CONTENTS
Inside Columbia’s CEO • www.ColumbiaCEO.com • Volume 1, Issue 2
58 31
37
41
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8 Opening Bell: The Buzz On CoMo Biz 12 The Columbia/Boone County Economic Index 14 Picture From The Past 16 Inside Greg Copeland’s Office 20 Talking Health Care At The CEO Roundtable 27 The Retail Report: Running The Numbers 31 Entrepreneurial Spirit: SoccerPro’s Tony Marrero 37 A Snapshot Of Columbia’s Competitive Grocery Business 41 MU’s Gold Rush: Nanoparticles As A Cancer Treatment
44 Regional News Round-Up 47 The 2010 Columbia Business Sentiment Survey 52
Capital Venture: A Legislator Q&A
58
Larry Potterfield and MidwayUSA: Shooting For Excellence
66
Parting Thoughts: Landmark Bank’s Jeff MacLellan
70 Spicewine Ironworks Named “World’s Best” 74
CEO At Play: Gadgets
77 Networking 81
Publisher’s Note
82
Closing Quotes winter 2010
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INSIDE COLUMBIA’S CEO STAFF Publisher Fred Parry fred@insidecolumbia.net
Meet Our Editorial Advisory Board
Associate Publisher Melody Parry melody@insidecolumbia.net Editor-in-Chief Sandy Selby sandy@insidecolumbia.net
Tom Atkins Chairman and CEO, Atkins Companies
Copy Editor Kathy Casteel kathy@insidecolumbia.net Editorial Assistant Jessica Perkins jessica@insidecolumbia.net Photo Editor L.G. Patterson
Randy Coil President, Coil Construction
Gary Drewing President, Joe Machens Dealerships
Gary Forsee President, University of Missouri System
Bob Gerding Partner, Gerding, Korte & Chitwood CPAs
Byron Hill President & CEO, ABC Laboratories
Dianne Lynch President, Stephens College
George Pfenenger President & CEO, Socket
Bob Pugh CEO, MBS Textbook Exchange
Mike Staloch Vice President of Operations, State Farm Insurance
Greg Steinhoff Executive Vice President of Business Development, Boone County National Bank
Jerry Taylor President, MFA Oil Co.
Carol Van Gorp CEO, Columbia Board of Realtors
Design Consultant Katie S. Brooks Creative Director Carolyn Preul design@insidecolumbia.net Graphic Designer Katharine Ley katharine@insidecolumbia.net Director of Sales Linda Cleveland linda@insidecolumbia.net Director of Marketing & Business Development Bill Bales bill@insidecolumbia.net Marketing Representatives Gerri Shelton gerri@insidecolumbia.net Katie Thrower katie@insidecolumbia.net Nathan Baldwin nathan@insidecolumbia.net Ken Brodersen ken@insidecolumbia.net Business Development Specialist Quinn Leon quinn@insidecolumbia.net Office Manager Brenda Brooks brenda@insidecolumbia.net Distribution Manager John Lapsley Contributing Writers Scott Charton, Anita Neal Harrison John Littell, Ed Robb 6
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Please Recycle This Magazine.
Inside Columbia’s CEO magazine 301 W. Broadway Columbia, MO 65203 • Office: 573-442-1430 • Web: www.ColumbiaCEO.com Inside Columbia’s CEO is published quarterly by OutFront Communications LLC, 301 W. Broadway, Columbia, Mo. 65203, 573-442-1430. Copyright OutFront Communications, 2009. All rights reserved. Reproduction or use of any editorial or graphic content without the express written permission of the publisher is prohibited. Postage paid at Columbia, Mo. The annual subscription rate is $19.95 for four issues.
OPENING BELL
the buzz on como biz
University Hospital ICU:
A ‘Beacon’ Of Success
U
niversity Hospital’s Medical and Neurosurgical Intensive Care Unit has won the Beacon Award for Critical Care Excellence from the American Association of Critical-Care Nurses. The award recognizes the top hospital intensive care units in the country. Until this fall, no hospital in Missouri had ever received the prestigious Beacon Award. “The Beacon Award puts University Hospital in select company among the best acute-care hospitals in the country,” says Dr. Stevan Whitt, medical director of the Medical and Neurosurgical Intensive Care Unit. “The award shines a light on the experience and skill with which we take care of critically ill patients 24/7, 365 days a year.” There are an estimated 6,000 intensive care units in the United States. The AACN has given approximately 200 Beacon Awards since the award’s inception in 2003. To receive the award, intensive care unit staff demonstrated how the ICU at University Hospital meets more than 40 rigorous criteria that measure excellence and quality in seven areas: patient outcomes; training
Young Entrepreneurs Take An Elevator To The Top
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and mentoring; recruitment and retention; education; research and evidence-based practices; leadership and organizational ethics; and overall healing environment. “Our ICU team selected the Beacon Award as a goal and worked for a couple years to meet the high standards set forth by the AACN,” says nurse Christina Vollrath, manager of the Medical and Neurosurgical Intensive Care Unit at University Hospital. “To achieve this success is a great recognition for our staff and reassuring to our patients that we are a leader in utilizing the best practices for quality patient care in a patient-centered environment.”
wo students at the University of Missouri’s Trulaske College of Business earned high honors in the recent Collegiate Entrepreneurs’ Organization Elevator Pitch Competition. Maria Holt, a senior in management, won second place with her proposal for a double-sided nail polish pen and Meghan Orbe, a junior studying marketing, placed fourth in the contest for her presentation on a frozen-meal delivery service geared toward college students. Thanks to sponsorship from MU’s Flegal Academy for Aspiring Entrepreneurs, five business students were able to attend this year’s contest and compete against students from across the United States as well as Canada and Puerto Rico. The competitors were required to condense their business ideas into 90-second presentations — the approximate length of an elevator ride. The Flegal Academy is matching the $2,000 Holt won and the $1,000 Orbe won for their top finishes in the contest.
A New Development For Neuner Brian Neuner has joined Sundvold Financial as vice president of business development, but that doesn’t mean he’s no longer hanging out with the Aflac duck. Neuner will continue to represent the supplemental insurance company while taking on added responsibility with Sundvold Financial. “Brian is a business leader in our community and he loves to network,” says Jon Sundvold, president of Sundvold Financial. “In just two years with Aflac, he’s been very successful with supplemental insurance and now he’ll add major medical to his menu of insurance products. We’ll also draw upon his financial background to provide depth and experience in our pension division.”
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OPENING BELL
the buzz on como biz
Survival Story
Small Business Survival Index 2009 State Rankings
M
issouri comes in at No. 18 on the Small Business & Entrepreneurship Council’s 2009 Small Business Survival Index, a ranking of the states according to their public policy climates for small business and entrepreneurship. SBE Council chief economist Raymond J. Keating, author of the study, noted when releasing the study: “It’s hard to find any good news at the national level for entrepreneurs, small business and their employees … But what about the states? The Small Business Survival Index helps business owners and investors understand the public policy burdens placed on entrepreneurship and small business, with the states ranked accordingly.” The “Small Business Survival Index” is a measure of which states are friendliest to small business, and which are not in terms of public
policy decisions. Factors included in the index are taxes, various regulatory costs, government spending, property rights, health care and energy costs. The SBE expanded the 2009 Index to cover 36 major government-imposed or governmentrelated costs affecting small businesses and entrepreneurs. Compilers added the measures together for an overall rating. In terms of their policy environments, the top 10 entrepreneur-friendly states under the Small Business Survival Index 2009 are South Dakota, Nevada, Texas, Wyoming, Washington, Florida, South Carolina, Colorado, Alabama, and Virginia. In contrast, the bottom 10 includes Hawaii, Minnesota, Massachusetts, Rhode Island, Maine, Vermont, New York, California, New Jersey and District of Columbia. Missouri fared better than its border states with the exception of Tennessee, which ranked 13th. Iowa fared the worst among Missouri’s neighbors, landing at No. 41.
>>>> Nuts No More David and Sherri Hockett have sold their I.B. Nuts & Fruit Too business to Charles and Vicki Lynch. The Hocketts started I.B. Nuts & Fruit Too in 1990 as a basement business with eight products. Today, the company features more than 80 products and has distributors in Missouri and Illinois. 10
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1. South Dakota 2. Nevada 3. Texas 4. Wyoming 5. Washington 6. Florida 7. South Carolina 8. Colorado 9. Alabama 10. Virginia 11. Ohio 12. Alaska 13. Tennessee 14. Utah 15. Indiana 16. Arizona 17. North Dakota 18. Missouri 19. Mississippi 20. Georgia 21. Oklahoma 22. Kentucky 23. Michigan 24. Illinois 25. Arkansas 26. Kansas 27. Pennsylvania 28. New Mexico 29. Louisiana 30. Wisconsin 31. Montana 32. Idaho 33. New Hampshire 34. Nebraska 35. Delaware 36. West Virginia 37. Maryland 38. Oregon 39. North Carolina 40. Connecticut 41. Iowa 42. Hawaii 43. Minnesota 44. Massachusetts 45. Rhode Island 46. Maine 47. Vermont 48. New York 49. California 50. New Jersey 51. District of Columbia
OPENING BELL
economic index
The Inside Columbia CEO’s Economic Index Boone County/Columbia Business Conditions Fourth Quarter 2009
2 0 0 9 Q 2
94.5
94 — -
96.6
2 0 0 9 Q 1
95.9
97.8
96 —
97.7
-
100.1
98 —
97.4
2 0 0 7 Q 3
99.0
2 0 0 7 Q 2
101.1
100.1
-
100.1
103.7
105.8
104.7 101.5
100 —
101.8
-
102.7
102 —
104.1
104 —
105.1
104.6
-
106.5
106 —
102.3
108 —
108.2
-
109.0
110 —
92 — 90 — 2 0 0 4 Q 2
2 0 0 4 Q 1
2 0 0 4 Q 4
2 0 0 4 Q 3
2 0 0 5 Q 1
2 0 0 5 Q 2
2 0 0 5 Q 3
2 0 0 5 Q 4
2 0 0 6 Q 1
2 0 0 6 Q 2
2 0 0 6 Q 3
2 0 0 6 Q 4
2 0 0 7 Q 1
2 0 0 7 Q 4
2 0 0 8 Q 1
2 0 0 8 Q 2
2 0 0 8 Q 3
2 0 0 8 Q 4
2 0 0 9 Q 3
DATE DATE
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nside Columbia’s CEO Economic Index is a quarterly snapshot of how Columbia’s economy is doing compared to where it was five years ago. Edward H. Robb and Associates, an economic and governmental consulting firm, prepared this index for Columbia and Boone County by collecting data from the past 18 years for 10 key economic indicators: hotel taxes; deplanements at the Columbia Regional Airport; Boone County total sales tax receipts; Columbia total sales tax receipts; Boone County sales tax receipts excluding
Columbia; total Boone County building permits; total Boone County single-unit building permits; total Boone County employment; total Columbia employment; and Boone County employment excluding Columbia. After analyzing the data, Robb went a step further and seasonally adjusted the figures to create the most accurate index possible. The result is a single number that indicates how robust our Columbia/Boone County economy was for a given quarter.
Prepared By E.H. Robb & Associates *The base year for all of the indices is 2000. All indices will average 100 for the 12 months of 2000. **Based on one month of analysis
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2 0 0 9 Q 4 **
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Majestic Makeover The Haden Building at Ninth and Broadway was a grand replacement for the building above that burned down in the early 20th century. The comparatively unadorned original started out as the Haden Opera House but opera eventually gave way to commerce when the Boone County Trust Co. moved in. The reborn structure remains a place of commerce, or perhaps we should say Commerce Bank. The bank has been housed in that building since 2006, when it purchased Boone National Savings & Loan Association.
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picture from the past
Photo By L.G. Patter son
OPENING BELL
OPENING BELL
inside the office
A Window On Columbia
L.G. “Greg” Copeland’s Office Overlooks The City He Loves Best by SCOTT CHARTON photos by L.G. PATTERSON
L.G. “Greg” Copeland’s law office on the southeast corner of Broadway and Ninth Street is not just at the crossroads of Columbia. It is the crossroads of his life story. To the northwest is the Boone County Courthouse, where Copeland has practiced law for 25 years. Around the corner to the southeast is Harpo’s, the bar beneath which Copeland as a student wrestler hefted a rented jackhammer to open a cellar space he transformed into Columbia’s most romantic candlelight-and-wine hideaway in the early 1970s, La Cantina d’Italia. Due south is the University of Missouri campus, where he arrived in 1966 aspiring to be a zoologist after exploring the natural wonders of Swope Park near his boyhood home in the Kansas City suburbs. And nearby is Tate Hall, the old MU law school where Copeland, looking for a fresh challenge, strolled in and boldly asked to enroll. He did, and it changed his life. 16
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In 1996, Copeland moved from a much smaller law office across from Boone Tavern to the more spacious, custom-renovated quarters at Ninth and Broadway. The site has a long past in Columbia, housing a variety of businesses ranging from an art supply shop to a women’s shoe store. A look through the large picture window of Copeland’s reception room reveals a downtown Columbia humming along. Copeland first considered taking that bustling view for his working office, but the litigator decided he needed a workspace free of such happy distractions. His office is set back along an elegant corridor, through heavy double doors,
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inside the office
“I get to help people out, I get to solve problems, and I get to challenge my mind — and I do it in the crossroads of downtown Columbia.”
across from three spacious conference rooms and a law library. One of the most striking features of Copeland’s office is a stand-up solid mahogany desk he commissioned in 1987, inspired by Supreme Court Chief Justice Oliver Wendell Holmes’ practice of writing his briefs while standing because it forced him to be concise. “Nothing conduces to brevity,” Holmes reportedly declared, “like a caving in of the knees.” The standing desk is adorned by a 6-inch-thick, well-leafed Webster’s New World Dictionary published in 1951. 18
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“Sure, I could go online to find the right word, but that wonderful dictionary has served me so well,” he says. “I feel the same way about the law library — there is nothing to compare with finding the right law book and holding it in your hands. Tapping the keyboard cannot compare.” A much-used book is a 1983 text on contract law, still marked with a rainbow of highlights from his law school days. Copeland says he learned contract law from his mentor, the late MU law professor Joe Covington. As he proudly displays the old textbook, Copeland reflects: “Professor Covington was more
than a teacher; he became a friend, but my regard for him was such I could never call him Joe — it was always Professor Covington.” There is whimsy close at hand, too: a nearly-empty aerosol can marked “Bull**** Repellant” (“I need to order a case of it!”) and a small framed Krispy Kreme doughnuts gift card, a gift from his neurosurgeon brother, bearing helpful advice: “In case of emergency break glass.” There are gifts from happy clients, such as an ornately tooled wood-and-silver box from Saudi Arabia and a hammered brass container from a friend who knows of his love for M&Ms. Copeland’s walls reflect three of his passions: the Kansas City Chiefs, the MU School of Law and the successful practice of law. There are autographed photos of Chiefs players and a panoramic color photograph of Arrowhead Stadium above the double doors. He is a member of MU’s Jefferson Club and proudly displays a framed MU Law Society medallion with a black and gold ribbon, awarded in recognition of his substantial support. Framed copies of stories from legal newspapers trumpet huge verdicts he has obtained for clients; another frame contains a photo of Copeland with one of his oldest friends, noted trial attorney Robert Langdon of Lexington. “I look forward to going to work every day,” Copeland says of his comfortable workspace where he prepares briefs and practices arguments for weeks before a trial. “I get to help people out, I get to solve problems, and I get to challenge my mind — and I do it in the crossroads of downtown Columbia. I plan to be here for a long time to come.”
