, so they can partner effectively with the leaders they work with. One of the key points is that trust has to be earned.

And the way to earn it is to add value to the leaders with whom you work. And the best way to add value is to help them find practical solutions to business and people problems…not to be the HR Police, enforcing rules and handing out forms.

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In other words, a good HR consultant may help you think through a decision with which you or your team is wrestling.

She would ask insightful questions to help you and the team think of all the upsides and downsides to the company and the employees. She may help with a plan to communicate it. She might give you honest feedback about what you do well and what you need to work on to be more successful. She may give you feedback about members of your staff or help you sell an idea to your manager. She would give you creative ways to apply HR practices. For instance, she may challenge the need to replace a retiring employee – and suggest ways to redistribute those responsibilities.

But of course, if you don’t trust that she has your best interests at heart or she can’t keep some things confidential, you aren’t going to partner with her. So, like with any partnership, she has to earn your trust. I would suggest that you have a “contracting meeting” to discuss each of your roles and responsibilities. For example, spell out things such as: »» How she can add value to you and to your employees. »» What kind of ongoing communication you both want to have. »» What should be confidential. »» Explore how open each of you is to feedback from the other. For example, do you want her to provide feedback on your leadership skills? Give input on business decisions? »» Talk about “trust busters” each of you has. For example, going around you to your employees without your knowledge. Or speaking for you instead of letting you speak for yourself. Or sharing negative information about you or your team with other people. »» In which areas do you want her to take a stronger role and exert more influence?

Having an open conversation about your respective roles will be a solid start to a collaborative partnership that could be developmental for both of you. n Joan Lloyd is a Milwaukee-based executive coach, organizational and leadership development strategist.

She has a proven track record spanning more than 20 years, and is known for her ability to help leaders and their teams achieve measurable, lasting improvements. Email your question to Joan at info@joanlloyd.com and visit www.JoanLloyd.com to search an archive of more than 1,600 of her articles. Contact Joan Lloyd & Associates at (414) 354-9500.

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strategies

Employee engagement Your power strategy for 2016

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mployee engagement has been a perennial concern for organizations for many years, and with good reason. Studies have consistently shown that engaged employees deliver better bottom-line results, are more loyal, and feel prouder of the work they do than employees who are not. Engaged employees build successful organizations.

To put an exclamation point on that statement, consider this statistic from a survey of 1,500 workers conducted by Dale Carnegie: Companies with engaged employees outperform those without engaged employees by up to 202 percent!

Despite this eye-popping number, 71 percent of employees say they are not fully engaged and only a quarter of businesses have an employee engagement strategy.

What’s going on?

Many things. Definitions of job satisfaction are changing, from money and 42

status to work/life balance and contribution to society. Ideas about how long to stay with a given employer are radically shorter than in generations past. Technology invites multi-tasking and global engagement, making it difficult to concentrate on the here and now.

Additionally, age-old challenges remain: Bad bosses stay while great bosses find better jobs. Disengaged co-workers create added stress and distraction. Job security is never guaranteed.

That’s reality. And here’s my challenge to you: Instead of waiting for your organization to come up with an engagement strategy, create your own!

What benefits might you derive? For starters, you could quickly become one of the most knowledgeable people on the job. By tuning in to conversations with the aim of picking up new information and insight, you could gain a deeper B i zT i m e s M i l w a u k e e

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SUSAN MARSHALL MANAGEMENT understanding of your business and the people and things that make it work. By noticing who forms alliances and who distances themselves from particular topics or projects, you could discover a hidden power structure. By learning the specific needs and challenges of various departments, you could gain a broader understanding of the opportunities to improve your service to customers.

Could. None of this happens until you act.

You may be wondering what good this would do because you don’t see op-

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portunity to move up where you work.

Maybe your boss has a greater interest in keeping you in your current job than in helping you advance. This happens a lot.

Maybe you worry that by increasing your knowledge you’ll create tension among your friends and co-workers who are not interested in getting so involved at work.

This happens, too.

But with greater knowledge and the confidence that comes with learning, you may find that your ideas about what satisfies you change. Any time you advance your skills, you pull away from those who do not. And while it can be scary to leave the comfort of what you once had, it is ultimately more exciting to move toward something bigger, better and more worthy of your time and skill.

One sure way to develop greater engagement with your work (and your life), is to put limits on your use of technology.

Every time you respond to an incoming text or email message, you hand over your attention and power to the sender.

Oftentimes, the sender has different priorities for your time than you do. They want to accomplish something on their to-do list regardless of what is on yours.

I know the cultural pressures to respond are significant, but you have the power to set boundaries and train people to engage differently with you.

Use meetings to learn about people, projects and processes. Set aside distractions; pay attention to what is going on.

