Petters Group Magazine Summer 2006 by goodwida

:: T A B L E

of CONTENTS

: :: :: :: ::: :: :: :: ::: :: :: feature 36 : : INSIDE GLANCE SUNBEAM Sunbeam products aren’t just for the kitchen counter anymore. Learn about their new line of major home appliances and how a Sunbeam wine cellar could be in your future.

galleries 16 : : JOHN T. PETTERS FOUNDATION Gain insight into the latest recipients of the John T. Petters Foundation scholarship and how far they are going with the money.

18 : : CHARITABLE GIVING GALLERY From company food drives to a million dollar donation to the arts, check out the ways Petters Group continues to do good!

44 : : PEOPLE & PLACES Get the scoop on where your fellow coworkers across the country have been in this sizzling picture gallery.

ON THE COVER TOM PETTERS—THE HOTTEST TICKET IN TOWN

From humble beginnings selling stereos out of his basement, the ultimate entrepreneur emerges as the visionary behind Petters Group Worldwide.

16 IN

every

letter from tom

ISSUE

:: 6

letter from andrea

:: 8

around the companies

: : 28

where in the world is tom?

:: ::: :: :: :: ::: :: :: :: ::: :: :: :: ::: :: ::

SUMMER

22 departments

26 : : STRATEGIC PARTNER BILL DUNLAP A unique and accomplished career brings top advertising legend Bill Dunlap to Petters Group.

20 : : MAKING A DIFFERENCE COLLEEN SARENPA Find out why trademarking is crucial to your business and Colleen Sarenpaâ&#x20AC;&#x2122;s guidance for this important symbol on your brand.

30 : : THE LEARNING CENTER The new China Learning Center expands educational opportunities for global success at Petters Group.

22 : : MAKING A DIFFERENCE BARBARA HITCHCOCK Discover the spectacular world of photography as Barbara Hitchcock takes you through a brief history of the Polaroid collection.

24 : : EXECUTIVE PROFILE MARY JEFFRIES Life on the fast track is just one of many adventures for COO Mary Jeffries.

from the kitchen

: : 45

the petters matrix

32 : : GLOBALIZATION As Petters Group grows globally, Steve Harper is providing guidance for international relationship building.

42 : : CORNERSTONES This exciting Streetwize program offers a fresh approach to project management for employees.

: : 46

reality bytes

: : 46

product spotlight

2006

:: PETTERSGROUP

LETTER from TOM

started Petters Companies in 1988. If someone had told me then that 18 years later the company would have almost 3200 employees, offices around the globe and own one of the world’s great brands in Polaroid, I would have said: “What a dream”.

I am an entrepreneur at heart. , Taking risks and seeing beyond the moment has always excited me. I’m a person who doesn’t like to hear “we can’t do that.” As a result, I’ve made my share of mistakes, not understanding just because I had an idea that it would happen. It takes a whole lot more than faith in an idea. One needs to have the people around them believe in the idea and that be able to execute on their dream. I learned plenty from my mistakes and the trials and errors of others. For instance, I learned that some deals cannot and should not be done. That’s why you see an increasing amount of discipline and thoughtfulness in our deal making decisions. As we have grown over the years, I have been lucky enough to be mentored by some of the best in the business. Through them I learned the power of cumulative and collective learning. Building on our cumulative and collective experience is what has enabled our company to grow. Whether you are a vendor, lender or team member in one of our companies, I hope you’re finding opportunities to learn and grow everyday with Petters Group. Learning and growing is key to what makes our work satisfying. And it is our collective, cumulative experience and learning that drives our companies forward and makes them great places to work and great organizations to do business with. Petters Group magazine, the first issue of which you’re now holding, is a tool we will be using to celebrate our company’s accomplishments, communicate new initiatives and provide education not only about Petters Group but about all the companies and investments in our portfolio. This magazine will bring you stories about fellow employees, executives, new companies, vendors and wins for existing companies. It will also bring you images and stories from around the world, from our Learning Center in Shanghai to explorations of our global sales and manufacturing relationships. The stories will be informative and entertaining. But we also want them to help you see how relationships might be built between our different groups, see how our values of integrity, humility, caring, innovation, execution and agility are brought to life and how our cornerstones of strategy, investment process, operation excellence and relationship management form the foundation for all we do.. We welcome your feedback about this publication and topics you would like to see included in upcoming issues. While I am constantly on the move, visiting our vast network of people and companies, I realize I am not hearing all that is happening. For this reason, I am very much looking forward to seeing your stories in this magazine. What you are about to explore in this publication is just the “tip of the iceberg” of what is to come for Petters Group Worldwide. And if someone could tell me where we will be 18 years from now, I’d say: “Anything is possible, believe in your dreams.” Enjoy every day. Live it like it is your last!

TOM PETTERS

SUMMER 2006

LETTER from ANDREA

The People, the Culture, the Energy of Petters Group Worldwide

hen work began on the premiere issue of the Petters Group magazine I was often asked, “How are you going to fill 48 pages — do we really have that much to talk about?” With investments in more than 60 companies, of which more than 20 are actively managed by

Petters Group, my answer was, “Absolutely — we have a third of the Fall issue already filled.” As with many of the projects we are working on, the magazine was a vision of Tom Petters. Beyond a flash, newsletter or email, he wanted to give everyone a broader insight into what makes the companies of Petters Group who they are today and where they plan on going tomorrow. Each quarter, a new magazine will give you snapshot stories in Around the Companies, in-depth company stories in Inside Glance and employee profiles in Making a Difference. Meet the executives and strategic partners on a more personal level, and learn how the Core Values and Cornerstones are being recognized and utilized in business practices every day. Throughout this publication you will see stories and pictures from across the companies. Some will be about their new ventures, others will be about their history, but all give credit to the reason they are here today — the people, the culture, the energy.

ANDREA MILLER

:: PETTERSGROUP

VOLUME 1 ISSUE 1 PUBLISHER Thomas J. Petters

EDITORIAL EDITOR Andrea Miller

andrea.miller@pettersgroup.com ASSISTANT EDITORS & WRITERS

Tiffany Nash, Mollie O’Brien CONTRIBUTING EDITOR Laura Putzer

Tom Gilgenbach, Steve Harper, Sheryl Hirsch, Barbara Hitchcock, Carrie Massine, Liz Orenstein, Sharleen Reyes, Colleen Sarenpa, Nurlan Urazbaev, Rachel Walker

CONTRIBUTING WRITERS

ART DESIGN/ART DIRECTION Heather Ulven CONTRIBUTING DESIGNERS Jenna Akre, Yola Hartmann,

Dan Hemken, Dana Oelfke, Matt Otto, Emily Sederstrom, Sarah Sucansky, Scott Tilton CONTRIBUTING PHOTOGRAPHERS Sarah Ause,

Todd Buchanan, Dan Delaney, Fred Petters

CIRCULATION CIRCULATION DIRECTOR Corey McMahon

ADVISORY BOARD Rick Engels, Patty Hamm, Steve Harper, Mary Jeffries

Special thank-you to the staff of Metropolitan Media Group for all their assistance in producing the Petters Group magazine. —————————————————————————— HOW TO REACH US ADDRESS >

Petters Group Worldwide

4400 Baker Rd., Minnetonka, MN 55343 Provide feedback, story ideas and events to magazine@pettersgroup.com REPRINTS >

Contact Tiffany Nash at

Petters Group is published by Metropolitan Media Group exclusively for Petters Group Worldwide.

UPFRONT

a ro u n d t h e c o m p a n i e s

Drew Levin, Danny Perkins and Nick Lachey visit with the editors of Teen.

NICK LACHEY TEAMS WITH YFLY Teen Online Social Network Launches |

PHOTO BY RACHAEL LIEBERMAN

n the fall of 2004, while juniors at the University of Florida, Drew Levin, a business major studying entrepreneurship, and Danny Perkins, a finance major, first recognized the need for an Internet-based social community exclusively for teens to connect with their friends and creatively express themselves in a safe environment. Their vision finally came to fruition in February with the official launch of www.YFly.com, which is geared specifically to teens age 13–18. While developing the website, Drew and Danny, alongside Tom Petters, formed strong alliances with A.J. Discala (Founder/Partner, Calico Capital Group), Parry Aftab (Executive Director, Wired Safety) and actor-singer Nick Lachey. Lachey connected with Drew and Danny through mutual friends at a time when he was looking for ways to make a positive impact on the online community after hearing his identity was being used under false pretenses. The two most important aspects YFly offers over the other plethora of online social networks are the safety and technology. We have all heard the horrific stories repeated during the past year about teenagers being solicited by adults with ill intentions on popular networking sites like myspace.com. It is no question that teens are willing to share more information because of disillusioned safety they feel online, where people of all ages canoodle. To address these issues and all aspects of privacy and security policy at YFly, the group brought in the world’s leading Internet

:: PETTERSGROUP

safety expert, cyber-lawyer Parry Aftab. The site enables teens to control their privacy settings, making sure only their friends can view what they post. To complement that, the site includes a “Don’t be stupid” button whenever they are uploading content or images to their pages to remind them to think twice about what they share. They also are being provided a comprehensive combination of reporting tools to report suspected adults and other cyber-abuses. Safety alone won’t attract the teens, though; they demand more, and YFly is the perfect combination of cool and safe. Perkins explains, “What sets YFly apart is that teen users can customize and personalize their online world ... without having to become a computer programmer. Personalizing your background, fonts, color schemes, images and more is all done with a few simple clicks.” YFly also is committed to providing its users with the newest, most needed technology for today’s teen. To keep in touch with their friends, the site provides instant messaging, private messaging, blogging and most notably group text messaging via cell phones. Unique to YFly, a group member can send a text message from their cell phone to this one address and everyone in the group will get the message on their phone for the price of only sending one text. “My brother Isaac is 14 and his life revolves around staying connected to friends on instant messenger and his cell phone. I’m excited that YFly is built on what teens want to do,” Lachey said.

PRODUCT SPOTLIGHT DID YOU KNOW?

PETTERS EMPLOYEES CHALLENGED TO SHAPE UP! There was an air of competition at Petters Group Worldwide where

COMBO LCD/DVD TV New Technology Innovation NOTHING IN THE RETAIL

can be moved to the top or bot-

WORLD IS “FUTURE PROOF”

tom of the television in a matter

employees were vigorously earning

— or is it? In the volatile, ever-

of five minutes and the removal

points for the Shape Up Challenge.

changing market of consumer

of one screw.

The challenge — a fun, simple six-week

electronics, Polaroid has found

What makes the TV/DVD

a way to put the brakes on

combo more “future proof” is

campaign — was geared toward improving the physi-

obsolescence. Polaroid

the fact that Polaroid Consumer

cal, mental and social health of everyone involved.

Consumer Electronics has creat-

Electronics has thought about

ed new technology for an LCD

other products, currently in the

TV-DVD combo with ATSC tuner

works, to add onto the televi-

program April 7th with a guest speaker from Medica

that would give consumers flexi-

sion. These other modules,

Health who walked participants through valuable tips

bility in their viewing needs.

including a PVR hard disc

Administrative Manager Amy Bassitt kicked off the

and tools for getting in shape. Participants also

Basically, the LCD TV is an

recorder, security/baby monitor

average, full-function television.

and wireless module, would be

received a score-card to track daily points earned in

The “wow factor” here is in the

connected to the remaining

five categories: Balance, Lifestyle, Activity, Self Care

DVD player. Snap off the back

plug on the back of the televi-

cover of the TV and you will find

sion. That way, consumers do

two plugs, one of which is where

not have to buy a new television

the DVD player is connected.

and can have the convenience

Originally, the player is mounted

of any two modules at their dis-

on the side of the television.

posal, simply through their

However, if the consumer does

Polaroid LCD TV.

and Time to Relax. The program stressed physical activity, but Bassitt said the goal was for employees to find a healthy balance between work and wellness. “Everyone works incredibly hard, but it’s important to take time to care for our

not have enough space to reach

health,” she said. “It begins with eating healthy and

the DVD player (e.g., the televi-

first be available in the 26-inch,

sion sits in a cabinet), the player

37-inch and 40-inch LCD TVs.

working out, but it’s just as important to include preven-

The LCD TV/DVD combo will

tive activities in your life like having your blood pressure checked, getting a physical and taking time to relax.”