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CEO ROUNDTABLE
Reform At The Roundtable
Columbia’s Top Docs And Health Care Execs Take On The Hottest Topic Of All by SANDY SELBY photos by L.G. PATTERSON
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t’s the topic that’s wagging the tongues of news channel pundits and Washington insiders, but what does health care reform really mean to patients and health care providers here in mid-Missouri? Inside Columbia’s CEO invited 11 of Columbia’s medical community leaders to share their diagnoses for what’s ailing our current health care system and to offer their opinions on the proposed cure.
A Breathless Pace The attendees agreed that little is really understood about the massive health care overhaul bills being proposed by the U.S. House and Senate, and it is the speed at which the legislation is being pushed through that worries Dr. Mark Adams of the Columbia Orthopaedic Group. “I think the real implications aren’t known right now,” Adams said. “I think we’re all holding our breath and trying to get a lay of the land as to what it’s going 20
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to be. I think there’s a little bit of an emphasis on doing it rather than doing it right. That scares me. Anytime they rush something ahead like this, there will be ramifications on the back side we’re not aware of yet.” “I think Dr. Adams has summarized it pretty well,” said University of Missouri Health Care CEO and incoming Missouri Hospital Association President Jim Ross. “This needs to be about how we take care of patients. So much of this reform has
been about insurance payment. How does it impact patients? How does it impact quality of care and make it better in this country? At least from what I read, that’s not well understood. How does it impact other parts of health care other than hospitals and doctors? What about home health, the nursing homes, the other components parts of the delivery system? I’m not thinking that it’s clear yet. If they [legislators] do this and declare the job done and move on and not come back, that troubles me some.”
Changing Expectations Dr. Jerry Kennett described the current state of health care in the United States as a perfect storm. “We have a society where we have extremely high costs, extremely high expectations and extremely high public demand. Our patients want the tests done now, they want to be seen now, they expect everything to be done and they don’t expect to pay for it — someone else is going to be paying for it. They have very poor personal responsibility and we have a very litigious society. It’s totally
different from all other countries. How are you going to bring all that together and bring the cost down?” The obvious goal of health care reform is to bring more people into the system, but that burden would put a strain on providers and patients alike. Dr. Joseph Muscato of Missouri Cancer Associates shared the story of a patient who was angry because she couldn’t get a same-day appointment, but when millions more people enter the system, he predicts she and everyone else can say goodbye to next-day appointments and the practice of shopping around for other opinions. “In other countries, that expectation doesn’t exist,” Muscato said. “They know it’s not going to happen.” “We all have to understand that this dialogue would not be going on if somebody somewhere hadn’t decided that the amount of dollars being spent on health care has to go down,” said Dr. Lee Trammel of Women’s Health Associates. “This actually is kind of a reiteration of the late ‘80s, mid-‘80s. The driving force at the time was industry, which was paying the predominantly large portion of the health care dollar. The patient didn’t really understand there was too much being spent on health care but the corporations who were footing the bill understood and began the first attempts of trying to rein in health care with managed care. Then the economy began to turn around and all the corporations started doing better. It just disappeared as an item. Like when gas prices were high and we had all these good ideas but when gas prices go down, everyone fills up their SUV and heads for the coast. The conversation should have been had back then but kind of got off the table.” But introducing a public option as a way to control costs is a frightening prospect to many at the table, including Boone Hospital CEO Dan Rothery, who said his hospital can’t cover its costs with the Medicare and Medicaid payments they currently receive. “I get worried when I hear about another public option when there are two right now that probably aren’t working very well. If we were solely based on Medicare and Medicaid, Boone
would cease to exist and I have an obligation to the community to make sure that hospital does exist. Where are 30 or 40 million more people going to be absorbed into the system? Who is going to pay the providers, hospitals and physicians more to take and see these patients? It’s pretty awesome in this medium-sized small community what a penetration of medical resources we have. The exponential effect of the economic impact of the medical resources in this community is interesting. It’s awesome is what it is. Perhaps we’re more at risk because of that. Change will adversely impact that.”
CEO Roundtable
Roll Call Mark Adams, M.D. Columbia Orthopaedic Group
Robert Churchill, M.D. Dean, University of Missouri School of Medicine
Jeri Doty Chief Planning Officer, University of Missouri Health Care
Les Hall, M.D. Chief Medical Officer, University of Missouri School of Medicine
“This is a huge impact on Columbia,” Muscato said. “The thing people don’t understand about the economy in Columbia is that the health care system transfers money into Columbia. When you have insurance payments, whether it’s Medicare or Blue Cross, you’re basically collecting premiums from large numbers of people and the people who provide coverage pay the people who deliver the care. This is very different from a retail economy where if somebody works in Columbia, makes money, spends money in the store — while that’s obviously good, that’s money that is being recirculated in Columbia. Here, you’re
Jerry Kennett, M.D. Chief Medical Officer, Boone Hospital Center
Joseph Muscato, M.D. Missouri Cancer Associates
James Ross CEO, University of Missouri Health Care
Dan Rothery President & CEO, Boone Hospital Center
Lee Trammell, M.D. Women’s Health Associates
Sallie HouserHanfelder
Hal Williamson Jr.
Director, Harry S. Truman Memorial Veterans’ Hospital
Vice Chancellor, University of Missouri Health System
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CEO ROUNDTABLE Harry S. Truman Memorial Veterans’ Hospital Director Sallie Houser-Hanfelder learned firsthand how valuable the VA’s electronic records were postKatrina. “Our patients were able to call us and we were able to get them hooked into a pharmacy wherever they were.” health care? The government. The very people who say they’re going to save this. Their track record is not stupendous.”
More Urgent Matters
The obvious goal of health care reform is to bring more people into the system, but that burden would put a strain on providers and patients alike. actually taking tremendous numbers of funds that are being transferred into Columbia’s economy. Therefore, the impact of decreasing medical care in a community like this is magnified because we’re actually in that realm of importing money or exporting care.”
Real-Life Examples The government is already in the health care business and Harry S. Truman Memorial Veterans’ Hospital Director Sallie Houser-Hanfelder is one of its employees. “We pretty much stay out of the political skirmishing,” she said. “For us, it’s providing the best care.” The VA is on the cutting edge of electronics records technology and other high-tech advances that are especially helpful in managing a patient population that is scattered from Iowa to Fort Leonard Wood. 22
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“We would hope they start leveraging some of the technology,” HouserHanfelder said. “We’re doing telehealth, we’re doing home health. Because our patients come with us and stay with us, we have an ability to drill down with the electronic record and find out how much of our population is within the parameters of clinical matrices. We hope they’re going to take a look at the VA model and say that’s the end product you want: a population that has control of its health care. I hope we can take some of the good that we do because we’re a closed system and leverage it in the private sector.” Not all government-run programs are as successful, according to Adams. “When you look at the infant mortality rate, which is one thing they are focusing on to show how terrible we are, the worst infant mortality subset in our country is the American Indian, and who runs their
“The health care reform we’ve been talking about isn’t going to affect Columbia in 2010 except psychologically, and that’s not unimportant,” said Hal Williamson, vice chancellor of the MU Health System. “Particularly at the university, we are looking at cuts to Medicaid, which would be important because we’ve actually had a 25 percent cut in a piece of funding the state gives us. But I think the recession is a more important driver of what happens in 2010 than health care reform. I think it’s fair to say our outpatient volumes have gone up in the last two years through the recession, but our inpatient volumes have been going down a bit.” Rothery agreed with Williamson’s assessment. “I don’t think we’ll see a lot of impact of health care reform in 2010. From the standpoint of workforce, I think the recession and the dire economy is actually helping us a little bit because there’s less turnover. People are more fearful and they’re hanging onto their jobs.
The Prognosis As chief planning officer for University of Missouri Health Care, Jeri Doty is used to looking ahead, but the recession and health care reform conundrum has made that job difficult. “One of the questions we’ve had, and we’re trying to instruct ourselves on, is whether there will be pent-up demand, recognizing there have been layoffs and such,” she said. “When there’s more of an economic recovery and people are back at work, will we have folks kind of flooding the system potentially who haven’t
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CEO ROUNDTABLE necessarily been receiving the care they need and who will be sicker and really demand more care and resources?” Massachusetts has a statewide expanded coverage plan in place, one that has often been suggested as a model for a national program, but according to Les Hall, University of Missouri School of Medicine’s chief medical officer, the repercussions of the pent-up demand are still being felt three years after the plan’s introduction. “They did see almost immediately an increase in waiting times to access primary care physicians,” Hall said. “Any place in Massachusetts now, there’s a severalmonth wait for an initial primary care
There’s a nationwide push to increase the class size in medical schools by 30 percent.
Dr. Joseph Muscato talks about the economic impact of the health care industry in Columbia and worries that the government’s health care reform plan could have a negative effect. Dr. Jerry Kennett expects payment reform to be a big part of any plan for change and warns that may be a very painful process for providers and patients. 24
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appointment. Depending on when health care reform took effect, we’d have to sense and respond to demand and make more outpatient access available. They’re still trying to figure out how to adjust their workforce in Massachusetts.” Workforce issues are becoming more of a concern in Missouri, too, even without any added pressure from health care reform. “One of my great concerns is the number of primary care interns,” Muscato said. “Only 14 percent of medical students actually go into internal medicine and I think only 2 percent of the class ends up in primary care internal medicine. When you talk to medical students today, none of them are going into primary care internal medicine because of the cost issues, time issues, the pressure issues, so forth and so on.” One person at the roundtable knows a lot about training the next generation of physicians — MU’s Medical School Dean Robert Churchill — and he’s worried.
“We’re a sort of state-supported school,” he said. “UMKC is more poorly funded and so is the University of Colorado, but we get $33,000 per medical student a year. KU gets $112,000 per student per year. Mississippi gets some huge number like $282,000, so our tuition is fairly high. I think our students, on average, have about $150,000 worth of debt when they graduate from medical school. Because of the pay relative to more specialized positions, it’s driving them to those specialties because they have a big debt to pay off.” There’s a nationwide push to increase the class sizes in medical schools by 30 percent, but there are obstacles preventing MU from doing that, according to Churchill. “We don’t have the space. We’d have to build a new building to put 30 more students per class. We don’t have the clinical material here in town to accommodate 60 more third- and fourth-year students here in town and probably would have to set up connections with major hospitals in other parts of the state. And the amount of money would have to increase. If you look at the average of all the medical schools in the United States and what they get per student, it’s $94,000. We’re at $33,000. We don’t want to drop to the lowest and if we expanded our class without increased funding, we’d be right at the bottom. There’s nothing driving us to increase class size without a lot more resources.”
Final Thoughts Ultimately, the roundtable discussion came down to one universal theme: providing the best care possible. “It’s still a privilege and an honor to be involved in medicine today,” Adams said. “In all this discussion, there’s one term we would agree on — universal access. We all are supportive of that. We want people to have access to the medical care system and to good health care. That’s different from a public option or single-payer, but universal access is something we all would strive to make possible.” winter 2010
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BY THE NUMBERS
Attention Shoppers Is Columbia Really The Retail Magnet It Professes To Be? Economist Ed Robb Runs The Numbers. by ED ROBB of E.H. ROBB & ASSOCIATES
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here is a pervasive perception, at least here in Columbia, that our city is a retail trade mecca that attracts a host of shoppers from the surrounding environs. Given the recent hand wringing by city and county leaders over the lack of sales tax growth, it seems an auspicious time to test the hypothesis that Columbia is truly a retail trade destination. To test this theory, we at E.H. Robb & Associates developed per capita sales tax indices for all of the counties and cities in the mid-Missouri area. The trade region was defined as Audrain, Boone, Callaway, Cole, Howard, Moniteau and Randolph counties. The major cities are Mexico, Columbia, Fulton, Jefferson City, California and Moberly. To construct these indices, it was first necessary to collect monthly sales tax receipts and population estimates for all of the sales tax jurisdictions within the region. The sales tax data were then adjusted for tax base and rate differences to get a consistent unit of measurement across all jurisdictions. Because of the volatility of the month-to-month changes in tax receipts, we aggregated the sales tax data to quarterly totals. After adjusting for seasonality, we constructed the individual raw indices as the ratio of the per capita sales tax receipts in each jurisdiction divided by the per capita sales tax receipts for the region. Table 1 (on Page 28) contains the annual averages for the major cities in mid-Missouri. These indices are demonstratively useful in their own right, but they do not take into account differences in wealth and income. To rectify this weakness, we also constructed county indices of wage and salary disbursements per worker. The raw indices were then divided by the average
Chart 1.