Who is talking about what? Who gets results? Who has mastered the art of napping with their eyes open? Whose eyes roll whenever a particular manager starts talking? What level of preparation has each attendee undertaken? What role do you play? What does the group want to accomplish by getting together? Learning “inside baseball” will allow you to decide how and with whom you want to associate.

There are many ways to get more deeply engaged with your work. Devising and executing a personal plan can boost your confidence and open new pathways forward. Don’t give the power of your future to someone else. Claim it and engage it.

You’ll find it’s way more fun than spending another cranky year on auto-pilot! n Susan A. Marshall is an author, speaker and the founder of Backbone Institute (www.backboneinstitue. com). She can be reached at (262) 567-5983 or susan@ backboneinstitute.com.

biz connections CA L E NDAR

NONPROFIT DIRECTORY

Annex Wealth Management will host Women, Wine & Wealth – a “Sandwich Generation” Break on Wednesday, Jan. 27, from 6 to 7:30 p.m. at Northstar American Bistro, 19115 W. Capitol Drive in Brookfield. The event will discuss financial strategies for the almost half of American adults ages 40 to 59 who are supporting aging parents and also either raising a minor child or supporting a grown child – the “sandwich generation” – over a glass of wine. For more information or to register for the free event, visit http://bit.ly/1PozAOY.

SPOTLIGHT

The Wisconsin Women’s Business Initiative Corp. will host Start, Run & Grow Your Business on Tuesday, Feb. 2, from 6 to 8 p.m. at its offices, 1533 N. RiverCenter Drive in Milwaukee. The six-week course will help attendees learn the fundamentals of running a business and develop a completed business plan. Cost is $275. For more information or to register, visit wwbic.com/classes.

Living As A Leader will host Leadership Breakfast-Lead Upward on Friday, Feb. 5, from 7 to 9:30 a.m. at the Milwaukee Athletic Club, 758 N. Broadway in Milwaukee. The event will cover “leading upward,” or influencing your boss or another person of power to get a mutually beneficial result. Cost is $65 and includes breakfast and session materials. For more information or to register, visit livingasaleader.com/lb-020516-registration.

Jewish Family Services will host 2016 unMasKEd on Saturday, Feb. 20, from 7 p.m. to midnight at the Harley-Davidson Museum, 400 W. Canal St. in Milwaukee. The masquerade ball supports mental health awareness and raises funds for JFS’ mental health clinic. It includes hors d’oeuvres and dessert stations, a silent auction, a Maskerade contest, live entertainment by Dead See the complete calendar of Man’s Carnival and dancing. Cost is $40 or $95. For more upcoming events & meetings. information or to register, visit www.unmaskedevent.com.

www.biztimes.com

BIZ NO T ES Medical College of Wisconsin The Wauwatosa-based Medical College of Wisconsin’s Advancing a Healthier Wisconsin Endowment has awarded more than $200,000 over two years to improving vision health for Wisconsin children.

The funds will go toward a screening, referral and education program administered in a number of communities through Prevent Blindness Wisconsin. The nonprofit will work with Dr. Deborah Costakos, associate professor of ophthalmology at MCW, as well as Milwaukee Public Schools nurses, Children’s Hospital of Wisconsin, Health Navigators and Herslof Optical.

Prevent Blindness Wisconsin offers free, direct sight-saving services across the state. It aims to prevent blindness by identifying the early signs of vision disorders, facilitating early and effective treatment and preventing eye injury.

Marquette University Marquette University has named Dr. Kimo Ah Yun the dean of its Diederich College of Communication, effective July 1.

Ah Yun is currently the associate dean of the College of Arts and Letters and a professor of communication studies at California State University, Sacramento. He joined the Sacramento State faculty in 1996 and has served in his current role since 2012.

He holds a bachelor’s degree in communication studies from Sacramento State, a master’s in

speech from Kansas State University and a Ph.D. in communication from Michigan State University.

Ah Yun replaces Dr. Lori Bergen, who served as communication dean until April, when she became the founding dean of the College of Media, Communication and Information at the University of Colorado-Boulder. Interim dean Dr. Ana Garner, professor of journalism and media studies, will continue to serve in her role until Ah Yun begins his role in July.

United Way donates $31,000 to SDC’s tax help program The United Way of Greater Milwaukee & Waukesha County has awarded a $31,000 grant to Milwaukee County’s Social Development Commission for its Volunteer Income Tax Assistance program.

The VITA program offers free federal and state tax preparation and filing assistance for low-income residents. It also offers financial workshops and banking assistance for those with a household income of $56,000 or less.

The SDC aims to raise $82,000 for VITA and also garner matching funds from the Internal Revenue Service for the 2015-’16 tax season. It expects to provide free tax return preparation and filing for 8,000 people this season.