SUMMER 2006

a ro u n d t h e c o m p a n i e s

UPFRONT

interns in two separate programs to develop the

business

each

school.

The

Sales/Support Internship will concentrate on recruiting and training property managers in the area and supporting them with website issues. The Marketing Internship will focus on marketing the Campus1Housing website. The internship program benefits the students, the university and the company, allowing Campus1Housing to expand their business to many schools across the country. Students benefit from the unique opportunity to get practical work experience in a start-up environment. Through the program, Campus1Housing interns will understand what it takes to operate a small business by managing student teams, selling and supporting customers, and successfully generating buzz with the local student body. “We believe this program will extremely benefit all our interns scholastically, allowing them to apply to the real world what they learn in

the

classroom,”

Co-founder

Campus1Housing Joe Condit said. Campus1Housing has been testing different concepts for an off-

CAMPUS’S NO. 1

campus housing website during the past year at five schools, includ-

Campus1Housing Launching Internship Program

campus. Campus1Housing launched a new version of their website on Friday, April 14th, accommodating both listings and auctions.

ing an auction platform for the high-demand properties around

“The internship program is a key factor of our business and prom-

ampus1Housing is launching its internship program this sum-

ises to add a lot of value to Campus1Housing,” Co-founder and

mer, giving students the opportunity to receive hands-on

CEO Jake Burns said.

experience in a start-up company. Campus1Housing is expanding their market to several new schools in the Midwest and is using

For more details on Campus1Housing, please visit www.campus1housing.com.

CAMPUS1HOUSING SPONSORSHIP that Bar” contest enticing students at

Studio 13, and many people showed up for

Campus1Housing was

Miami University to come up with the next

the announcement. “We had the best night

proud to sponsor a bar

name for the bar previously known as The

in sales we have had so far,” Elliott said.

promotion in Oxford,

Hole in the Wall. After reviewing more than

The winners, Amy Mezaros and Allie

Ohio. The bar, recent-

1,300 suggestions from students, Marty

Landyt, were given $500 each and the

ly undergoing new

Elliot, the new bar owner, chose “Studio

recognition for the new name. Co-founder

ownership, was look-

13” for the new bar name — 13 being the

of Campus1Housing Joe Condit said, “The

ing for a new name

address of the bar.

entire promotion was a success. We gained

On Feb. 25, Campus1Housing sponsored

over 1,300 registered students and Marty

the unveiling of the new bar name at

got major recognition for his bar.”

FROM JAN. 12 THROUGH FEB. 18,

that appealed to their customers. Campus1Housing sponsored the “Name

:: PETTERSGROUP

PRODUCT SPOTLIGHT

YESVIDEO AND RITZ ANNOUNCE PARTNERSHIP After a successful test in 12 Ritz and Wolf Camera stores, YesVideo’s YesDVD™ Generator minilab system will be deployed in 326 Ritz and Wolf Camera locations nationwide. Store employees will be able to perform in-store transfer of videotapes and digital photos to DVD. In addition, YesVideo’s outlab services, consisting of videotape, movie film, slides and photo prints to a Hollywood-style DVD, processed at YesVideo's headquarters in Santa Clara, Calif., will also now be offered at all Ritz-Wolf locations.

KEY TECHNOLOGY ADDED Petters Hospitality Group Signs Pro:Idiom Agreement PETTERS HOSPITALITY & ENTERTAINMENT GROUP is living up to its promise to provide state-of-the-art technologies to its customers in the hospitality industry. In March, an important agreement was formed with Zenith Electronics Corporation to license Pro:Idiom, an encryption technology that will be incorporated into Petters LCD and Plasma displays. Pro:Idiom is the first digital rights management system developed specifically for the lodging industry and is supported by LodgeNet Entertainment Corporation and On Command Corporation. The technology also is supported by entertainment studios and HD satellite programmers including DirecTV as a standard needed to protect the content from piracy. The robust and highly secure Pro:Idiom technology enables rapid, broad deployment of

HD and other high-value digital content to the hotel industry. Utilizing Pro:Idiom takes more than an upfront financial commitment to license the technology. This inscription information comes in the form of a chip that is inserted into a box that is hooked up to the television sets. For all of this to happen, Petters has been working with its manufacturers to develop the technology that is necessary to update its displays with the Pro:Idiom chip. The costs and effort might seem high upfront but the mission is to decrease the costs for customers in the long run. “The Petters Hospitality & Entertainment Group’s focus is to provide a quality product in an efficient and agile manner allowing hoteliers flexibility to create customized systems without incurring typical customized costs,” said Jon McGaunn, President and COO of Petters Hospitality & Entertainment Group.

Minilab

SUMMER 2006

UPFRONT

a ro u n d t h e c o m p a n i e s

ART BY AARON Aaron Chang International Emerges PHOTO BY AARON CHANG One of Aaron Chang’s best selling prints called Harlequin is of this 50-foot wave breaking 100 miles offshore of San Diego.

:: PETTERSGROUP

fter years of licensing his name and images to create consumer goods, Aaron Chang has taken back these rights and has partnered with Petters Group to create Aaron Chang International. Chang, who grew up in San Diego and Hawaii, has an extreme love of surfing and has spent 25 years capturing it on film. He takes his camera to extremes going to daring areas of the ocean around the world

to catch the most visually fantastic pictures. The evolving company, Aaron Chang International, uses his stunning photography as the base for all of its products in juniors’ and men’s swimwear lines. While this will continue to be a focus, there are many offshoots on the horizon. Norm Zwail, Aaron Chang’s newly-hired president, described a brand extension that would forge the surf cul-

ture with a yoga-Zen culture. The line will reflect an outdoor lifestyle and active wear. Now that the lines of clothing being created are back under Chang’s control, he has become more involved in the creative process of the brand, acting as Chief Creative Officer. New marketing strategies also will be used with a focus on Chang to promote him, which will in turn promote his products.

KEY MANAGEMENT NEWS

ET CETERA

ACI SIGNS NORM ZWAIL In launching into its next stage of expansion, Aaron Chang International (ACI), a San Diego-based surf and outdoor lifestyle apparel company, brought in Norm Zwail as President. Zwail was formerly President of the Marika Group, a manufacturer of women’s fitness and yoga clothing. Zwail will oversee and be responsible for, among other things, all of the company’s operations, domestic and international sales and marketing, e-commerce, licensing, production, manufacturing and global sourcing. GREG KANDARE JOINS HOSPITALITY GROUP Petters Hospitality and Entertainment Group announced it has hired Greg Kandare for the position of Vice President of Products to oversee sourcing and fulfillment. The addition of Mr. Kandare will add technical expertise to the organization. Kandare comes to Petters with more than 10 years of professional experience in marketing, product development and manufacturing. Previously, he worked for Dell Inc. as Senior Quality Manager of Notebook Manufacturing and most recently as Senior Marketing Manager for Dell’s Corporate Business Group. JON POLLOCK OVERSEES NEW TECHNOLOGY The increased focus on incorporating new technology into many of the products offered by Polaroid Consumer Electronics has brought Jon Pollock to the organization as Vice President/General Manager Product Planning and New Technology. Pollock comes from Dell Computers where as Senior Marketing Manager he oversaw the $1.1 billion peripherals business and ran a sales team whose key account at $450 million in annual sales was the U.S. Air Force. Prior to Dell, he was with Intel and Novell. “I’ve been a part of large companies for a very long time,” Pollock said. “I am very excited to be a part of this smaller, high growth entrepreneurial company in which I can take more ownership.” As soon as school is out, his wife and four children will be moving to Minnesota.

VALUES MESSAGE: CARING The following is the philosophy of Charles Schultz, the creator of the “Peanuts” comic strip. You don’t have to actually answer the questions. Just read straight through, and you’ll get the point. 1. Name the five wealthiest people in the world. 2. Name the last five Heisman trophy winners. 3. Name the last five winners of the Miss America competition. 4. Name 10 people who have won the Nobel or Pulitzer Prize. 5. Name the last half-dozen Academy Award winners for best actor and actress. 6. Name the past decade-worth of World Series winners. HOW DID YOU DO? The point is, none of us remember the headliners of yesterday. These are no second-rate achievers. They are the best in their fields. But the applause dies. Awards tarnish. Achievements are forgotten. Accolades and certificates are buried with their owners. Here’s another quiz. See how you do on this one: 1. List a few teachers who aided your journey through school. 2. Name three friends who have helped you through a difficult time. 3. Name five people who have taught you something worthwhile. 4. Think of a few people who have made you feel appreciated and special. 5. Think of five people you enjoy spending time with. EASIER? The lesson: The people who make a difference in your life are not the ones with the most credentials, the most money or the most awards. They are the ones that care.

ON THE MOVE

FINGERHUT MOVES TO NEW LOCATION In April, Fingerhut Direct Marketing moved from its Baker Road offices to a new location at 7777 Golden Triangle Road in Eden Prairie. SUMMER 2006

UPFRONT

a ro u n d t h e c o m p a n i e s

PRODUCT SPOTLIGHT

BY THE NUMBERS

POLAROID SEVEN-INCH TV FOR MEXICAN CABBIES Cabdrivers Can Watch the World Cup 181-channel television (NTSC) tuner, and a lithium-ion polymer battery for three hours of playback. Complete with removable telescopic antenna, DC (car) power cord, and other accessories, this device is ideal for a country in love with soccer. This year, the 2006 World Cup will be held across 12 venues in Germany. Of

ab drivers in Mexico, fear not!

the 64 games, the first match begins June 9

Polaroid Consumer Electronics has

in Munich, and the final showdown ends a

launched the seven-inch portable LCD TV with NTSC tuner (model FLM-0711) in

month later in Berlin. Preliminary tests for the model were a

Mexico. Now you can stay up-to-date on

success and confirmed that the TV was

your favorite soccer teams during the

going to do very well in Mexico. A compar-

World Cup.

ative model is in the works for the

The seven-inch portable LCD TV fea-

European market and, eventually, this little

tures built-in stereo speakers, a bilingual

TV might make its way into the United

on-screen display (English and Spanish),

States. Stay tuned.

POLAROID CONSUMER ELECTRONICS CUSTOMER SERVICE DEPARTMENT: Will handle about 500,000 calls this year.

.................... Answer calls on average within 18 SECONDS — many companies take more than 30 seconds.

.................... Manage its CALL ABANDON RATE AT 2.4% — many companies lose more than 5% of calls.

.................... Receive on AVERAGE 4 unsolicited customer compliment letters each month.

.................... WITH THE EMERGENCE OF THE HD/DIGITAL BROADCASTING PLATFORM, and the affordability of flat panel televisions, many consumers will be buying new TVs during the next couple of years. PCE’s Customer Service department stands ready to assist Polaroid consumers to assure they fully enjoy their new products. In addition, according to the 2005 Market Shares Report from The NPD Group and Twice Magazine, from January to October 2005 POLAROID

RANKED IN THE TOP 10: Ranked NO. 7 in overall video classification

DID YOU KNOW?