Jefferson City
140.0
Jefferson City Mall Phase I
Columbia Mall Phase I Jefferson City Mall Phase II
Fulton New Three
Columbia Lowe’s
Super Center East
Super Center Walmart
Best Buy
Barnes & Noble
Lowe’s
130.0
Kohls
120.0 Columbia Mall Phase II Columbia Super Center East
Sam’s Club
110.0 1978Q1
1980Q1
1982Q1
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Chart 2.
1994Q1
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2010Q1
Columbia
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Super Center East
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Columbia Mall Phase I
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Columbia Mall Phase II
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Super Center East
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Kohls
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Super Center West
Jefferson City Mall
94.0 92.0 90.0 1978Q1
1980Q1
1982Q1
1984Q1
1986Q1
1988Q1
1990Q1
1992Q1
1994Q1
1996Q1
1998Q1
2000Q1
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BY THE NUMBERS
Table 1.
Mid-Missouri Raw Per Capita Sales Tax Indexes
wage indices to yield the final, or adjusted, per capita index values. The adjusted indices are in Table 2. An index level greater than 100 indicates that the jurisdiction is a net importer of retail sales, making it a retail draw for shoppers from other areas. A number less than 100 implies that the jurisdiction loses sales and tax revenues to other jurisdictions. So is Columbia a retail trade destination? Using either the raw or adjusted indices, the answer would appear to be a qualified yes, given that both indices are greater than 100. However, other nearby jurisdictions such as Jefferson City or Osage Beach (which was not included in the regional definition) have significantly higher index values; compared to those markets, Columbia is certainly not a retail mecca. The preliminary 2009 adjusted index for Columbia of 104.5, for example, is identical to the value in 1989, and only 4 percent greater than its lowest level of 100.5 recorded in 1983. Although year-toyear changes in the index for Columbia — or any other jurisdiction — reflect a myriad of factors, a significant proportion of these changes can be attributed to the opening of malls and other big-box retailers.
year
Mexico
1980
98.5
99.6
Mall And Big-Box Openings
I
n addition to their value in describing the overall level of retail trade, these indices also provide insight into the competitive interplay between neighboring cities. In particular, they provide a means to quantify the impact of major retail outlet openings, not only on the city where the store is located, but also on the other towns in the region. While a comparison of the index values for Fulton and Mexico, for example, can reflect the influence of big-box openings in either city, a better comparison is provided by the indices for Columbia and Jefferson City — the two big dogs in the regional retail battles. Charts 1 and 2 (on Page 27) depict the raw per capita sales tax indices for Columbia and Jefferson City. In addition
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Columbia Fulton
Jefferson Boonville city
75.4
121.8
75.1
California
Moberly
92.9
95.8
1981
97.0
98.5
77.6
122.8
72.0
88.1
100.1
1982
96.6
97.7
78.4
126.2
72.2
82.9
98.7
1983
92.9
97.1
74.1
128.0
72.6
84.4
99.7
1984
91.5
98.3
74.1
126.8
66.9
83.7
101.0
1985
89.2
100.5
66.5
126.5
66.5
824
100.1
1986
82.4
102.2
67.6
128.2
69.5
58.6
95.7
1987
83.3
102.4
67.7
125.9
70.4
73.5
96.2
1988
85.3
101.7
70.4
126.6
68.2
76.7
93.8
1989
85.9
103.5
68.0
125.0
64.3
75.2
91.3
1990
82.6
104.5
70.5
123.7
63.9
72.2
90.2
1991
82.7
106.9
67.7
121.5
65.0
69.0
83.6
1992
80.9
106.9
67.5
122.2
63.0
65.7
83.6
1993
80.7
107.2
66.6
122.6
62.8
67.2
80.9
1994
82.6
108.2
65.5
121.6
62.8
63.6
78.4
1995
80.6
108.3
60.5
123.9
58.9
61.5
79.7
1996
80.1
107.5
56.1
126.3
56.8
64.0
82.7
1997
78.4
108.4
55.5
124.4
59.2
65.0
82.7
1998
77.1
107.8
59.2
125.8
58.0
64.4
81.0
1999
75.2
108.5
63.6
122.2
58.3
67.3
83.3
2000
75.9
107.4
62.6
124.1
58.9
66.4
84.1
2001
74.4
107.2
59.7
125.4
60.9
66.7
84.1
2002
72.9
107.5
61.4
124.0
63.5
63.2
85.3
2003
71.1
107.5
61.2
124.8
60.3
61.4
84.0
2004
69.6
106.7
64.1
126.6
61.3
59.9
82.5
2005
72.8
107.7
61.9
124.3
59.9
58.3
81.3
2006
77.6
108.2
59.6
121.9
59.2
63.1
81.7
2007
80.2
105.4
62.3
126.5
61.4
61.8
80.7
2008
80.4
105.2
63.8
125.5
63.4
62.7
82.7
2009
77.2
105.2
67.5
125.0
63.1
62.0
81.8
to the index values, we annotated these charts with the opening dates of the major big-box retailers in each city. As would be expected, there is a great deal of correlation between major retail openings in the two cities. The increase in the Jefferson City index and corresponding decline in the Columbia index from 1980 to 1983 is due to the opening of Jefferson City’s Capital Mall in 1981. Jefferson City’s market share increased 1.6 percent during the following year while Columbia’s declined by 1.8 percent. In dollar terms, Columbia lost $57,600 in adjusted sales tax revenues, which in today’s dollars would be more than $136,000.
The increase in the Columbia index beginning in 1984, and corresponding decline in the Jefferson City index, is due to the opening of the Columbia Mall in 1983 (Phase I) and 1984 (Phase II). Over the two-year period of the opening, Columbia’s market share increased by 2.4 percent. All of the surrounding cities except Moberly experienced significant declines in their market shares at this time — Jefferson City lost 0.5 percent, Fulton 0.6 percent and Mexico 0.9 percent. In dollar terms, Columbia gained $64,600 in adjusted sales tax receipts, or nearly $140,000 in current dollars. The next significant shift in regional shares occurred in the third quarter of
Table 2.
Table 4.
Mid-Missouri Adjusted Per Capita Sales Tax Indexes
Mid-Missouri Major Store Openings
Jefferson city
Boonville
California
Moberly
65.1
120.8
92.5
117.1
93.0
101.8
63.2
121.7
96.0
116.1
97.7
97.9
101.0
58.5
127.6
98.8
112.7
93.8
1983
96.7
100.5
54.1
130.6
97.8
115.2
93.5
1984
92.4
101.4
57.6
126.0
89.7
117.5
93.1
year
Mexico
Columbia Fulton
1980
96.3
101.2
1981
90.8
1982
1985
89.4
102.1
62.0
120.2
85.7
107.8
93.3
1986
83.7
105.4
91.5
120.1
89.6
75.7
89.7
1987
84.2
104.9
63.6
117.1
91.9
93.8
92.4
1988
87.2
103.4
68.9
117.5
90.1
96.5
89.9
1989
88.7
104.5
66.1
116.1
84.2
97.6
90.4
1990
85.7
105.2
69.1
114.5
84.7
93.2
91.6
1991
86.6
106.3
68.8
112.8
84.8
88.3
85.7
1992
86.9
106.0
66.9
114.5
83.2
85.4
85.3
1993
87.3
107.5
66.5
115.4
81.1
87.7
73.7
1994
88.3
106.7
66.8
113.8
79.3
80.6
83.2
1995
83.8
107.8
59.8
115.3
73.8
81.0
87.5
1996
83.7
107.5
55.0
117.5
70.3
80.8
90.3
1997
80.0
109.3
54.2
114.5
73.4
81.3
92.6
1998
74.5
108.5
58.2
117.5
72.9
82.2
89.9
1999
79.6
108.8
62.5
112.8
71.9
83.8
94.4
2000
80.2
108.1
61.7
113.7
74.2
82.8
94.6
2001
81.2
107.1
58.5
116.1
76.0
84.4
95.7
2002
81.1
106.7
62.7
114.1
78.2
81.2
96.4 93.9
2003
77.9
107.1
60.6
116.4
73.1
76.8
2004
75.9
106.2
61.7
119.1
72.8
75.1
91.6
2005
80.5
407.1
60.0
116.2
71.7
74.0
90.2
2006
84.3
107.5
60.6
113.4
67.2
80.6
91.3
2007
85.9
105.0
62.8
118.3
68.9
75.8
90.1
2008
86.7
104.5
64.4
117.2
75.6
77.9
90.2
2009
83.3
104.5
68.1
117.1
75.4
77.0
89.2
1990, with the nearly simultaneous openings of the Columbia Sam’s Club and the first Jefferson City Walmart Supercenter. Each city experienced a significant increase in their market shares, 0.5 percent in Columbia and 0.8 percent in Jefferson City. As the size of the mid-Missouri market has grown, the impact of any new big-box opening has diminished. The opening of the Conley Road Walmart Supercenter in Columbia increased our market share by only 0.4 percent in 1994. The last significant market share increase — 0.2 percent — occurred in 1996 with the dual openings of Lowe’s and Home Depot.
city
store
year
Boonville
Isle of Capri Casino Supercenter
2001 2009
Jefferson City
Lowe’s Barnes & Noble Best Buy Kohl’s Supercenter East
2000 2003 2006 2007 2009
Fulton
Sutherland Mid City Lumber Sears Tractor Supply Orscheln
2006 2007 2007 2007 2009
Mexico
Super Center
2005
Moberly
Lowe’s
2009
The Closing Ring
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ommunity pride is not limited to Columbia. Every city exhorts its citizens to shop locally and support hometown businesses. The problem for Columbia is that the major surrounding communities now have many more local retail alternatives. Shoppers in outlying areas no longer have to drive to our fair city to spend their money. Table 4 presents major retail openings just since January 2000. Columbia is now bounded by supercenters and major building supply stores on all sides. If community pride matters and no new “super magnets” open in our city, then the days of robust sales tax growth are over.
Table 3.
Mid-Missouri Major Store Openings Change in Market Share date
event
Columbia
Jefferson city
Boonville
California
fulton
mexico
Moberly
1981. Q1
JC Mall
-1.8
1.6
0
0
0.5
-0.2
0
1983. Q4
Columbia Mall
2.4
-0.5
-0.2
0
-0.6
-0.9
0.3
1990. Q3
Sam’s/ JC Super Center
0.5
0.8
0
0
0
0.3
0
1994. Q2
Conley Super Center
0.4
0
0
-.03
0
0
0
1996. Q3
Columbia Lowe’s
0.2
0
0
0
0
0
-0.5
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ENTREPRENEURIAL SPIRIT
Tony Marrero
The Little Search Engine Optimizer That Could SoccerPro Enjoys Rapid Growth In The Online Marketplace by KATHY CASTEEL photos by L.G. PATTERSON
S
occer Hall of Famer Phil Woosnam had a straightforward game plan: “The rules of soccer are very simple,” he once said. “Basically it is this: if it moves, kick it; if it doesn’t move, kick it until it does.” Good advice for playing the world’s most popular sport. And, it turns out, it’s a kickin’ marketing plan for Columbia’s SoccerPro, a local specialty sporting goods shop that in just five years has grown to become the second-largest soccer retailer in the United States. From its brick-and-mortar beginnings, SoccerPro’s quick expansion into online commerce has brought in customers from all over the World Wide Web, fueling revenue growth of 40 to 45 percent a year. A recent merger with St. Louis-based SoccerMaster has stabilized the company and positioned it in the upper tier of the soccer market. Co-founder Tony Marrero remains at the helm of the enlarged retailer’s online efforts as he continues to write SoccerPro’s remarkable success story of savvy Internet marketing. So how did a little soccer store in Columbia, Mo., find a way to create all this excitement? Marrero smiles. “We didn’t tell anyone we were a little store in Columbia, Mo.”