The VITA program will begin Jan. 19 and run through April 18. Locations and hours for assistance will be posted at www.cr-sdc.org in mid-January.

To have your business briefs published in a future issue of BizTimes Milwaukee send announcements to briefs@biztimes.com. w w w.biztimes.com

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Clarke Square Neighborhood Initiative 2110 W. Scott St., Milwaukee 414-647-0548 | www.clarkesquare.org Year founded: 2013

the upcoming term? Yes

Mission statement: The mission of CSNI is to improve the neighborhood and benefit community residents. CSNI is responsible for leading and coordinating the continued implementation of the Clarke Square Quality of Life Plan.

What roles are you looking to fill? We always seek individuals with legal, financial and fundraising experience, with an emphasis on neighbors who live in the neighborhood.

Primary focus of your nonprofit organization: Our organization works with neighbors and dozens of partners to implement the Clarke Square Neighborhood’s Quality of Life Plan. The Clarke Square Neighborhood encompasses everything west of Chavez Drive until Layton Boulevard and everything south of the Menomonee Valley (Mitchell Park) until Greenfield Avenue. At roughly 40 square city blocks, we are one of the most densely populated neighborhoods in Milwaukee (about 8,000 residents).

Other focuses of your nonprofit organization: We prioritize the implementation of our Quality of Life Plan strategies relating to Project 10 (health and wellness), economic development, and housing. But we also actively work in all other strategy areas such as public safety, social connections, neighborhood beautification, youth, parks & recreation, employment and job training, lifelong learning, and community-school partnership.

Number of employees at this location: Three Key donors: Zilber Family Foundation Executive leadership: »» Ian Bautista, executive director Board of directors: Our board directors come from Milwaukee’s civic leadership, including faith communities, financial institutions, nonprofits, the business sector and importantly, from our neighborhood leaders.

Is your organization actively seeking board members for

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Ways the business community can help your nonprofit: Please do business with the outstanding businesses in our neighborhood, including El Rey, Pete’s Fruit Market, the Factory and Gloria’s Cakes & Café, which all have experience in business-to-business relationships.

If your business is interested in expansion or finding an ideal location for your next store or site, contact us. Our neighborhood has sites available for retail, commercial and manufacturing businesses of all sizes, from turn-key to build-to-suit.

We also invite metro area businesses to consider sponsoring and/or volunteering for one of our events (e.g., the Ciclovías and the Mitchell Park Concert Series, planned for the warm months of 2016). Current dates for the 2016 Ciclovías are June 12 and August 14 (see website: en.cicloviamke. org as the dates near for more details).

Key fundraising events: Join us for Ciclovía (June 12 and August 14) along Chavez Drive, and a special art exhibition in support of our Chavez Drive Farm Project (economic development through arts and culture) on Friday, Feb. 26 (contact Juan López, farm project coordinator, for more details at 414-647-0548 x 120 or juan@ clarkesquare.org). Dates for this summer’s Music in Mitchell Park and other events will be posted to our calendar soon (www. clarkesquare.org, click on “current events”).

Get latest nonprofit news delivered to your inbox every Friday. Sign up for BizTimes’ Nonprofit Weekly at biztimes.com/subscribe.

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biz connections PE RSO NN E L F I L E Marlene Castillo has

■ Accounting Warren Ragland has been promoted to senior advisor-trade compliance and services at Addison-Clifton LLC in Brookfield.

■ Banking & Finance Elise Markwardt has

been named community lending program manager at Johnson Bank’s Franklin location. Castillo comes to Johnson Bank with 18 years of mortgage banking experience.

Business Development ■ & Coaching

joined Diversified Management Inc. as an associate financial advisor in the Milwaukee office.

First Business Financial Services Inc. recently announced that Nate Dosch has joined First Business Trust & Investments as vice president in the Milwaukee office.

Ray Hoffman has joined Small Business Growth Partners, Germantown, as a chief selection specialist. He will be in charge of the national sales and marketing campaign.

Waukesha-based OnCourse Learning, a leading provider of workforce solutions and a professional trainer for the financial services, health care and real estate industries, has named David Shoemaker its chief learning officer.

■ Building & Construction

Palzewicz Ruedt ActionCOACH of Elm Grove has added Max Palzewicz and Todd Ruedt to its team of coaching professionals. Ruedt has 30 years of experience in the landscape services industry, growing his own business.

BELFOR Property Restoration, Wauwatosa, has named Jeff Kaminski its new general manager.

Kaminski has 20 years of experience in residential, commercial and institutional construction estimating and property restoration.

■ Education Cardinal Stritch University, Milwaukee, has named Mark Gesner executive director of academic and community engagement. Gesner will be responsible for supporting the implementation and sustainability of the university’s academic identity, including a focus on community partnerships, engaged learning and innovation.