POLAROID SPONSORING THE CONTENDER Polaroid Consumer Electronics is a sponsor of The Contender Season 2, which kicks off July 18 on ESPN. The series, hosted again by World Boxing Hall-of-Famer Sugar Ray Leonard, will run for 13 weeks on Tuesday nights and will end with a live finale at the Staples Center in Los Angeles. Sixteen new boxers are fighting for the chance to become “The Contender.” With their hopes and dreams on the line, each with his own story, they will vie for their shot at greatness. Beginning July 18, tune in at 10 p.m. Eastern, 7 p.m. Pacific to decide who you think should be the next “Contender.” 14

:: PETTERSGROUP

.................... Came in NO. 1 in portable DVD player quality

.................... LCD TVs ranked NO. 9

.................... NO. 7 in overall imaging

.................... Held strong at NO. 7 for 35 mm lens shutter cameras

.................... And NO. 4 in single-use camera rankings

ET CETERA

A New Investment for SpringWorks pringWorks LLC has invested in YesVideo Inc., the leader in automated media content indexing and digital authoring. SpringWorks™ is an investment company of Petters Group Worldwide that seeks to discover and nurture emerging technologies. This round of capital will be used by YesVideo to expand its line of embedded software applications, branded as YesDVD™, aimed at making DVD

FREEZE FRAME

recorders produce professionally featured DVDs with the push of one button. Through YesVideo’s software, a DVD is automatically produced from consumer videotapes and photos. The content is organized into chapters based on new scenes, and photos are placed into logical slideshow clusters based on similar images of an event. YesDVD™ includes Hollywood style navigation menus to the content as well as

computer edited “music highlights” of the best scenes. In addition, YesDVD™ has a custom contact sheet with thumbnail images of all the key chapters or photo groups which serves as an index guide to the content on the DVD disc. If the YesDVD product is placed in a PC, an embedded application, called the Digital Scrapbook, launches automatically and enables the consumer to easily edit and share their video and photo memories. YesVideo has developed three channels for the consumer to convert analog or digital content to DVD. The first channel consists of conversion services offered through partnerships with existing photofinishing companies and mass

ET CETERA

retailers. The customer’s content is sent to the processing facility and then they receive a DVD with their content. Currently, YesDVD is provided through Walgreens, Rite-Aid, Ritz and Wolf Camera Stores, Best Buy, CVS Pharmacy and Brooks/Eckerd Drug. Retailers like Best Buy and Ritz/Wolf Camera stores are beginning to house DVD mini-labs, the second channel, at select locations, which offer consumers the ability to produce professional style DVDs as an instore service. Polaroid has teamed with YesVideo for the last channel, embedding an easy-to-use version of YesDVD software into DVD recorders. For more information on YesVideo, visit www.yesvideo.com.

BROADSIGN INTERNATIONAL EXPANDS INTO EUROPE

POLAROID EXCELLENCE AWARDS Polaroid recognized key contributors in operations at its Excellence Awards ceremony in April. The SAP IT Project Team was recognized for successfully implementing PBB in SAP for Mexico and Japan within an extremely aggressive timeframe. Pictured from left are: Cindy Micavich, Senior Vice President of Information Technology, and the team: Mike Greenidge, Janet Cumming, Walter Dickerson and Toby Munro.

BROADSIGN INTERNATIONAL has signed another deal in Europe, under which Dutch in-store operator POSTV is to adopt BroadSign’s DMLS software for new and existing digital signage networks and also become BroadSign’s distributor in Benelux. The choice of the advanced technology is part of a plan to position POSTV as the region’s dominant digital-signage player by the end of 2007. The company runs networks in retailers including Makro, MediaMarkt, and T for Telecom, and is going through a major expansion phase, with some 6,000 new screens due to be installed this year. POSTV also is involved with CabTV in Dutch taxicabs and in-flight TV

for Netherlands carrier KLM. General manager Michiel Reinoud said POSTV opted for DMLS “because, unlike other solutions available today, it has a built-in media-sales workflow, which greatly facilitates dealing with media buyers.” He also cited customization and frequency of upgrades as factors in his decision. The contract is the second European deal that BroadSign has made public. France’s network operator OKDAK started deploying new interactive kiosks with built-in BroadSign DMLS module in January. The new agreements are the result of BroadSign’s BroadPartner program aimed at establishing a network of high-profile distributors around the world. The program started in 2005 and officially was launched at Screen Expo Europe show in February 2006. Broadsign is planning to announce new contracts in North America and Europe later this year. SUMMER 2006

GALLERY

the john t. petters foundation

Spring 2006 Scholarship Recipients Six students awarded $5,000 scholarship to study abroad WRITTEN BY MOLLIE O’BRIEN

ith only one previous recipient of the John T. Petters Foundation scholarship, the Foundation team was determined to make a statement with its second round of study abroad scholarships. Three universities were chosen as partners so the Foundation could learn more about the scholarship-giving process and monitor where their scholars were going, to be sure they were giving funds to top-notch educational programs.

Miami University Scholarship Presentation: Tom Petters with recipients Alan Cook, Theresa Wilson, University Dean Jenkins, and Tangela McIntosh, as well as Foundation Administrators Cameron Codilis and Mollie O’Brien.

A total of seven students were selected this February as John T. Petters Scholars for 2006 after an initial application review and interviews with the finalists. Three students from John’s school, Miami University in Ohio, were awarded scholarships. Tangela McIntosh is a junior who will be studying on the Southeast Asia trip; Theresa Wilson, a sophomore, will be traveling to India; and sophomore Alan Cook will be traveling to Luxembourg and later joining the India program. All the students will be traveling during summer 2006. Four scholarships were awarded to students attending The College of Saint Benedicts/Saint John’s University in Minnesota. Heather Johnson, a junior, will be traveling this summer to Italy and Germany. Juniors Molly Weyandt, Tabitha Wetzel and Matthew Logering all participated in a program called E-scholars, a three-semester program that focused on entrepreneurialism, which culminated in studying business in China this March. Banquets were held in March and April at each university to allow the formal awarding of scholarships and an opportunity to recognize the students’ achievements. Students and parents alike were excited at the opportunity to meet Tom Petters and express their gratitude to him and the Foundation. The next round of scholarships will be awarded in October 2006 and will expand the current base of partners. PG

: : FOUNDATION HISTORY AND MISSION The John T. Petters Foundation honors the short and remarkable life of John Petters. John was a gregarious 21-year-old student who was one of the most vibrant individuals you’d ever want to meet. While attending Miami University in Oxford, Ohio, he tragically lost his life on spring break in Florence, Italy, in March 2004. John had a desire to help deserving students study abroad, and his family and friends made sure this would not end with his passing. Scholarships are awarded on a need-basis to students who display John’s characters of leadership, motivation and the overall passion to study international business. The Foundation awards scholarships on a semi-annual basis through partner universities and educational nonprofit organizations. Visit www.johntpettersfoundation.org for more information.

:: PETTERSGROUP

Foundation Front : : Foundation Launches New Website THE JOHN T. PETTERS FOUNDATION’S most important marketing tool has been given a face-lift with the recent launch of its new website. After months of construction and multiple updates the website projects a warm and inviting vibe for its visitors. This space is the primary portal for potential

scholarship recipients to decide whether they are eligible to apply for a scholarship and download an application. Other important features include donation information, scholarship recipient profiles and pictures, and messages from Tom Petters and Chairman Jennifer Petters. The next stage of development will make their website more interactive with the visitors and recipients including an alumni section. The website can be viewed at www.johntpettersfoundation.org.

Left: MaryAnn Baenninger, President of the College of Saint Benedict; Tom Petters; and scholarship recipients Matthew Logering, Heather Johnson, Molly Weyandt and Tabitha Wetzel. Right: Sister Colman O’Connell, Tom Petters, MaryAnn Baenninger and Brother Dietrich Reinhart, President, St. John’s University.

SUMMER 2006

GALLERY

charitable giving gallery

contributed photo

Art’s Capital Walker Art Center Given Donation of $1 Million WRITTEN BY ANDREA MILLER

$1 million contribution was made by Tom Petters to the Walker Art Center’s capital campaign to complete a fundraising drive begun in 2000, in conjunction with a building expansion designed by the Swiss architectural firm Herzog & de Meuron. The expansion has shaped the Walker’s future and enabled it to remain a valuable cultural resource in Minnesota, as well as one of the leading contemporary arts centers in the world. The existing facility first will add 130,000 square feet of interior space and then four acres of green space. Major gifts to the Walker’s campaign have come from longtime supporters as well as from succeeding generations eager to con18

:: PETTERSGROUP

tribute to the cultural vitality of their community. “Tom Petters is the perfect example of how new generations of Minnesotans are investing in the cultural infrastructure of this region,” Walker Director Kathy Halbreich said. “Tom is an innovative entrepreneur who embraces change and the opportunities that exist in the global marketplace—qualities that make him naturally interested in modern and contemporary art. Tom has supported the Walker for a number of years, and we are thrilled with his most generous gift.” In recognition of Petters’ contribution, the Walker will name its new library the T.J. Petters Family Library. As the region’s largest library devoted to contemporary art, the library — open since April 2005 — maintains

photo by Gene Pittman of the Walker Art Center

holdings reflecting the Walker’s collection of sculpture, painting, prints and photography, as well as its programming in architecture, design, dance, film, performance and video. The T.J. Petters Family Library contains a comprehensive collection of books, exhibition catalogues and periodicals on contemporary artists; some 8,000 monographs and 30,000 catalogues from exhibitions held in the United States and Europe from the 1940s to the present; and a collection of nearly 1,500 examples of contemporary book art. PG

Giving Back Charitable giving program highlights

: : PETTERS FOOD SHARE DRIVE A big thank you goes out to all Petters Group Worldwide and Petters Consumer Brands employees who participated in the March Food Share Campaign, Minnesota’s largest food and cash drive. Both teams had a great showing and raised nearly $5,000 and 1,400 pounds of food. The ICA, a West Metro local food shelf, was truly thankful for all that was done. Our sense of caring, and the motivation of root beer floats, breakfast and friendly competition, truly speaks volumes for our company. Congratulations! [1] DeAnne Anderson & Rebecca Holzem serving root beer floats. [2] DeAnne Anderson & Leslie McLaughlin serving breakfast to food drive participants. [3] Donations from Petters Group Worldwide. [4] Donations from Petters Consumer Brands.

$12 Million Gift to Rollins College : : Two Faculty Chairs A $12 MILLION GIFT FROM TOM PETTERS TO ROLLINS COLLEGE will provide endowment for two new faculty chairs in international business or international relations. “International business is extremely important. In a sense, our young people need an opportunity to learn and exchange cultures and visions,” Tom Petters said. “This will afford many young people, faculty and administration the opportunity to actually experience international business beyond the out-

standing program which exists today.” “This gift is a perfect match of the college’s mission of educating for global citizenship and responsible leadership with Tom Petters’ priorities of academic integrity, internationalization, capitalism, entrepreneurial spirit and lifelong learning,” Rollins President Lewis M. Duncan said. The gift will also complement the partnership the school has with Petters Learning Center, which will open in Shanghai, China in 2007.

: : THANK YOU! Dear Petters Group, Thank you for your donation of an eightinch and 10-inch Polaroid portable DVD player, a 20-inch Polaroid LCD monitor and two Polaroid Izone Digital cameras for our Feb. 4, 2006 auction event. We appreciate your support and generosity. — WISHES & MORE

Dear Mr. Petters: Please accept my sincere appreciation for your contribution to the Anti-Defamation League’s Man of Achievement Award Dinner honoring Stan Baratz. Your contribution enables ADL to continue to battle bigotry and promote tolerance among all people. — ADL

Dear Tom, What a pleasant surprise to go to my mailbox today and find a check from The Thomas J. Petters Family Foundation to support our annual needs for youth and families. Thank you so much for this support, and we will be certain to allocate this gift toward our facility in Plymouth, Minn.–Hazelden Center for Youth and Families. — HAZELDEN

Dear Petters Group, We’d like to thank you for supporting “A World of Wishes,” the Make-A-Wish Foundation® of Minnesota. Your donation of the 15-inch LCD TV/monitor helped us raise more than $175,000, enough to grant the wishes of 35 seriously ill children. — MAKE A WISH

SUMMER 2006

:: PETTERSGROUP

MAKING A DIFFERENCE

:: c o l l e e n S A R E N P A

Making Your Mark The Many Benefits of Marketing Trademarks

magine if we didn’t have names. We might refer to each other as “hey you,” and it would hardly be helpful to say, “Where is hey you?” Likewise, without trademarks (aka brands or marks), consider how we would tell someone which product or service to purchase. Needless to say, you would be very frustrated!

