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MILWAUKEE’S MINING EQUIPMENT MANUFACTURERS TRY TO
DIG OUT OF THE HOLE
ALSO IN THIS ISSUE:
SHEBOYGAN COUNTY’S EMPLOYMENT PROBLEM SIGNS OF PROGRESS EMERGE IN ADDRESSING SKILLS GAP EMPLOYERS EXAMINE FEDERAL OVERTIME RULING
PUBLICATION DATE
AUGUST 22, 2016
P R O U D LY P R E S E N T S
RESERVATION DEADLINE
JULY 15, 2016
FamilyBIZ WISCONSIN
A N N U A L
P U B L I C A T I O N
FOCUSING ON WISCONSIN’S FAMILY & CLOSELY HELD BUSINESSES There are more than 10 million family and closely held businesses in the U.S., from “mom and pop” shops to Fortune 500 companies. Their economic influence is enormous, producing an estimated 50 percent of the nation’s GDP and paying 65 percent of all wages. Wisconsin FamilyBiz will cover the issues facing those businesses, offering advice and strategies, along with “been there, done that” stories from business owners throughout the state. Organized into chapters focusing on Family Dynamics, Leadership, Legacy, Succession and Estate Planning, Wisconsin FamilyBiz delves into five key aspects of every family business. With distribution in metro Milwaukee, Green Bay, the Fox Valley and Madison, make this publication an important part of your marketing strategy and reach the decision-makers in the companies that are driving our state’s economy forward.
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inside
June 13 - 26, 2016 S P E C I A L R E P O R T:
M A N U FAC T U R ING
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In addition to the cover story, coverage includes a look at the signs of progress in addressing the skills gap and an analysis of Sheboygan County’s employment problem.
HIGHLIGHT S Coffee Break
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A conversation with Angela Damiani of NEWaukee.
Book Review
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‘How to Have a Good Day: Harness the Power of Behavioral Science to Transform Your Working Life.’
The Good Life
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Jewelry reminds neurosurgeon of home.
On the Money
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How to get smart about the stock market.
News 10 Employers work out what overtime ruling means for them.
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S TR ATE GIE S Leadership Susan K. Wehrley Innovation Dan Steininger Human Resources
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Christine McMahon
COV E R S T ORY MILWAUKEE’S MINING EQUIPMENT MANUFACTURERS TRY TO
BIZ CONNECTIONS
DIG OUT OF THE HOLE ON THE COVER: A mining shovel on display outside of Joy Global’s facility in West Milwaukee. — photo by Troy Freund Photography
Nonprofit Directory Spotlight 29 Biz Notes 29 Personnel File 30 BizTimes Around Town 33 The Last Word 34
Downtown Sheboygan
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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). Subscription Customer Service: BizTimes Milwaukee, 126 N. Jefferson St., Suite 403, Milwaukee, WI 53202-6120, USA, Phone (414) 277-8181, Fax (414) 277-8191, circulation@biztimes.com, www.biztimes.com
BizTimes Milwaukee (ISSN 1095-936X & USPS # 017813) Volume 22, Number 6, June 13 - 26, 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. POSTMASTER: Send all UAA to CFS. NON-POSTAL AND MILITARY FACILITIES: send address corrections to BizTimes Milwaukee, 126 N. Jefferson St., Suite 403, Milwaukee, WI 53202-6120. Entire contents copyright 2016 by BizTimes Media LLC. All rights reserved.
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leading edge NOW
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he University Club of Milwaukee in downtown Milwaukee and the Tripoli Country Club in northern Milwaukee County plan to merge. The private clubs’ boards have each approved a non-binding letter of intent for the combination. “This is a merger of two historic clubs that have been in Milwaukee for a long time,” said Charley Weber, president of Tripoli’s board of governors and managing director and senior associate general counsel at Milwaukee-based Robert W. Baird & Co. Inc. “It’s a partnership, not a financial transaction at all.” The Tripoli Country Club was founded in 1921. It is located at 7401 N. 43rd St. in Brown Deer, off of Good Hope Road, and has about 350 members. It offers a top-rated golf course, swimming, tennis, paddle tennis and winter activities, as well as dining and meeting and event spaces. TCC has about 150 employees, 25 of whom are full-time. The University Club was founded in 1898 and is located at 924 E. Wells St. downtown and near the lakefront. It has about 450 members, said Julie Tolan,
president of the University Club board of directors. The University Club offers casual and fine dining, meeting and event facilities, enrichment and educational programming and other city amenities. The University Club has 34 full-time and 24 part-time employees. Tolan, who also is president and chief executive officer of the YMCA of Metropolitan Milwaukee, said the clubs hope to complete the merger by the end of the year. The University Club’s membership and revenue saw some decline over a five year period, but then recovered “modestly” over the past two years with the help of renovations, Tolan said. The combination of the clubs will offer members additional amenities and hopefully attract more young professionals, she said. “From both perspectives, I think both of our memberships are going to utilize this new whole club more frequently as a result,” Tolan said. “There’s recruitment and retention, but there’s also usage.” Their memberships will separately vote on the plan in the fall, though no specific dates have been set. There will be town hall meetings held this summer
to answer members’ questions about the merger. “From our perspective, both clubs have been really intentional about finding different ways to enhance the value and experience for our respective members,” Tolan said. “In our case, we have many members who re- The University Club. ally are looking for a broader array of amenities, so certainly swimming, tennis, golf.” And Tripoli’s members can take advantage of the downtown club for business purposes, she said. “Tripoli consistently looks for ways to enhance our member experience and add value for our members and over the years, a number of our members have inquired or commented on the desirability of having downtown dining benefits or other benefits at a private club,” Weber said.
ANDREW WEILAND
University Club and Tripoli Club to merge
“We need to create distinction and I think between the two of our organizations, we’ve been really successful in attracting current and future leaders in the city and that’s really appealing to the Tripoli membership, as well,” Tolan said. The organizations have not yet decided what the new club’s name will be, but the University Club will at the very least retain its name on the downtown location, Tolan said.
——Molly Dill
SOCI AL M E D I A S T R AT E GI ES
Transitioning between industries can be a positive experience If a career change is in your future and social media is your passion, or you’re an employer looking to fill a role with an external candidate, know that it is possible to transition between industries successfully. Know your audience New employees should take time to identify and understand their audience by looking at research and studying engagement patterns. Employers should be transparent to help staff gain a full understanding of their target market. Both should ask questions about brand interaction and use the information gathered to help plan a content strategy that drives results and connects with customers in an authentic way. Be open to change With a change in industries and audience, it might be necessary for new employees to make adjustments to the platforms they’re accustomed to using. Employers may also learn about new opportunities that could benefit their company when hiring staff with experience in other areas. Facebook and Twitter might be the best options to utilize in an industry like health care, where the messaging can be more detailed, while college students may spend their time on Instagram and Snapchat sharing in-the-moment events happening on campus. Understand policies As a supervisor who has brought on new talent, be sure to explain the 4
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fundamentals of your industry and how they interact with social media. Are there laws or restrictions in place that may affect the information that can be shared? Once you pinpoint the considerations for sharing content publicly with your staff, ensure that an approval process is in place while new team members become acclimated. Remember the basics Social media should be engaging, informative and fun. It offers a unique way to interact with your audience in real time, which can be used to a brand’s advantage if done correctly. Transitioning between industries can happen smoothly by keeping these things in mind.
——Jess Owens is senior public relations strategist for Carroll University in Waukesha. w w w.biztimes.com
leading edge COFF E E B R E A K
POLITIC AL BEAT
Bathroom policy lawsuit: goal is to protect children BY WISPOLITICS.COM, special to BizTimes
What was the most exciting thing your company did in the past year? “Through our work with the Wisconsin Economic Development Corp., we expanded YPWeek to 15 communities across the state, which has created a unifying brand for Wisconsin and launched the nation’s largest millennial talent network. In a time when every community across the country is competing for talent, we have developed a proven mechanism for community engagement and talent attraction as a united coalition. The impact for the state of Wisconsin has only just begun!”
NEWaukee has been partnering with the new owners of Grand Avenue. Why did you make this decision and what can you tell us about this work? “We have been headquartered in the Grand Avenue for five years and many of our programs have centered on the revitalization of this corridor of our downtown. The Night Market is a prime example of this effort to reimagine Westown (the west side of downtown). We currently serve on the design team with the new ownership of the Grand Avenue and have developed the concept of the urban marketplace based on the successes we have found with the local, micro vending during the Night Market. We’re super excited that the design team and the ownership have been open to re-concepting this threeblock development and transforming the property into a premier destination for downtown.”
that we are the only social architecture firm in the country. Our talent attraction and retention services are place-based. We believe that the place in which a company is located and how invested that company is in the community have a direct correlation to the ease with which it sources talent needed to make its products and the customers needed to buy its products.”
Do you have a business mantra? “Uncompromising movement forward.”
From a business standpoint, who do you look up to? “As a serial female entrepreneur, it is often hard to find peers, let alone mentors to look up to. I believe the work that Miki Agrawal, the founder of Tushy and Thinx as well as other social enterprises, does is amazing. She’s pushing the envelope in many different ways and making waves that only benefit other female entrepreneurs in any industry.”
What is the best advice you would give an aspiring entrepreneur? “NEWaukee is the third business I founded before the age of 30. My advice to anyone with the desire to jump into the wild ride that is entrepreneurship is to embrace the impermanence of life. Some things work and some don’t, but the only person standing in the way of realizing your dreams is you.”
Do you plan to hire any additional staff? “We’re a lean and mean team, but as our work grows throughout the country we do plan to augment our staff.”
What’s the hottest trend in your industry? “We are proud to boast
What do you like to do in your free time?
Angela Damiani CEO NEWaukee 161 W. Wisconsin Avenue, #16, Milwaukee www.newaukee.com Industry: Social architecture firm – Professional services Employees: 6 Family: Married to James Shiparski w w w.biztimes.com
“I run a small business that blurs the lines of my social and professional life. I spend a lot of time outside, walking and biking the city of Milwaukee, as well as getting my hands dirty in our tiny garden.” n
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Wisconsin Attorney General Brad Schimel’s decision to join a multi-state lawsuit challenging the Obama administration’s new bathroom policy for transgender people is drawing responses from across the political spectrum. Both sides say their main goal is to protect children in Wisconsin. U.S. Rep. Mark Pocan (D-Madison) said Republican Schimel’s decision is no surprise considering Gov. Scott Walker’s “backwards approach to governing the state.” Pocan said the state, instead of fighting the policy, should seek ways to make schools safe for the most vulnerable students. “It’s a poor and pitiful attempt to catch a dying wave of shameful political attacks on transgender youth in an effort to advance an antiquated ideology,” Pocan said. On the other side, Rep. Jesse Kremer (R-Kewaskum) and Sen. Steve Nass (R-Whitewater) sent out an “open letter to Wisconsin’s parents and children” on the issue. The lawmakers were behind the “Student Privacy Protection Act,” which would have established rules for which bathrooms transgender students can use. It failed to become law in the last session. “The Wisconsin Legislature will take a stand against the bullying and intimidation tactics of the federal government,” according to the letter, “ensuring that state and local rights are maintained by making the privacy and safety of Wisconsin students of utmost importance.” The Obama administration earlier this month established a Title IX policy that lets public school students use the bathrooms that match their gender identities. The policy forces all recipients of Title IX money to treat people according to their “internal sense of gender.” Wisconsin and 10 other states, led by Texas, sued. Schimel argued the policy conflicts with the language of Title IX and state law, which prohibits discrimination based on “sex” but not on gender identity. WisPolitics.com is a media partner of BizTimes Milwaukee.
BY TH E NU MBERS
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Sporting goods retailer Sports Authority Inc. will close all of its remaining stores, including its four Milwaukee-area locations in Brookfield, Delafield, Greenfield and at Bayshore Town Center in Glendale, according to a bankruptcy court filing.
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leading edge ON TH E C ALEN D AR
MA DE I N M I LWA U K E E
ESOP won’t change Paper Machinery’s formula
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(414) 336-7123 | Twitter: @arthur8823 arthur.thomas@biztimes.com
owned. The leadership team met to discuss changes. Among them was a need for more stringent budgeting. “In the past, as a family-owned company, you spent what you had to spend to get the job done. Now, we need to predict what we will spend. That will be fun,” Kazmierski said with a smile. But to the outside world, it will appear not much has changed, said Dellomodarme, who was named chief executive officer as part of the transition. “Our customers keep coming back to us because of the PMC name. The PMC name is built on solid engineering, it’s built on quality, it’s built on service. I don’t think you can separate one from the other,” he said. Dellomodarme added customers know they are getting a machine that can last 40 years or more. “To change that formula would be silly,” he said. “There’s no sense in doing that.” The company’s main products are machines used to form paper cups and other packaging. Customers are suppliers to McDonald’s Corp., Starbucks Corp. and KFC Corp. Kazmierski said about 70 percent of the cost of making cups comes from materials and the balance is labor. The result is that product development has focused on pushing machines to higher and higher speeds. “The faster the machine can run, the better you can compete in the marketplace,” he said. Paper Machinery Corp. has been able to increase the speed of its machines by more than 37 percent over the last roughly 20 years. The PMC 1001 model is capable of 240 cups per minute and the newer PMC 1003 produces 330 per minute. In addition to speed and efficiency, innovation comes in the form of safety. The company’s machines are also used in packaging foods like ice cream. With machines going directly into food processing facilities, Paper Machinery had to adapt the technology to allow users with less knowledge to operate them. That resulted in advances for the cup producers that allowed them to reduce the labor needed to run each machine. “It was kind of a cross-pollination of the technology,” Kazmierski said. Other improvements come from Paper Machinery’s technicians. The same employees who build machines also install
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Top 10 Businesses of the Year ABOVE: Paper Machinery Corp.’s Scott Koehler, chief financial officer; Luca Dellomodarme, chief executive officer; and Michael Kazmierski, executive vice president, on the floor of the company’s 150,000-square-foot facility. BELOW: Paper is fed into Paper Machinery Corp.’s machines to form cups and other packages.