■ Hospitality Marcus Hotels & Resorts, a division of The Marcus Corp. in Milwaukee, announced the promotion of

Peggy WilliamsSmith to senior vice

president, SafeHouse Restaurants. In her new role, WilliamsSmith will oversee the development of the SafeHouse brand.

■ Insurance

Smart Enough to Know... It doesn’t have to be lonely at the top TEC provides the opportunity for business leaders to learn from non-competing peers in a confidential setting with an experienced TEC Facilitator. The results speak for themselves: Member companies grow on average 2.5 times faster than non-member companies.

Cuffie

Porter Milwaukee-based Northwestern Mutual Life Insurance Co. has named Sheldon Cuffie chief information officer, Rebecca Porter vice president of corporate strategy, Stribling and has promoted Steve Stribling to vice president of disability income.

TEC members receive: • Full and half day meetings led by a specially-trained, experienced TEC Facilitator • Personal coaching sessions • Workshops led by business experts • Online best practices library

Now...let’s get down to work.

■ Legal Services Attorney Samantha Amore, a graduate of the University of Wisconsin Law School, recently joined the Milwaukee law firm O’Neil, Cannon, Hollman, DeJong & Laing S.C. She has experience in preparing tax returns and advises clients on gift, estate and income tax matters.

tecmidwest.com | 262/821-3340 Chief executives working together

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biz connections Submit new hire and promotion announcements to www.biztimes.com/submit/the-bubbler

Jon Richards has joined the law firm of Ziino, Germanotta, Knoll & Christensen, Milwaukee, as a partner. His practice areas include business formation and transactions, nonprofit governance, estate planning, probate administration, real estate and consumer law.

Weiss Berzowski LLP, Milwaukee, has added Dan McDermott to its Estate Planning and Business teams as an attorney.

■ Marketing Boelter + Lincoln Marketing Communications has promoted Garth Cramer to creative director and has added Brian Stefanik as associate creative director.

Cramer Cramer was previously the associate creative director and Stefanik rejoins Boelter + Lincoln after working as senior art director at BVK.

Tarrell Hedrich Top Floor, a New Berlin-based digital marketing agency, has named Andrea Tarrell director of marketing and Noemi Hedrich account supervisor.

■ Manufacturing Wolter Power Systems, a member of Wolter Group LLC, Brookfield, has named Joe Rubens its vice president of sales. Rubens previously worked for Cummins Rocky Mountain in sales and management positions. He functioned as the Southern division regional manager for branches in Phoenix and Las Vegas.

integrated marketing teams to create solutions for a wide range of clients. Dierbeck will manage copywriting for print advertising and digital communications, including websites and social media messaging, as well as external marketing communication materials.

■ Nonprofit Erickson Dierbeck Zizzo Group, Milwaukee has named Kate Erickson art director and Aimee Dierbeck copywriter. As an art director, Erickson will be working collaboratively with the creative and

Cindy Kazan, owner of Communi-K Inc., a full-service marketing, public relations and brand positioning agency, has been named interim vice president of development and communications at

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Jewish Family Services, Milwaukee.

The United Performing Arts Fund, the largest united fund in the country supporting the Milwaukee-area performing arts, has promoted Laura Rodriguez to marketing director, and has hired Hannah Johnson-Breimeier as development coordinator, Joseph Layden as operations assistant and Angela Topetzes Strelka as its new director of development.

Hyatt

Beck-Riekkoff John Hyatt has been named president and chief executive officer of IMPACT Milwaukee. Hyatt joined the organization in 1994 and served as the clinical services director before he was named senior vice president in 2000. Additionally, Sue Beck-Riekkoff, a program director at IMPACT, will begin serving as chief operating officer under Hyatt

Award Requirements & Criteria

Now Accepting

Applications for the 2016

Eligibility Requirements

Minimum of 3 years in business Significant presence in Southeastern Wisconsin

Judging Criteria

A commitment to good business practice A history of good employee relations/benefits Customer focused commitment Financial growth and consistency Community service involvement Education partnerships and workforce development

Apply today!

Visit waukesha.org to submit your application today.

Application Deadline: March 14, 2016.

S P O N S O R E D BY

Top 10 Businesses of the Year Awards Luncheon Thursday, June 23, 2016 | 11:30am - 1:30pm Country Springs Hotel & Conference Center - 2810 Golf Road, Pewaukee To reserve your seat at the event or for more information, visit waukesha.org.