“Assuring that the brand is legally available ... is my job.” — COLLEEN SARENPA When you think of it, trademarks are central to our daily decisions. “Honey, make sure you grab me a Starbucks® coffee and not a Caribou® coffee.” “Wow, Polaroid® TVs sure seem to have the best clarity.” “I hope they don’t think my Prada® purse is fake.” In essence, trademarks, much like our given names, are used to identify exactly who is providing a product to the consumer. To put it another way, they serve as a single source identifier. For example, when you arrive at your vacation destination to realize you forgot your Polaroid camera, you can buy another Polaroid camera there and know that it will have the same quality you have come to know with the Polaroid brand. Brands can have a variety of meanings, including status, nostalgia and quality. Brand development involves creative thinking, making it an emotional experience for marketers. Assuring that the brand is legally available and capable of being registered and protected is my job. Typically, marketers want to use descriptive words (marks) because they are easier to market,

while the trademark specialists tend to insist on selecting unique and more “ownable” marks. The problem with a weak mark from a legal standpoint is that everybody else wants to use those terms as well, creating the potential for more people to challenge your use and registration. As a result, clearance of the brand ends up being a more extensive and subjective analysis of a variety of facts. If the mark is cleared, the difficulty for the marketer can later result in limitations with respect to stopping competitors from using similar marks for similar products. Oftentimes, by the time the marketer gets to me, Intellectual Property Manager, they already have fallen “in love” with the brand, making it difficult for them to easily surrender to the risks or concerns communicated after conducting various trademark searches. The risks then get weighed from both a legal and business standpoint to figure out if there are any options for overcoming or minimizing the problems. Once a brand is launched, you do not want it to “get no respect,” as Rodney Dangerfield might say. This respect spans from holding rights in worldwide trademark registrations to maintaining a consistent brand image. A trademark is not a noun! It should always be used as an adjective identifying or modifying the generic term for the product; otherwise, you risk your brand ending up in the trademark cemetery, along with such former trademarks as aspirin, cellophane and thermos. Just think of the uphill battle the Rollerblade folks have been fighting due not only to having a weak mark, but their own initial misuses. Appropriately, using those wonderful little trademark symbols (™/®) is important as well. Clearly, the development and use of a brand is the synergy of the relationships between trademark specialists and marketers, resulting in a successful marketing effort. PG

WRITTEN BY COLLEEN M. SARENPA PHOTO BY FRED PETTERS

When not watching over our trademarks like a hawk, teaching a trademark class or serving on trademark related committees, Colleen enjoys time with her family, friends and two dogs. Growing up the youngest of seven meant growing up tougher because everything was up for grabs - toys, clothes, even food! She's been married to her husband Todd for 30 years. Their son Paul is a sophomore at the University of Minnesota and is busy with his own deck-staining business called Stain King™. Wonder if Mom helped clear that trademark? For branding and trademark questions, contact Colleen at colleen.sarenpa@ pettersgroup.com.

SUMMER 2006

:: PETTERSGROUP

MAKING A DIFFERENCE

:: b a r b a r a H I T C H C O C K

An Art-lover’s Dream The Making of a World Class Collection

t age 26, I walked into a Polaroid laboratory where I met the legendary company’s founder, Edwin H. Land. My knowledge of instant photography was limited to family snapshots, so I was amazed at the new world opened before me. Little did I know that my new job would also place me in a group that worked with another famous figure, Ansel Adams, a warm, affable gentleman who is regarded as the pre-eminent landscape photographer of our time. What brought Land and Adams together was what attracted me to Polaroid: photography. When I arrived on the scene, Polaroid had a small collection of photographs, including images by Dorothea Lang, Edward Weston and Harry Callahan. The company also had begun collecting photographs made by expert photographers in the ’50s and ’60s who used a variety of newly invented instant films. Each week, a number of photographers went off to make pictures at the beach, wooded fields or in the city, documenting what they did, gathering information for the scientists and engineers back at the labs. The Polaroid Collection grew from this advisory relationship. What a fabulous job! I borrowed a 4-by-5 view camera and made time to take photographs as well as do my daily work. It was great fun taking pictures, but I wanted to learn more about the art of “fine art photography.” Polaroid opened the Clarence Kennedy Gallery in 1973 to serve as a showcase for works by photogra-

phers using Polaroid products and to provide an opportunity for employees to see how instant films were used in the professional field. I signed up as a volunteer in the gallery in order to see the art, meet the artists, help install shows: basically do anything that was needed. Initially, a committee of Polaroid

our efforts to “fill in the gaps” by recommending artists whose work would enrich the collection. With expert help on hand coupled with the unwieldy issues that frequently characterize committees, the membership decided to “restructure” in 1984, leaving a smaller, more flexible steering committee of

WRITTEN BY BARBARA HITCHCOCK PHOTOS BY JAN VAN STEENWIJK

“What brought Land and Adams together was what attracted me to Polaroid: photography.” — BARBARA HITCHCOCK employee volunteers was set up to select the images to be included in the Polaroid Collection. They met biannually to review portfolios. Usually 40 to 50 photographers were sponsored annually through the film-print exchange or through the direct purchase of one or more of each photographer’s works. The establishment of the collection program, or Artist Support Program, formalized the corporation’s longtime sponsorship of individual artists. Using this model that engaged well-known photographers, an international component of the Polaroid Collection was established in the mid ’60s in Amsterdam at Polaroid’s international headquarters. In 1981, I became responsible for administrating this collection. Realizing there were significant historical and contemporary omissions in the collection that needed addressing, the committee sought expert advice. Curators from various respected museums agreed to support

six. This committee endured for several years, but ultimately withered away, leaving two who actually studied art and photography in school. Luckily, I was one of the two. So under the auspices of these various curatorial strategies, we ran the Kennedy Gallery and the Artist Support Program; initiated a cataloging and archiving system; developed exhibitions, catalogs and books; supported marketing initiatives; and functioned as a PR agency to publicize our many public instant photography activities. During my tenure overseeing the International Collection, from 1981 until it was absorbed into the Cambridge-based domestic collection in 1990, we had developed, organized and toured more than 50 Polaroid exhibitions that appeared in primary and secondary museums throughout the Americas, Europe, Japan and Asia-Pacific. And today, we continue to develop exhibitions and collaborate with institutions to display and tour them. PG

It often feels like I don’t have much time for a personal life, but that’s probably because it’s as busy as my work life! My husband, Jan, works on me to slow down. I do love gardening, biking, reading in the sun with ocean waves as the background, walks in the woods and travel — especially within Europe and Japan. Jan is Dutch and lived for many years in Copenhagen, Denmark. Jan’s son Michel and his wife are expecting their first child in August, so I know there will be some more travel and busy times ahead! I’m trying to learn very basic Danish and have purchased children’s books to build my vocabulary, which will soon come in handy. I love the quiet of the country, but naturally museums are magnets for me, as are the theater, music and cinema, so I enjoy cities with all their energy as well.

SUMMER 2006

:: PETTERSGROUP

EXECUTIVE PROFILE

:: m a r y J E F F R I E S

Mary Jeffries A Vision of Cool and Classy Management WRITTEN BY LIZ ORENSTEIN PHOTO BY TODD BUCHANAN

umming up Mary Jeffries in one word is easy: busy. However, at even the wildest of moments she comes across cool and classy, as though the daily hustle and bustle of Petters Group Worldwide does not faze her at all. When Jeffries, Chief Operating Officer of Petters Group Worldwide, joined the company in May 2005, she quickly realized she was in for a ride. Before joining Petters Group, she was a General Partner and Chief Operating Officer for St. Paul Venture Capital. Prior to that, she was Chief Operating Officer — MARY and Chief Financial Officer for Weber Shandwick International, one of the top public relations and marketing communications agencies in the world. Jeffries feels those experiences left her very well positioned for the role she plays at Petters Group. “I learned how to manage and navigate through a broad group of companies,” she explained, which is now just one integral part of her role. As Chief Operating Officer, Jeffries not only manages the day-to-day operations of Petters Group but oversees the direction of the investments made. “Mary is my right hand. She has brought structure and balance, providing a great framework for many of our new initiatives to Petters Group,” said Tom Petters, CEO and Chairman of Petters Group Worldwide. The most exciting aspects of her role in the company, she explains, are the people, the diversity, the entrepreneurial spirit and opportunity in each of the endeavors Petters Group takes on. “For Tom [Petters], the sky’s the limit,” Jeffries said. “He is a visionary who has put together a great team of people working to achieve his visions and goals, and that makes my job exciting.” Not only does Jeffries enjoy the excitement of her role in the company, but she also enjoys and appreciates the flexibility. “You can’t just turn off your family,” she jokes. She has been married to her husband, John, for 22 years. Their children Ryan, 20, and Rachel, 16, cause Jeffries to

light up whenever she discusses their latest ventures. “If my daughter calls in the middle of the work day or whenever I am needed, I will be there for her. We all have to be flexible,” she said. Whether it’s a conference call to China at 11 p.m. or answering e-mails on the Blackberry just before a plane takes off, Jeffries is connected to the Petters Group businesses which operate 24-7 around the world. “We’re a team and that is how Petters works,” Jeffries said. She is not all work and no play though. When not JEFFRIES on the Petters Group campus, Jeffries loves to golf, ski and travel. Just returning from a trip to the Italian coast with her family, she explains she really doesn’t have a favorite destination. “I love New York for New York,” she says, “but my parents’ cabin in Iowa, that’s where I’d spend a long weekend.” The typical Mary Jeffries weekend lacks downtime: “That’s not my way of relaxing.” Her weekends are a time for family, friends and her one guilty pleasure — reading People Magazine. “I love pop culture,” she said with a laugh. “I always have to read it.” And while many know Jeffries for her stunning wardrobe and gorgeous jewelry, most might overlook her elaborate pen collection. Sitting front and center on her executive desk is a dark wood box with a glass window, full of pens. “I’ve got a different pen for every outfit or mood,” she said. Opening the box, one can find pens of all colors and sizes, some acquired from her travels, others gifts from friends and family. “This one is probably one of my favorites,” she said, grabbing a silver pen with a colorchanging helix. “I got this one from my father-in-law who was a doctor. A drug salesman gave it to him.” Just as Jeffries has brought a balance to the daily operations at Petters Group, she is achieving a balance between family and what could be an all-consuming job. “I don’t view work as work because I love what I’m doing — it’s my day,” Jeffries said. PG

“I don’t view work as work because I love what I’m doing.”