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Luca Dellomodarme, Scott Koehler and Michael Kazmierski don’t expect much to change about Paper Machinery Corp., which was recently turned over to employees in a surprise announcement. The three were given responsibility for operational control as Donald and John Baumgartner initiated an employee stock ownership plan. “The risk of failure had been there for 64 years,” said Kazmierski, who was named executive vice president of sales as part of the transition. He acknowledged it is a little more daunting to not have the family to support the company, but said he believes Paper Machinery Corp. is positioned for a bright future. In the days following the announcement, the company held meetings with employees to explain what it means to be employee-
The Waukesha County Business Alliance and BizTimes Media will host the annual Top 10 Businesses of the Year Awards on Thursday, June 23, from 11:30 a.m. to 1:30 p.m. at Country Springs Hotel, 2810 Golf Road in Pewaukee. Ten southeastern Wisconsin business winners are selected by an independent panel of judges based upon financial growth, customer focus, a history of outstanding employee relations and a commitment to the community. They are honored at the awards luncheon and featured in the print and online editions of BizTimes Milwaukee. Cost is $75, or $60 for WCBA members. For more information or to register, visit www.waukesha.org/ pages/Top10BusinessesoftheYear. biztimes.com/events/#all-events
BOOK REVIEW
“How to Have a Good Day” Paper Machinery Corp. 8900 W. Bradley Road, Milwaukee Industry: Cup forming machinery Employees: 250 www.papermc.com and service them. Dellomodarme said the technicians’ experiences at the customer facilities are often the genesis of future improvements. “There’s an intrinsic value to the customer-supplier relationship that they know their mechanics can relate to our mechanics directly,” he said. “A lot of them have friendships with the folks in the field.” Koehler, the company’s chief financial officer, said the hope is employees will continue to take more ownership now that the ESOP is in place. He said there were already some examples of people taking things more seriously, although he added several had jokingly stopped in his office to tell him to get to work. Kazmierski, who has been with the company since 1974, said he already felt like PMC had a great work environment before the ESOP was announced. “Things couldn’t have gotten any better,” he said. “But they did.” Get the latest manufacturing news delivered to your inbox every Monday. Sign up for BizTimes’ Manufacturing Weekly at biztimes.com/subscribe.
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In “How to Have a Good Day,” economist and former global management consultant Caroline Webb explains how to apply behavioral sciences to transform one’s approach to everyday working life. Webb takes three scientific ideas into step-by-step guidance that show how to set better priorities, make your time go further, ace every interaction, be your smartest self, strengthen your personal impact, be resilient to setbacks, and boost your energy and enjoyment. Using these ideas, it becomes easier to navigate the typical challenges of modern workplace conflict with colleagues, dull meetings and overflowing inboxes with skill and ease, Webb explains. “How to Have a Good Day,” is filled with stories from people who have successfully used Webb’s tips and applied science to their lives to enrich their existence. “How to Have a Good Day,” is available on www.800ceoread.com for $20.80.
——Corrinne Hess
leading edge NON P RO F IT N E W S
THE GOOD LIFE
Walnut Way hires new executive director from United Way
Jewelry reminds neurosurgeon of home
A new executive director has been hired by Walnut Way Conservation Corp. LaShawndra Vernon, current program director at United Way of Greater Milwaukee & Waukesha County, will assume Vernon the role on June 13. “LaShawndra brings knowledge of the mission of our organization and has led programs in her current role with United Way and has served as a spokesperson and champion for the mission,” said Tracy Meeks, chair of Walnut Way’s search committee. “We are excited about the future of Walnut Way and look forward to working with her as we enter the next phase of strategic planning.” Vernon will replace Walnut Way founder Sharon Adams, who stepped down as executive director in December. Adams founded Walnut Way 16 years ago with her husband, Larry, and several neighbors to tackle what they saw as a growing problem in their neighborhood – vacant lots and abandoned homes. They began by renovating one house, a former drug house on the corner of their neighborhood at 2240 N. 17th St., and transformed it into the organization’s headquarters. In addition to home renovations and repair projects, Walnut Way also helps connect homebuyers and those in the neighborhood planning home improvement projects on their own with the resources they need to complete them. Vernon has worked with Walnut Way in the past as a representative of the United Way and has experience with grant writing and project development.
——Ben Stanley
Since she was a young girl growing up in India, Dr. Hema Patel, a neurosurgeon at Children’s Hospital of Wisconsin in Wauwatosa, has been fascinated by jewelry. Patel “Jewelry has always been my passion,” Patel said. “My mom was really into jewelry. Most Indians, we don’t have land to give to our grandchildren; we just pass on jewelry.” A few years ago, while putting in long hours practicing medicine and feeling engulfed by her work, Patel decided she needed to broaden her horizons with a hobby. So she revisited her old passion and began creating her own jewelry pieces. “My main life is in America, but I have a very close connection to India,” Patel said. ”I go back once a year and such. I decided every piece that I make should have something Indian and something American.” Patel doesn’t sell her jewelry. She makes it for herself. So far, she has made around 15 different pieces. Each of them is unique and some have
Examples of jewelry pieces Patel has created over the past few years, using materials from India and the United States. taken her multiple years to complete. She has a jeweler in India who occasionally recommends certain items for her to use, and she combines them with things she finds in the Midwest – from broaches and beads to fossils she found while on vacation in Michigan’s Upper Peninsula. “I think they’re beautiful, but I’m not sure what (others) would think,” she laughed. “It just gives me such a sense of pride. In India, if you’re doing well in school you don’t really let your other creative sides expand. If I would’ve grown up in America, maybe I would’ve done something more artsy.”
——Ben Stanley
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leading edge O N T HE M ON E Y
How to get smart about the stock market The stock market can affect world events and your own finances; however, many investors find it too complex to really grasp. Why not increase your knowledge of the stock market to better understand its impacts? Get started with these steps: Study investment terminology. The stock market is rife with complex concepts and frequently-used terms. Understanding what the abbreviations (such as NASDAQ and NYSE) mean is helpful. Break it all down with an online investment dictionary that provides plain-English definitions, or ask a financial advisor for insight. Enroll in a class. Take advantage of free webinars or workshops on investing fundamentals. If you prefer a classroom setting, seek out courses on investing or personal finance at a local college or university. Follow the news. Start following the business and financial sections of favorite media outlets. You’ll begin to understand business activities that influence the marketplace. As you become more attuned to global markets, you’ll start to see the ripple effect of mergers and acquisitions, product innovations and even news events on Wall Street confidence. Watch investment programs. Radio and television often feature investment programs for both new and seasoned investors. Be wary, though, of infomercials disguised as informational investment programs. Check out stock market apps. Hundreds of apps exist to help consumers understand investing. Ask your financially-savvy friends which apps they use. Before downloading an app, check the reviews, and choose those that have been vetted by trusted sources.
BR EA K ING GR OUN D
PRESERVATION PARK Preservation Park, a small pocket park dedicated to Milwaukee’s rich brewing history, is being planned at the former Pabst Brewing complex. Zilber Ltd. would like to start construction on the park, planned at the southeast corner of Juneau Avenue and North 10th Street, later this summer. It will include steel panels along Juneau Avenue showing a timeline narrative of the former Pabst brewery’s development.
——Corrinne Hess Track your favorite companies. To better understand individual stock movement, pick several publicly-traded companies to follow. Check their stock price, company newsroom and social media accounts daily. Tracking the stocks will help you realize how company announcements and actions, such as a product launch or a remark by an executive, can affect the stock price. Work with a financial professional. A professional can detail your investment options and help you make financial decisions that suit your individual needs. Work with someone who is willing to explain investment concepts and provide educational materials.
——Gary Dunco is a private wealth advisor and Katie Braun is an associate vice president with Ameriprise Financial in Brookfield.
Thank You
Attendees and sponsors On June 2, leaders of family-owned and closely held businesses in southeastern Wisconsin gathered at the Italian Conference Center in Milwaukee for the second annual Family & Closely Held Business Summit, presented by BizTimes Media. The morning event began with an enlightening keynote from Tom Deans, author of “Every Family’s Business,” which the New York Times said is one of “10 Books Business Owners Should Read.” A panel discussion followed with local family and closely-held business owners sharing their experiences and insights. Attendees were then able to learn more at up to 5 of 20 roundtable discussions on family and closely held business topics. SPONSORS:
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PARTNERS:
To view videos of the event, please visit biztimes.com/family
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ON LIN E POLL
Re: Republicans on health care “Do (Republicans) not know or realize that insured employers in the private sector have made enormous strides toward getting unbridled health costs under control?” — John Torinus, Serigraph Inc.
Re: Funding higher education in Wisconsin “What’s needed before the next budget debate is less rhetoric and more reflection on what it means to the Wisconsin economy to boast one of the nation’s best higher education systems.” — Tom Still, Wisconsin Technology Council
Re: Sales
The Bon-Ton Stores Inc. recently unveiled its newly renovated downtown Milwaukee Boston Store at the Shops of Grand Avenue.
“The rule of thumb is: ask early and ask often. The best way to master the skill is – practice in front of someone who can say yes.” — Jeffrey Gitomer
What do you think of the new federal overtime rule? It’s an overreach by the government and will hurt businesses and lead to fewer jobs:
63.8%
It’s great and about time. This will help workers and therefore boost the economy:
28.6%
No big deal. It will have little to no impact on me, my company or the economy:
What does success look like to you?
New overtime rules announced. Millions of employees impacted. Are you ready?
Bill Ford, President of PM Plastics – customer since 2013
On Tuesday, May 17, the Department of Labor announced new rules on overtime pay, thereby raising the salary level at which employers are required to pay overtime. These changes impact the majority of profit and non-profit organizations, and the DOL estimates that 4.2 million U.S. workers who are currently exempt will now be eligible for overtime compensation. Employers are required to implement these changes by December 1, 2016. For a summary of the new rules and details on our upcoming roundtables addressing these changes, please visit www.dkattorneys.com/newexemptionrules or contact Laurie E. Meyer of our Labor & Employment Team at 414.225.1419 or laurie.meyer@dkattorneys.com.
414.466.8000 ParkBankOnline.com
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Member FDIC
For Bill Ford, success is continually redefining the standard for world-class customer service. Two years ago, when mega-retailer Target approached PM Plastics to accomplish its largest product roll-out ever, Ford made the decision to switch from a larger bank to Park Bank to gain the flexibility needed to successfully ramp-up operations. By truly understanding the company’s goals and strategy, Park Bank stood behind PM Plastics, enabling it to deliver complete customer satisfaction and earn Target’s distinguished supplier award in the process. Learn more about their story at ParkBankOnline.com/success.
BROOKFIELD | GREEN BAY | MILWAUKEE
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innovations BidRide takes the surge out of ridesharing Auction app allows rider to set price
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idesharing services have become a common form of transportation in Milwaukee, particularly among young professionals. While the services, such as Uber and Lyft, offer a convenient way to request a ride MOLLY DILL, managing editor Email: molly.dill@biztimes.com Phone: (414) 336-7144 Twitter: @BizMolly
from one location to another via a mobile app, there are a couple of aspects some users dislike, says Andrea Davis. For one, the existing ridesharing services use a surge pricing model, in which the cost of a ride can increase significantly during peak ridership times and large events, such as Summerfest.
Another concern among riders is safety, as Uber and Lyft drivers are contractors who sometimes do not have commercial insurance. Davis has co-founded a new ridesharing service, called BidRide, which was launched in late April and is currently piloting in Milwaukee. She recently presented her startup at a meeting of entrepreneurship organization 1 Million Cups at Ward4 in the Historic Pritzlaff Building near downtown Milwaukee, where other innovators asked her questions about the company. Growing up in her family’s taxi company, American United Taxi Co., Davis felt the industry was slow to innovate and adapt to the new transportation paradigm. “Traditional taxis are perceived as
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SOONER OR LATER, EVERY FAMILY BUSINESS OWNER HAS TO ASK, ‘HOW DOES THIS BUSINESS SURVIVE BEYOND ME?’
“
Family Business Legacy Institute
– Rick Marino, Owner, Ram Group, Inc.
Family Business Legacy Institute provides learning opportunities, team-building and experienced counsel for families in business together. We’re here to help you navigate the tough decisions and protect the legacy you’ve built. Now accepting new members. Learn more at FBLI-USA.com
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Family Business Legacy Institute IT’S NOT JUST BUSINESS. IT’S FAMILY.