Bricks And Mortar And Cyberspace The brainchild of two former Hickman High School soccer teammates, SoccerPro opened in April 2004 as a small retailer in Bernadette Square catering to local players and fans. Partners Tony Marrero
and Curtis Stelzer stocked the store’s 1,100 square feet of space with shoes, jerseys and other gear from Nike, Adidas, Puma, Umbro and Diadora. “The online store was always in the plan,” Marrero says. “We launched the Web site in late fall with a simple
application. We had an 800 telephone number and an e-mail address, and we worked hard to provide an image and answer our customers’ needs.” Marrero intended the Web site to complement sales at the Bernadette Square store. Instead, it opened up a new leader for sales growth. Through search engine optimization, SoccerPro fine-tuned the image it presented to potential customers, increasing the odds that interested shoppers — even those who had no idea where Columbia, Mo., was located — would find their way to the Web site. Search engine marketing is a vital aspect of e-commerce. Through sponsored ads and links, businesses can position themselves to appear high on the list of results from a search engine such as Google. The pay-per-click model, in which advertisers pay the search engine host only when their ad is clicked, is keyword-specific to generate focused results for individuals seeking the product the advertiser is selling. But pay-perclick advertising — available from many providers, including network operators such as Google AdWords, Yahoo! Search Marketing and Microsoft adCenter — can be expensive, Marrero says. “Sponsored ads are quick and effective,” he says. “But you must make sure the ad is good and gets appropriate viewing through correctly chosen keywords. And you have to manage your budget for that advertising.” Marketers with more patience than budget can forgo the pay-per-click model by building a keyword base, Marrero says. By editing Web content and coding, merchants can optimize the relevance of Web sites to search-engine keywords. The more often a Web crawler encounters the search term on a site, the more relevant the site is to the search. Search results are displayed with the most relevant at the top of the page. “You want to be in the top two or three links after the sponsored links,” Marrero says. “It takes time to build that base. You have to be patient.” The partners had the patience to build their market. Stelzer focused on the local retail operation and customer relations, winter 2010
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SPIRIT and Marrero became “the online guy” who managed the business side of SoccerPro. “I enjoy working in the engine room,” Marrero says, acknowledging a comparison to Scotty in the old “Star Trek” television series. Working in the engine room was good for business. E-commerce grew rapidly; by 2007, SoccerPro was the largest individual soccer specialty shop in Missouri, conducting 65 percent of its business through its Web site. Online sales now account for 90 percent of business. SoccerPro ships to all 50 states, Canada, Puerto Rico and Guam; more than 25 percent of its customers are in California, followed by large consumer contingents in Illinois, Texas and New Jersey. SoccerPro’s growth occurred as other soccer retailers faced declining sales. “There were times when it was difficult to convince Adidas and Nike that we grew so quickly in two years,” Marrero says. “Not that they didn’t believe our sales figures, but just the fact that we were seeing any growth at all. Most retailers were dropping in sales from the year before. Overall, it was just a tough time. We had seen, on average, 40 percent growth from the year before since we opened in 2004. From 2006 to 2008, we doubled our business.” The company is now nationally recognized by Nike as a marketing partner.
With A Little Help From My Friends … Marrero is quick to point out that SoccerPro’s early success was not a solo effort. The partners took advantage of various networks of talent with Internet expertise. “You can’t work in a vacuum,” he says. “We did what we could, then brought in marketing talent.” Marrero reached out from Missouri to Texas, tapping networks at his alma mater, Texas Christian University, and local experts such as Brant Bukowsky, who heads up the online marketing team at VAMortgageCenter.com. “We surrounded ourselves with intelligent and generous experts,” Marrero says. “There’s a lot more online marketing talent in Columbia than anyone here realizes.” Networking through Bukowsky brought Travis Smith to SoccerPro in 32
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SoccerPro quickly outgrew its original space at the front of Bernadette Square. By the summer of 2008, the business had moved to roomier digs in the shopping center, closing its warehouse by Cosmo Park and consolidating inventory in more than 5,600 square feet to house its retail and shipping operations at 2525 Bernadette Drive.
early 2008. Coming from MidwayUSA — “another great company that’s doing amazing things online,” he says — Smith was drawn to SoccerPro “because given a dedicated effort to search marketing, rapid growth was on the horizon,” he says. “At the time I had five years of Internet marketing experience behind me and was fully aware of the explosive growth that was possible. Like any other entrepreneur knows, the appeal of using your passiondriven skills to grow a company is nearly impossible to resist.” It was a good match, Bukowsky says. “Tony knew the value of online marketing. He had the foresight to know that every company should be doing business online. Travis has done an amazing job of increasing site traffic.”
The E-Commerce Expressway Traffic to the SoccerPro Web site, where there’s “no charge for awesomeness,” increased 800 percent in 18 months. “One of the most measureable indicators of success has been the number of highly targeted visitors (meaning a visitor that has searched precisely for what we’re selling) that come to our site every day wanting to buy,” Smith says. In 2007, about 1,000 to 2,000 unique visitors came to www.soccerpro.com each day. Last year, that number was between 4,000 and 5,000. This year’s traffic is up to 8,000 to 10,000 daily visitors and Marrero expects close to 20,000 visitors a day during the holiday season. An infusion of creativity and humor has enhanced the Web site experience for shoppers, Marrero says. “At first, we were very structured, but now we feel pretty winter 2010
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SPIRIT good about ourselves and we’re more relaxed. Humor helps. Customers want to do business with us because of the way we do business.” And that includes doing business with Sergio the Soccer Squirrel, SoccerPro’s mascot who signs transactional e-mails, engages customers in live chat and tweets from the company’s Twitter account. “We’ve had a strong business and ranked well nationally as a single store if you include our Web business,” Marrero says. “Not many stores could compete with what we did out of our ‘single door.’ The addition of our Web inventory that we kept in the retail store’s back room made that retail store much larger than most soccer specialty brick-and-mortar stores.” Keeping that back room full proved difficult, Marrero concedes, and was a major impetus for the merger with SoccerMaster.
Online shoppers do business with Sergio the Soccer Squirrel. “We were looking for stability,” he says. “SoccerMaster has been around since 1978, but it had focused on its brick-and-mortar stores and hadn’t really developed much of an online presence. Our online expertise complemented their retail capabilities. It has made our Columbia retail store like a candy store for soccer customers.” SoccerMaster, which has retail outlets in Missouri, Illinois, Kansas and Arizona, grew by 20 percent with the acquisition of SoccerPro. The SoccerPro Web site remains as a division of SoccerMaster. Marrero is now manager of SoccerMaster’s online division, which is still known as SoccerPro. The 37-year-old entrepreneur has high expectations for maintaining growth “in a strategic way,” he says, expanding the opportunities as he fine-tunes the company’s shipping costs and order tracking. “We want to be the national leader in soccer retail,” Marrero declares. “So we’ll make sure the customer has a good experience.” 34
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Searching For Success
S
earch marketing is about intercepting people with an itch to scratch,” says SoccerPro Marketing Director Travis Smith. “They tell you what the itch is, and with scientific precision you can scratch it for them. It’s turned the world of selling upside down.” It is becoming easier to reach those itchy Web customers, if you know whom you’re trying to reach. The Online Publishers Association’s current analysis of Internet activity shows that consumers are spending the majority of their online time at content sites, where brand marketers want to reach and engage them. In the past six years, the OPA says, consumers have doubled the time they spend searching — about an hour a day now — as a way to navigate the Internet. And it is the searchers, not surfers, that online marketers want to reach. A new study from University of Missouri researchers Kevin Wise, Hyo Jung Kim and Jeesum Kim indicates that those who acquire information through Internet searching are more engaged with the information than those who stumble upon information through surfing the Web. “Once someone has made the choice to find something (when searching), that something becomes a signal stimulus,” Wise says in the Journal of Media Psychology. Such behavior is borne out in Internet marketing plans that include search engine optimization, Web site blogs and social networking sites. Search engine optimizers focus Web sites on specific keywords designed to reach the most interested consumers. The trick, says SoccerPro co-founder Tony Marrero, is “to turn all those visitors into loyal customers.” A good place to start learning about Internet marketing is the Internet, says Brant Bukowsky of the online marketing team at VAMortgageCenter.com. He recommends the resources at SEOmoz, a search engine optimizer in Seattle. “Check out the variety of guides, blogs and articles offered on www.seomoz.org,” he suggests. Other Web sites Bukowsky recommends: www.problogger.net www.marketpilgrim.com http://adwords.google.com
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MARKETPLACE
Food Fight
Hy-Vee By The Numbers
Name: Hy-Vee Inc. Founded: 1930, Beaconfield, Iowa Stores: 228 (the Conley Road store will be No. 229), plus specialty stores. Employees: 56,000 Annual Revenue: $6.4 billion National Market Share: 1.5 percent, one of the top 30 grocery chains CEO: Ric Jurgens
How The Opening Of A New Hy-Vee Changes Columbia’s Grocery Market
Pass The Peas, Please
by John Littell photos by L.G. PATTERSON
H
y-Vee Inc. is hungry for business. So hungry, in fact, that in November the company opened a new, 78,000-square-foot store on Nifong Boulevard, to be followed by a similarly sized supermarket on Conley Road this spring. Either the residents of Columbia have a major case of the munchies or the Des Moines-based grocery chain is betting a bundle that this city can support three of its superstores. “Because we are a privately held, employee-owned company, we have the luxury of taking a long-term approach,” says corporate spokesperson Ruth Comer, assistant vice president for media relations. “We don’t have to impress the analysts every quarter. Our original store in Columbia was a leader in sales and profits from the first and we have been planning to expand for eight years. It just so happened that two desirable properties became available at the same time.” As in real estate, the three cardinal rules in the grocery business are: location, location, location. People shop at a particular store because of the service, the selection and the price, but also because of the convenience. It’s all very well to sell paprika at half off, but nobody is going to drive 50 miles to score some reasonably priced spice.
Hy-Vee Inc. employs more than 56,000 people, but one former associate remains a standout — Arizona Cardinals quarterback Kurt Warner. When he was 24, Warner was cut by the Green Bay Packers and was desperately looking for a job. He found one at Hy-Vee in Cedar Falls, Iowa. With his arm, he probably restocked shelves from across the aisle, but football fame found him again and the rest is the stuff of NFL Hall of Fame history.
Columbia’s second Hy-Vee opened Nov. 10 at 405 E. Nifong Blvd. The supermarket employs a staff of 425. “We’re in our 80th year and that’s a long time,” Comer says with a laugh. “We stick with the fundamentals. Consistency means success.” The chain has weathered societal changes and found that virtues like friendly service are timeless and continue to attract customers. Hy-Vee was founded during one of the worst economic times ever — 1930 — by Charles Hyde and David Vredenburg. The current name, which was adopted
in 1952, is a combination of the partners’ last names. The corporation now does business in eight Midwestern states and boasts 228 grocery stores and an array of specialty shops such as drug stores and gas station convenience stores. The chain racked up more than $6.4 billion in annual revenue during the latest reporting period. Although this is a big company by any standard, it enjoys about 1.5 percent of the national supermarket chain business. winter 2010
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MARKETPLACE Gerbes The 800-pound gorilla in the room is Walmart, the largest grocery retailer and private employer on the planet. With three supercenters and a Sam’s Club in founder Sam Walton’s hometown, Walmart Walmart is a force is a force to be reckoned to be with locally, but reckoned giving it a run for its Columbia with locally, revenue is Gerbes, but giving it with three a run for its supermarkets Columbia in town. If you revenue is thought Gerbes Gerbes. was a parochial concern, think again. It is a part of The Kroger Companies, the second-largest grocery purveyor in the United States, with 2,500 supermarkets, 320,000 employees and revenues of $76 billion. Founded in 1883 by Barney “Be particular, never sell anything you would not buy yourself ” Kroger, son of a Cincinnati merchant, the chain now does business in 31 states under two dozen names, including Kroger, Ralph’s, Fred Meyer and Gerbes. Barney made his fortune by combining the meat and grocery businesses under one roof, and by baking his own bread in anticipation of the revolution of in-house brands. Today, Kroger produces 41 brands that account for 24 percent of revenue.
Schnucks Another potent player in Columbia’s grocery game is Schnucks on Forum Boulevard. It’s part of the 106-store Schnucks Markets Inc. headquartered in suburban St. Louis. With a reach of seven states, the corporation employs 15,000 38
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people and has sales of $2.5 billion annually. Begun in 1939 by Edwin and Anna Schnuck and their sons, Donald and Edward, it has blossomed into one of the largest privately held grocery stores in the country. There is still a Schnuck at the helm. With the threat of almost 160,000 square feet of Hy-Vee competition, Schnucks’ Columbia store manager Bill Chrisco says that competition is all part of the game and keeps him sharp. “Many customers will visit a new store just because it’s new or convenient,” he says. “That means we have to strive to do better, especially in this economy. A customer who is used to spending $100 a week may have to change their habits and spend, say, $75. Not only that, but they may be looking for different kinds of product.” If steak is off the menu, hamburger is in. Chrisco, 62, arrived in Columbia in the summer of 2002, after working in the St. Louis metro area since 1965. “I moved to 29 or 30 different stores there,” he says. But he had never received such a friendly reception as he did here. “I was surprised when regular customers introduced themselves and welcomed me to town,” he says. “It’s a nice atmosphere to do business in.” Schnucks also provides a valuable service for shut-ins, layabouts and those who are psychologically unable to resist impulse buying — Schnucks Express. Shop online, in the comfort of your pajamas, and for a small fee they will deliver to your door. The service is fast and efficient.
Patricia’s Foods For those who prefer a smaller, more intimate shopping experience, there’s Patricia’s Foods on North Keene Street, one of a six-store chain all located in Missouri. Todd White, the 39-yearold director of operations, owns the company with four other partners. The 37,000-square-foot store in Columbia prides itself on a loyal customer base. “We’re a very, very friendly, serviceoriented store,” White says. “We are one of the last to have meat cutters and don’t just sell prepackaged meat. We also have one of the best wine selections around.”
A 13-year veteran of the HyVee operation, White has nothing but praise for the organization, yet wonders if the plan will be completely successful. Patricia and her friends will be right in there defending their hardwon territory. That brings up a nagging thought that the double-barreled blast of new stores in Columbia has more to do with accounting practices than demographics. All projects of this magnitude take months and months of planning. Perhaps, like most everyone else, Hy-Vee was surprised by the severity of the economic downturn, but had sunk so much money into the project, it was cheaper to move ahead than to cancel.