SUMMER 2006

:: PETTERSGROUP

S T R AT E G I C P A R T N E R P R O F I L E

:: b i l l D U N L A P

Bill Dunlap Strategies for Tomorrow

t Petters Group Worldwide, we often hear mention of the company’s Strategic Partners, but very few of us really know anything about them. Bill Dunlap — Strategic Partner and current Chairman of Petters Media and Marketing Group — is one man that is doing great things for Petters Group. “Bill is an advertising legend,” Tom Petters said. “His extraordinary achievements include over 40 years of leadership experience at some of the most innovative companies in the world. Under his guidance, we will take our marketing successes to a new level.” About eight years ago, Bill Dunlap met Petters while working on some charitable functions. He knew Tom was the type of guy who fit his top five principles of life, principles Dunlap strongly believes in and tries to adhere to each day. They are: Do things that give you energy and do not take away energy; Yesterday is history, tomorrow is the future, so live for today — life is not a dress rehearsal; Truth is stranger than fiction; Do things for other people; and most importantly, the importance of family. Throughout Dunlap’s busy career, family has always come first. He has three daughters: a 40-year-old who works in public relations, a 37-year-old who is a professor at Willamette University in Oregon and a 33-year-old who is a practicing psychiatrist. He also has a 3-year-old son who he describes as quite the character and who is apparently following in his dad’s love of basketball, attending Timberwolves games with him when he can. Dunlap started his career at Proctor & Gamble in 1960, rising to the position of Director of Proctor & Gamble’s New Product Development unit. He moved to the public sector in 1970, becoming the youngest Assistant Postmaster General in U.S. history. During his time in the U.S. Postal Service, Dunlap was a liaison to the White House, and he was in charge of the stamp program, with approximately 750,000 employees reporting to him. Among some of his remarkable accomplishments for the stamp program was his idea for the Love Stamp and commemorative stamps based on a U.S. post station he sent to the moon on the Lunar Rover. After five years with the U.S. Postal Service, Dunlap returned to advertising, eventually as head of MCA

Advertising in New York. In 1981, Dunlap was named President of Campbell Mithun, becoming CEO of the agency two years later and Chairman in 1994. During the two decades that Dunlap was at the helm of Campbell Mithun, the agency grew fivefold to billings of more than $1 billion. He was instrumental in managing the agency’s expansion into U.S. markets beyond its Minneapolis headquarters, and into additional marketing communication services such as new product development, Hispanic marketing, graphic identity and package design. Marketing today is entering into perhaps its most experimental time in media history, thanks in part to the ease and affordability of technological innovations. For example, the Internet has emerged as a vital advertising medium for video, as technology continues to drive down the cost of digitizing content and putting it on the web.

WRITTEN BY TIFFANY NASH PHOTO BY DAN DELANEY

“Bill is an advertising legend.” — TOM PETTERS Announced in March, Petters Media and Marketing Group — led by Dunlap, Paul Traub as CEO and Stuart Romenesko as President/COO — will focus on building relationships and companies within the interactive media arena, including TV shopping, direct marketing, Internet companies and airline marketing. The Group hopes to assemble the largest customer database by utilizing such projects as Fingerhut, WSS, uBid, and the airlines, increasing consumer interactivity via various media. “This trio brings extensive experience in the development and management of interactive companies and relationships to Petters Group. I look forward to enhancing our current relationships with the companies we currently own and accelerating our growth in the fields we are entering,” Tom Petters said. “This will begin a new generation of partnerships and revolutionary direct marketing connectivity to Petters Group!” PG

SUMMER 2006

WHERE IN THE WORLD IS TOM?

m a rc h 2 0 - m a rc h 2 4

As a man who is constantly on the move, Tom Petters is often asked, “Where in the world are you?” This is a little snapshot of one of Tom’s weeks.

MONDAY, MARCH 20

WEDNESDAY, MARCH 22

Waking up in his West Palm Beach home, it is in the 60s and sunny – a perfect day to enjoy the beach. Tom however hits the treadmill early so he can squeeze in conference calls with Boston and Minnesota in the morning before he heads to the airport to fly to Oxford, Ohio. He sneaks in a few emails on his Blackberry before take off and as soon as they land. A meeting with university personnel to which he is late. That evening he attends the scholarship recognition banquet at Miami University (Ohio) for three scholars receiving the John T. Petters Scholarship to study overseas.

Meetings, Meetings, Meetings – investors, bankers and a brief stop at our New York office fill the day. After a day of little time for calls or to check his Blackberry he has 35 voicemails and 120 new emails.

TUESDAY, MARCH 21 Call it late night or early morning emails are being sent at 1 am in order to catch up on yesterday’s work. After a few hours of sleep the day starts with more calls. Most of the morning and early afternoon is spent attending the Advisory Board meeting for Miami University (Ohio), taking any chance he gets to sneak in a call or to check the Blackberry. By mid-afternoon he is on a plane headed for New York. Traffic makes him late for a dinner. Checking emails and more conference calls wind up his day.

:: PETTERSGROUP

THURSDAY, MARCH 23 Conference calls with Florida and Boston start the day, then he is in meetings with Polaroid team members. A mid-afternoon flight to Florida is delayed which gives him time to check his Blackberry and sneak in a few more calls before they close the doors. He arrives in time for a late dinner with friends but ends up being late as he tried to sneak in just one more call.

FRIDAY, MARCH 24 On the treadmill early so he can get into the Florida office for a meeting with the Petters Hospitality & Entertainment Group. This leads into conference calls, more appointments and finally a chance to go home and enjoy the 70 degree weather and a view of the ocean as he wraps up the day clearing voicemails and catching up on emails. PG

Movies, music, photos and mapsâ&#x20AC;Ś The Ultimate Travel Partner

Your all-in-one GPS/DVD Player The MGX-0550 gives you accurate color maps of 49 states including Hawaii, and Canada, keeping you pointed in the right direction. In addition to state-of-the-art visual routing, the MGX-0550 provides voice guidance at every turn. The built-in DVD player entertains your passengers by playing all your favorite DVDs, music CDs, and photo files on one handy unit.

Accessories Include: Suction-cup mounting system provides easy adjustments and quick release Travel-safe durable carrying case Rechargeable lithium-ion polymer battery for up to 3 hours of DVD viewing time Slim credit-card sized remote control External antenna gives you optimum reception AV cable for optional hookups AC power adapter/charger and DC car adapter

THE LEARNING CENTER

international education

Ms. Jun Wang with Rollins College MBA Students

Learning Half a World Away Chinese education to benefit both sides of the world WRITTEN BY TOM GILGENBACH

t the impressionable age of 18, Jun Wang, an Applications Engineer for Fingerhut Direct Marketing, contemplated one of the most important decisions of his life. Like most

:: PETTERSGROUP

Chinese students, Wang weighed the advantages of staying close to home or studying abroad in the United States, England or the many other countries with a history of strong universities and colleges. Unable to find a quality college

geared to their interests, many of Wangâ&#x20AC;&#x2122;s classmates elected to leave China for their secondary studies. Wang decided to buck the odds and stay home. â&#x20AC;&#x153;I was lucky in that I had the option to go to North China University of Electric

“The opportunity to learn and exchange cultures and visions is extremely important to our future and the future of China.” — TOM PETTERS

Power,” Wang said. “It has a strange name but it’s strong in power electronics.” Today’s China portrays a different picture. The shift from an agrarian to industrial economy, helped in no small part by the manufacture of Polaroid and other brands of consumer electronics, has led to China’s incredible economic growth during the past 20 years. A negative result of the rapid growth is a major shortage of managerial talent, no small feat for a population of 1.3 billion. To meet the nation’s need for welltrained managers, China, in addition to Western companies with Chinese business interests, focused on building quality secondary schools and business schools with accredited MBA programs. Today, Chinese students have the choice to attend school in-country, just as Jun Wang did years ago. Programs are so good they rival the Massachusetts Institute of Technology’s Sloan School of Management or the University of Maryland’s Robert H. Smith School of Business. The Petters China Learning Center, a vision to add to China’s growing need for learning and career growth, could soon be among the elite schools of choice for professionals from the United States and China to expand on global learning opportunities. Tom Petters, Chairman and Chief Executive Officer of Petters Group Worldwide, said the decision to build a res-

idential and learning facility in Shanghai is a win-win proposition for students and business leaders. “The opportunity to learn and exchange cultures and visions is extremely important to our future and the future of China,” Petters said. “Our business model requires a close relationship with our factories in China. So it’s important that our employees understand the nuances of doing business in China, to learn the language and culture. We’ll also invite our factory contacts to learn Western-style business practices. Doing so will only lead to more efficiencies. And it’s the right thing to do. We’re giving back to the people that help us succeed.” Patricia Hamm, Executive Vice President of Human Capital and Learning Group of Petters Group Worldwide, said Petters’ vision will be built on a model of university and corporate partnership. “Our first step is to build and foster a world-class global learning community for our employees and our international partners,” Hamm said. “With our university partnerships — Miami of Ohio, Rollins College, Saint Mary’s University, and the College of Saint Benedict/Saint John’s University in the mix — we want to provide a safe residential living and study experience. College students studying in China will be able to interface with Chinese students while learning global business skills, Chinese arts, history and culture. Our third target customer is the

Western and China business community. Our goal is to provide staggered courses that will expand the management and leadership skills for the Chinese professional while providing U.S. executives in China learning opportunities that will broaden and strengthen their skill sets for global success. To do that, we’ll offer the best teachers, the best lecturers, and we’ll build a campus-style facility that encourages learning through cultural interaction.” The building design of the center is underway as well as the formation of the student and professional curriculum. Ilan Alon, Jennifer J. Petters’ Professor of International Business from Rollins College, a premier private liberal arts college in Winter Park, Fla., is on the advisory board of Petters’ future residential and learning center. As part of the “learning partnership at Petters, “some of Rollins’ best MBA students have been engaged in a semester-long feasibility study for this center, including a trip to Shanghai to research best practices in the market,” Alon said. “There’s no doubt demand exists for professional and business education, so we’re taking the next step. We’re creating the resources we need to provide high-quality, relevant and practical programs that meet international certification standards. Stay tuned as we watch history in the making. PG

SUMMER 2006

G L O B A L I Z AT I O N

worldwide web

A Real Worldwide Web Petters is global, so what are we going to do about it? WRITTEN BY STEVE HARPER PHOTO BY FRED PETTERS

:: PETTERSGROUP

t one time or another during the past 16 years, I called Yugoslavia, Bolivia, Eastern Slavonia, Guatemala, Bangladesh and Italy “home.” When my family and I

left each country, we took a little bit of the culture and tradition with us. Through our friendships, business associations, volunteer work and our promotion of U.S. policy, we left a lit-

tle of ourselves in those countries, too. I look at the bottom of the plates I purchased recently at Crate and Barrel, and I see the words “Made in Bangladesh.” The coffee I drink comes

from Guatemala; I love my Italian wine, pasta and olive oil; and my adopted Bolivian son is a constant reminder of my ties to Bolivia and the Andes Mountains. As I think back on those 16 years — and the 18 years I spent growing up overseas — I am forever reminded that the world really is small. With the purchase of Polaroid, Petters Group has become a truly global company; film is manufactured in Scotland, white goods in Spain and Mexico and consumer electronics in China. As we become a more globally active company, we’ll need to focus on how to effectively send staff overseas. I think three areas critical to that success are understanding the cultural, business and security environments of the countries where we work. A recent addition to Petters Group as the Vice President of

ferently, and your challenge is to find a way to bring your unique strengths to the deal without believing that your way is always the better way — think “complement” not “overpower.” There are many resources for understanding another culture, and the U.S. government is probably one of the most useful. Look no further than the U.S. Embassy to find people ready to explain the cultural, business and security environment of each country. Another way of understanding foreign cultures is to talk to their representatives in the United States. All countries where we can do business have an embassy in Washington and most have a consulate or trade mission in Chicago. These representatives can be invaluable assets in our

the basic outlines of a culture’s history can improve your ability to communicate with and understand the people. Doing business in every country is different. Begin with the question, “How does one connect into their networks?” Again, a resource I would recommend is the U.S. Government’s website at http://www.commerce.gov/trade_opportunities.html. It has a good overview of the programs available to help American companies conduct business overseas. Their primary goal is to help the American economy by increasing the exports of American goods. As you start to make plans to travel overseas, you should always check the State Department Consular Affairs website, www.travel.state.gov. It will answer just about