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slow, for good reason,” she said. “Most taxicab rides are not picked up within 10 BidRide minutes,” while Uber and Lyft rides often Milwaukee arrive more quickly. Innovation: Ridesharing auction app Riders also perceive taxis as more exwww.bidrides.net pensive than ridesharing services, but Davis said that’s not usually the case. “After we looked at the challenges, we hours per week in their free time, she said. looked at, ‘What are the opportunities? The rider downloads the BidRide app What can we do differently?’” she said. and inputs his or her credit card informaBidRide is powered by an app, and uti- tion. When the rider would like to go somelizes American United’s existing licensed where, he or she enters the pick-up and drivers and well-marked, fully insured drop-off locations. The app suggests a price, taxicabs to provide ridesharing services, and the rider makes the decision on what to Davis said. offer, then puts the request out to the driver When Uber enters a new city, it must network. There is no minimum bid. recruit both drivers and riders. BidRide A driver can accept the price, make a has a leg up since it uses existing taxicab counter offer or deny the bid. The driver drivers with which it already has a rela- can see a map within a 15-mile radius and tionship, she said. which riders are making bids. Multiple “We already have the drivers. We just drivers can bid on the same rides. A ride’s need to get them to sign up for the app,” status is indicated by a green, yellow or red Davis said. “They already have to have the dot. A green ride has not been reviewed, a appropriate amount of insurance for you yellow ride is in the bidding process and a to get in their cars.” red ride is in transit. There are a couple of other key differBidRide takes the flat fee and a small ences from existing ridesharing apps. For commission of each ride, but the tip is one, there is no surge pricing. The rider not included. and driver agree to a price for the ride, plus “Our main appeal is that we have the a $1 bid fee, through an auction process. rider and the driver negotiate the price “Since the rider and the driver nego- between themselves,” Davis said. “We have tiate the price, (the drivers) can make as nothing to do with the price. Whereas much money as they want,” Davis said. apps like Uber and GetTaxi, they decide And BidRide’s drivers work full time, the price for you.” about 40 hours per week, versus ridesharing drivers, who often work about 10 .................. INNOVATIONS continued on page 11
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biz news Employers examine federal overtime ruling New minimum salary threshold could change business models
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bout 4.2 million more workers will be eligible for overtime pay beginning Dec. 1, under a final rule issued last month by the U.S. Department of Labor. The rule significantly increased the minimum salary threshold at which nonexempt employees are required to receive overtime pay under the Fair Labor Standards Act. Salaried executive, administrative and professional workers earning less than $47,476 must be paid time-and-a-half for overtime work past 40 hours in a week. The previous threshold for this regulation was $23,660. The salary threshold will be automatically changed every three years to reflect wage growth over time. “For all intents and purposes, the salary threshold was a non-factor for a long period of time,” said Mark Goldstein, president of Goldstein Law Group S.C. in Milwaukee. In its ruling, the DOL says employers have several options to comply with the rule: 1) Pay time-and-a-half for overtime
work; 2) Raise workers’ salaries above the new threshold; 3) Limit workers’ hours to 40 per week; or 4) Some combination of the options. The significant Goldstein increase in the salary threshold, as well as the time by which employers must implement it – Dec. 1 – was sharply criticized by several business groups. Many individual business executives also took issue with the rule. In a BizPoll on BizTimes.com in the days following the May 18 ruling, nearly 64 percent of respondents indicated the rule is “an overreach by the government and will hurt businesses and lead to fewer jobs.” Whether or not they agree with it, employers are going to have to move into high gear to begin evaluating how to comply with the rule, said Thomas Godar, a shareholder on the labor & employment
INNOVATIONS................................ from page 10
app while driving. She said that would not be safe. They also asked about BidRide’s biggest challenges. “Well, like I said, we’re competing with Uber, which is already super popular. Probably getting into other cities. BidRide, we already own the taxicab company here in Milwaukee,” but the same is not true in other cities, Davis said. Millennials are the target demographic for BidRide – particularly young professionals. The company is working to develop strategic partnerships to get the word out to that group. BidRide is also running a number of promotions to encourage sign-up, she said. Currently, the BidRide app is available on Android devices and the company is working to launch an Apple app, Davis said. n
The drivers use the service to supplement their usual taxi service. When things are slow, they often log on to the app to look for ride bids. There is evidence riders like the bidding model, depending on their timeframe, said L. Maxwell McKissick of LMM Communications, who provides marketing services for BidRide. “We’ve found that in our analytics, the customers are going back and forth quite a bit in the negotiation process,” McKissick said. “They’re liking the process a lot better, so they want to get that best possible price. And the drivers, if they’re also in a down period time as well, they typically go back and forth.” BidRide currently has about 100 drivers and just more than 100 riders using the service, Davis said. “We’ve steadily seen our user accounts increase every day,” McKissick said. Attendees at Davis’ presentation asked about whether drivers would be using the
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team at Whyte Hirschboeck Dudek S.C. in Waukesha. “This is certainly going to go forward on December 1 unless a court injunction is offered – I guess anything’s possible, I just don’t think people should count on that,” Godar said. The impact of the ruling will vary depending on a Godar company’s industry, location and size, he said. “The burden may be seen as falling on retailers and call centers, hospitality and some community health care, and I think the burden may fall on smaller versus larger employers,” Godar said. Employers with the most exposure are those whose employees work a lot of overtime or don’t make minimum wage, Goldstein said. Employees whose work fluctuates seasonally, such as CPAs, could be heavily impacted, said Dennis Tomorsky, CPA, J.D., CGMA, president and chief executive officer of the Wisconsin Institute of Certified Public Accountants. Many of the WICPA’s 7,700 members work in tax return preparation, where an employer may ask an employee to work far more than 40 hours per week during the rush leading up to Tax Day, but allow flexible and reduced hours in other Tomorsky seasons, he said. “The larger CPA firms in the major metropolitan areas, when they bring CPAs or accountants in at the entry level, they’re already paying over that limit so it’s probably not going to have much of an impact on larger firms in major metropolitan areas,” Tomorsky said. But for rural or small CPA firms, the ruling could force employers to hire more part-time or seasonal workers to avoid the high overtime cost, he said. Exactly how to track overtime hours in an age of smartphones equipped with
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BY MOLLY DILL, staff writer
work email is on many employers’ minds, said Laurie Greenlees, human resource business advisor and manager of the HR Hotline at Waukesha-based MRA-The Management Association. The 24/7 HR Hotline, which usually receives 95 requests per day, set an all-time record the day after the DOL’s final rule was released with 148 calls, Greenlees said. Some employers may have to institute policies that prohibit overtime hours such as those spent checking work emails at home, Goldstein said. “We’d like to think of employees as aligned or bought in and willing to go the extra mile or willing to do whatever needs to be done,” he said. “The law is kind of perverse where it creates this disincentive.” MRA has more than 4,000 member companies with more than 800,000 employees. Its members are based in the Midwest, but often have locations in other states as well. “Our members are very concerned, not only from a budgetary standpoint, but also how it will impact their company from an employee morale and company culture standpoint,” Greenlees said, particularly when it comes to transitioning exempt workers to non-exempt status. Employers will need to carefully evaluate each employee, the hours he or she works and his or her duties, said Kathryn Helmke, human resource government affairs director at MRA. “Let’s say you had someone at $36,000 a year,” Helmke said. “If they typically work about five hours of overtime a week, they’re still under the $47,000 threshold. If they work 10 hours of overtime a week, now they’re over the 47,000 threshold.” One advantage of the new rule, Goldstein said, is that it also allows employers to count bonuses and commissions as part of total pay. Employers will likely have to shift duties around among employees or redistribute the cost of reducing overtime or giving raises. “There is anxiety out there, but it shouldn’t be outright panic,” he said. “It should be a time to think strategy about what one’s doing and why.” n 11
real estate Burleigh corridor in Wauwatosa becoming a major retail destination
J
oe Bartolotta rarely has a plan when deciding to open a new restaurant, but over the last 23 years he has rarely been wrong. Bartolotta grew up in Wauwatosa and opened his first restaurant, Ristorante Bartolotta, in The Village area of Wauwatosa in 1993. More recently, he decided to partner with Phoenix CORRINNE HESS P: (414) 336-7116 E: corri.hess@biztimes.com Twitter: @CorriHess
Hospitality Group to open four restaurants in The Mayfair Collection development northeast of U.S. Highway 45 and Burleigh Street in Wauwatosa. The scope of the mixed-use project convinced Bartolotta that restaurants would do well there.
“There are going to be 1,100 apartments built here in two-and-a-half years,” Bartolotta said. “There is going to be a lot of density, and we’re going to be in the heart of it. I’ve learned that to be successful, you have to have a lot of bodies around you.” Bartolotta’s first restaurant at the development, Osgood’s, opened in November. The other three, located at 11200 W. Burleigh St., across the parking lot from Whole Foods in a 17,000-square-foot building owned by Phoenix, began opening in June with ABV Social, a sports bar with an emphasis on craft beers and creative bar food. Café Grace, a French café, and Taqueria El Jefe, a Mexican restaurant, will open this summer. The restaurants are a small piece of The Mayfair Collection, a mixed-use project at the former site of Kohl’s and
SB A L O AN S The U.S. Small Business Administration approved the following loan guarantees for April:
Milwaukee County Culver’s, 6031 W. Layton Ave., Greenfield, $1.27 million; House of Fashion Boutique LLC, North 56th St., Milwaukee, $40,000; Ikon Investments LLC, 7605 W. Lisbon Ave., Milwaukee, $60,000; JJM Fitness & Wellness LLC, 7512 W. Oklahoma Ave., West Allis, $200,000; Kiddie Mobile LLC, 4579 N. 71 St., Milwaukee, $49,500; MC Burleigh St Restaurant 2 LLC, 11200 W. Burleigh St., Milwaukee, $5 million; Milan Grbic, PT LLC, 950 N. 35th St., Milwaukee, $100,000; Miss A. Inc., 7201 W. Capitol Drive, Milwaukee, $15,000; New World Now LLC, 5307 S. 92nd St., Ste. 126, Hales Corners, $350,000; Oscar’s Restaurant, 7041 S. 27th St., Franklin, $691,000; S3 International LLC, 2101 W Camden Road, Milwaukee, $5 million; Technical Enterprise Inc., South 13th St., Oak Creek, $50,000;
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Roundy’s warehouses. Chicago-based HSA Commercial Real Estate has been working on the 69-acre development project for several years. Phase one of Mayfair Collection, which opened in 2014, includes Nordstrom Rack, Saks Fifth Avenue OFF 5th and other stores. The second phase includes a Whole Foods store, a HomeGoods store, the Bartolotta’s restaurants and a Homewood Suites by Hilton hotel. Beginning in summer 2016, HSA Commercial and its residential development partner, Fiduciary Real Estate Development, will begin phase one of the residential component, which includes 250 apartments at what is being called “The District.” Over the next five years, 1,100 apartments are expected there. The city of Wauwatosa first envisioned a version of The Mayfair Collection in
For the complete list of SBA Loans for April, go to www.biztimes.com
The Penworthy Co. LLC, 219 N. Milwaukee St., Milwaukee, $1.75 million; Wisconsin Vapers LLC, 257 E. Hampton Ave., Milwaukee, $10,000; Wisconsin Vapers LLC, 257 E. Hampton Ave., Milwaukee, $30,000; Woori Corp, 408 E. Chicago St., Milwaukee, $286,000; World Logistics Corp. Inc., 4685 W. Bradley Road, Milwaukee, $78,400; World Logistics Corp. Inc., 4685 W. Bradley Road, Milwaukee, $79,200; World Logistics Corp. Inc., 4685 W. Bradley Road, Milwaukee, $78,400;
Waukesha County 3K Services LLC, 38518 Sunset Drive, Oconomowoc, $8,000; Alpine Lanes Inc., S80 W18700 Apollo Drive, Muskego, $1,028,000; Alpine Lanes Inc., S80 W18700 Apollo Drive, Muskego, $432,000; American Imports Inc., N96 W14433 County Line Road, Menomonee Falls, $332,000; Crahan Law LLC, 2240 N. Grandview Blvd., Waukesha, $50,000; DL2 Fitness LLC, 12505 W. Bluemound Road, Brookfield, $476,000; evcValuation LLC, 375 Bishops Way, Suite 236, B i zT i m e s M i l w a u k e e
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Brookfield, $100,000; Forest Grove Builders LLC, 353 Forest Grove Drive, Ste. 200, Pewaukee, $150,000, JH Harness & Saddlery, 1327 Pearl St., Waukesha, $187,800; Kowal Investment Group LLC, W238 N1660 Busse Road, Suite 100, Waukesha, $350,000; Michael Brown, N50 W16043 Honeysuckle Lane, Menomonee Falls, $112,000; New Berlin Grading Inc., 19470 West Lincoln Ave., New Berlin, $956,000; Ove Water Services Inc., S53 W31165 Old Village Road, Mukwonago, $505,000; Rob Miller Homes LLC, 706 Main St., Delafield, $128,000; Russell Restaurant 2 LLC, 257 W. Broadway, Waukesha, $50,000; Secure Information Destruction LLC, 19762 Loveland Ct., Muskego, $295,000; Secure Information Destruction LLC, 19762 Loveland Ct., Muskego, $25,000; Supersealers Asphalt Maintenance Inc., S14 W33989 State Highway 18, Delafield, $97,000; Tailgators Bar & Grill, N64 W23246 Main St., Sussex, $230,000; Tally’s Tap & Eatery LLC, S31 W24661 Sunset Drive, Waukesha, $511,500; Tofte’s Table LLC, 331 Riverfront Plaza, Waukesha, $150,000.