Long-Term Strategy For whatever reason, Hy-Vee is entering a maelstrom supermarket competition, battling big and bigger chains, as well as smaller, more service-oriented operations. The company says it will continue its successful “Hy-Vee Hot Deal” TV advertising, stressing savings and price, and hoping to elicit “a smile in every aisle.” Only now, there are a lot more aisles to gin up grins in. “We have the same philosophy as our founders Hyde and Vredenburg,” Comer says. “We’re in this for the long run.” winter 2010
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INVENTIONS Kattesh Katti (on left) and Raghuraman Kannan
MU’s Gold Rush
Excitement Is Building About The Potential Of Gold Nanoparticles As A Cancer Treatment by SANDY SELBY photos by L.G. PATTERSON
O
nly in fairy tales can someone spin straw into gold, but now University of Missouri researchers are on the verge of spinning gold into a breakthrough treatment for cancer. As they sit in their offices next door to the Ellis Fischel Cancer Center, Kattesh Katti and Raghuraman Kannan can barely contain their excitement about the potential for the new treatment they have developed. In monetary terms, this new treatment could translate into a market value of between $700 million and $1 billion a year, but of even greater value are the lives it could save. And it all starts with a nanoparticle, which Kannan, an assistant professor in MU’s Department of Radiology, describes as a collection of atoms. “To make it very simple,” he says, “you can put 100,000 nanoparticles in a strand of hair.” “It’s almost like leaving an ant in a car,” says Katti, a Curator’s Distinguished Professor of Radiology and Physics. “It’s really just a tiny ant compared to the size of a car.” Katti and Kannan are using gold nanoparticles in their research because of gold’s proven affinity with proteins in the body. The researchers hypothesized that radioactive gold
nanoparticles, which emit therapeutic beta radiation, could be injected into a cancerous tumor. Unlike other injectable treatments that migrate out of the tumor before they can do much good, they thought the nanoparticles might actually stay put. The next step was to test their theory on mice. “We have done a series of experiments and what we observed in 100 percent reproducible fashion was that more than 90 percent of the injected dose stays in the tumor for a minimum of 24 hours,” Katti says. “The industry standard is if you can achieve 10 percent retention, it’s a big deal. So you can see that’s why there’s all the excitement here, at the National Institutes of Health and everywhere.” What’s more, Katti adds, the side effects were minimal or nonexistent. The first round of experiments focused on prostate cancer. Katti and Kannan injected just one dose of the radioactive gold nanoparticles in a winter 2010
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INVENTIONS prostatic tumor, and then monitored the tumor’s size over the next 30 days. “We saw there was absolutely no growth in the tumor at all,” Katti says. “Not only that, the tumor actually shrunk.” In the control group, the tumors grew by six to eight times over the same period. “We followed the second set of animals for 60 days and the data has come out stellar,” Katti says. “There is absolutely no growth of tumor over a 60-day period. So in all probability, we can use it for humans and one shot will not only shrink the tumor, but there will be no further growth of the tumor.” If this treatment were effective solely for prostate cancer, it could save thousands of lives in the United States and abroad each year. “It appears from all the statistics that Dr. Kannan and I recently heard from the National Cancer Institute meeting, there is a strong consensus that if somebody is a male, they will get prostate cancer,” Katti says. “How dangerous it will be, and to what extent they can tolerate, and the genetics of the individuals will all dictate how quickly the disease will spread, but the bottom line is the male population will suffer from prostate cancer. There is no escape from that. “The detection of prostate cancer has met with certain challenges,” he says. “There are clearly conflicting reports that PSA [prostate-specific antigen] measurement alone will not lead to accurate diagnoses, which means lots of patients will go unnoticed or misdiagnosed. There are many cases where the tumor grows to such levels that surgical removal becomes a life hazard. What do you do?” If a treatment came along that could shrink a tumor and make it operable, that treatment would revolutionize prostate cancer management. But Kannan and Katti believe their radioactive gold nanoparticle treatment could be used to control all kinds of cancer. “Pancreatic cancer is one target we’re currently investigating,” Katti says. The research is a cross-campus collaboration between the University of Missouri’s School of Medicine Radiology Department, the College of Veterinary Medicine, the Department of Chemistry and the MU Research Reactor. Testing is 42
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If this treatment were effective solely for prostate cancer, it could save thousands of lives in the United States and abroad each year. currently taking place with dogs, which provide a near-perfect model for this particular research project. “Prostate cancer in dogs is 100 percent similar to prostate cancer in humans,” Kannan says. One of the collaborators, Sandra Axiak with the College of Veterinary Medicine, is conducting the experiments. “In dogs, prostatic cancer is not well studied, and therefore, we have no standard of care for treatment,” Axiak says. “In collaboration with Dr. Katti, we have initiated a preliminary clinical investigation in dogs diagnosed with prostate cancer, studying both the safety and effectiveness of radioactive gold nanoparticles injected directly into the prostatic tumor.” Early findings on the dog research are promising and from there, the goal is to begin human testing. Katti and Kannan are submitting a proposal to the U.S. Food & Drug Administration in 2010. If the proposal passes FDA muster, human trials can begin at Ellis Fischel Cancer Center. “The plan is to conduct Phase I clinical trials right here because we have all the expertise here and we have Ellis Fischel next door,” Katti says. “This place needs Phase I clinical trials.” Katti and Kannan have licensed their nanotechnology through a spinoff company, Nanoparticle Biochem Inc. Henry White is the CEO of the organization and handles the business side while Katti and Kannan concentrate on the science. The pair of researchers also had business in mind when they went for and won an NIH Small Business Innovation Research grant they used to develop a kit that simplifies delivery of the nanoparticle treatment to patients and will give them
a running start toward large-scale human treatment. Katti and Kannan say the important research they’re doing could not happen anywhere else, thanks to the convergence of a medical school, veterinary college and research reactor in one town. But that’s not the only reason these world-class, soon to be world-changing researchers call Columbia home. “A lot of people say this is a flyover place,” says Katti, a 20-year Columbia resident. “But if you land here and you happen to stay two or three days, you begin to fall in love with this place.”
A Professor By Any Other Title Most of us go through our careers one job title at a time, but Kattesh Katti and Raghuraman Kannan have multiple titles to go with their many university affiliations. While it might make for a wordy business card, it’s an indication of how highly respected these gentlemen are at the University of Missouri.For the record, Katti’s official title is Curator’s Distinguished Professor of Radiology and Physics, Margaret Proctor Mulligan Distinguished Professor of Medical Research, Senior Research Scientist at University of Missouri Research Reactor, Director of the University of Missouri Cancer Nanotechnology Platform. Kannan has earned the titles of assistant professor in MU’s Department of Radiology, and Michael J. and Sharon R. Bukstein Distinguished Faculty Scholar in Cancer Research, Director of the Nanoparticle Production Core Facility. If the early promise of their cancer treatment comes to fruition, they will surely be adding more titles and accolades behind their names. Nobel Prize winner, perhaps?
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REGIONAL ROUND-UP Jefferson City Computing Firm Wins Prestigious Contract
J Two Mid-Missouri Hospitals Named Best Values
D
ata Advantage LLC recently selected 75 hospitals for the Best in Value: Superior Quality Merit Award from the 2009-2010 Hospital Value Index, the first and only national study of U.S. hospitals and the value of care they provide. Moberly Regional Medical Center and St. Mary’s Health Center in Jefferson City were two of only three Missouri hospitals to make the list. (Heartland Regional Medical Center in St. Joseph is the third.) The 2009-2010 Hospital Value Index is an independent analysis of each hospital’s performance in the categories of quality, affordability and efficiency, and patient satisfaction. Out of the more than 4,500 hospitals that were analyzed, 75 received the Superior Quality Merit Award for achieving high marks in the quality category. “This group of hospitals has a proven ability to deliver high-quality care, a key element in providing overall value to their communities,” says Hal Andrews, CEO of Data Advantage. “Our study suggests that hospitals that achieve outstanding scores in the area of quality will be rewarded in the new world of value-based purchasing, so each of these hospitals is off to a good start.” The quality category is analyzed using data from the Centers for Medicare and Medicaid Services Core Measures, AHRQ Patient Safety Indicators, CMS 30-day mortality scores and CMS-reported hospital readmission rates. In order to receive the award, hospitals were first considered as Best in Value, or in the top 25 percent of all hospitals in the study. The top 10 percent of this group were then ranked in the quality category in order to receive the Superior Quality Merit Award.
efferson City’s Summit Financial Solutions Inc., an affiliate company of Computer Services Inc., recently announced that Great Southern Bank has selected the Summit.NET imageprocessing platform to be the foundation for its item processing services. Great Southern Bank is a $3.7 billion regional community bank based in Springfield. The bank serves customers in Missouri, Kansas, Iowa and Nebraska. According to Lin Thomason, vice president of information systems at Great Southern Bank, the choice to go with Summit.NET was an easy one. “Summit.NET is consistent with Great Southern’s strategy of surrounding our core system with best-of-breed integrated solutions to meet the bank’s processing objectives and customer requirements,” Thomason says. “We are very proud to add Great Southern Bank as a Summit client,” says Ron Thill, president of Summit Financial Solutions. “We believe the Summit philosophy to focus on our customers and provide the best solution and service possible will work well with Great Southern Bank’s growth plans. Great Southern Bank joins a number of multibillion-dollar institutions that have ordered Summit.NET this year. Summit Financial Solutions is a developer and provider of payment processing software and services. Summit introduced the financial industry’s first integrated check imaging solution based entirely on Microsoft’s .NET platform. Summit.NET was the first system specifically built to handle the electronic image exchange requirements of Check 21. The company’s open data and image capture, exchange, remittance and lockbox solutions are in service at more than 600 banks.
Construction Underway At Linn State Tech
S
tarting the fall semester of 2010, the majority of Linn State Technical College transportation programs will have a new home. Construction of the Vehicle and Power Center is currently under way with the anticipated completion of the building prior to the fall of 2010. The 84,000-square-foot facility will provide adaptive, flexible space to meet the highly specialized lab and
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classroom requirements for heavy equipment and transportationrelated technician programs. The academic programs moving into the building include Heavy Equipment Technology, Caterpillar Dealer Service Technician Option, Medium/Heavy Truck Technology, Automotive Collision Technology, Powersports Technology and other emerging technologies.
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An Inside Columbia’s CEO
Special Report by SANDY SELBY
The 2010 Columbia Business
Sentiment survey Few businesses emerged unbruised by a brutal 2009. As we bid good riddance to a difficult year, we at Inside Columbia’s CEO wondered if optimism was another casualty of the economic downturn. To get the answer, we went to Columbia’s leading business brains and asked them to share their candid assessment of what our community is doing right, where it’s going wrong and what they think the future holds for the economy. Eighty top-level executives and business owners participated in our first-ever sentiment survey and their responses may surprise you.
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The 2010 Columbia Business
Sentiment survey 14%
Look Who’s Talking Our survey respondents represent a diverse group of businesses. The majority of those businesses (77 percent) are privately owned but we also heard from leaders of nonprofit organizations (9 percent), federal and state institutions (6 percent) and publicly traded businesses (6 percent). Nearly 57 percent of those surveyed are full or part owners of the business with the remainder identifying themselves as employees. As would be expected with any group of top execs, the age range skews toward maturity, with only 8 percent identifying themselves as 39 or younger. Nearly 50 percent of respondents are in their 50s. Male respondents outnumber women nearly 3 to 1. There was a good mix of responses when we asked how long these owners and managers have been in their current position. A slim plurality (29 percent) has been in their current jobs for 10 to 25 years, but nearly as many have held their positions for 5 to 10 years (27 percent), and fewer than 5 years (24 percent). Those who have surpassed their silver anniversary in their current job account for the remaining 20 percent. Some of our survey respondents represent large organizations with thousands of employees and massive budgets, but most work in smaller operations reporting annual revenue of less than $10 million and 50 or fewer employees. 48
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19%
8%
Annual Revenue Of Survey Respondents’ Businesses
8% 3% 3%
45%
n Between $1 million and $10 million n $100 million+ n Less that $500,00 n Between $10 million and $25 million n Between $500,000 and $1 million n Between $25 million and $50 million n Between $50 million and $100 million
16% 22% 11%
Number Of People Employed By Respondents’ Businesses
9%
5% 33%
5%
n Between 10 and 50
n Between 100 and 500
n Fewer than 5
n Between 50 and 100
n More than 1,000 people
n Between 500 and 1,000
n Between 5 and 10
The 2010 Columbia Business
Sentiment survey
THE Economic Outlook We asked the executives to give us their 2010 economic predictions for the city, state, nation and world. Interestingly, most are, if not downright optimistic, at least hopeful that things wouldn’t get worse for the global and national economies. The pessimists gained ground when the discussion turned to the state economy with 31 percent predicting further decline. In Columbia, the outlook is much more positive. Nearly half expect the local economy to improve in 2010; only 14 percent are bracing for tougher times.
2010 ECONOMIC OUTLOOK 38%
n Stay the same n Improve n Decline
38%
united states
worldwide
17% 44%
44%
missouri
17%
columbia
30%
14%
37%
39%
Business As Usual? Next, we asked the executives to take a hard look at their own operations and give us an honest assessment of where things are heading in 2010. A significant percentage (62 percent) are preparing for an increase in organizational costs — things such as payroll, benefits and other overhead expenses. Almost as many (54 percent) believe business revenues also will increase in 2010. There’s a decided lack of confidence and consensus in the profitability forecast but the optimists looking for higher profits hang onto a slim plurality in the category. In what should be reassuring news for those yet to reach the executive suite, some two-thirds of business owners and managers surveyed expect staffing to stay at current levels. Unfortunately, 19 percent do anticipate a decrease and only 14 percent expect to add jobs in 2010.