Understanding the basic outlines of a culture’s history can improve your ability to communicate with and understand the people. International Affairs, it is my role to help all the companies navigate through these areas. The reality is that opportunities in today’s world will come as much from outside the United States as inside. An item that sells well in Minneapolis will probably sell well in Rio, Ankara and Pretoria if you learn the culture. In order to be successful we will have to understand both the macroeconomic trends and the microeconomic forces that drive consumers in different cultures. For example, in most countries the lending industry is much less developed than it is in the United States. Finding a way to provide financing in those countries could lead to significant opportunities for additional sales. So just how do you “understand” a culture and learn how things “work”? Do you have to live overseas all your life to be effective in the international environment? Not even close! It starts with respecting the fact that other cultures do things dif-

struggle to break into a new market. It’s been my experience that, like the U.S. Commercial Service, these foreign commercial representatives are eager to entice business to their countries and are ready to offer incentives. The culture in a foreign country is going to be different. When I lived in Italy, for example, it would drive me crazy that I couldn’t get sour cream. How can a country live without this basic cooking ingredient? Don’t they realize how important it is for making Mexican food? Aside from food and language, history is a critical factor in what separates one group of people from another. If you speak to a Croatian, they can tell you the history of their people back to the founding of the country and remember battles from 1000 years ago. It’s important to respect their right to care about the past, even if we as Americans usually do not. As Americans, we tend to forget our history because it is relatively short. Understanding

any question you could have about traveling abroad, whether you need to know how to get a visa or where to get medical help. It will also tell you about the dangers in each country, who to contact for the appropriate shots and even allow you to register your trip. That way, if something happens to you or the country where you’re traveling, the government and family members know where to start looking. To succeed overseas will require us to draw on ALL of our core values — integrity, caring, agility, innovation, execution and, especially, humility. As you find yourself dealing with a new country, expanding in an existing country, or trying to understand what’s going on in Washington DC where I am based, contact me at steve.harper@pettersgroup.com. Let me know your challenge, and I can put you in touch with someone either in the U.S. Government, the host country government, or a business association or organization that can get you the information or contacts you need. PG

SUMMER 2006

FROM THE KITCHEN

c o o k i e s g a l o re

SPRING PETALS TIME: 8â&#x20AC;&#x201C;10 minutes TEMP: 350oF YIELD: 5-6 dozen INGREDIENTS 1c butter 2 1/2 c sifted all-purpose flour 3-oz cream cheese 1/2 tsp salt 1c sugar 1/4 tsp cinnamon 1 egg yolk 1 tsp vanilla

1. Cream butter, cream cheese and sugar well. 2. Beat in egg yolk and vanilla. 3. Gradually blend in flour, salt and cinnamon which have been sifted together. 4. Fill cookie press. 5. Form cookies on un-greased cookie sheets. 6. Bake. 7. Remove at once to cookie racks. 8. Decorate with cream cheese frosting using a pastry bag. 9. Sprinkle.

CHOCOLATE THUMBPRINTS TIME: 8â&#x20AC;&#x201C;10 minutes TEMP: 375oF YIELD: 6 dozen INGREDIENTS 1c margarine or butter, softened 1c sugar 1 tsp vanilla 2 oz. (two squares) unsweetened chocolate, melted & cooled 1 egg 2 1/2 c sifted all-purpose flour

2. Blend in vanilla, chocolate and egg. 3. Gradually add flour to creamed mixture. Mix well. 4. Chill dough 30 minutes for easier handling. 5. Shape into one-inch balls. 6. Place two inches apart on un-greased cookie sheet. 7. With thumb, make imprint in center of each cookie. 8. Bake.

1. Cream butter and sugar until light and fluffy.

Recipes from the kitchen of Tiffany Nash, Petters Group Worldwide Marketing Coordinator, who stole these secret recipes from her mother, Kim Nash

:: PETTERSGROUP

9. Decorate with milk chocolate frosting using pastry bag. 10. Sprinkle.

photo by Sarah Ause

4IPQQJOH4PVSDF DPNÂ&#x2122; JT B OFX FYDJUJOH NVMUJ DIBOOFM FMFDUSPOJD SFUBJMFS UIBU CSJOHT B XJEF TFMFDUJPO PG IJHI RVBMJUZ CSBOE OBNF BOE DVTUPN MBCFM QSPEVDUT UP NJMMJPOT PG DVTUPNFST FWFSZ EBZ WJB UFMFWJTJPO JOUFSOFU WJEFP PO EFNBOE BOE 4IPQ$BTUÂ&#x2122; EJTUSJCVUJPO DIBOOFMT 8IFO JU DPNFT UP UBMFOU 4IPQQJOH4PVSDF DPNÂ&#x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Â&#x2122; QSPHSBNT FYUFOE PVS TBMFT BOE CVJME CSBOE BXBSFOFTT UP OFX UFDIOPMPHZ TBWWZ BVEJFODFT $POTVNFS IBCJUT BSF DPOTUBOUMZ DIBOHJOH BOE XJUI PVS WJEFP PO EFNBOE QSPHSBNT 4IPQQJOH4PVSDF DPN JT BCMF UP DVTUPNJ[F QSPHSBNT UIBU EFMJWFS KVTU XIBU PVS DVTUPNFST XBOU WJB B DPOWFOJFOU IJHIMZ JOGPSNBUJPOBM BOE FBTZ UP VTF GPSNBU "MM PG PVS QSPEVDUT BSF BWBJMBCMF PO PVS XFCTJUF 4IPQQJOH4PVSDF DPN *U T IFSF XIFSF PVS DVTUPNFST BSF BCMF UP mOE JO EFQUI JOGPSNBUJPO BOE EFUBJMFE QIPUPHSBQIT 8F BMTP PGGFS TQFDJBM GFBUVSFT JODMVEJOH UIF JOGPSNBUJWF 844 6OJWFSTJUZ TFSJFT BOE PG DPVSTF WJEFP PO EFNBOE

#FIJOE UIF TDFOFT XF SF KVTU BT TLJMMFE &WFSZPOF BU 4IPQQJOH4PVSDF DPN JT SFBEZ UP BDDFQU BOZ DIBMMFOHF BT XF CVJME B GVMM TFSWJDF TBMFT OFUXPSL 8F WF QSPWFO XF DBO EP JU BOE XF XJMM DPOUJOVF UP JOOPWBUF UP TFSWF UIF OFFET PG PVS FWFS FYQBOEJOH DVTUPNFS CBTF

8IFO ZPV CVZ GSPN 4IPQQJOH4PVSDF DPN ZPV MM m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

F E AT U R E

inside glance

A Ray of New Light Petters Consumer Brands Launches Sunbeam Major Appliances Line WRITTEN BY LIZ ORENSTEIN

:: PETTERSGROUP

etters Consumer Brands has made it a goal to surround its customers with a variety of quality branding solutions. In doing so, Petters Consumer Brands found great value and branding opportunity with Sunbeam’s already existing line of small appliances. Looking into a partnership, Petters Consumer Brands signed a licensing agreement with Sunbeam for a line of major appliances, focusing on the kitchen where Sunbeam has already made a name for itself, but to also branch out into other rooms in the house. Aligning with Sunbeam’s initiative to provide innovative products that simplify busy lifestyles, the agreement originated with floor care products

and larger appliances. Petters Consumer Brands kicked off Sunbeam major appliances with the launch of refrigerators, ranges, microwaves, and dishwashers in October 2005. “We see the same opportunity with the Sunbeam brand that we saw with Polaroid several years ago,” said Mike O’Shaughnessy, President of Petters Consumer Brands. “With our innovative development and manufacturing resources and the Sunbeam track record of quality and customer satisfaction, we can offer retailers affordable, high-quality products their customers demand,” said O’Shaughnessy. With the excitement the initial products brought, the appliance line is steadily growing. Instead of

The Sunbeam major appliances line has a bright future with Petters Consumer Brands. focusing solely on kitchen appliances, the line has exploded into products for each room of the house. Customers will soon be able to add to their existing Sunbeam appliances with options from categories ranging from wine cellars to freezers to washers and dryers to room air conditioners and canister vacuum cleaners. General Manager of Major Appliances, Lenny Paul, says, “The initial feedback from customers is that our products fit into the position of the industry. We anticipate the same response for the new categories as well.” As Sunbeam major appliances grow within Petters Consumer Brands, getting the product recognized and into retailer and customer hands are crucial. Working to achieve this goal is a team of ambitious, determined, persistent people making the deals and getting the products into the market. With people in the Minnetonka office and in the field, as well as the partnership with Jarden Consumer Solutions in Boca Raton, Florida, the team is working hard to push Sunbeam’s major appliances success to the level Petters Consumer Brands accomplished with Polaroid and beyond. David McGee, Petters Consumer Brands Associate Marketing Manager for Appliances, agrees. “The ingredients that led to Petters Consumer Brands’ success with Polaroid have served as a model for our appliance team,” he said. “Being a new team member, it has been very exciting to be a part of such a determined group of individuals pulling together to achieve the same goal.” Not only is the team working internally to get products into the market, but the Petters Consumer Brands team has also been appearing at a variety of tradeshows, pushing Sunbeam major appliances into the market and locking down appliance sales. In February, the Petters Consumer Brands team took Sunbeam major appliances to the PrimeTime Show by Nationwide at the Venetian hotel in Las Vegas. Nationwide, an appliance dealer network consisting of 2,500

members, 7,000 store fronts, and $10 billion in revenue, featured both appliance and consumer electronics products. The Petters Consumer Brands team displayed the entire line of appliances, as well as introduced conceptual products, and wrote orders. The show also brought positive brand awareness and relations with dealers. Petters Consumer Brands Customer Advocate Jon Clinton said, “The show was a great forum for Petters Consumer Brands to present the new Sunbeam appliance line that everyone has worked so hard to establish.” Success showed in the orders and large number of dealers expressing interest in the Sunbeam appliance line. March brought the team to the Housewares Show in Chicago. There, Petters Consumer Brands exhibited a full stainless steel kitchen, displaying a range, refrigerator, microwave, and dishwasher. Retailers and distributors were able to get a hands-on feel for a Sunbeam appliance kitchen and a good look at how the pieces come together to fulfill kitchen appliance needs. Not only was the Housewares Show successful at getting product into the market, but an article was featured in the March 13, 2006 issue of Home Furnishings News weekly newspaper, boasting Sunbeam’s presence in the kitchen appliance market. In the article, Carlos Coroalles, Vice President of Licensing at Jarden Consumer Solutions, said that because Sunbeam has been a leader in small kitchen appliances, Sunbeam’s migration from small appliances to major appliances is a natural step for the company. The Sunbeam major appliances line has a bright future with Petters Consumer Brands. With product lines emerging, the team growing, and the excitement arising, Sunbeam major appliances have the potential to take significant share of this 42 million unit business. And with everyone’s hard work, Sunbeam major appliances will truly provide practical solutions for everyday living. PG

: : THE NEW SUNBEAM LINE Offering a wide selection of appliances for the home.

Microwave SNM1502RAS

Dishwasher SNB652SIAS

Electric Range SNS3EMLXAW

Electric Range SNS3GMLZAS

Refrigerator SNR13TFPAS

Vacuum SNV11CBRB

SUMMER 2006

10001 1

:: PETTERSGROUP

T E K TINICTOWN

10 01000

01000

TEST T O H THE

0011

COVER STORY

WRITTEN BY MARK DRUSKOFF AND ANDREA MILLER PHOTOS BY TODD BUCHANAN

Tom Petters Opens Doors Around the World

he Blackberry is buzzing, cell phone ringing and a constant stream of people are lined up at whatever door he’s behind. Who is this hottest ticket in town? Tom Petters, the visionary behind Petters Group Worldwide. Life hasn’t always been like this. Eighteen years ago, Tom was the one lining up at doors as he worked on financing, buying and selling companies. “Ten years ago, I’d say yes to a majority of the deals. Now I try to say no to nine out of 10. You know why? We have to be very selective in the deals we do. We don’t have enough capacity. We don’t have 6,000 employees, and I don’t want 6,000 employees,” Petters said. He was echoing his philosophy on creating a lean, mean enterprise and not getting bogged down with overhead. To paraphrase boxer Mohammed Ali, one of Petters’ personal heroes, Petters wants to build a company that “floats like a butterfly and stings like a bee. Large corporations get bogged down,” he said. “By following our core values of agility, innovation, execution, integrity, caring and humility, we can capture opportunities other companies are too slow to plan for or react to.”

attempt to establish new distribution channels for the merchandise. For instance, Petters Warehouse Direct used conventional retail stores to get merchandise to consumers. RedtagOutlet.com brought the opportunity merchandise model online. RedtagBiz.com applied the RedtagOutlet concept to business-to-business transactions. Ultimately, none of these business gained sustainable traction in the marketplace. But in 2001, Petters sought to make lemonade from lemons when he took the Redtag brand name and applied it to yet another company, Redtag Inc., which utilized the Petters Companies model on a worldwide basis but with a primary focus on China. With Redtag Inc., Petters’ sought to extend his company’s reach back up the supply chain to secure a steady stream of merchandise to fill his pipeline.