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2005, when the Wauwatosa Economic Development Corp. commissioned the Burleigh Street Triangle redevelopment plan for the site. At that time, a study determined there was $305 million of untapped purchasing capacity in the trade area near the Burleigh Triangle, which is bordered by Highway 45, Burleigh Street and the Currie Park Golf Course. The study showed the area was well-positioned for upper-end retailers and housing that would attract young, mobile professionals. Based on location, the study also showed the triangle could attract large, modern office space. Hopes to attract development to the Burleigh Triangle stalled during the Great Recession, and HSA eventually emerged. In addition to The Mayfair Collection, HSA is working on a smaller retail building on the opposite side of the street at the former Schwaab Inc. stamp factory building at 11415 W. Burleigh St. HSA purchased the property in January 2015, and by the end of the year will redevelop it into a 32,000-square-foot multi-tenant retail building that will complement The Mayfair Collection. Brenton Schrader, an associate at HSA Commercial Real Estate, said because of the geometry of the Burleigh Triangle, there was not a lot of frontage along Burleigh Street in The Mayfair Collection. The Schwaab property will offer tenants 4,000 to 12,000 square feet of space along Burleigh, Schrader said. A real estate source who didn’t want to be identified said Verizon Wireless is leasing 4,500 square feet in the east corner of the development. HSA also purchased a 45,321-squarefoot bank-owned property at 3077 N. Mayfair Road in September, which Schrader called the gateway to The Mayfair Collection because it is at the corner of Mayfair and Burleigh. The building is currently occupied by Milwaukee Career College, which has a five-year lease. Schrader is hoping to work with the school to consolidate its operations to one or two floors so HSA can lease space on at least the lower level. “With all of the shopping draws that
B A
Joe Bartolotta at his newest restaurant, ABV Social, which opened June 1 at the Mayfair Collection.
have been added to The Mayfair Collection, particularly the restaurant component, we’re starting to find an interest in office tenants who want to become part of the district,” Schrader said. “We would like to explore that interest.” Last year the city worked with Vandewalle & Associates Inc. to revise the 2005 Burleigh Triangle plan to incorporate The Mayfair Collection and the development planned along Highway 100 (Mayfair Road).
But despite all of the progress, the Burleigh/Highway 100 area is still a work in progress. The former Ponderosa Steakhouse property at 3161 N. Mayfair Road is in the process of being demolished and although Kin Properties Inc. of Boca Raton, Florida, purchased it in March, there are still no plans for the property. Kin Properties also owns the At Home store in the former Kmart building at 3201 N. Mayfair Road.
There is also the issue of the abandoned car dealerships at 11221 and 11333 W. Burleigh St. The 5.7-acre property, which sits between the new Meijer store at 11111 W. Burleigh and the HSA stamp factory property, was purchased in 2011 by Ohio-based electronics retailer Micro Center, but never developed. Paulette Enders, Wauwatosa development director, said the company planned to build a store, but nothing has been on the horizon for years.
A The old Schwaab Inc. building versus the new site where development will take place (B).
That is why the 2015 plan was developed, Enders said: to keep making progress, without a specific timeline. “Once The Mayfair Collection started to evolve, it raised awareness of the potential in this part of the city,” said Wauwatosa Mayor Kathy Ehley. “That was an area that was stagnant for a long, long time and was an area of concern. Now, we have an incredible amount of options out there, it is busy and we are drawing people from a large radius, which is good.” n
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manufacturing
TROY FREUND PHOTOGRAPHY
special report
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cover story
MILWAUKEE’S MINING EQUIPMENT MANUFACTURERS TRY TO
DIG OUT OF THE HOLE BY ARTHUR THOMAS, staff writer
There have been a lot of depressing head-
South Milwaukee to Arizona. South Milwau-
lines for the Milwaukee-area mining equip-
kee mayor Erik Brooks said the company told
ment manufacturing operations of Joy Global
him 200 jobs would leave his city, with most
Inc. and Caterpillar Inc. over the past year.
transitioning in 2018.
Milwaukee-based Joy posted a $1.2 bil-
Those changes are a far cry from a few
lion loss last year, closed its Orchard Street
years ago, when a 2010 BizTimes Milwaukee
plant, laid off the workers in its heavy fabrica-
headline suggested the massive growth of
tion and welding departments in September,
Joy and Bucyrus was making Milwaukee the
and then closed those departments in May.
“mining equipment manufacturing capital of
Joy Global did have some positive news
the world.”
in the first half of 2016, reporting on its June
Of course, Joy and Cat, or their local pre-
earnings call it had received orders for two
decessors Harnischfeger Industries Inc. and
mining shovels headed to the Canadian oil
Bucyrus International, are no strangers to
sands and another for a longwall system
challenging times or the cycles of the mining
in India that had been in the works for five
industry. Both local companies filed for bank-
years. The two projects were worth almost
ruptcy in the 1990s and both grew substan-
$150 million, but the company also said Ca-
tially from around 2004 to 2012.
nadian wildfires cost it $10 million to $15 million in revenue for the year.
Given the industry they serve is known for its cyclical nature, it should not be a surprise
Peoria, Ill.-based Caterpillar reported
that the two companies are taking actions to
its 2015 profit was down 43 percent from
remain competitive. Those actions are even
2014. The results included an $88 million
less surprising given the number of forces
operating loss for the resource industries
driving commodity prices down and leading
segment that includes the former South
their customers to hold off on investments in
Milwaukee-based Bucyrus International
new equipment.
Inc. mining equipment manufacturing business it acquired in 2011.
While the mining industry’s downturn started in 2013, prices for the major com-
Caterpillar plans to cut 10,000 jobs by
modities served by Joy’s customers still fell
2018 and is closing its mining equipment cor-
between 20 and 30 percent in 2015. Slower
porate office in Oak Creek and moving 250
growth in China and a number of challenges
administrative jobs from there to South Mil-
for the U.S. coal industry mean both markets
waukee. Caterpillar also announced in May
are undergoing a restructuring that will re-
it would be moving engineering jobs from
shape them for the long term.
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cover story ARTHUR THOMAS
manufacturing
Joy Global announced last year it would close its Orchard Street facility and move the work to Texas.
“We do not see a return to the supercycle of the past,” Joy Global said in a statement, adding customers have a new level of discipline to control their capital requirements. “Oversupplied markets will rebalance eventually and the cycle will improve in time for most of the commodities we serve to fuel global growth,” the company said. Joy Global only agreed to answer questions for this story by email. Caterpillar declined to participate. The spate of bad headlines for the companies dates back even further, to the 2012 peak of the mining boom that fueled growth over the past decade for the mining equipment manufacturers. In 2013, Caterpillar dealt with an extended contract negotiation that included the union formally rejecting the company’s offer. Just after the contract was approved, 260 employees were laid off from the South Milwaukee facility, and another 60 layoffs came in 2014. Caterpillar moved its global mining headquarters to Oak Creek after acquiring Bucyrus, but announced the closure of the facility last year. The engineering 16
activities currently in the area are moving to Arizona. The manufacturing work in Milwaukee still includes electric rope shovels and draglines, along with aftermarket parts for each. Each company has around 900 local employees and the local unions for both companies now have about 230 members working at each plant. The shrinking local workforce and changing nature of the industry raise the question of whether these two companies, with a local lineage dating back more than 100 years, will continue to have a presence in the area. Former Bucyrus chief executive officer Tim Sullivan said the commodities market is bottoming out now. While 2017 will likely still be tough, he expects things to pick up in the following two years and SULLIVAN predicted both Joy and Caterpillar would be hiring and making more mining equipment in three years. But Sullivan also cautioned that the mining equipment industry won’t return B i zT i m e s M i l w a u k e e
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to the levels it was at when it peaked. “We will never (again) see what happened in the last decade,” he said.
RIDING THE WAVE TO GROWTH “What happened” was the growth of emerging markets, particularly China. Sullivan said previous spikes in commodities have been driven by the industrialization of countries and regions, but nothing on the level of China (population: 1.35 billion) had been seen since the industrialization of the U.S. “There’s not another China on the horizon,” Sullivan said, noting that many might expect India to fill the void. “(But) India cannot move at the speed China has moved at. Nobody can.” Under normal circumstances, the subprime mortgage bubble in the United States should have slowed commodities, but Sullivan said the growth from China was strong enough to sustain the higher levels the industry was experiencing. “We were getting incredible demand for our equipment,” he said. “They were riding the China wave through 2008, all the way up to a couple years ago.”
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The two companies went to new heights on the strength of China’s growth and strong demand for commodities. In 2001, Bucyrus had $290 million in revenue and 1,600 employees. In 2010, the last full year before Caterpillar acquired the company, revenue was up to $3.7 billion and the headcount was 9,800. Caterpillar’s resource industries segment had $15.6 billion in revenue in 2011 and topped out at $21.2 billion in 2012. Joy Global also topped out in 2012, reaching $5.7 billion in revenue, with a worldwide workforce of 18,019. Revenue had been $1.1 billion in 2001, with a workforce of 7,240. The growth wasn’t all organic; both companies made a series of acquisitions to get them where they are today. For Bucyrus, those included Terex Mining in 2010, adding hydraulic excavators and off-highway trucks to its line. The company also acquired underground coal system provider DBT in 2007. Caterpillar also added Chinese underground support maker Siwei in 2012, although that deal ran into issues related to the company’s accounting. Joy Global’s acquisitions included Mon-
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manufacturing
❱
ARTHUR THOMAS
tabert, a maker of hydraulic rock breakers, in 2015 and LeTorneau Technologies, a maker of large wheel loaders, in 2011. Al Cervero, vice president for construction, utility and mining at the Association of Equipment Manufacturers, said a lot of consolidation has been taking place in the industry, but there’s enough competition to make it healthy and successful. “That consolidation is going to serve the industry well,” he said, adding that both Caterpillar and Joy have developed broad lines of product offerings.
cover story
CHINA, COAL BRING AN END TO THE PARTY The companies may have broadened their lines, but both also have plenty of exposure to the coal industry. The combination of falling coal prices, a slowdown in China’s growth and the general oversupply of commodities have sent prices tumbling in recent years. “I don’t think anyone anticipated the degree to which (the market for coal) was going to go down in 2013,” said David Mitchell, president of Milwaukee-based Monarch Corp., a supplier to both Joy and Caterpillar. U.S. coal production is off 32.5 percent this year. The 896 million short tons produced in 2015 were down 11 percent from 2012 and 23 percent from 2008. Joy Global said increasing regulations on carbon emissions and an abundant supply of low-cost natural gas “has created one of the most challenging environments that the U.S. coal market has ever seen.” Both companies are implementing their own strategies to manage through the downturn. Sullivan noted commodities are volatile and prices are rarely stable, adding that managing a company tied to them is the “major leagues.” “You have to know what you’re doing or you’re going to run into financial difficulty,” he said. Mitchell said he sees differences in how the two companies are approaching their future. In closing its heavy fabrication and welding departments, Joy is signaling it will rely on suppliers like Monarch, a supplier for fabrication, machining and assembly of heavy components, to provide those services. “I think (Joy will) be leaner and they’ll be able to react to the market a lot more quickly,” Mitchell said. “It puts an onus on us as the supply base to be able to react.” Caterpillar, on the other hand, has 18
Joy Global has facilities on 40 acres near National Avenue and Miller Park Way.
opted to keep the capacity to make big parts and components for its machines, Mitchell said, noting that as a much larger company, Caterpillar has a bigger footprint to draw on. Even though the South Milwaukee facility has capabilities Caterpillar doesn’t have elsewhere, members of United Steelworkers Local 1343, the union representing workers at the plant, are on edge about the future. “The membership is pretty nervous right now,” said Brad Dorff, Local 1343 president. He said the nerves are more about the state of the industry than anything the company is doing. A few years ago, the union had more than 800 workers at Caterpillar; now, there are 230 members working there. The looming departure of engineering jobs certainly doesn’t ease the nerves, but the company has said it will continue manufacturing in South Milwaukee. There also has been some good news. Dorff recently found out nine people would be recalled from layoff. The need for the returning employees came from retirements and some increase in orders for parts. The company also recently invested in B i zT i m e s M i l w a u k e e
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a $5 million gear-cutting machine and in other upgrades. “It’s more than just putting paint on the walls,” Dorff said, although he added the union realizes machines could be moved if the company wanted to do so. He also said the relationship between the company and the union has changed since Sullivan ran Bucryus and it has been difficult to manage at times. Chris Chappelle, United Steelworkers Local 1114 president, said the attitude among members at Joy Global is one of fear, worry and feeling let down. Having been laid off five times himself, Chappelle said he understands the industry is cyclical. “(But) this is not cyclical. This is ‘We’re closed; We’re done; We’re going elsewhere,’” he said of the company’s Orchard Street and department closures, adding the company told him keeping the operations just wasn’t cost effective. “They said if we worked for minimum wage and they cut our benefits in half, that wouldn’t be enough to make them stay.” The two companies have taken differing approaches to working with their local unions, said Ross Winklbauer, USW subdistrict director for both unions. Caterpillar has taken a very direct approach, providing notice and then lay-
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ing people off, he said. Joy Global, on the other hand, has offered buyouts and severance not just for employees in the facilities it is shutting down, but throughout the local workforce. As a result, some of the younger laid off workers have had a chance to return to work. “Joy Global tried to hold on to their employees for quite a while,” Winklbauer said. Chappelle said the relationship between the union and Joy Global has been decent over the past 15 years, but also said the management team has increasingly been brought in from the outside, hampering the relationship. “They’ve gone global,” he said, and the focus seems to be on China and the LeTorneau operations in Texas.