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biz connections SB A L O AN S The U.S. Small Business Administration approved the following loan guarantees in December:

tosa, $100,000, U.S. Bank; Exotic Hair Boutique, 7165 W. Burleigh St., Milwaukee, $15,000, Wells Fargo Bank;

Brooks Clinic of Port S.C., 1032 S. Spring St., Port Washington, $182,700, Port Washington State Bank;

Jefferson County

Hometowne Windows & Doors Inc., 10930 W. Rogers St., Milwaukee, $200,000, Landmark Credit Union;

Brooks Clinic of Port S.C., 1032 S. Spring St., Port Washington, $180,000, Port Washington State Bank;

Jo’s Early Learning Academy II Inc., 4801-13 W. North Ave. #3023, Milwaukee, $1.15 million, Village Bank and Trust;

Grafton Preschool and Childcare LLC, 3217 Badger Circle, Grafton, $1,017,000, Wisconsin Business Development Finance Corp.;

MTAEK Investments LLC, 7701 W. Bernard Ave., Milwaukee, $400,000, BMO Harris Bank;

Hamlet and Smith Inc., 1043 13th Ave., Grafton, $150,000, Partnership Bank;

Passion for Kids LLC, 7526 W. Fond du Lac Ave., Milwaukee, $100,000, Wisconsin Women’s Business Initiative Corp.;

WEBA Properties LLC, 255 Lakeview Drive, Belgium, $543,000, First Bank Financial Centre;

Spoel Equipment Leasing Inc., W1307 Industrial Drive, Ixonia, $400,000, Waukesha State Bank;

Kenosha County Midwest Graphics Services Inc., 9522 58th Place, Suite #300, Kenosha, $25,000, U.S. Bank; William G. Aiello DDS SC, 3415 30th Ave., Kenosha, $102,000, Tri City National Bank;

Milwaukee County All-City Towing LLC, 1213 Mallory Ave., Milwaukee, $30,000, Wells Fargo Bank;

Rose Polymer Composites Inc., 5915 N. 55th St., Milwaukee, $230,000, Wisconsin Bank & Trust;

Animal Wellness Center of Oak Creek, 9142 S. Chicago Road, Oak Creek, $1.2 million, Live Oak Banking Company;

Sheeley Services Inc., 1345 N. 74th St., Milwaukee, $10,000, Tri City National Bank;

B.C. Miller Holdings LLC, 5915 N. 55th St., Milwaukee, $2.48 million, Wisconsin Bank & Trust; Body Activation LLC, 6797 Green Bay Ave., Milwaukee, $10,000, U.S. Bank; Companion Natural Pet Food LLC, 3720 N. Fratney St., #1C, Milwaukee, $75,000, First Bank Financial Centre; Companion Natural Pet Food LLC, 3720 N. Fratney St., #1C, Milwaukee, $295,000, First Bank Financial Centre; Companion Natural Pet Food LLC, 3720 N. Fratney St., #1C, Milwaukee, $40,000, First Bank Financial Centre; Damage Control Inc., 3303 W. National Ave., Milwaukee, $350,000, Waukesha State Bank; Elmer Miller Inc., 2500 Mayfair Road, Wauwa-

Sheeley Services Inc., 1345 N. 74th St., Milwaukee, $90,000, Tri City National Bank; Singh’s Corner Grocery Inc., 2714-18 S. 13th St., Milwaukee, $129,000, Tri City National Bank; Suzanne Powers Realty Group, 4214 N. Oakland Ave., Milwaukee, $100,000, U.S. Bank;

Racine County

Chick-fil-A plans to open its fifth Wisconsin restaurant on Highway 100 in West Allis, and is also planning another location in Brookfield, according to sources.

The Atlanta-based fast food chain is proposing a 4,876-square-foot standalone restaurant at the northwest corner of Highway 100 and Cleveland Avenue in the West Allis Shopping Center parking lot at 2563 S. 108th St. Currently, there are standalone Chick-fil-A restaurants in Brookfield, Greendale and Madison and stores under construction in Oak Creek’s Drexel Town Square and in Mount Pleasant, both scheduled to open in March.

Chick-fil-A has a restaurant located inside Regency Mall in Racine, which will close by the

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Walworth County Coyotero Legacy LLC, W1351 Eastwood Road, Genoa City, $90,000, Ridgestone Bank;

ASC Pumping Equipment Inc., 145 W. Progress Drive, West Bend, $150,000, First Bank Financial Centre;

Kowalkowski Plumbing LLC, S107 W2 Maple Ct., Mukwonago, $15,000, U.S. Bank; Lake States Vending Inc., W288 N7703 Appaloosa Lane, Hartland, $350,000, First Bank Financial Centre; Lessiter Publications Inc., 16655 W. Wisconsin Ave., Brookfield, $989,000, Wisconsin Business Development Finance Corp.; Midwest Thermal Services Inc., 4568 N. 127th St., Butler, $50,000, Park Bank;

CJ Remodeling LLC, 3100 Sherman Park Circle, Jackson, $150,000, Cornerstone Community Bank;

Midwest Thermal Services Inc., 4568 N. 127th St., Butler, $150,000, Park Bank;

Joseph C. Valind LLC, 3700 W. Washington St.,

Muskego Nursing Home Inc., S77 W18690 Janesville Road, Muskego, $120,000, First Bank Financial Centre;

end of the month.

deposits and about 570 employees.