“Tom sees things that no one else sees. He’s the classic visionary entrepreneur, and he knows how to connect the dots.”

WHERE IT BEGAN Petters’ very first venture, Ear Electronics, began — GEORGE DANKO, CEO, SPRINGWORKS, LLC when Petters was just 15 years old. Working at a job cleaning a St. Cloud stereo store, Petters hit upon the idea of buying stereo equipment wholesale and selling it retail. He had a successful 18-month run before his parents dis- ON A ROLL At the same time, Petters continued to look for ways to expand covered his entrepreneurial shenanigans and shut him down. After graduating high school, Petters worked for a series of his distribution channels. His next move in that direction was to employers, mostly electronic retailers, before launching his next acquire the then 55-year-old Fingerhut from Federated company, Petters Companies, in 1988. Operating as a one-man Department Stores. In just a few weeks in early 2002, Petters and business brokerage, Petters found sellers of so-called opportunity goods, such as bankrupt retailers or manufacturers with excess invento- partner Ted Deikel, the former CEO at catalog retailer ry, everything from shoes to televisions. He acquired the product Fingerhut, put together an acquisition plan and the money to make it happen, and submitted a bid to buy several pieces of and then resold it to retail outlets. Every deal required millions of dollars to finance. Fingerhut’s operations: its fulfillment center in St. Cloud, a Because the risks were too great for normal sources of headquarters building in Minnetonka and a massive data cenfinancing, Petters had to go to individuals and he always ter in Plymouth. The deal came down to the wire, but, in July 2002, FAC, LLC closed the transaction. kept his word on repaying his backers. Soon after, a flurry of activity began to create a catalog before As the size and complexity of deals increased, Petters slowly built up an organization to handle the workload. A the all-critical holiday shopping season. The catalog went out, natural entrepreneur, Petters attempted to fully leverage his and 90,000 orders were processed by the end of that year. Within two years, Fingerhut’s operations had improved to the unique role in the marketplace by spinning out new companies. The common denominator in each case was Petters’ point where it made sense for Petters to bring in investors to help

SUMMER 2006

COVER STORY

with growth capital. In 2004, well known private equity firms Bain Capital and Battery Ventures jointly invested $62.5 million in Fingerhut. Further expanding distribution, Petters followed up the Fingerhut transaction with the acquisition of online auction site uBid Inc. “After launching in 1998, uBid went public and had a market capitalization as high as $1.9 billion,” said Tim Takesue, one of uBid’s co-founders. In 1999, it was acquired by CMGI Inc., but by 2003, uBid was losing $16 million a quarter. Petters purchased uBid in April 2003 for just $3.6 million, according to SEC documents. Petters became the majority owner, and Takesue and uBid’s president, Robert H. Tomlinson Jr., became minority owners. “What stands out about Tom is his ability to rally people around him,” Takesue said. “uBid needed to lean on Petters Group a lot for legal and financial help. And his people were just coming off a huge transaction with Fingerhut and were tired but they were there for us.” Within 30 days of the acquisition, the company was profitable again. “What we enjoy about Tom Petters is he empowers his people,” said Takesue, who has known Petters since the 1980s. In December 2005, uBid went public again with Petters Group maintaining a minority investment.

“I want our legacy to be that we spurred not evolutionary, but revolutionary change.” — TOM PETTERS

:: PETTERSGROUP

ALL IN THE FAMILY With investments in 60 companies and as active manager in more than 20 of them, the Petters Group family of companies really has grown in the past year. One of the companies that Petters has taken from infancy to adulthood is Petters Consumer Brands. Based on one of Petters’ ideas, Petters Consumer Brands leverages all parts of the supply chain by licensing a well-known brand, applying it to otherwise generic merchandise, producing it with manufacturing partners in China or Mexico, and distributing it through multiple retail channels. Petters assembled an international manufacturing team led by Larry Harmer and sales team headed up by Mike O’Shaughnessy. Their extensive contacts with manufacturers and national retailers allowed

: : CORPORATE TIMELINE them to quickly get products into major outlets, such as Wal-Mart, Target, and Circuit City. Petters’ most successful brand to date is Polaroid. Under a license agreement, Petters applied the brand to televisions, DVDs, LCDs and plasmas, which launched in November 2003. The success of Polaroid’s consumer electronics business spawned similar license agreements with Sunbeam, Emerson and Oster. An additional brand name under Petters Group, outside the consumer electronics area, is Aaron Chang International, a California-based surf wear apparel designer. Images from world famous photographer Aaron Chang are imprinted on the clothes within the line. The success of the Polaroid relationship led to Petters’ decision to acquire the Massachusetts-based maker of instant cameras. Petters Group completed the acquisition in April 2005. With control of Polaroid, Petters wanted to apply the Petters Consumer Brands’ business model to a whole new category of products. To ensure those products remain state-of-the-art, Petters created Springworks, LLC, headed by CEO George Danko. The Springworks charter is to invest in companies developing technologies that will give future consumer electronics products an edge, and to stay ahead of the constant commoditization in the industry. “Tom sees things that no one else sees,” Danko said. “He’s the classic visionary entrepreneur, and he knows how to connect the dots.” The firm, which Danko describes as a “kinder, gentler” venture capital, has invested in a half-dozen companies that have “the ability to develop breakthrough products.” “Flexibility is tremendously key,” Danko said, “because there are so many evolving technologies coming from so many different directions.”

LOOKING FORWARD Before the completion of the acquisition of Polaroid, Petters started surrounding himself with strategic partners from a variety of industries and a management team he says more than makes up for his shortcomings. “Those people gave me the courage to buy Polaroid,” Petters said. The influx of seasoned leaders helped bring focus to the types of companies and investments Petters Group would pursue. Four Petters Group cornerstones — strategy, investment process, operational excellence and relationship management — now bring structure and discipline to what remains a very entrepreneurial environment. Similarly, the company now specializes in specific sectors where it has unique competency and demonstrated expertise: consumer brands; retail services, distribution and merchandising solutions; manufacturing and supply chain management; emerging consumer technologies; consumer media and marketing; hospitality, entertainment and aviation. “We are setting parameters in order to determine what is the best fit for Petters Group,” said Petters. Leveraging strengths from companies within the portfolio is helping to build stronger companies all around. Campus1Housing utilized uBid’s auction platform to create their website. YesVideo’s technology is being placed in a Polaroid DVD to create a first of its kind DVD player. “I want our legacy to be that we spurred not evolutionary, but revolutionary change, and that it came from a company that went from nowhere to somewhere because of its people,” Petters said. At the rate he’s growing, he just might get his wish. PG

1973 Petters starts Ear Electronics, at age 15, a mail order electronics business

Mark Druskoff is editor of MinnesotaBusiness Magazine. Andrea Miller is Director Corporate Communications for Petters Group Worldwide.

2003 Petters acquires uBid Inc. for $3.6M + warrants from CMGI Inc.

2003 SoniqCast becomes independent operating company

1977 Begins work for Schaak Electronics in St. Cloud

2003 Petters Consumer Brands begins licensing Polaroid name for electronics

1980 Moves to Colorado to work for electronics retailer

2004 Sunbeam is added to Petters Consumer Brands as a licensee

1988 Returns to Minnesota and founds Petters Companies, a wholesale business trading in opportunity goods

2004 Launches Springworks

1995 Petters Warehouse Direct stores open

2005 Broadsign investment is made

1998 Redtagoutlet.com Inc., an online consumer retail site, incorporates

2005 April, Petters acquires Polaroid Holding Company for $426 million

1999 RedtagBiz.com Inc., an Internet wholesale company, incorporates

2005 Emerson is added to Petters Consumer Brands as a licensee

2000 Petters Warehouse Direct sold to its managers (returns to Petters Group in 2004) 2000 Redtagoutlet.com’s assets combined with Ted Deikel’s BoomBuy.com 2001 RedtagBiz organization joins Redtag 2002 Petters and Deikel form FAC Acquisition, LLC to acquire Fingerhut assets

2005 Investments made by SpringWorks include Fidelica, IPS and Qubic Light

2005 Campus 1 Housing is added and opens in five markets 2005 Innovative Campus launched YFly.com 2006 Petters Capital formed 2006 Petters Hospitality & Entertainment Group opens in the West Palm Beach office 2006 Aaron Chang International launches 2006 Petters Media & Marketing Group is formed 2006 SpringWorks invests in YesVideo SUMMER 2006

CORNERSTONES

operational excellence

Streetwize Project Management

PM Street-smarts for PGW

WRITTEN BY ANDREA MILLER AND CARRIE MASSINE PHOTO BY DAN DELANY

:: PETTERSGROUP

round the clock, around the world, Petters Group Worldwide and its companies are people on the move. Hundreds of projects are being planned and executed across many departments and several companies — with emails and phones calls flying in all directions. To help employees and teams manage the challenges, opportunities and risks inherent in their projects, a program called Streetwize Project Management is being introduced this year. The program helps employees get “street smart” in project management concepts, as opposed to the formal training usually associated with project management certification. The program includes

skill-building, ongoing support and roll-out of a project management tool called eProject. A PROJECT MANAGEMENT ‘MINDSET’ “It’s not simply a ‘how-to’ program,” stressed Rick Engels, CFO of Petters Group Worldwide, and sponsor of the initiative. “We want to help participants develop the right mindset — a particular outlook and approach — that will help them get their projects accomplished. Initially, we’ll focus on defining key milestones and metrics for our initiatives. And flexibility is a key concept. Things never go exactly as planned, so you have

to create a structure for projects that allows for quick reaction to change.” And since the Streetwize program is expected to change the way employees work and plan their projects, it addresses some key concerns: the compulsion behind the change (why change?), the timing of the

connection. So no matter where in the world your travels might take you, your project is available with the click of a mouse. It’s designed to allow the entire team to quickly check on project status, update tasks, attach or route documents and much more. “With our people working in offices and traveling all over the world, I think this tool will help keep us better connected and informed,” Engels said. Improved commuMANAGER OF PGW’S PROJECT OFFICE nications are a key benefit of the system, structure to the projects we manage, but as is ease of use. “The eProject system offers a also how to be better team members on simplified version of project management,” Business Performance Director Kevin Riedl projects that other people manage.” said. “Although not as robust as Microsoft Project, it’s easy-to-learn, easy-to-navigate THE ‘COVERT’ PROJECT MANAGER While the Streetwize program targets execu- environment allows for rapid roll-out and a tives and senior managers, it also attracts higher rate of user acceptance.” what Massine calls “covert project managers” — employees with good people-skills who IF IT AIN’T BROKE … have been made into project managers but Implementing change is difficult. And transhave never trained to perform in that role. “It forming a successful organization is an uphill could be a budget analyst at PCB, a market- task, especially when the organization is ing assistant at Polaroid or a member of the known for its pioneering efforts and profitable HR department who has been assigned to business model. Where conventional wisdom manage a project and feels the need for the decrees, “If it ain’t broke, don’t fix it,” CEO framework, tools and techniques for manag- Tom Petters says, “Transformation, in my opinion, is a way of life. As international coming projects,” Massine said. petition increases, we need to be proactive and prepared to act. These global opportunities ANYWHERE, ANYTIME The eProject tool is an ASP solution that can and challenges are forcing us to take a closer be accessed from anywhere via an Internet look at our project management practices.” PG “People can make a difference using the content immediately,” she said. “We’re finding that today, project management is a necessary skill rather than a career choice,” Massine said. “As participants in the Streetwize training, we’ll learn not only how to give better clarity and

“We’re offering both a learning opportunity and a support system to help us do our jobs more effectively.” — CARRIE MASSINE, program (why now?) and the expected results (how will it affect me?). Why are project management skills critical today? The answer is simple, and the stakes are high. Projects of all sizes and types are the way that organizations accomplish their work — and doing it faster, smarter and better allows us to sustain competitive advantage. METHOD TO THE MADNESS “We’re rolling out more than just a software package,” said Carrie Massine, manager of PGW’s Project Office. “We’re offering both a learning opportunity and a support system to help us do our jobs more effectively.” A toolkit with templates for quickly getting started has been developed. Penny Locey, Management & Organizational Development director, notes the Streetwize training offers participants ideas that they can take back to work and use the next day.