RESTRUCTURING FOR THE FUTURE Joy is in the midst of attempting to find $100 million in cost savings through the optimization of its manufacturing footprint. A few years ago, the company was able to support $6 billion in revenue, but the downturn has reached a point at which guidance for 2016 calls for $2.4 billion to $2.6 billion in revenue and utilization of its manufacturing capacity is around 25 or 30 percent.
manufacturing The goal is to reach 75 percent utilization and support $4 billion to $4.5 billion in revenue. Analysts at Milwaukeebased Robert W. Baird & Co. Inc. suggest that would require the elimination of 2.5 to 3 million square feet. Joy has almost
1.3 million square feet in the Milwaukee area, among facilities in West Milwaukee, Oak Creek, downtown Milwaukee and on 84th Street. Asked if the planned footprint reductions could include the closure or reduction
in size of the 40-acre facility on National Avenue, Joy Global said it evaluates business and workload on a regular basis, adjusting as necessary to remain competitive. “We evaluate our global operations for safety, quality and performance met-
rics, and our Milwaukee operations are performing very well in this respect,” the company said. Chappelle said the fact that the National Avenue location is in a prominent place near Miller Park, the Menomonee
South Milwaukee contemplates future of Caterpillar property BY CORRINNE HESS, staff writer
He’s also not ignoring the 76-acre elephant in the room. The entrance to Caterpillar Inc.’s South Milwaukee facility sits at 1100 Milwaukee Ave., adjacent to the city’s downtown. The mining company, which once employed 10 percent of the city’s population, is tightly nestled between Milwaukee, 10th and Rawson avenues, stretching three long blocks from east to west and six blocks north to south in the heart of the city. Last month, Caterpillar announced to employees it would centralize its surface mining and technology division in Tucson, Ariz. and move 200 jobs out of South Milwaukee over the next five to seven years, with the majority of the work leaving in 2018. South Milwaukee officials want to be prepared for whatever the future holds for the massive Caterpillar site. “I hope we are positioning ourselves for when (mining) does turn around, Caterpillar will maintain a significant presence here,” Brooks said. “But short of us buying a dragline, I don’t think there is much we can do right now (to help the company). It’s a cyclical downturn in the mining industry globally.” On the corner of 10th and Milwaukee is a tiny pocket park, Heritage Place, commemorating the city’s beginnings. There are two plaques, one detailing the city’s timeline and the other the history of Bucyrus. Bucyrus Foundry and Manufacturing Co. moved from Bucyrus, Ohio to South Milwaukee in 1893 and the city, which was incorporated in 1897, grew up with it. “We became part of the fabric of Bucyrus and Bucyrus became part of the back story of South Milwaukee,” Brooks said. “We truly were a company town.” When Peoria-based Caterpillar bought the company, then called Bucyrus International Inc., in 2011, Brooks anticipated a change. And when the mining industry as a whole took a hit, the changes became imminent.
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Brooks said Caterpillar has been investing in the space it retained. What is happening with the vacant space is unknown, and one of those buildings sits along the highly-traveled 10th Avenue, which is a prime spot for redevelopment, he said. Of the 76 acres Caterpillar occupies, the company owns approximately 43.5 acres. The remaining 32.5 acres are owned by OLP JV Milwaukee LLC, which is registered to One Liberty Properties Inc., a real estate investment firm based in Great Neck, New York.
Caterpillar has 76 acres of land in South Milwaukee, taking up three city blocks from east to west and six from north to south.
The campus is split in two by Rawson Avenue, with the pieces referred to as “north of Rawson” and “south of Rawson.” Caterpillar owns two properties “north of Rawson,” a 36.6-acre parcel at 1118 Rawson Ave. and a 2.2-acre parcel at 1100 Rawson Ave. that contains an office building and many of the original Bucyrus buildings. On the “south of Rawson” side, the company owns five small parcels, all used for parking. All of the land is still under the ownership name Bucyrus International. Brooks is hoping to meet with representatives from One Liberty Properties this month to find out their intentions for the property they own. Lawrence Ricketts, chief operating officer and executive vice president of One Liberty Properties, declined to comment.
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Caterpillar’s mining equipment division headquarters is on Milwaukee Avenue in South Milwaukee. CORRINNE HESS
South Milwaukee Mayor Erik Brooks is hoping to breathe new life into the struggling downtown storefronts, and also offer support to the new businesses that have recently arrived.
The company has already consolidated operations on the South Milwaukee campus. Last year, Caterpillar combined operations from one of its 500,000-square-foot buildings into 250,000 square feet of space.
CORRINNE HESS
In early May, the South Milwaukee common council unanimously adopted a comprehensive downtown plan focusing on the 900 and 1000 blocks of Milwaukee Avenue – the city’s main commercial district.
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There are two plaques in Heritage Place Park to commemorate the city of South Milwaukee and Bucyrus. Both grew up together beginning in the late 1800s.
Brooks said South Milwaukee has to contemplate life with a smaller Caterpillar. “As much as we want Caterpillar here, and we want them to grow and succeed in South Milwaukee, we have to be realistic and face reality – they are moving jobs out of South Milwaukee, and that’s real,” Brooks said.
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Valley and plenty of commercial development isn’t lost on employees. “That’s another thing in the back of everyone’s mind,” he said of the potential real estate value of the site. Asked if Joy would continue to have a significant presence in the area, the company said, “Milwaukee is the proud home of our corporate and surface mining headquarters, and hundreds of area workers.” The company has about 900 employees in the area. Manufacturing activities include the machining of gears, shafts, rollers, motor frames and hoist drums. Blasthole drill assembly and heat treat operations also take place here, in addition to distribution, engineering, product management, quality, supply chain, sales and other administrative functions. Winklbauer said the union is hopeful both companies will continue to have operations in the area, noting both have had similar slumps in the past. “We’re optimistic,” he said. “We are hoping they are still here.” Sullivan said he believes Caterpillar and Joy will stay. “What both companies do is very special,” he said, adding the products are highly engineered with complicated manufacturing and moving the operations and workforce to another location isn’t easy. “You have to have a really strong desire to spend some money to make that happen.” Sullivan said he feels Joy Global, in particular, is making the right moves, noting it has invested in hard rock and shifted toward commodities that are not as replaceable as coal. Mitchell said he sees Joy’s moves as a reaction to the market and an effort to remake itself for the future. “It’s a positive that they’re doing this, because it means they understand they need to be around for the long term,” he said.
A CHANGING INDUSTRY Mining equipment is trending toward incorporating more technology to improve efficiency. That includes autonomous or remote-controlled trucks to haul material away or other systems that limit downtime. “With some of these continuous mining systems, you can be pretty darn efficient,” said Lance Roberts, head of the Mining Engineering and Management Department at South Dakota School of Mines and Technology. Roberts said it will become increasingly challenging to remove material from
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mines and that creates demand for new, more advanced equipment. “For the most part, we’ve probably mined the easy stuff,” he said. Joy Global’s newest products have included underground hard rock loaders, a surface hybrid excavator and more efficient electric drive technology. The company’s JoySmart Solutions offering also integrates smart connected products, advanced analytics and direct service to help customers eliminate costs and improve productivity. “As an essential partner to the mining industry, we are focused on solving our customers’ toughest challenges, as our success is dependent on their success,” the company said. Sullivan, Monarch’s Mitchell and AEM’s Cervero all indicated they expect commodity prices to return at some point, but which level will represent the new normal remains a question. Mitchell said the infusion of technology into the industry won’t eliminate the need for the big pieces his company produces. “All of that stuff is still going to require large, manufactured steel components,” he said, although it will be more common to build large parts closer to where they will ultimately be used to reduce shipping costs. Mitchell doesn’t see automation reaching a point at which it is cost efficient enough to replace the welders he uses to build 170,000-pound crawler frames. “We’re not going to get there for a while and even when we get there, we’re still going to need the highly-skilled labor that understands the process,” he said. Cervero sees the potential for a different future. “I will not say that you will continue to see the need for somebody to put weldments together,” he said, adding that his organization is working with researchers to 3-D print a boom for an excavator next spring. “I don’t know what those jobs are going to be. There are going to be jobs, but instead of a welder you may be a 3-D printer,” Cervero said. Winklbauer said the pressure from 3-D printing and automation is not just something that could threaten workers at Joy and Caterpillar; It is a threat to workers throughout manufacturing. But human workers still have tremendous value, he said. “I’ve never seen a robot being able to crawl into a very tight corner and do the kind skilled welding our men and women do at Joy Global and Caterpillar,” Winklbauer said. n w w w.biztimes.com
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ARTHUR THOMAS
manufacturing
Students from Arrowhead High School participate in a tour of Menomonee Falls-based Bradley Corp., led by manufacturing supervisor Scott Krueger.
Signs of progress emerge in addressing skills gap
Multitude of programs turning the tide for manufacturing
P
erhaps no single issue has been more at the forefront of manufacturing discussions over the last several years than the skills gap. The idea that employers are not able to find enough potential employees to fill their needs has been a topic at seminars and conferences and has drawn the attention of both the press and lawmakers. While some researchers have questioned whether the skills gap is really just a wage gap, the issue ultimately boils down to a question facing almost every industry: Where will the next generation of workers come from? Like many industries, manufacturing faces a looming wave of retirements by baby boomers. According to U.S. Census 22
BY ARTHUR THOMAS, staff writer
Bureau data, 25.6 percent of Wisconsin’s manufacturing workforce is older than 55, up from 21.5 percent at the end of 2010. “If nothing is done within the next five to seven years, they’re all going to be hurting severely,” said Mark Hoedel, a welding instructor at Lynde and Harry Bradley Technology and Trade School. That same data also shows a few bright spots for manufacturers, as it appears more young people are taking an interest in the industry. Those younger than 24 make up almost 7 percent of the manufacturing workforce and the number of workers in that age group is up 24 percent, to 30,331. Manufacturing now accounts for 10.6 percent of those younger than 24 in the B i zT i m e s M i l w a u k e e
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overall workforce, up from 8.5 percent at the end of 2010. “When they start hearing what kind of money can be made straight out of high school, their eyes kind of light up,” Hoedel said of his students. There’s also been progress at the state’s technical colleges, with enrollment in manufacturing programs up 35.6 percent from 2011 to 2015. Waukesha County Technical College and Milwaukee Area Technical College were among the biggest gainers, increasing program enrollment 54.3 and 53.5 percent, respectively. “There’s been progress in the awareness element,” said Stephanie Borowski, president of Butler-based GPS Education Partners. “I think where we’re still lacking
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is young people seeing advanced manufacturing and technical education as a long-term career option.” For GPS student Dewain Roberts, the potential for a career path became clear during his time in the program. He wanted to be an architect when he first heard about GPS as a 16-year-old at James Madison High School. He has had placements at Glenn Rieder, Perlick and Strattec, and now plans to go into mechanical engineering. He also has a 10-year plan that starts with going to MATC and ends with a master’s degree. Roberts is hoping to land a job someday that is hands-on, something where he spends some time at a desk and some time testing out ideas. He said one of his biggest concerns was having a boring job. “I thought manufacturing was mostly working on the floor all day, not actually really learning anything, just getting by,” he said. For some it is, Roberts said, but for those willing to learn and work, there are opportunities to advance. GPS Education Partners is at one end of a spectrum of programming that was developed to address the skills gap. That spectrum also includes youth apprenticeships, internships, dual enrollment programs, high school lab areas and tours of facilities for students. “I think it’s starting to finally get momentum because you’ve got the executives talking about it,” said Bryan Mullett, chief strategy officer at Menomonee Fallsbased Bradley Corp. Bradley is among the companies providing funding and industry guidance to the Arrowhead High School Design Engineering Manufacturing Center, a 10,000-square-foot facility that added a number of labs to the school’s campus. Students toured Bradley’s facility last month and heard about how the company develops new products. Organizations like the Waukesha County Business Alliance, Metropolitan Milwaukee Association of Commerce and MATC have taken thousands of students on tours of manufacturing facilities. “The manufacturers themselves have done a great job of opening up their facilities,” said Dorothy Walker, MATC dean of applied science and technology. With so many different programs, it would seem there’s potential for resources to be stretched thin and problems to arise. “I feel like everybody’s pushing in
ARTHUR THOMAS
Dewain Roberts at his work station at Milwaukee-based Strattec Security Corp.