49%
31%
37%
29% ORGANIZATIONAL COSTS
62%
revenues
10%
10%
54%
LOCAL BUSINESS PROJECTIONS FOR 2010 n Increase n Stay the same n Decrease
35%
profits
67%
24%
staffing
19% 40%
14% winter 2010
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The 2010 Columbia Business
Sentiment survey
What Matters To Business The cost of living in Columbia is the single most important contributor to quality of life in our city. That’s according to the surveyed execs, who ranked cost of living as No. 1 on a list of seven contributors to quality of life. Here’s the executives’ entire list, in order of importance to those surveyed: Cost of living
Educational resources
Entertainment opportunities (sports, the arts, etc.)
Perhaps that attractive cost of living is responsible for the quality of the region’s workforce. The executives in the survey are overwhelmingly satisfied with Columbia’s workforce quality; 60 percent rate it adequate and 37 percent give it a high rating. There is room for improvement in Columbia’s business environment, though, and increasing financial incentives for business is at the top of the surveyed executives’ wish list, followed closely by crime control.
Travel and transportation infrastructure
Weather/climate
Recreational resources (parks, golf courses, lakes, etc.)
8%
33% Local Government Priorities: The Business Community’s Wish List
8% 6% 8% n Increasing financial incentives for business
37%
n Controlling crime n Improving public school education n Improving airport/air service n Infrastructure (streets, sidewalks, sewers, stormwater) n Other
What Worries A CEO? The current economic climate
Competition
Cost of goods and services
Government regulations (city, state and federal)
Although most of the executives and business owners we surveyed say they are very satisfied (59 percent) or mostly satisfied (34 percent) with their jobs, they still lose sleep over the challenges facing their businesses in 2010. Here’s the list — ranked from most to least worrisome — of the challenges Columbia businesses are up against. In some ways, the personal challenges facing an executive are the same as the challenges facing his 50
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Maintaining competitive salaries and benefits for employees
Employee morale
The availability of labor
or her business; our survey respondents worry most about maintaining a competitive edge but they’re also concerned about motivating and inspiring the next generation of leaders. Sound decision-making is the most important attribute a manager can possess, according to those we surveyed, but the ability to think strategically and act ethically also receives high ratings.
The 2010 Columbia Business
Sentiment survey
What’s In It For Them? What brings a smile to a CEO’s face? According to our survey, the grins come from making a positive impact on the lives of customers and employees. Spending time with family is also highly rewarding for this survey group, as is their company’s overall success. Family comes in at No. 1 when we asked the execs about the most influential people in their lives. Spouses and parents are the most common answers; some give credit to Jesus Christ, professional mentors and other family members. Spouses also earn high marks as confidantes, outscoring other managers, business partners and friends. 20%
23%
23%
15%
The Measure Of A CEO’s Personal Success
8%
The Greatest Influences In A CEO’s Life
13%
20%
5%
Who Does A CEO Confide In Most?
7% 5%
3% 7%
57%
25%
42%
27%
n Impact on the lives of employees and customers
n Spouse n Spouse
n Other managers
n Parent(s)
n Business partner(s)
n Company’s success
n Professional mentor
n Friend(s)
n Personal financial security
n Jesus Christ
n Chief financial officer
n Other
n Other
n Other
n The amount of time spent with loved ones
18%
19%
n Sound decision-making
27% 10%
The Most Important Attributes For A Successful CEO
n Strategic thinking n Strong ethics n The ability to remain calm in crisis
10%
32%
n Other
Top Challenges For CEOs/ Managers
12%
3%
n Sustaining a competitive advantage n Maintaining profitability 35%
n Developing leaders
34%
n Attracting and retaining good employees n Other winter 2010
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CAPITAL VENTURE Boone County’s Lawmakers Look Ahead To The 2010 Legislative Session
by KAT HY CA STEEL
When the General Assembly convenes in Jefferson City for the 2010 session of the Legislature, the watchword in the statehouse halls will hearken back to a campaign slogan of the 1990s: It’s the economy. The recession has put a damper on business activity in the Show-Me State and cast a long shadow over efforts by area lawmakers to stimulate the mid-Missouri economy. Boone County’s delegation of four state representatives and one state senator will arrive in the capital city this January hoping to balance economic reality with prospects for safeguarding the area’s financial future. In this preview of the next legislative session, lawmakers offer their ideas to stimulate the Columbia business climate in the face of declining tax revenue and looming budget cuts. Their proposals run the gamut of highway and construction projects, bond issues, tax credits, new business startups, encouraging science and technology development, and ideas for innovative industrial growth.
Sen. K urt Sc haef er Kurt Schaefer (R-Columbia) represents the 19th District — Boone and Randolph counties — in the Missouri Senate.
What are the most important issues coming up in the 2010 legislative session that will affect the Columbia economy?
With Missourians facing doubledigit unemployment and tighter budgets at home, the Legislature must focus on job-creating initiatives. Our focus should be on long-term employment, continued funding for education and job training, and helping to reduce burdens and red tape on small businesses. The outlook is for additional budget cuts next year if Missouri is to live within its means in this current economy. Where do your priorities lie in making the hard decisions to cut funds? When push comes to shove, where will you vote to cut first: higher education, K-12 schools or health care?
Missouri is facing double-digit decreases in state revenue. Couple that with a balanced budget requirement for our state budget, and the governor and state Legislature are going to have to make some very tough decisions. Ultimately, it is the governor who will submit a balanced budget to the state Legislature. When the governor does submit his budget in January, I will look at each program and determine which of his cuts in funding will have the least-negative impact on Missourians. Should the approved state funds for
construction of a new Ellis Fischel Cancer Center remain in limbo to alleviate the budget shortfall? Do you think the funds should be released?
The purpose of the federal stimulus funds was to increase the number of people in the workforce by investing in shovel-ready projects. The Ellis Fischel Cancer Center is not only a shovel-ready project, it will provide expanded teaching opportunities and state-of-the-art cancer treatment to those who need it most and can afford it the least. I strongly disagree with the governor’s withholding of these funds and will continue to work toward ensuring this project is completed. What are your local priorities for Missouri’s unspent federal stimulus funds from the American Recovery and Reinvestment Act of 2009?
The expansion of Ellis Fischel Cancer Center at the University of Missouri is my top local priority. Should the state issue general obligation bonds to fund higher education building improvements, construction, landscaping and land purchases? How would such a program specifically benefit Columbia?
If done properly, I support placing a statewide bonding proposal on the ballot for a public vote. With the current economic downturn and historically low interest rates,
a sensible bonding proposal could help put Missourians back to work, help the state complete much-needed capital infrastructure improvements, and help provide flexibility to our institutions of higher education at a time when operating budgets are short of cash. Because we are home to the flagship of the University of Missouri system, the Columbia area stands to gain the most from such funds. If the U.S. Congress proceeds with a public option for health insurance in the federal health care legislation while offering states the choice of participating, would you support or oppose Missouri opting out of a government-run health insurance plan?
At this point it is simply too early to make a decision. With the significant differences between the bills in the U.S. House and U.S. Senate, it is impossible to know what the final bill will look like. Do you have any proposals for economic development incentives in Columbia and Boone County?
Last session, I sponsored legislation that allowed the Department of Natural Resources to accept federal stimulus funds and disburse those funds as grants for energyefficiency projects. The Columbia landfill, with its new bioreactor and landfill gas-powered generators, is uniquely situated to benefit from
such funds for the generation of sustainable energy and to anchor new and innovative industrial growth in the surrounding area. Columbia can — and should — be at the forefront of Missouri’s energy-efficient industrial future. I intend to work with the city of Columbia, Boone County, Regional Economic Development Inc., local businesses and many others to maximize development of forwardthinking and job-creating projects in and around our community.
“The expansion of Ellis Fischel Cancer Center at the University of Missouri is my top local priority.”
rep. mary still Mary Still (D-Columbia) represents the 25th District, which encompasses eastern Columbia and southeastern Boone County, in the Missouri House of Representatives.
What are the most important issues coming up in the 2010 legislative session that will affect the Columbia economy?
In Columbia, our most important priority must be funding for public education and the University of Missouri. We must have good public schools if we are to attract the professors, the insurance professionals and the medical professionals that make up the backbone of our economy. These professionals want their children to go to good public schools. Additionally, we must make funding for MU and the School of Medicine a top priority if the economy of our community is to prosper. I also want to continue to push the need for payday lending reform . The Better Business Bureau reports that Missouri allows lenders to charge up to 1,950 percent APR on a twoweek loan, the highest allowed among the 43 states who still allow payday lenders to operate. I support the same bill sponsored by former U.S. Sen. Jim Talent. That bill was specific to military families and it limited interest rates to 36 percent and did not allow rollover of loans. I believe all hard-working Missourians are worthy of this same protection. The outlook is for additional budget cuts next year if Missouri is to live within its means in this current economy. Where do your priorities lie in making the hard decisions to cut funds? When push
comes to shove, where will you vote to cut first: higher education, K-12 schools or health care?
To those who support a smaller government and lower taxes, this will indeed be a glorious year. In Columbia, however, where our economy depends on good public schools, a top-rated state university and medical services, this is the most challenging budget we have experienced since the Great Depression. Cuts to Medicaid affect University Hospital, which affects our local economy. Cuts to schools will hurt our ability to attract quality professionals to our community, and cuts to the University of Missouri will affect our ability to provide the education our
interest rates, available federal funding and eager contractors, it is financially irresponsible not to support general obligation bonds similar to those Kit Bond proposed in the 1980s. Should the approved state funds for construction of a new Ellis Fischel Cancer Center remain in limbo to alleviate the budget shortfall? Do you think the funds should be released?
I think the funds should be released and it is a significant accomplishment that this funding passed through the Legislature. However, I am not optimistic that the money will be released. The revenue situation is bleak. First-quarter state revenue has
“In Columbia, our most important priority must be funding for public education and the University of Missouri.” students need to help our economy move forward. None of these are good options and we as legislators must do our best to balance the damage. I support a statewide bond issue to get our economy moving so that our cuts will not be so dramatic. In a time of low
dropped by 10 percent over last year, individual income has decreased by 10.7 percent, sales tax receipts have dropped by 6.8 percent, and corporate tax revenues are down 15.9 percent. What are your local priorities for Missouri’s unspent federal
stimulus funds from the American Recovery and Reinvestment Act of 2009?
Thus far, the recovery act money has helped us fill budget gaps and prevent job losses. For example, education in Missouri received $215.8 million; First Steps [Missouri’s Early Intervention system for developmentally disabled infants and toddlers] received $8.6 million; transportation construction received $695 million. While the recovery money has been important to prevent job loss, my hope is that more of this money will go to construction projects in our area that will create new jobs. This will have a multiplier effect on our economy and be the foundation for future growth. Should the state issue general obligation bonds to fund higher education building improvements, construction, landscaping and land purchases? How would such a program specifically benefit Columbia?
Yes, the state should issue bonds. It is financially irresponsible not to bond at this point. Interest rates are at an all-time low, the federal government will cover a portion of the borrowing costs, and contractors are eager for work. This money should be used for the University of Missouri’s priority building projects, and I also propose that bonding be expanded to finance priority construction in our state parks. This will expand the political
the Engineering Building, to build additional facilities for nursing and health professions, and/ or this could be a way to finally secure funding for Ellis Fischel. The bonding bill would be a very wise investment in Missouri’s future, along with an immediate shot in the arm for our local economy.
appeal of bonding to all parts of the state and address the important need to protect these valuable state assets. If the U.S. Congress proceeds with a public option for health insurance in the federal health care legislation while offering states the choice of participating, would you support or oppose Missouri opting out of a governmentrun health insurance plan?
I want to help as many people in Missouri as possible to access our medical facilities in Columbia. I want to make sure that Columbia gets its fair share of any and all federal funds that improve access to health service. Do you have any proposals for economic development incentives in Columbia and Boone County?
All proposals for economic development incentives must focus on our strengths as a community. We are a diverse and creative community attractive to young professionals who have the capacity to expand our economy. We have a university with world-renowned expertise in plant, animal and life sciences, and we have one of the world’s premier research reactors. Our immediate challenge is do everything possible to retain the high-quality faculty and researchers we now have with the goal of transferring these strengths into new technologies and industries to grow our economy.
Rep. Steph en W eb b er Stephen Webber (D-Columbia) represents the 23rd District, which encompasses west Columbia and northwestern Boone County, in the Missouri House of Representatives.
What are the most important issues coming up in the 2010 legislative session that will affect the Columbia economy?
Clearly, the budget will dominate the 2010 session. The Boone County delegation will have to work together, as we did last year, to protect the University of Missouri and our Columbia priorities. Other vital issues will be legislation to expand insurance coverage to include autism, and working to tighten legislative ethics rules. The outlook is for additional budget cuts next year if Missouri is to live within its means in this current economy. Where do your priorities lie in making the hard decisions to cut funds? When push comes to shove, where will you vote to cut first: higher education, K-12 schools or health care?
I believe every line item in the budget should be reviewed individually. I do not support making broad, across-the-boardcuts. We need to work carefully with a scalpel, not clumsily with an axe. Should the approved state funds for construction of a new Ellis Fischel Cancer Center remain in limbo to alleviate the budget shortfall? Do you think the funds should be released?
Ellis Fischel is of tremendous
importance to Columbia, as well as cancer patients all across the state. I am hopeful that if tax receipts are better than expected, the governor will be able to fund the project. If that’s not possible we will go back to the legislative process and try to find a creative way to get the job done. What are your local priorities for Missouri’s unspent federal stimulus funds from the American Recovery and Reinvestment Act of 2009?
We need to utilize the federal stabilization funds to plug the budget in order to avert major cuts to Mizzou. We also need to follow through on a plan that has been put forward to use it to shore up teacher pay through career ladder. Should the state issue general obligation bonds to fund higher education building improvements, construction, landscaping and land purchases? How would such a program specifically benefit Columbia?