Since entering the Wisconsin market with standalone restaurants in 2014, Chick-fil-A has been a success here, with record-breaking sales for the opening of its Brookfield location.

Old National Bancorp, the parent company of Old National Bank, has $11.9 billion in total assets and about 2,750 employees at 160 branches. It is the largest financial services holding company headquartered in Indiana.

AnchorBank to be acquired by Old National for $461 million

Through the transaction agreement, Anchor shareholders can either receive 3.5505 shares of Old National common stock or $48.50 in cash for each of their outstanding shares. No more than 40 percent of outstanding shares may be paid out.

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Belt Accounting & Tax LLC, 617 Main St., Delafield, $200,000, Ridgestone Bank;

Innovative Signs Inc., 21795 Doral Road Suite B, Waukesha, $15,700, Cornerstone Community Bank;

Ozaukee County

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Bam Bam’s Pig Roast, 1816 Easy St., Waukesha, $10,000, U.S. Bank;

Post Land Group LLC, 824 N. 10th St., Oostburg, $450,000, Wisconsin Bank & Trust;

Washington County

Madison-based Anchor operates AnchorBank fsb, which has 46 branches, including seven in southeastern Wisconsin. It is the third largest bank headquartered in Wisconsin. It has $2.2 billion in assets, $1.5 billion in loans, $1.8 billion in

All American Building Services, 16800 W. Greenfield Ave., Brookfield, $25,000, U.S. Bank;

Buendel LLC, 1230 George Towne Drive, Pewaukee, $50,000, First Bank Financial Centre;

Wisconsin Equipment & Fixture Mart, Milwaukee, $654,000, Ridgestone Bank;

Anchor BanCorp Wisconsin Inc. plans to be acquired by Evansville, Ind.-based Old National Bancorp for about $461 million. The stock and cash transaction is expected to close in the second quarter.

Waukesha County

Millennium Technologies LLC, 1404 Pilgrim Road, Plymouth, $700,000, Wisconsin Bank & Trust;

BI Z B R I E F S

Chick-fil-A restaurants planned in West Allis, Brookfield

Wittenberger Bus Service Inc., $684,000, First Bank Financial Centre;

Broesch & Co. S.C., 1733 Manhattan Drive Suite D, Waukesha, $70,000, First Bank Financial Centre;

TMI Consulting LLC, 1845 N. Farwell Ave., #209, Milwaukee, $150,000, Celtic Bank Corp.;

Advanced Manufacturing, 1090 Falls Road, Grafton, $250,000, Ridgestone Bank;

Overlook Investments LLC, 610 Schoenhaar Drive, West Bend, $1,205,000, First Bank Financial Centre;

GHS Racine Inc., 2320 Douglas Ave., Racine, $201,000, Wells Fargo Bank;

United States Motor Power, 1824 Hobbs Drive, Delavan, $133,000, Wisconsin Business Development Finance Corp.;

Advanced Manufacturing, 1090 Falls Road, Grafton, $1,022,000, Ridgestone Bank;

West Bend, $345,000, Waukesha State Bank;

All Anchor employees will become Old National employees, the company said, “however, any major decisions involving post-conversion roles and positions for current AnchorBank employees will be determined in the near future.”

Both boards of directors have approved the acquisition, but it is still subject to an Anchor shareholder vote and regulatory approval.

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Ontech Systems Inc., N85 W16186 Appleton Ave., Menomonee Falls, $420,000, First Bank Financial Centre; Ove Water Services Inc., S53 W31165 Old Village Road, Mukwonago, $150,000, First Business Bank-Milwaukee; Performance Coatings LLC, 1301 W. Second St., Oconomowoc, $50,000, First Bank Financial Centre; Solid Partitions LLC, N30 W22383 Green Road, Waukesha, $103,000, Tri City National Bank; Spa Paw & Tail LLC, 5055-75 S. Emmer Drive, New Berlin, $997,000, Wisconsin Business Development Finance Corp.; Stanley Drive LLC, N88 W14369 Stanley Drive, Menomonee Falls, $630,000, Ridgestone Bank; Sunset Popcorn LLC, 446A Sunset Drive, Waukesha, $30,000, Wisconsin Women’s Business Initiative Corp.; Willow Dental S.C., 3333 Sunnyslope Road, New Berlin, $30,000, U.S. Bank.