2016 E D I T I O N
the same direction,” said Amanda Payne, vice president of public policy at WCBA, adding that each program takes a slightly different approach and she has seen a lot of collaboration. Susan Koehn, Milwaukee 7 director of industry partnerships, said she encourages businesses to look at developing their workforce as part of the supply chain and if there were fewer programs, companies may be discouraged if one didn’t work for them. “There’s never going to be a one size fits all solution,” she said. David Mitchell, president of Milwaukee-based Monarch Corp. and a participant in several state and local workforce initiatives, said he also has seen a lot of collaboration and all the programs help identify best practices. Wisconsin is ahead of the curve in addressing workforce issues, he said. “I don’t think we take time to step back and look at the rest of the nation,” Mitchell said. Despite the progress, manufacturing still faces the prospect of parents and stu-
dents shying away from manufacturing careers when large layoffs happen at local companies. “I think that’s a huge battle,” Payne said. She said people pay attention to media reports and may not know about a smaller company with 15 openings. “Unfortunately, you get one big headline about layoffs and that can be very damaging for the perception,” she said. To that end, a number of manufacturers have started exploring ways to share their workforce with each other. Mitchell said the idea is when one is having a slow period, employees can work elsewhere and return when things pick up. “We know our guys. I know every guy on the floor by name,” Mitchell said. “When we have to lay people off, we hate it.” The idea has potential to work well among manufacturers who know and trust each other. “The trick is, how do you scale something like that with companies that don’t have that longevity of relationships?” Koehn asked. n
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BEN STANLEY
manufacturing
A view of North Eighth Street, the main street in downtown Sheboygan.
Sheboygan County’s employment problem Filling thousands of open jobs harder than it would seem
W
hile many rust belt communities with manufacturing-heavy economies have struggled to regain lost jobs in the wake of the Great Recession, 60 miles north of Milwaukee, the lakeside city of Sheboygan has been struggling with the opposite problem – a glut of well-paying manufacturing and office jobs. In April, Sheboygan County, which has a population of just fewer than 115,000, posted an unemployment rate of 3.6 percent, well below the state rate of 4.3. While Sheboygan County is hardly alone in the state with healthy employment statistics – nearby Fond du Lac also had an unemployment rate of 3.6 percent as of April, followed closely by La Crosse (3.7 percent) and Appleton (3.8 percent) – the sheer number of open jobs at its cluster of large companies (many familyowned) is unique. Since January, there have been between 3,000 and 4,000 open jobs at any given time at the county’s largest employ24
BY BEN STANLEY, staff writer
ers, such as Kohler Co., Bemis Manufacturing Co., Nemak, Sargento Foods Inc., Acuity and Johnsonville Sausage. The problem has been finding people to fill them. “In terms of bringing people in, Sheboygan County has grown in the last couple of years, but we have not grown at a rate that will be able to fill all of our jobs right now,” said Dane Checolinski, director of the Sheboygan County Economic Development Corp. “We’re trying to put the accelerator on that.” The city of Sheboygan’s population has been remarkably consistent over the past four decades, fluctuating between 48,000 and 51,000 people since 1970. The county population has grown, but at a slow rate – from around 97,000 in 1970 to just fewer than 115,000 in 2013. As a result, its housing inventory is being stretched to the limit as employers attract families to the area. Homes are selling at their fastest clip since 2008 and last B i zT i m e s M i l w a u k e e
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year, the city of Sheboygan had an apartment vacancy rate of 0.4 percent, according to a housing study commissioned by city leaders. Now, with thousands of new jobs, the city and county are poised for significant growth and local political and business leaders have been busy trying to capitalize on the growth-friendly climate by attracting both workers to fill immediate workforce needs and developers to expand its housing inventory. At the same time, local businesses have been working with Sheboygan North and Sheboygan South high schools, as well as Lakeshore Technical College, to develop manufacturing training programs to bridge the local skills gap and encourage young people in the area to consider a career in manufacturing. “We have noticed a worker shortage that’s been evident for the last year or two,” said Sheboygan Mayor Mike Vandersteen. “With the current baby boom generation
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going away, there’s going to be a real attrition in the number of workers we’re going to have. This isn’t a one- or two-year problem; this is going to be a decade-long problem we’re going to have to face.” The city has been aggressively seeking new development. Around $37 million worth of housing projects will be under construction by the end of June that could add another 700 people to downtown Sheboygan, with an additional 120 units planned in the surrounding communities. To help connect job seekers with Sheboygan County employers, the Sheboygan County Economic Development Corp. has launched a website, complete with marketing materials about area amenities, that includes job postings from local businesses. As of June 1, there were more than 3,100 available. The EDC and the city are also conducting a study on whether running buses later at night would help employers fill second and third shift jobs.
BEN STANLEY
Morrissey said one of the major questions the company is answering for potential employees is: Where is Plymouth, Wisconsin? Another: What does the area have to offer?
Not a one horse community “From a GDP standpoint we’ve grown at 3.2 percent, which is roughly twice the national average last year and three times faster than the state,” Checolinski said. “Durable goods manufacturing has accounted for 0.75 percent of our growth, insurance and finance also 0.75 percent, and nondurable goods manufacturing, which includes food processing, grew 0.75 percent as well.” Checolinski said Sheboygan’s large number of family-owned companies that
Looking southeast on the corner of North Eighth Street and New York Avenue in downtown Sheboygan.
“We’re doing a lot of outreach work and we’re starting to ramp up our marketing,” said Sargento human resources director Marilyn Morrissey. Sargento plans to hire 45 production employees by the end of 2016 to work at a new 60,000-square-foot facility in Hilbert in nearby Calumet County. When the expansion was announced in 2015, it was expected to eventually create 140 new jobs.
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aren’t publicly traded put the area in a good position after the country began emerging from the Great Recession. “In the downturn, they were able to make long-term strategic moves to buy market share,” he said. “Now that the economy has bounced back, they have come back stronger.” And they came back stronger all at once. Although development projects are in the works and new technical training programs are being developed, Sheboygan County employers still have immediate and glaring workforce needs. The demand has given rise to creative solutions. Last summer, Greater Praise Church of God in Christ on Milwaukee’s northwest side began busing Milwaukee residents to work at Sheboygan employers. Called the Joseph Project, the initiative takes people looking for work in a neighborhood with high unemployment and puts them through a weeklong soft skill training session, then gives them an opportunity to interview at Sheboygan companies.
The program has connected more than 50 Milwaukee residents to Sheboygan jobs. The Sheboygan EDC donated two additional vans to the Joseph Project in May. Cassandra Zinkel, Kohler Co.’s senior manager of talent sourcing, said Kohler has been looking into “alternative arrangements” for potential employees currently living in Milwaukee or Chicago that wouldn’t require them to commute back and forth to Sheboygan County. Kohler is hoping to hire 550 new employees by the end of 2016 – two-thirds of them to fill newly created positions and the rest to replace employees lost due to organic turnover. Of the company’s greatest recruitment challenges “perception is one of them,” Zinkel said. “Some folks haven’t been to Sheboygan County,” she said. “I think there is maybe the perception that it is farther away from the metro Milwaukee area than it really is. So a lot of it is education; educating them on what it is like to live here and work here.” n
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strategies No need to be lonely at the top How to avoid saying things under stress that alienate others
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sually, about three months after I start working with a client, his or her guard drops down and the façade that the person has it all together, and has all the answers, wanes away. By this time, I’ve earned the person’s trust because the person understands I will not judge him or her, nor will I try to control the person and take over his or her position by giving unwanted advice. Earning trust is a great moment for me, because I know the person is beginning to go deeper to find his or her inner voice and gut knowing. When this happens, the person begins to hear his or her inner voice in a new way, as well as connect with other people more genuinely. This builds trust in an organization and keeps the leader from feeling lonely at the top. While it doesn’t flatten out the organization in terms of titles, it creates a more authentic connection and invites the same openness and honesty in return, ultimately leading to trust. It sounds so easy, so why doesn’t this occur regularly? Most executives are moving so fast to create results from their E.G.O. (Edging their Greatest self Out), they do not take the time to connect with themselves at a deeper level. They often do not really listen to themselves, so what they blurt out often is not what they intend to say. Those around them often forget about the pressure they are under to meet the goals, and therefore take their sometimes
Technology
intense personalities personally. This creates loneliness for the leader, who was already disconnected from himself or herself; now that leader has an even greater loneliness because he or she is unintentionally intimidating and alienating others. I will never forget the time a client made this all so very clear to me. He was running late for a meeting we had midafternoon. He got caught in traffic and called me to let me know he would not be
and said, “Drive safely; No worries. When you get here we can talk about the next time and place to suit your needs.” Interestingly, when he arrived, he apologized for getting angry at me when it wasn’t my fault he was late. He admitted to me his impatience and tendency to “switch and blame it on others,” often intimidating his secretary, wife and employees. Because I did not react to him or become overly accommodating, he said he was able to wit-
“ When we are connected to ourselves, we don’t feel lonely because we are clear, calm and confident.” on time. As he was explaining, he started to raise his voice with me and asked me, “Why am I driving to your office anyway? I’m a busy man and don’t need to be stuck in traffic!” In the moment, I wondered if he forgot he set the time and location because he did not want to spend the extra fee to have me drive to him. While my E.G.O. wanted to blurt out, “Really, did you forget you were too cheap to pay for me to come to you?” I heard my inner dialogue and knew that was not my greatest potential at work. With a deep breath, I got re-connected with my greatest self, dropped my defensive posture
ness his own reactive pattern and realize why he did it: He didn’t want to feel his own inadequacy or vulnerability. Being lonely at the top is often due to our lack of clear intra-personal communication: hearing our own internal use of language or thought we have regarding a situation. If our intra-personal communication is judgmental and reactive and we don’t take the time to acknowledge it and shift it, we can be guaranteed that our E.G.O. will not only Edge our Greatest self Out, it also will alienate others. This creates the loneliness we feel. Not only will listening to your inner
S US A N W EH R LEY LEADERSHIP dialogue keep you from being lonely at the top because you are not blurting out things that will alienate others, but also you will have a deeper sense of connection to yourself. When we are connected to ourselves, we don’t feel lonely because we are clear, calm and confident. Nothing creates loneliness more than not knowing what you want or need to do. The feeling of being lost creates a feeling of loneliness because you have lost touch with your inner guide. Challenge: To help you from feeling lonely at the top, do these two things every day: 1. Practice breathing more deeply, especially when you feel rushed and stressed. 2. Begin to listen to your inner dialogue before you blurt something out. n Susan K. Wehrley is the author of the book “EGO at Work.” She is also the founder and president of BIZremdies, a business that helps companies and their executives collaborate, create and connect to their goals. Her website is www.BIZremedies.com. She can be reached at (414) 581-0449 or Info@BIZremedies.com.
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ALEXANDRE ROTENBERG-SHUTTERSTOCK
strategies
ABOVE: Harry Selfridge LEFT: Selfridges department store in London.
Innovate or die
The challenges of innovation in a family business
H
arry Selfridge, founder of the iconic Selfridges department store in London, was born in Ripon, Wisconsin. He cut his teeth in the retail market by working for Marshall Field’s in Chicago. He even built a mansion on Lake Geneva during those years. But on a trip to London, he saw an opportunity and broke the mold by creating an American-style department store named after him. It was an immense success. He brought his son Gordon into the business and gave him major responsibilities in the company. Gordon had innovative ideas and objected to some of his father’s business strategies. He learned quickly his ideas were ignored. There was added drama because his father developed a gambling problem and eventually took up with some very young starlets, to the embarrassment of the family, the board of directors and of course, Gordon himself. This story is so riveting that PBS did an entire Masterpiece special on it. Family businesses can be a blessing or
a curse to the children of the owners. So how do succeeding generations drive innovation in a corporation that has been wedded to the past and the genius of the founder? The April 2015 issue of the Harvard Business Review included an article titled “Leadership Lessons from Great Family Businesses.” In it, the authors point out U.S. family businesses “employ 60 percent of workers and are responsible for 78 percent of new jobs. These are not just mom and pop shops either. In one-third of the S&P 500 companies, family members own a significant share of the equity and can influence key decisions, including the election of the chairman.” Owners who create a business can be brilliant, talented and hard-working entrepreneurs. But they can also be guilty of conformational bias or may also have habits that make them resistant to the ideas of a new generation taking the business in new directions. So what advice do family owners have for others in their shoes? Cynthia LaConte, chief executive ofw w w.biztimes.com
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DAN STEINING ER INNOVATION ficer of Milwaukee-based Dohmen Co., said having the opportunity to start her own business under the umbrella of the corporate entity was invaluable. It gave her a chance to test her chops as an entrepreneur on her own terms, outside of the shadow of the family business. It also gave the family and the board a chance to measure performance and leadership capability in a neutral and objective way. Steve Jacobus of Jacobus Co. discovered the importance of having all family members align around a shared vision and mission statement to ensure everyone is on the same page. He feels it is very helpful to have a board of advisors that can mentor younger family members and give objective review of innovation strategies. The Boldt Co. took a different ap-
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proach. Bob DeKoch, the president for the past 18 years, along with Tom Boldt, the CEO, and Oscar Boldt, the chairman, helped grow the Appleton-based company into one of the top construction firms in the country. The family then decided to sell a majority interest of the business to the employees under an approved ESOP plan. According to senior executive Jim Rossmeisel, this dramatic step will motivate employees and ensure the future vitality and growth of the business. The paramount challenge will always be the succession plan put in place to ensure continued strong leadership at the top. The authors of the Harvard Business Review article strongly recommend the establishment of a professional board made up of a significant number of outside directors. In choosing successor leadership, any family member under consideration should be assessed for a match in basic competencies and values, much as an outside candidate’s capability would be considered relative to the company’s goals. It is not healthy to hand company leadership to a family member unless he or she has the character, work habits and entrepreneurial spirit to lead the company. This might not seem fair to family members, but it has to be remembered that the best interests of shareholders, customers and employees trump the feelings of any one person. It’s not fair to that son or daughter to put him or her in a position where the child could ultimately cost the company its existence. Getting counsel through a board and outside coaches is another important tool for family businesses. These resources act as a buffer between family members, bringing experience and objectivity to decision making. Who knows, if Harry Selfridge had followed this advice, he might have avoided his fate of standing outside his department store as an elderly gentleman, virtually penniless, observing his creation and remembering the times when he was on top of the world. n Dan Steininger is the president of BizStarts, a lecturer on innovation and creative problem-solving at the UWM School of Continuing Education, and president of Steininger & Associates LLC, which helps companies drive new revenues through innovation. He can be reached at Dan@BizStarts.com.