: : 8 STEPS TO PROJECT MANAGEMENT MINDSET 1. GET EVERYONE ON THE SAME PAGE Build consensus on the issues and tactics before beginning your project. 2. SET SMART OBJECTIVES AND DEFINE ‘SUCCESS’ UP FRONT Reach agreement on what needs to be accomplished and what can be accomplished. 3. IDENTIFY RESOURCE NEEDS If resources can’t be articulated and justified, they probably can’t be secured.

4. SET REALISTIC SCHEDULES Don’t let a project team lead itself to unattainable expectations, and make sure roles and responsibilities are clearly communicated. 5. PLAN THE WORK There is no substitute for a good plan.

7. COMMUNICATE To your team, your management, your partners and your customers. 8. CLOSE THE LOOP Always pause at the conclusion of a project to examine the path the project took — both the good and the bad — to capture any learning that has taken place.

6. WORK THE PLAN Improvise, innovate and adapt within an agreed-upon framework.

SUMMER 2006

GALLERY

people and places

Waltham Partnership for Youth : : Linking Education and Business Breakfast The Waltham Partnership for Youth Inc., seeks to expand the role that business plays in the lives of youth. Its mission builds on the belief that education, skill building and entrepreneurship are essential components to future success. [1] From left: Rich DiBona, Health, Safety & Environmental Manager; Sheryl Hirsch, Senior Communications Manager; Gene Kelly, Senior Facilities Administrator; Denice MacDougall, Facilities Administration; and Dick Martin, Plant & Machinery Engineering Director. Not pictured: Ed Sullivan, Director of Facilities & Security, who serves on the Waltham Partnership for Youth Board of Directors.

1 1

Aaron Chang International Moves Offices : : On May 9, Aaron Chang International hosted a party for all its friends, family and local shops to break-in a new office space in Carlsbad, Calif. The evening highlighted Aaron Chang’s new slide show and images, as well as the new line of Aaron Chang International fashions.

[1] ACI Sales & Marketing Manager Shannon MacDuffee, with Surf Expo coordinators Nikki Houston and Lisa Lundrigan. [2] Aaron Chang with sons Saxon and Eland. [3] Artist Roberto Diaz, Sports Agent Murphy, and ACI President Norm Zwail. [4] Rory Cordette, Mutiny Media Sales Manager, and ACI’s Customer Service Manager Lori Meza. [5] President Norm Zwail and German Distributor Frank Braun.

Television and Radio is exhibiting a tribute to Polaroid commercials which ran from the 1950s through the 1980s. The reason for the salute is the donation to the museum of the Polaroid advertising archives. An article which ran in the April 5 business 1 section of The New York Times stated that much of today’s advertising is influenced by the early Polaroid campaigns created by the renowned ad agency Doyle Dane Bernbach. A compilation of the commercials and prints has been assembled into a short film, “Best Minutes of the Day: The 2 Golden Age of Polaroid.” It features some of the stars of the ads, including Alan Alda and Mariette Hartley as they pitched products named Amigo, Pronto and Swinger. The exhibit will be shown through July 9 at both the New York and Los Angeles branches. [1] Bob Gregerson, President of Polaroid Instant Imaging; Randall Smith, former Director of Advertising at Polaroid; and Barbara Kotlikoff, Vice President of MT&R. [2] Randal Smith, former Director of Advertising Polaroid; Deirdre Evens, former Senior Vice President Marketing Polaroid; and Brad Kullberg, Vice President of Corporate Business Development at Polaroid. [3] Stewart Cohen, Chairman of Polaroid; Bob Gregerson; Deanna Munson, Vice President of Operations at Petters Company; and Mary Jeffries, COO of Petters Group. [4] Alan Alda and Mariette Hartley joined in the celebration.

:: PETTERSGROUP

photos by Jay Brady Photography Inc.

The Golden Age of Polaroid : : The Museum of

THE PETTERS MATRIX

AARON CHANG INTERNATIONAL LLC 5600 Avenida Encinas Suite 130 Carlsbad, CA 92011 P 866-200-SURF www.aaronchang.com BROADSIGN 827 S. Bridgeway Place Suite 200 Eagle, ID 83616-6097 www.broadsign.com CAMPUS 1 HOUSING 4400 Baker Road Minnetonka, MN 55343 www.campus1housing.com FIDELICA MICROSYSTEMS, INC. 1585 McCandless Drive Milpitas, CA 95035 www.fidelica.com FINGERHUT DIRECT MARKETING 7777 Golden Triangle Drive Eden Prairie, MN 55344 www.fingerhut.com FINGERHUT FULFILLMENT 6250 Ridgewood Road St. Cloud, MN 56303 www.fingerhut.com IMPACT GROUP 18760 Lake Drive East Chanhassen, MN 55317 INFINITE POWER SOLUTIONS 14998 West Sixth Avenue Building E, Suite 600 Golden, CO 80401 www.infinitepowersolutions.com INTEGRITY MARKETING AND SALES 4400 Baker Road Minnetonka, MN 55343

METROPOLITAN MEDIA GROUP 5001 American Boulevard West Suite 400 Bloomington, MN 55437 PETTERS CAPITAL 233 South Wacker Drive Suite 9700 Chicago, IL 60606 PETTERS CONSUMER BRANDS 4400 Baker Road Minnetonka, MN 55343 www.pettersgroup.com PETTERS HOSPITALITY & ENTERTAINMENT GROUP Flagler Center Tower 505 South Flagler Drive Suite 700 West Palm Beach, FL 33401 www.pettersgroup.com PETTERS MEDIA & MARKETING GROUP 655 Third Avenue 21st Floor New York, NY 10017 PETTERS WAREHOUSE DIRECT 4400 Baker Road Minnetonka, MN 55343 www.petterswarehouse.com POLAROID CONSUMER ELECTRONICS 4400 Baker Road Minnetonka, MN 55343 www.polaroid.com POLAROID INSTANT IMAGING 1265 Main Street Waltham, MA 02451 www.polaroid.com

POLAROID EYEWEAR Polaroid Eyewear AG Max Hรถgger-Strasse 2 8048 Zurich, Switzerland www.polaroideyewear.com QUBIC LIGHT 1 Harbor Drive Suite 200 Sausalito, CA 94965 www.qubiclight.com SONIQCAST 4400 Baker Road Minnetonka, MN 55343 www.soniqcast.com SPRINGWORKS 4400 Baker Road Minnetonka, MN 55343 www.pettersgroup.com SYMMORPHIX 1278 Reamwood Avenue Sunnyvale, CA 94089-2233 www.symmorphix.com UBID 8550 West Bryn Mawr Suite 200 Chicago, IL 60631 www.ubid.com WSS MEDIA 1701 Broadway Street N.E. Minneapolis, MN 55413 www.shoppingsource.com YESVIDEO 3281 Scott Boulevard Santa Clara, CA 95054 www.yesvideo.com YFLY.COM 12100 Wilshire Boulevard Suite 800 Los Angeles, CA 90049 www.yfly.com

SUMMER 2006

REALITY BYTES

g e o rg e d a n k o

WHAT’S YOUR FAVORITE ELECTRONIC GADGET? A 65-inch HDTV with surround sound. WHAT WAS THE LATEST DESTINATION ON YOUR VACATION LIST? A cruise across the Atlantic to Europe scheduled on April 30, 2006. WHAT WOULD YOUR WIFE SAY IS YOUR WORST HABIT? Not following her advice and recommendations immediately and explicitly. WHAT IS YOUR FAVORITE RESTAURANT/MEAL? My favorite restaurant is Bacio. Favorite meal is baked stuffed lobster, a northeast coast specialty. WHAT IS YOUR DREAM CAR, AND WHY? A Jaguar –Vaden Plas; for its understated elegance, you can’t beat the styling.

HOW DO YOUR KIDS DESCRIBE YOU TO THEIR FRIENDS?

To quote one son: “Kind, caring, fair, empathetic and fun to be with.” photo by Todd Buchanan

PRODUCT SPOTLIGHT

Springboard for Teamwork : : Polaroid and YesVideo Team Up

WHEN YESVIDEO BECAME AN INVESTMENT FOR SPRINGWORKS they were introduced to the Polaroid Consumer Electronics team. The result is the Polaroid DRM-2001G DVD, a recorder-hard disc drive combination unit which features embedded YesDVD software. The product began rolling into Wal-Mart stores in mid-April. Building on Polaroid’s strength in preserving memories, the Polaroid DVD recorder with YesDVD technology is designed to make it easy for consumers to transfer personal videos to DVD while preserving the highest video quality. The Polaroid recorder includes automatic production of YesDVD discs that feature professional onscreen DVD menus with intelligently-selected chapters with picture thumbnails for 46

:: PETTERSGROUP

IF YOU COULD DO ANYTHING FOR A JOB, WHAT WOULD IT BE? The job I now have; how can you beat working with a tremendous group of really talented people who wake up every day and swing for the fence? I get to help a group of businesses succeed and make use of my broad range of varied experiences and countless mistakes, and make sure they make better decisions and don’t make the same mistakes. Finally, there is Tom Petters; there is not a company in this world with a leader that can match his combination of creative genius, passion, excitement, willingness to take risk, high values, charisma and willingness to let his employees succeed.

easy navigation and music video highlights of the best moments. YesDVD software uses state-of-the-art scene detection software algorithms to determine the natural chapter points and finds the first clear image in the video segment to represent that chapter. These images automatically populate the onscreen menu and DVD case coversheet to create a visual index and guide for easy searching and viewing. Once a DVD is created on the Polaroid unit, the YesDVD disc can be placed in DVD-ROM drive of the consumer’s PC and an application launches with instructions for printing a color DVD case coversheet. “Adding YesDVD technology to the Polaroid DVD recorder adds tremendous value to our product,” said Jim Koestler, Director of Product Development. “DVD players have always been an excellent way to enjoy commercial or home movies. Now consumers will have the option to convert their precious memories to high-quality DVDs that are fun to watch or share with generations to come,” Koestler added. PG

Finally... Home Entertainment Designed to Fit Your Space and Style.

Polaroidâ&#x20AC;&#x2122;s new FXM Series Wide-Screen High Definition LCD TV/DVD Combo with built-in moveable DVD disc tray will revolutionize home entertainment. The moveable tray can be placed in three possible positions on the back of the LCD TV for ultimate convenience.

Special Features Include: 32â&#x20AC;? 16:9 Wide-Screen HD LCD TV/DVD Combo Resolution: 1366 x 768 Contrast ratio: 1000:1 181-channel cable-ready NTSC and high definition ATSC tuner Various inputs, including HDMI, for all your components Plays DVDs, CDs, and is JPEG compatible Now available at Walmart.com and select Wal-Mart stores nationwide.