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biz connections

n GLANCE AT YESTERYEAR VOLUME 21, NUMBER 22 JANUARY 25 - FEBRUARY 7, 2016 126 N. Jefferson St., Suite 403, Milwaukee, WI 53202-6120 PHONE: 414-277-8181 FAX: 414-277-8191 WEBSITE: www.biztimes.com CIRCULATION E-MAIL: circulation@biztimes.com ADVERTISING E-MAIL: ads@biztimes.com EDITORIAL E-MAIL: andrew.weiland@biztimes.com REPRINTS: reprints@biztimes.com SALES & MARKETING

PUBLISHER / OWNER

Dan Meyer dan.meyer@biztimes.com

DIRECTOR OF SALES

Linda Crawford linda.crawford@biztimes.com

DIRECTOR OF OPERATIONS

Mary Ernst mary.ernst@biztimes.com

PROJECT MANAGER

Jon Anne Willow jonanne.willow@biztimes.com

ADMINISTRATIVE ASSISTANT

NORTH POINT LIGHTHOUSE This photo, taken by R.S. Corwin circa 1927, shows North Point Lighthouse in Milwaukee. Built in 1887 and taken out of service in 1994, the lighthouse was restored in 2007 and now serves as a historic landmark in Lake Park.

This photo is from the Milwaukee Public Museum’s Photo Archives collection. Additional images can be viewed online at www.mpm.edu.

Sarah Sinsky sarah.sinsky@biztimes.com

ACCOUNT EXECUTIVE

Kevin Gaschk kevin.gaschk@biztimes.com

EDITORIAL EDITOR

BUSINESS DEVELOPMENT EXECUTIVE

Andrew Weiland andrew.weiland@biztimes.com

Maribeth Lynch mb.lynch@biztimes.com

MANAGING EDITOR

ACCOUNT EXECUTIVE

Molly Dill molly.dill@biztimes.com

Maggie Pinnt maggie.pinnt@biztimes.com

REPORTER

SENIOR ACCOUNT EXECUTIVE

Corrinne Hess corri.hess@biztimes.com

Amber Stancer amber.stancer@biztimes.com

REPORTER

ACCOUNT EXECUTIVE

Arthur Thomas arthur.thomas@biztimes.com

Christie Ubl christie.ubl@biztimes.com

INTERN REPORTER

Maredithe Meyer maredithe.meyer@biztimes.com

PRODUCTION & DESIGN GRAPHIC DESIGNER

Alex Schneider alex.schneider@biztimes.com ART DIRECTOR

Shelly Tabor shelly.tabor@biztimes.com

Independent & Locally Owned — Founded 1995 —

COMME N TA R Y

Like Milwaukee, Sheboygan must fight war for talent

S

heboygan is a really nice community. I know. I lived there from 1998 to 2000 when I worked as a reporter for The Sheboygan Press.

It’s a small, blue collar city of about 50,000 residents. But it has a beautiful beach and marina on the shores of Lake Michigan. Blue Harbor Resort is a fun family destination. There’s a gorgeous historic theater downtown and a great art museum. Just outside the city are world class golf courses and the Village of Kohler has first class hotels and dining.

Despite those amenities, Sheboygan suffers from the image of a small, quirky beer and brats town. In some ways, it’s a mini-Milwaukee.

Sheboygan faces an interesting challenge. In November, the Sheboygan metro area had an unemployment rate of only 3.3 percent. That’s the good news.

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The bad news is that low unemployment rate is a reflection that many Sheboygan employers are struggling to attract workers they need to fill open positions.

Sheboygan suffers from a classic small town brain drain as kids grow and move away to larger, more exciting cities. Some come back when they start a family, but others do not. At the same time, Sheboygan struggles to attract newcomers.

That’s why Sheboygan County business leaders recently unveiled a new marketing campaign aimed at drawing potential employees to the area. The “Someplace Better” campaign is intended to sell job candidates on the quality of life assets in Sheboygan County. Those assets include the area’s economy and its schools, but the campaign also has a heavy emphasis on selling the Sheboygan area’s lifestyle amenities, including parks, arts and culture.

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Major Sheboygan County employers Kohler Co., Sargento Foods Inc. and Bemis Manufacturing Co. threw their support behind the Someplace Better campaign and said they have hundreds of jobs to fill.

As the baby boomer generation moves into retirement, every community is going to find itself in Sheboygan’s boat. There will be an intense war for talent. Communities that invest in parks, sports, arts and cultural amenities are going to have an advantage in attracting talented workers who could choose to live anywhere and are looking for someplace special.

For those same reasons, leaders of the Metropolitan Milwaukee Association of Commerce are pushing for increased public funds for the Milwaukee area’s quality of life amenities. Last fall, a 50-member task force of regional community leaders, convened by the MMAC, issued a report

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ANDREW WEILAND Editor BizTimes Milwaukee

concluding that additional public funding is needed to preserve and protect the region’s signature cultural and entertainment assets, including the Milwaukee Art Museum, the Milwaukee Public Museum, the Marcus Center for the Performing Arts and the Milwaukee County Zoo. The MMAC pushed hard for public funding for a new downtown Milwaukee arena, which was approved last year. A major upgrade was just completed at the Milwaukee Art Museum. That’s a good start.