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strategies
Onboarding
A talent acquisition and retention strategy
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A Gallup study showed that one of the top reasons employees leave a company is because they lack strong interpersonal relationships. You know that a well-designed onboarding program could have eliminated this loss. The study, State of the American Manager: Analytics and Advice for Leaders, quantified results. A good onboarding program can: »» Fast-track new hire productivity (up
ou’ve had a position open for months. It’s a strategic role – one critical to the company’s overall success. Over the past six months, you’ve interviewed 10 promising candidates, but none has made the cut. Then in walks candidate number 11, who’s clearly the perfect match. He has all of the critical competencies and capabilities, and his values align perfectly with the company culture. You’ve hit the jackpot. You extend an offer and the candidate accepts. Eight months later, with strong results represented on the year-to-date charts, the manager walks into your office and submits his resignation letter. You’re surprised, but not shocked. During your last few conversations, you sensed something wasn’t quite right, but when you inquired, he said, “Things are fine.” What happened? Human Resources handles the exit interview. It seems that the manager felt “alone” and not part of the team. “I had to figure out how to do most things on my own. I didn’t feel that anyone had my back. Working here just isn’t fun,” are some of the comments he shared with HR. You calculate the cost of this turnover to be roughly half a million dollars – probably more. It’s difficult to swallow, but this further validates your argument for a formal onboarding program (not to be confused with employee orientation, which is usually a week or two in length and involves a lot of paperwork).
to 60 percent better and faster). »» Improve cultural assimilation. »» Build important and lasting connections/relationships. »» Reduce overall turnover (up to 69 percent by year three). »» Increase efficiency in how people work, leading to higher career effectiveness (up to 288 percent). »» Improve service levels. »» Lower job stress. Five elements of a successful onboarding process: 1. Self-efficacy – the employee’s belief that he or she can succeed.
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standing of desired expectations and deliverables. 3. Social integration – feeling connected to others and having meaningful relationships. 4. Cultural integration – aligning acceptable behaviors, values and norms. 5. Training – expanding competencies that are needed to succeed.
“ Critical to both engagement and retention are the relationships new hires form with others.”
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2. Role clarity – having a clear under-
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During the first few days at work, be sure to let the new team member know how he or she can make a meaningful difference in the company’s success. For example, if you hired a front receptionist desk employee, be sure to explain that he or she carries the responsibility of projecting the corporate brand to guests and employees. How that person dresses, what he or she says, how he or she says it and how he or she engages with others directly influences visitors’ first impressions of the company. Then, be clear with your expectations. Onboarding guru George Bradt recommends incorporating plans for addressing what he calls the three A’s: Accommodate: Make new hires feel welcomed and comfortable when they arrive. Show them around, introduce them to people, set them up with a readied workspace – don’t make them wait for a computer and phone. Create a welcome package that includes little extras like company apparel, personal notes or a card signed by team members, and some local restaurant gift cards so they can take people to lunch to get to know them. Bundling things together conveys intention and demonstrates you’re excited they decided to join the company. Assimilate: Critical to both engagement and retention are the relationships new hires form with others. Beginning
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CHRISTINE McMAHON HUMAN RESOURCES on day one, host a welcoming luncheon and/or end-of-day celebration with cake. When people leave the company, they are given a party; how about throwing one the day they join? Have someone present to facilitate introductions and help the new person make connections. Forwardthinking companies often assign a “buddy” to each new employee. “Buddies” are often relatively new employees who work outside the chain of command and remember what it was like to be new to the company. The “buddy” provides a safe place where the new employee can go to connect or when they need help. Accelerate: New employees want to prove to you that you’ve made the right decision by contributing as soon as possible, but onboarding should be paced so learning and integration happens without exhausting or overwhelming the new hire. Instead, think of onboarding as a series of building blocks that, when systematically timed, create a solid infrastructure that supports high performance. At the end of the first week and then at the close of each of the employee’s first three months, survey the team member regarding his or her experiences, challenges, what would help the person be more productive or efficient, and what would improve his or her overall work experience. This ensures the team member has the necessary tools and support to succeed. Finally, measure productivity through metrics. Make sure new hires are becoming productive and, if they are not, figure out what is going wrong. This will give you added insights about how to finetune the onboarding process. n Christine McMahon advances sales success by providing strategic sales and leadership coaching and training. She is co-founder of the Leadership Institute at Waukesha County Technical College’s Center for Business Performance Solutions, and can be reached at (844) 369-2133 or ccm@christinemcmahon.com.
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NONPROFIT DIRECTORY
Engman-Taylor Co. will host Factory of the Future on Wednesday, June 15, from 7:30 to 9 a.m. at its facility, W142 N9351 Fountain Blvd. in Menomonee Falls. Joe Jones, president of Big Systems and Bob Lazlo, business process director of Guardian Business Solutions, will discuss the Factory of the Future guidelines for modernizing operations. The event includes breakfast. Registration and more information is available at www.gbsvoice.com/registration-page.
SPOTLIGHT
The UWM School of Continuing Education will host First Steps to Starting a Business on Wednesday, June 15, from 6 to 9 p.m. at the SCE, 161 W. Wisconsin Ave. in Milwaukee. The three-hour course will cover the information needed to start a business, including financial, marketing, legal, risk and other considerations. Cost is $29. For more information or to register, visit http://uwm.edu/sce/ courses/first-steps-to-starting-a-business.
Riveredge Nature Center
Capuchin Community Services will host the annual Capuchins’ Run-Walk for the Hungry on Friday, June 17, at 7 p.m. beginning and ending at Henry Maier Festival Park. Proceeds help feed the hungry through Capuchins Community Services’ St. Ben’s Community Meal and House of Peace. Registration is $25 for the run and $20 for the walk until June 5, with discounts for children, and includes entrance to Polish Fest and free return to Polish Fest all weekend. For more information or to register, visit www.capuchinsrunwalkforthehungry.org. Jannsen Wealth Management will host Savvy IRA Planning for Boomers on Tuesday, June 28, from 5:30 to 7 p.m. at Mangold Creative, 126 Main St. in Pewaukee. Terry Jannsen, president of Jannsen Wealth Management, will discuss strategies for savvy IRA planning, roll-over options for retirement plan funds, minimum distributions and other IRA topics. The See the complete calendar of seminar is free and includes refreshments and networking. upcoming events & meetings. For more information or to register, visit www.biztimes.com/ www.biztimes.com events/savvy-ira-planning-for-boomers.
PER SO NNE L F I L E
■ Banking & Finance GSF Mortgage, Brookfield, added David Mastopietro as a mortgage loan originator. He is a 20-year veteran of the industry and has worked in many facets of the finance industry, including selling non-conforming mortgages, insurance, collections and loan processing.
Traci Licari joined the Brookfield office of Willis Towers Watson as a human capital and benefits consultant. Licari will work closely with producers to ensure effective and efficient delivery of client services while controlling a meaningful book of business. PNC Bank promoted Brian Meier to assistant vice president and branch manager for retail banking in Wisconsin. In his position, Meier is responsible for the support and management, customer relations and staff performance of PNC’s retail branch operation in Lake Geneva. Meier has more than seven years of banking experience, including portfolio management, personnel management and business development positions. Brown Deer-based Bank Mutual promoted Melinda Toy to product marketing and
communications manager. She is responsible for developing and overseeing marketing strategy and execution for all business lines, mortgage and Bank Mutual’s insurance and wealth management subsidiary. Wisconsin Bank & Trust added Nathan Peters as vice president of commercial banking at its Greenfield banking center. Wisconsin Bank & Trust has also named Nathaniel Lynn Peters a mortgage loan officer at its Glendale Banking Center. He has more than 30 years of experience in financial services, including retail, mortgage and commercial lending, business banking and credit card technology. Prior to joining Wisconsin Bank & Trust, he was a branch manager and worked with business development for Heritage Credit Union. Merger and acquisition firm Bridgewood Advisors Inc., Milwaukee, hired Daniel Klawitter as an analyst. Klawitter was formerly an analyst within Briggs & Stratton’s corporate development team.
■ Building & Construction Campbell Construction, Mukwonago, hired two new employees. They are Barbara Sheedy, company controller, and Neil Ribarchek, project manager/estimator.
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4458 County Hwy Y, Saukville (262) 375-2715 | www.riveredgenaturecenter.org Facebook: www.facebook.com/riveredgenaturecenter Instagram: @riveredgenaturecenter | Twitter: @RiveredgeNC Year founded: 1968 Mission statement: Inspire, inform and enable responsible environmental decision-making and sustainable practices by: »» Providing leadership in education; »» Preserving and restoring Riveredge and other natural sanctuaries; »» Serving as a resource for scientific research. Primary focus: Riveredge Nature Center works to connect communities, families and people of all ages to nature. We do this through efforts in education, research and land restoration. Other focuses: Over the past three years, the board and staff team at Riveredge have embarked on a mission to expand the reach and impact of nature on society. We are currently working to use our resources and expertise to partner with communities to improve the health and happiness of our lives through integrating nature in the formal school system, throughout our communities and as part of individual lifestyles. This is in addition to a robust, inquiry-based education program on the grounds of Riveredge and a strong effort to inspire the next generation of environmental scientists through extensive internship opportunities with our research and conservation team. Employees at this location: 16 full-time and 16 part-time Key donors: Our key corporate partners include We Energies and West Bend Mutual Insurance. Executive leadership: Jessica Jens, executive director; Sunny Knutson, director of education; Julia Courtright, director of development; Mandie Zopp, director of research & conservation Board of directors: Ted Neitzke IV, president, West Bend School District; James Brindley, vice president, Health Payment Systems Inc.; Kyle Knop, secretary, HGA Architects and Engineers; Rick Fox, treasurer, West Bend Mutual; Bradley Brin, retired business owner; Jennifer Clearwater,
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Discovery World; Chris Ford, community volunteer; Mike Grisar, We Energies; Nancy Groethe, community volunteer; Norm Lasca, retired professor, University of Wisconsin-Milwaukee; Dan Lyons, retired business owner; David Mckinney, Alliance for Strong Families and Communities; Dori Naef, We Energies; Kim Pemble, Children’s Hospital of Wisconsin; Gaurie Rodman, Aptura; Mary Rozek, CPA, private practice; Kathy Schrader, attorney Is your organization actively seeking board members for the upcoming term? Yes. What roles are you looking to fill? We are looking for potential board directors who have a growth mindset and will help us continue our recent growth phase by utilizing their interests, community connections and business relationships to help Riveredge expand its networks. Ways the business community can help your nonprofit: From getting your hands dirty to sponsoring innovative community programs, Riveredge has opportunities for your business to be involved in nature. We invite businesses to join us for volunteer work projects of all kinds. We work with you to find a project your team would enjoy and that would make a big impact for the communities we serve. We also continue to seek business partners as sponsors for community programs, education initiatives, land restoration efforts and special events. Key fundraising events: Riveredge hosts two large fundraising events which support all areas of our program: the Farm to Table Dinner on September 10th and the River Valley Bike Ride on June 26. Additionally, we host Sturgeon Fest at Lakeshore State Park, which celebrates the release of more than 1,200 young sturgeon each year and raises funds to support the sturgeon reintroduction project for the Milwaukee River. Lastly, the Frothy Forage is a naturebased microbrew festival held in May which raises funds to continue the restoration of 379 acres of “wild” Wisconsin at Riveredge.
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biz connections PER SO NNE L F I L E Greenfire Management, Milwaukee, named Eric Anderson superintendent. He has more than 17 years of construction experience. Anderson has managed numerous projects, from multi-family residences to commercial and retail businesses.
■ Health Care Children’s Hospital of Wisconsin, Wauwatosa, announced that Catherine Burns will be joining the organization as vice president of network strategy and development. The vice president of network strategy and development is a new position that will develop and direct the current network and payer contracting strategies as they evolve to include the transition to value- and risk-based contracting.
■ Insurance Brian Koslowski recently joined the Waukesha office for M3 Insurance as a senior risk manager. Specializing in property and casualty, Kozlowski will work with clients to develop risk management strategies and conduct risk assessments and training. He has more than 20 years of experience in corporate safety, insurance risk management, and health and safety consulting.
Submit new hire and promotion announcements to www.biztimes.com/submit/the-bubbler
■ Legal Services Foley & Lardner LLP, Milwaukee, announced that Dana Lach has returned to the firm’s health care finance, public finance and finance & financial institutions practices in the Milwaukee office. Lach has extensive experience counseling health care and other nonprofit organizations, including colleges and universities, in tax-exempt and taxable bond transactions, commercial loans, non-traditional financing products such as commercial paper programs and securitizations, and derivative transactions.