Absolutely! The issuance of general obligation bonds is one of the smartest things we could do as a state. The combination of low interest rates as well as incentives offered by the federal government make this the ideal time to reinvest in our infrastructure. The University of Missouri could use this money to finish the improvements to
If the U.S. Congress proceeds with a public option for health insurance in the federal health care legislation while offering states the choice of participating, would you support or oppose Missouri opting out of a government-run health insurance plan?
If the federal government decides to authorize and fund a public option for health care, then I don’t see the wisdom in denying Missourians a health care choice that will be available in other states. It will depend on the final bill, but as of now, I would not support opting out and denying an option to our citizens that would be available to people in Illinois or Kansas. Do you have any proposals for economic development incentives in Columbia and Boone County?
Clearly, the university and our health care facilities are a priority, but we need to maintain a holistic outlook. We need to utilize the University of Missouri as a solid partner for startups like Newsy. We need to continue to promote life science growth like ABC Labs. And we need to look at maintaining existing businesses like Oscar Mayer, which is going to be looking at a major renovation in the near future. We are a diverse, vibrant town, and we need to grow our economy the same way.
“The issuance of general obligation bonds … would be a very wise investment in Missouri’s future, along with an immediate shot in the arm for our local economy.”
Rep. C h ris K elly Chris Kelly (D-Columbia) represents the 24th District, which encompasses western and southern Boone County — including parts of south Columbia, Hartsburg and Ashland, in the Missouri House of Representatives.
What are the most important issues coming up in the 2010 legislative session that will affect the Columbia economy?
Funding for the University of Missouri is the single most significant factor. Specifically, Boone County legislators must pay particular attention to funding for the medical center as a critical part of the university budget. The “health” of the university and its hospital system is the largest single factor affecting the health of our community’s economy. In addition, the Legislature must address problems with the Second Injury Fund [which protects employers who hire workers with pre-existing disabilities or injuries that are made worse by an additional workplace injury]; it is now running a deficit. Without legislative action, this fund will be technically bankrupt next year. The Second Injury Fund is a serious issue for all businesses and workers
in Missouri, not just Boone County. The Legislature must address the fund’s current budget deficit and must fix the process to avoid future deficits. The outlook is for additional budget cuts next year if Missouri is to live within its means in this current economy. Where do your priorities lie in making the hard decisions to cut funds? When push comes to shove, where will you vote to cut first: higher education, K-12 schools or health care?
Most people do not realize how closely funding for the University of Missouri and funding for health care are intertwined. Cuts at the university’s School of Medicine and University Hospital have a serious impact on the available revenue for the entire campus. Every cut to health care is an income transfer out of the university and out of Columbia. When I consider funding for higher education, I must at the same time think of funding for the
medical sector. Similarly, K-12 education affects our current and future economies and our community’s quality of life. We bring jobs and highly paid professionals to our community because of the quality of our schools. People with good jobs will pay taxes that support all of our services. We need to think about the foundation for our future even in difficult budget years. When voting in the budget committee and on the floor, I will look at all these vital areas in context and try to find a balance that best meets the needs of Boone County. Should the approved state funds for construction of a new Ellis Fischel Cancer Center remain in limbo to alleviate the budget shortfall? Do you think the funds should be released?
I believe that the money for Ellis Fischel should be released. If
Rep. Steve H o b bs Steve Hobbs (R-Mexico) represents the 21st District, which encompasses parts of north Columbia and northern Boone County as well as parts of Callaway and Audrain County, in the Missouri House of Representatives.
the governor’s decision is to not release funding for the approved Ellis Fischel construction, it is imperative that it be funded as part of our proposed statewide bond issue. The Boone County delegation fought very hard and in unison for Ellis Fischel and will continue doing so. We must focus on factors that will support our economy and way of life. The construction of Ellis Fischel will give our economy a boost in the short term. Construction jobs are good jobs, and workers and suppliers consume goods and services in our communities and pay taxes. Unemployed workers consume state services and the tax payments of others. When the project is completed, the facility will not only provide our state with top-notch medical care, it will also bring well-paid medical specialists and support staff to our community. They will buy homes, shop in our stores, consume local services and pay taxes. We must keep our eye on the factors that support our quality of life and our future economic vitality. Even in these fiscally difficult times, we must not ignore the opportunity for “smart debt,” such as the proposed statewide bond issue. What are your local priorities for Missouri’s unspent federal stimulus funds from the American Recovery and Reinvestment Act of 2009?
What are the most important issues coming up in the 2010 legislative session that will affect the Columbia economy?
The budget. With declining revenue for the state, it will likely be difficult for the University of Missouri to avoid cuts and that is always bad for the Columbia economy. The outlook is for additional budget cuts next year if Missouri is to live within its means in this current economy. Where do your priorities lie in making the hard decisions to cut funds? When push comes to shove, where will you vote to cut first: higher education, K-12 schools or health care?
My number one priority for ARRA highway funding is the overpass at the airport on U.S. 63. We have made some progress: the Department of Transportation is now working on the engineering and the right-of-way has been acquired. The airport interchange is important, not only as a safety issue but also as a means to foster economic development at the airport and create jobs for Boone County. In terms of the general revenue budget, the state used about $1 billion in this fiscal year and will use about $900 million in FY2011. The stimulus and stabilization funds will be used to support the entire state budget: the university, the elementary and secondary schools, law enforcement, mental health and other services. It will support the whole budget rather than specific projects. This funding saves jobs. It is hard to imagine how much worse our budget situation would be without federal stimulus funding for the state. Should the state issue general obligation bonds to fund higher education building improvements, construction, landscaping and land purchases? How would such a program specifically benefit Columbia?
The state should issue general obligation bonds to engage in and complete needed capital improvements at our state
In past budget shortfalls, higher education has taken the brunt of the cuts. It is my hope that we will look at every line item and make fair reductions across the board as needed. Should the approved state funds for construction of a new Ellis Fischel Cancer Center remain in limbo to alleviate the budget shortfall? Do you think the funds should be released?
The funds should be released. I think the governor made a mistake when he withheld these funds. This project will create construction jobs and leverage private funds, but most
universities and colleges. In Columbia, that would mean construction of new buildings for MU’s Engineering School, Ellis Fischel and perhaps The State Historical Society of Missouri. These projects are multifaceted. They create good jobs for workers and suppliers during
We must analyze the economic impact on Boone County. Because of the large and sophisticated medical presence in our community, every increase in governmental health care activity has positive economic consequences in our area. University Hospital is one of two
“My number one priority for ARRA highway funding is the overpass at the airport on U.S. 63” their construction. They build or repair needed infrastructure that will serve our children and grandchildren for decades. Most importantly, after completion they will draw the kind of specialists and staff who will make our community and our economy vibrant and healthy. If the U.S. Congress proceeds with a public option for health insurance in the federal health care legislation while offering states the choice of participating, would you support or oppose Missouri opting out of a government-run health insurance plan?
We need to see the legislation before we act. Those of us from Boone County must maintain our focus on the economic ramifications of the final federal health care program on our county and our state.
importantly, the research and care the facility will provide will save lives. What are your local priorities for Missouri’s unspent federal stimulus funds from the American Recovery and Reinvestment Act of 2009?
My priority is to obtain the funds for Ellis Fischel. Should the state issue general obligation bonds to fund higher education building improvements, construction, landscaping and land purchases? How would such a program specifically benefit Columbia?
Yes. I supported this plan last
“Tier One Safety Net” hospitals in Missouri. As the health care provider-of-last-resort for 85 counties, the hospital receives a substantial amount of revenue from patients in various governmental health programs; at the same time, it is burdened by the cost of treating many uninsured and indigent patients. Boone Hospital Center, although not as involved as a “disproportionateshare” hospital, also is an active provider for patients whose bills are paid from these programs and, in fact, does much more with lowincome patients than most people realize. We must also consider how best to insure those Missourians without medical coverage. Unless the state, in tandem with the federal government, finds a way
year and will support it during the coming year. These bonds will provide funding for needed improvements and infrastructure for the University of Missouri and create jobs locally. If the U.S. Congress proceeds with a public option for health insurance in the federal health care legislation while offering states the choice of participating, would you support or oppose Missouri opting out of a government-run health insurance plan?
I would support opting out for Missouri. Do you have any proposals for
to cover a substantial portion of currently uninsured citizens, health care costs will continue to escalate, fueled in part by the increased pressure — and cost — of emergency room care. Any legislation, federal or state, must be carefully examined to see its local and statewide ramifications before any decision is made to opt-in or opt-out. Grandstanding on a partisan or philosophical point is of benefit to no one. Do you have any proposals for economic development incentives in Columbia and Boone County? I continue to push for the airport overpass to make the airport and its surrounding area more economically viable for economic growth. I am also constantly engaged in various possibilities and challenges in the medical arena — where Columbia and Boone County have the greatest potential for economic growth. Beyond the medical area, I have also been working with University of Missouri administrators and faculty to see how we might capitalize on the scientific and technological innovations that can become the basis for new economic development. The Life Sciences Center, the Engineering School, and the MU Research Reactor are examples of resources that can build an economy of the future.
economic development incentives in Columbia and Boone County?
I look forward to working with Regional Economic Development Inc. and the local business leaders to create jobs in our area. I will once again file legislation for tax credits for REDI to create “shovelready sites” in the state (2009 House Bill 429).
“My priority is to obtain the funds for Ellis Fischel.”
Shooting for
Excellence MidwayUSA won the 2009 Baldrige Award for the best-run small business in America. Now CEO Larry Potterfield is aiming at a citywide movement to bring out the best in Columbia.
by KATHY CASTEEL photos by L.G. PATTERSON
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Larry
Potterfield travels the world with a hunter’s passion, bagging big-game trophies from Alaska to Zimbabwe. His business acumen is as wide-ranging as his huntsman’s zeal; the 60-year-old CEO of MidwayUSA has built his shooting, hunting and outdoor supply business into a worldwide retail empire, recognized as one of the best-run businesses in America. This winter, Potterfield’s quest is closer to home. He has a vision for Columbia as a community of excellence. Bringing together a coalition of businesses and service agencies, Potterfield is quietly building an “Excellence in Columbia” movement, based on the principles in the business model of the Malcolm Baldrige National Quality Program. “We’re trying to adopt a mission statement for this vision: to be the best community in America,” he says. “Everyone talks about being the best, but you’re not going to be the best just by talking — you have to have a plan.” Potterfield’s plan is to get everyone on board the excellence bandwagon — participating in the Missouri Quality Award and the Baldrige National Quality Award programs, and using them as tools to assess and improve performance to drive business success. “Can you imagine,” he muses, “if we can get the businesses and manufacturers, schools, health care, services and nonprofits all united in a quest for excellence, and then it becomes a movement … “Oh. My. Gosh.”
At MidwayUSA, the pursuit of excellence is a lifestyle. “When you walk in the building, you’re living the Baldrige criteria,” Potterfield says. “We’re very passionate about it.” That passion led the family-owned catalog and Internet retailer to win the 2009 Malcolm Baldrige National Quality Award a year after the company’s 2008 Missouri Quality Award. The honors, although reaffirming, do not mark the end of Midway’s journey. The programs the awards inspire have created a blueprint for improvement that any company can use to implement best practices.. “There’s evidence that the Baldrige criteria improve an organization,” Potterfield says. “It’s a model. You have to immerse yourself in it. And the CEO has to embrace the overarching program.” The Malcolm Baldrige National Quality Award is presented annually to recognize performance excellence in U.S. organizations in the manufacturing, service, small business, health care, education and nonprofit sectors. The program, administered through the U.S. Department of Commerce, is the nation’s highest presidential honor for organizational innovation and performance. Named after former President Ronald Reagan’s Secretary of Commerce Malcolm Baldrige, the program originally was designed in 1987 to help American manufacturers compete with Japan. Baldrige applicants submit a 50-page application that is judged on six performance criteria — leadership; strategic planning; customer focus; measurement, analysis and knowledge management; workforce focus; process management — and results. The criteria has become the world’s standard for performance excellence. Studies have shown that Baldrige award recipients, on average, experience a 500 percent growth in revenue within 10 years of going through the process. MidwayUSA began its Baldrige journey in 2006, not to fix problems but to maintain success. “The right time to manage is when you’re winning,” Potterfield says. “You can’t build on failures.” He cites some of the advantages the three-year process has brought to the company’s success story: • Helps improve and sustain results
• Creates a common business language and focuses all employees in the same direction • Creates direction through the mission statement and company goals • Provides a systematic approach to business operations and process documentation • Provides a leadership tool through volunteer opportunities as examiners for the Baldrige National and Missouri Quality Awards programs The most valuable part of the program may be yet to come — the feedback report from the October site visit by the Baldrige examiners, expected later in December. “The feedback report is an unbiased view of current performance, measured against rigorous standards,” Potterfield says. “It tells you what you’re good at and where you can improve.” The sprawling MidwayUSA complex sits only a few miles from where Potterfield began his business career “with a little bit of dream and a lot of circumstance.” In the summer of 1977, fresh from a six-year hitch in the U.S. Air Force, Potterfield and his brother, Jerry, opened Ely Arms Inc. — named for their northeast Missouri hometown (population 26) — in a 1,632-squarefoot shop on U.S. 40 that backed up to the Rollingwood subdivision where the brothers lived with their young families. The University of Missouri graduate brought to this venture an MU business degree and a love of hunting and shooting sports honed in his rural youth and military service. The brothers sold new and used rifles, handguns, ammunition, and shooting and reloading supplies. Their first six months in business, they took in $168,000 in sales. A year later, they changed the name of the shop to Midway Arms to avoid trademark issues with the similarly named Eley Inc. of Kynoch Industries, a division of Nobel. By 1979, Midway Arms had its first branded product, a .357 Magnum brass cartridge case produced by Starline Brass. Midway sold millions of rounds of the brass, leading the way to the bulk component business. Midway’s mail-order business opened in 1978. When brother Jerry opted to return to northeast Missouri, Potterfield and his wife, Brenda, bought him out in 1980.