For the region to remain competitive in the war for talent, investment in community assets must remain a priority and can’t be allowed to deteriorate. n

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biz connections

ABLE West networking The Brookfield, Wauwatosa and West Allis/West Milwaukee chambers of commerce held ABLE West Networking on Jan. 6 at Dave & Buster’s in Wauwatosa. The Active Business Leads Exchange events include breakfast, networking, 30-second commercials about each member, a business presentation and shared success stories.

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Kate Mikkelsen of Office Furniture Resources and Ryan Hutto of Big Heart Productions LLC.

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David Kocol of David Kocol LLC and Mark Boever of MAB Mortgage LLC.

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Kay Lorenzen of Wauwatosa Woman’s Club and Carrie Witzel-Crook of Neo Fourno Inc.

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Mary Hoehne of Granville Business Improvement District and Mike Thompson of ActionCOACH of Elm Grove.

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Andrea Nemecek of Allume Architects and Pam Foti of Vesta Senior Network.

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Laura Ehr of Easter Seals Project SEARCH and Allison Quartuccio of Denali Realty Group.

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Judi Murphy of Murphy Associates and Sue Kohlmann of Kohlmann Management Group.

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Sandra Raasch of Platinum Benefits Group and Ron Fischer of Fischer Home Inspection.

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Arthur Lee of Alliance Tax & Consulting Service LLC and Betsy Olson of Merit Title.

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ERICH SCHROEDER PHOTOGRAPHY

the last word

Where will the talent come from for ‘grow or die’?

Jeff Clark is president and CEO of Sussex-based Waukesha Metal Products, which also has locations in Grafton and Mexico. The “grow or die” philosophy may not be effective without a skilled workforce, he says.

“Our nation is built on the American Dream, and I have always lived by the business philosophy of ‘Grow or Die!’ This has worked well over the years, but the talent pipeline driving this dream is shrinking. With an aging workforce and smaller population downstream, Wisconsin’s economic vitality is tied directly to our ability to develop a ready workforce with the necessary skills to meet tomorrow’s high-demand careers.

“At the root of this challenge is our need to provide an educational journey for our children that includes exposure and exploration of the many career paths available for our future talent. All Pre-K-12 schools in Wisconsin are required to provide academic and career planning (ACP) to students at the sixth grade level by 2017. This is just the beginning of the talent pipeline and 50

really drives exploration. Businesses providing workbased learning opportunities to students offer the best tool for career exploration.

“The Governor’s Council on Workforce Investment recognized this and presented a 2014-’18 Strategic Plan.

The CWI built on ACP by recommending we ensure students have the opportunity to experience work-based learning, and the Wisconsin school report cards include measurements of this and career readiness. Data is king!

Access to workforce requirements and projections are critical to a student’s exploration.

“Coordination between educators, students, employers and parents is key to providing the best experience.

Engaging students is imperative in building awareness of career opportunities and skill requirements necessary to succeed in our businesses. Progressive leaders structure their talent acquisition strategy to include strong connections within the Pre-K-16 school system, including technical colleges and universities. Those ahead of the curve have already moved beyond the traditional

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Jeffrey Clark President and CEO Waukesha Metal Products N53 W24635 S. Corporate Circle, Sussex Industry: Metal stamping and fabrication Employees: 135 www.waukeshametal.com

college/university internships to expand work-based learning for high school students.

“We are all busy, but talent is or will be a limiting growth factor in the near future at all of our businesses.

My experience working with the students and educators has been rewarding and beneficial. Our organization has grown by mentoring students through work-based learning. There are numerous organizations/initiatives I have found to be great conduits to connect with the students, but it requires effort and time.” n

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WISCONSINBIZ ECONOMIC DEVELOPMENT | RESEARCH & INNOVATION | BUSINESS GROWTH

Highlighting Wisconsin’s key industries, innovators, leaders, entrepreneurs and thriving business communities.

The 2016 edition of WisconsinBiz, a print and online magazine, offers a look at business throughout our great state, and highlights the people, companies, institutions and communities that are growing a strong and vibrant economy in Wisconsin.

PUBLICATION DATE APRIL 18, 2016 RESERVATION DEADLINE MARCH 4, 2016

Why Participate: • Drive business development efforts • Employment recruitment • Highlight your organization - your team and history • Economic development tool • Public relations and branding • Show your pride for doing business in Wisconsin Showcase your commitment to business growth in Wisconsin by participating in the only statewide resource guide fostering economic growth in the state.

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