Ellen Travis joined Weiss Berzowski LLP, Milwaukee, as a paralegal on the estate planning team. Bronfman E.L. Rothschild, Milwaukee, announced that Hoyt R. Stastney joined the firm as general counsel. Prior to joining Bronfman E.L. Rothschild, Stastney was an equity partner at Quarles & Brady LLP, where his focus included securities, investment management, mergers and acquisitions, corporate finance and financial institutions.
■ Nonprofit Goodwill Industries of Southeastern Wisconsin, Greendale, recently named Angela Adams director of community relations. In this new position, she will lead Goodwill’s efforts to
cultivate relationships with key stakeholders in the community that are connected to the delivery of Goodwill’s mission.
■ Professional Organizations
Walker
Powell Sara Walker, senior vice president, Associated Wealth Management, and Shontra Powell, chief operations officer, American Society for Quality, have been elected as directors-at-large to three-year terms on TEMPO Milwaukee’s board of directors.
■ Professional Services Collin Arkin joined Hastings Air Energy Control Inc., New Berlin, as CAD Technician. Arvin works in CAD software and transforms rough product designs into professional conceptual sales documents used in business development and minor fabrication. He also reviews engineering drawings and designs to ensure adherence to established specifications and standards.
■ Public Relations & Marketing Mangold Creative, Pewaukee, added Kelsey
Katherine Wood Schill and Amy Schmidt Jones, attorneys at Michael Best & Friedrich in Milwaukee, were honored with the Wisconsin Law Journal’s 2016 Women in the Law Award. This award honors top women attorneys for their achievements in the legal field and community, while paving the way to success for other women in the legal profession.
Foley & Lardner LLP Jay Rothman, chairman and CEO of Foley & Lardner, and John Wilson, a partner in the firm, were recently honored with awards from Marquette University at its 2016 Alumni National Awards. Rothman (Arts’ 82) received the Professional Achievement Award from the Helen Way Klingler College of Arts and Sciences for his leadership role with the firm as well as serving as chairman of the board of directors of Children’s Hospital of Wisconsin. Wilson (Arts ’92) received the Distinguished Alumnus
and social media specialist. In this role, Jannsen will develop social media, online advertising and digital marketing campaigns for clients. Jannsen Jannsen comes to Mangold Creative from The Bartolotta Restaurants, where she served as graphic designer for nearly two years. Trivera Interactive, Menomonee Falls, added Jeff Ganger as digital marketing strategist. In his new role, Ganger will assist the firm’s clients by creating digital marketing strategies that include websites, social media and inbound marketing tactics to reinforce their brands and drive ROI. Ganger has more than 15 years of experience in print and website design, creative direction, inbound marketing and sales. The Roberts Group, Waukesha, promoted Julia Hansch to senior account executive. Hansch will lead the account services team at the health care advertising agency by developing and executing marketing plans at the senior level. She began her health care career as a media relations specialist for Gundersen Lutheran Health System in La Crosse.
Austin Haga joined Vive Marketing in Milwaukee as marketing coordinator.
■ Real Estate
BIZ NO T ES Michael Best & Friedrich LLP
Jannsen as a design
Devin Tessmer joined CBRE’s Milwaukee Award from the Les Aspin Center for Government. Wilson participated in the Les Aspin Center for Government program in 1990, has served on the Les Aspin Center board of visitors for 10 years and is a financial supporter of the Center.
Reinhart Boerner Van Deuren s.c. Sixteen Reinhart Boerner Van Deuren s.c. attorneys are recognized as 2016 “Leaders in their Field” by Chambers USA. Reinhart is recognized in six of Chambers’ Wisconsin-eligible practice areas, earning a top ranking for its Real Estate practice, and a ranking in Banking & Finance, Corporate/ M&A, Labor & Employment, General Commercial Litigation and Intellectual Property. Chambers USA ranks the leading firms and lawyers in an extensive range of practice areas. Researchers conduct in-depth interviews with clients and lawyers across the United States. Chambers’ ranking criteria includes legal knowledge and experience,
effectiveness, professional conduct and commitment to client service.
Lake Express Ferry The Lake Express Ferry has received the TripAdvisor Certificate of Excellence for the second consecutive year in recognition of great traveller reviews on TripAdvisor over the past year. The Lake Express Ferry is in its 13th season of operation and is the only highspeed ferry operating on Lake Michigan, offering daily service between Milwaukee and Muskegon, Mich. The ferry takes two-and-a-half hours to cross the lake and is able to accommodate cars, motorcycles, bicycles and pets. The Certificate of Excellence accounts for the quality and quantity of reviews submitted by travelers on TripAdvisor over a 12-month period. To qualify, a business must maintain an overall TripAdvisor bubble rating of at least four out of five, have a minimum number of reviews and must have been listed on TripAdvisor for at least 12 months.
To have your business briefs published in a future issue of BizTimes Milwaukee send announcements to briefs@biztimes.com.
office as an associate within its retail group. Tessmer will be responsible for landlord and tenant representation of retail properties in southeastern Wisconsin. Additionally, he will assist a variety of tenants with lease negotiations and site selection. Elm Grove-based Denali Realty Group, a real estate agency that lists and sells residential properties in Milwaukee, Waukesha and surrounding counties, added Andrea Alexander as a licensed real estate agent.
■ Technology Ethoplex, Germantown, hired Tom Nelsen as director of operations. Nelsen will manage the overall operations team needs, systems and controls. He will manage performance of daily proactive pipeline management by staff and formulate best practices in order to effectively communicate with all staff, clients, customers, partners and vendors.
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n GLANCE AT YESTERYEAR VOLUME 22, NUMBER 6 JUNE 13 - 26, 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 PUBLISHER / OWNER
Dan Meyer dan.meyer@biztimes.com DIRECTOR OF OPERATIONS
Horse-drawn fire crew This historic Milwaukee photo shows a fire department building decked out in patriotic décor. The inscription says the structure, located at 100 W. Virginia St., was built in 1900. Horse-drawn carriages stand in front. The building still serves as a fire station today.
Mary Ernst mary.ernst@biztimes.com DIRECTOR OF STRATEGIC INITIATIVES
Jon Anne Willow jonanne.willow@biztimes.com ADMINISTRATIVE ASSISTANT
Sarah Sinsky sarah.sinsky@biztimes.com
EDITORIAL EDITOR
Andrew Weiland andrew.weiland@biztimes.com MANAGING EDITOR
— This photo is from the Milwaukee Public Museum’s Photo Archives collection. Additional images can be viewed online at www.mpm.edu.
Molly Dill molly.dill@biztimes.com REPORTER
Corrinne Hess corri.hess@biztimes.com REPORTER
Arthur Thomas arthur.thomas@biztimes.com REPORTER
Ben Stanley ben.stanley@biztimes.com
SALES & MARKETING DIRECTOR OF SALES
Linda Crawford linda.crawford@biztimes.com BUSINESS DEVELOPMENT EXECUTIVE
Maribeth Lynch mb.lynch@biztimes.com SENIOR ACCOUNT EXECUTIVE
Amber Stancer amber.stancer@biztimes.com ACCOUNT EXECUTIVE
Kevin Gaschk kevin.gaschk@biztimes.com ACCOUNT EXECUTIVE
Maggie Pinnt maggie.pinnt@biztimes.com ACCOUNT EXECUTIVE
Christie Ubl christie.ubl@biztimes.com
PRODUCTION & DESIGN GRAPHIC DESIGNER
Alex Schneider alex.schneider@biztimes.com ART DIRECTOR
Shelly Tabor shelly.tabor@biztimes.com
INTERN REPORTER
Maredithe Meyer maredithe.meyer@biztimes.com
Independent & Locally Owned — Founded 1995 —
COMME NTA R Y
Growing businesses must be a top state priority
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ast year, Wisconsin placed dead last in the Ewing Marion Kauffman Foundation ranking for startup activity. The Milwaukee metro area and the state’s entrepreneurial business growth rankings also fell significantly in the foundation’s latest report. Those rankings are a huge concern for the state, since most job creation and job growth comes from new businesses. If we want to improve the state’s economy and create more job opportunities, we must create an environment in the state that leads to robust business creation. To shine a light on the importance of this issue, BizTimes Media presented Milwaukee-based gener8tor, one of the top accelerator firms in the nation, with its annual Regional Spirit Award. In addition, George and Julie Mosher, the founders of Milwaukee-based National Business Furniture, were honored by BizTimes with a Lifetime 32
ANDREW WEILAND Achievement Award. George now mentors and invests in early stage companies in Wisconsin and has invested about $30 million in 240 firms. The Moshers and gener8tor were recognized at the Bravo! Entrepreneur & I.Q. (Innovation Quotient) Awards, as part of our annual BizExpo event. The awards program also included a panel discussion, which I moderated, with local young entrepreneurs who own rapidly-growing companies. They included: gener8tor co-founder Joe Kirgues, RentCollegePads.com founder Dominic Anzalone, Scanalytics cofounder Joe Scanlin and Bright Cellars co-founder Richard Yau. I asked these young entrepreneurs what could be done to improve the startup environment in Wisconsin. “We think a lot of the ecosystem is designed around investing in things othB i zT i m e s M i l w a u k e e
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er than people,” Kirgues said. “If you’ve ever seen a university official talk about a building blueprint, their eyes just light up. We want to see that same excitement, but when they are talking about how they invest in their people…We have a gap in our infrastructure around investing in people.” Funding remains a problem for Milwaukee-area startup firms trying to get to the next level. “We think Milwaukee and the region generally is strong on angel financing,” Kirgues said. “But we have trouble with the $1 million to $2 million checks. There’s angel money here. (But) there’s a gap at the next stage…and there’s a gap at the $10 million check stage.” “There is a lot of available angel money in town,” Anzalone said. “If you have a good business and put together a business that can scale, I think it won’t be the
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most difficult thing to raise capital for. But I would agree once you get past the seed round and go to the series A round for over $1 million, it gets difficult.” “We’ve got corporations, very big ones, that sit in our backyard that for the same (amount of money) that they write for a corporate outing lunch check, that could transform three, four, five startups and arguably launch them into an area that would allow them to get (more) funding and bring attention back to the region,” Scanlin said. “Bigger picture, if I had to tell you what we wish we saw more of, I wish we saw more companies growing at a pace that justified that financing,” Kirgues said. “I suspect if there were more of those, we would see more financings.” n
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2016 BizExpo BizTimes Media held its annual BizExpo, a regional businessto-business conference, on Wednesday, May 18, at Potawatomi Hotel & Casino in Milwaukee. About 2,500 people attend BizExpo each year, which includes more than 100 exhibitors, three main stage events and 18 free seminars. The main stage events were the Women in Business breakfast, the Bravo! Entrepreneur and I.Q. Awards luncheon and the From the Locker Room to the Boardroom panel in the evening. 1 Sarah Zwicky of Dohmen and Brian McKaig of United Way of Greater Milwaukee & Waukesha County. 2 Gary Billington of Connect. The. Dots LLC and Jennifer Wolters of Global Furniture Group.
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3 Gequilla Keiser of the Superior Culinary Center and Sara Hathaway of Roomsponder LLC. 4 Linda Jackson of the Milwaukee Times, Shontra Powell of ASQ and Dinah Gant of GG Diversified LLC. 5 A BizExpo attendee playing giant Jenga at the TEC booth. 6 Networking at the BizExpo. 7 Julie and George Mosher accepting the Lifetime Achievement Award. 8 Woman Executive of the Year award recipient Paula Penebaker and BizTimes Media publisher Dan Meyer at the Women in Business breakfast. 9 Women in Business panelists Shontra Powell of ASQ, Debra Kessler of TJ Hale Co., Mary Lou Young of the United Way of Greater Milwaukee & Waukesha County, Linda Gorens-Levey of General Capital Group, Kathryn Campbell of Johnson Controls Inc. and moderator Kimberly Kane of Kane Communications Group.
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ERICH SCHROEDER PHOTOGRAPHY
the last word
Engage with the entrepreneurial community Mark Grosskopf is president, chief executive officer and owner of Milwaukee-based New Resources Consulting. Executives should take an active role in supporting Wisconsin’s entrepreneurial community to strengthen the workforce, he says. “We’ve all heard the statistics of the ‘brain drain’ that occurs when companies leave the state of Wisconsin. Several factors certainly lie outside the bounds of our ability to impact them – mainly the climate. However, one of the things we can do to encourage an ongoing presence in Wisconsin is to support and actively engage with our local community of entrepreneurs. “There are a few successful startup incubators that 34
Mark Grosskopf
bring in and expose talented, driven and enterprising business people to our state. I’m most familiar with gener8tor, but there are others. “The objective of these groups is to facilitate startup companies to hone their message, build a solid business plan and attract investment. This establishes a platform for the brightest and most creative professionals to experience our state, allows investment firms in Wisconsin to have an opportunity to inject capital locally, and for those of us who work and live here, creates an opportunity to mentor and further cultivate this environment. “Twice a year, gener8tor scours the country for the best startup prospects and lures them to its incubator program. Upon graduation from the program, the busi-
B i zT i m e s M i l w a u k e e
n
J une 13 - 2 6 , 2 016
n
President, CEO and owner New Resources Consulting 1000 N. Water St., Suite 950, Milwaukee Industry: Technology and business consulting Employees: 273 www.nrconsults.com
nesses pitch their plan to investors and move to the next level of business evolution. Not all of the businesses remain here, but all have a better understanding of what Wisconsin can offer, several hire talented individuals from this area, and yes, many do create roots and local jobs for years to come.” n
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