Hey, Aren’t You … Larry Potterfield has become the face of MidwayUSA. As the star of the company’s GunTec how-to videos, he appears regularly on the Outdoor Channel, where he is seen by millions of TV and Web viewers every day. Fame caught up with the intensely private CEO a few years ago, says Aaron Oelger, MidwayUSA’s marketing vice president. “We were walking through an airport in Canada,” Oelger says, “and people recognized Larry and started coming up to him and introducing themselves. Now, whenever he travels, he can’t get out of an airport without people recognizing him. They all want to talk to him.”
The retail shop closed in 1984 as Midway moved to a mail-order distributiononly model. By 1987, Midway was doing about $5 million a year in bulk component business, selling mostly to dealers. That year, Congress lifted restrictions on ammunition shipments, and the company began selling direct to consumers. Inventory continued to expand to offer a diverse product line of toys and tools for shooting, hunting and gunsmithing aficionados (company tagline: “Just About Everything”). The system networked its computers in 1987 as well, “and we’ve never looked back,” Potterfield says.
Now located on Van Horn Tavern Road, MidwayUSA (renamed again in 1998) employs a workforce of 350 in a complex that includes a 140,000-squarefoot facility for administration, marketing and distribution of its catalog and Internet sales; customer orders and e-mail transactions take place in a nearby 13,000-square-foot contact center. Battenfeld Technologies, a manufacturer of shooting, reloading and gunsmithing supplies run by Potterfield’s son Russell, is right next door. An impending building swap with Columbia Public Schools will consolidate the company’s properties and allow for expansion when the school
district’s Building Services Department vacates a 17,996-square-foot structure. A multimillion-dollar capital expense project is in the works for 2010 to construct a new flow system for the shipping operation. Business is good these days. The company has enjoyed nearly 30 percent annual growth for the past five years, but 2009 has been a real barnburner. “It’s been a phenomenal year because of politics,” Potterfield acknowledges. “At the end of third quarter, business was up more than 35 percent.” He has stepped back from the day-today operations of MidwayUSA, naming winter 2010
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42-year-old Matt Fleming as president last January while retaining his position as founder/CEO and chairman of the board. Wife Brenda is vice president of community relations, and daughter Sara is vice president in charge of the contact center and Midway Farms. The Potterfield Group encompasses the family’s business interests, including MidwayUSA with its Midway International division and GunTec knowledge center, Battenfeld Technologies, Midway Farms executive conference center, real estate holdings, risk management and MidwayUSA Foundation. A staunch supporter of Second Amendment rights, Potterfield founded the “NRA Round-Up” program in which customers round up their sales totals to the next dollar amount; the additional money is donated to the National Rifle Association’s Endowment Fund. The MidwayUSA Foundation funds programs for education and training in shooting, hunting, firearms safety and outdoor skills; beneficiaries include the Scholastic Shooting Trust, an endowment that has funneled donations to high school and collegiate shooting teams such as the University of Missouri’s nationally ranked team. “New shooters are the lifeblood of our industry,” Potterfield said when he established the trust in 2008. “Bringing new shooters into the sport is critical to the future of shooting sports.” Planning for the future is the secret to success, Potterfield has found. Strategic planning is his forte; his obsession with it is part of the company lore. “Larry is always thinking ahead,” says company president Fleming. “We formulate three-year strategic plans here at Midway, but he thinks so far out in the future that we joke about his 500-year campus.” Potterfield smiles at the 500-year reference; he’s heard it all before. His rejoinder is a favorite anecdote about a European cathedral and planning a century ahead. “Larry tells the story about a community that built a cathedral on a treeless plain,” Fleming says. “The people had the wherewithal to plan for the time when the timbers in the cathedral would rot and need to be replaced, so they planted a forest when
they started construction. A hundred years later, the cathedral’s ceiling timbers needed replacing so the fifth-generation descendants went out into the hundredyear-old forest and cut some trees to make new timbers for the church. “That’s what Larry does,” Fleming says. “He plants trees for future generations.” Planning five generations out is about right, Potterfield says. “Strategic planning is the key to all successful business,” he says. “It forces you to ask the question: Do you have a systematic approach?” Coupled with an efficient process management procedure (MidwayUSA has 1,500 processes), strategic planning “is really how you run the business,” Potterfield says. “It’s being engaged in the process.” To engage a strategic plan, the Baldrige model calls for the business to come up with a vision (MidwayUSA’s vision is to be the best-run business in America) supported by a mission statement, company goals and a code of conduct. Strategic objectives follow (What will we do to make sure we accomplish these goals?). The strategic plan leads to action plans at the company and department level, deployment of the action plans and management of their execution. “It’s a serious approach to business, and one of the reasons I’m here,” says Aaron Oelger, vice president of marketing. “I’ve never seen anything like MidwayUSA’s passion in its approach to business.” Planning is serious business and it takes a lot of time, but it is time well spent, Potterfield believes. The higher the level of leadership, the more time required for planning. Potterfield and Fleming spend about 90 percent of their time in strategic planning and 10 percent in tactical deployment, they say. As responsibility moves down the chain of command in MidwayUSA’s classic organizational structure, the ratio of strategic to tactical activities shifts. “You must understand how much time this is going to take,” says Deanna Herwald, vice president of quality management systems. “You have to set aside time and capacity for strategic planning.” The time commitment for planning has been a real eye-opener for Lorah Steiner, executive director of Columbia’s
Measuring MidwayUSA: Benchmark Against The Best MidwayUSA has five company goals: 1. Customer satisfaction 2. Employee satisfaction 3. Vendor satisfaction 4. Shareholder satisfaction 5. Modern management practices “Our No. 1 priority is customer satisfaction,” says CEO Larry Potterfield. “In our top goal, we’re doing great: 93 percent customer satisfaction.” He proudly points out that MidwayUSA’s customer satisfaction rate is the same as Apple Inc. and Crutchfield Electronics. “If you’re going to be the best-run business in America,” he says, “you’ve got to benchmark against the best.” Other benchmarks to measure MidwayUSA: 98% customer retention rate 82% employee satisfaction rate 91% vendor satisfaction rate 200% growth in profits over the last five years
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Convention and Visitors Bureau. In working with Potterfield to map out the Excellence in Columbia initiative, Steiner says she was struck by “how little time we take to focus on strategic planning. It can really give you a clear picture of where you’re headed.” Potterfield envisions sharing that clear picture with a community focused on excellence through the vision of Columbia’s CEOs. “He is such a huge believer in the Baldrige model,” Steiner says. “He wants
to share the potential for success with everyone.” The true believer points to Leadership Excellence magazine, which for the past two years has listed the Baldrige program as one of the top 10 leadership development programs. Potterfield wants his Columbia initiative to feed a grassroots support network to the Missouri Quality Award and Baldrige National Quality Award programs. He’s asking CEOs to attend conferences with
the Excellence in Missouri Foundation, volunteer two examiners for the Missouri Quality Awards in 2010, and complete a Show-Me Challenge selfassessment or apply for a 2010 Missouri Quality Award. “We’re starting to raise awareness in Columbia,” he says, anticipation punctuating his usually low-key conversational tone. “With everyone focused on this process of excellence, just think what Columbia could be … “Oh. My. Gosh.”
Quality Control The first way station on the journey to excellence is the Excellence in Missouri Foundation, which administers the Missouri Quality Awards. Chartered by Gov. John Ashcroft in 1992, the foundation offers programs around the state to foster improvement in quality, customer satisfaction and global competitiveness of Missouri-produced goods and services. Organizations — for-profit businesses, public agencies and nonprofit groups — can tap into the foundation’s educational, training and assessment opportunities. All Excellence in Missouri programs are based on the Malcolm Baldrige National Quality Award criteria. The jewel of the state program is the Missouri Quality Award, an assessment process that provides organizations with a framework to measure performance across a wide range of key indicators — customers, products, service, operations, human resources and finances. “It’s a very balanced approach,” says foundation president Raina Knox. “We use the Baldrige criteria to examine the organization’s approach, deployment, learning process and integration.” Applicants for the Missouri Quality Award receive a detailed feedback report analyzing strengths and opportunities for improvement. Those who qualify for a weeklong site visit by a team of MQA examiners receive additional consultation. “Feedback reports are not prescriptive,” Knox says. “They contain detailed comments in every subcategory of the application analyzing what the business does well and what might be improved. With this feedback, the company can chart its entire improvement path.” Any Missouri-based organization may apply for a Missouri Quality Award. There are six categories — manufacturing, service, education, public sector, health care and nonprofit — and competition is grouped by size (small, medium or large) as determined by the number of employees. Awards are presented each November at the Excellence in Missouri conference, held this year at Lake of the Ozarks. Winners for 2009 included St. Mary’s Health Center of Jefferson City, Park Hill School District of Kansas City and Concordia Publishing House of St. Louis. Conference attendees heard from past Baldrige National and Missouri Quality Award winners, shared success stories and best practices, fine-tuned their quality programs, and networked. The foundation also offers the Show-Me Challenge, an assessment tool for beginners, and Show Me More, an intermediate program for in-depth performance evaluation, plus individualized consulting. Organizational workshops and a spring Quest for Excellence conference provide additional support. The foundation encourages volunteers to act as examiners in the quality award process, citing it as another learning opportunity for leadership development. Further information on the Excellence in Missouri Foundation and the Missouri Quality Awards is at www.mqa.org. To find out more about the Malcolm Baldrige National Quality Program, visit www.baldrige.nist.gov. 64
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DIVIDENDS
parting thoughts
Bank Notes
Landmark’s Jeff MacLellan Looks Back At Two Decades Of Growth In Columbia photo by L.G. PATTERSON
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hen Landmark Bank CEO Jeff MacLellan turns the last page of his 2009 calendar to close out the year, he will also close the book on a 22-year career at the helm of the bank. MacLellan, who is retiring Dec.31, arrived in Columbia in 1987 as president and CEO of First National Bank and then became president of The Landrum Company, the holding company that held a collection of eight banks in two states. MacLellan presided over the growth and consolidation of this bank network to its present position as the 35-member Landmark Bank operating in Missouri, Oklahoma and Texas. Widely regarded as an expert on Columbia’s economic indicators, MacLellan shares with Inside Columbia’s CEO readers his perspective from more than two decades of seeing to the business of Columbia business.
What have been some of the defining indicators of economic health in Columbia since 1987? For the past 22-plus years, I have tracked various indicators related to the Columbia economy. The area has experienced very little disruption in that time, until the last three years. In fact, the local economy was quite strong for most of this period, with almost all indicators showing healthy growth and prosperity. Let’s look at some of these indicators: The city’s population grew from approximately 67,000 in 1987 to the recently reached milestone of 100,000, at an average rate of 1,500 inhabitants each year. The overall growth was 50 percent, but the annual growth rate was about 2 percent. 66
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Households grew from 23,600 to 41,000, a growth rate of 74 percent. This means that the growth in the need for real estate exceeded the population growth by 50 percent; the average household size declined from a little more than 2.8 people per household to 2.4 people per household. This factor alone increased the demand for real estate in the market, all other factors remaining equal. Residential building permits averaged more than 300 per year during the late 1980s, increasing to approximately 500 in the early to mid-‘90s. In 2004 and 2005, they spiked at 1,333 and 1,426, respectively. Permits dropped to 347 in 2008, and it looks like the number of permits will be in a similar range this year. Clearly, building real estate was big business in Columbia for a number of years but the current economic adjustment has caused construction to revert to levels not seen since the late 1980s. The value of total construction permits issued by the city in the late ‘80s and early ’90s, ranged from $50 million to $100 million. That ballooned to values of $300 million to $350 million between 2004 and 2006. Currently, the value of permits issued is about half that, valued at $150 million to $175 million. Home sales steadily increased from 1987 through 2004, according to statistics gathered by the Columbia Board of Realtors. Sales rose from 1,062 homes sold in 1987 to a peak of 2,918 home sales in 2004. Last year, 1,715 homes were sold and this year the number will be more like 1,575, a level comparable to the early to mid-‘90s. Foreclosures in Boone County generally ran around 100 or less from 1987 to 2007. Last year, there were 367 foreclosures and this year it looks like we will reach an alltime high with more than 600.
Mortgage rates have usually been quite accommodating during this period, generally running at less than 10 percent for a 30-year fixed-rate mortgage. Since the year 2000, rates have been below 7 percent, increasing the affordability of housing in Columbia. Jobs in the community numbered 60,254 in 1987, and grew to 95,100 by 2008. The numbers fell slightly last year to 92,700. Employment actually grew at a slightly higher rate than the population, but that has changed in the past couple of years as the unemployment rate has increased. Conversely, Columbia’s unemployment rate in 1987 was 3.3 percent and actually averaged 2.6 percent over the past 22 years. The current unemployment rate for the city is 6.8 percent, according to the Missouri Economic Research and Information Center. Business licenses increased from about 2,900 to 5,000, meaning approximately 100 net new businesses were added each year since 1987. Retail sales through Columbia establishments have tripled, going from $666 million in 1987 to $1.976 billion the last couple of years, not counting Internet sales. The median age in Columbia has increased from approximately 26 to approximately 32 over the past 22 years. This is a national trend as well, as people are living longer, although Columbia is still younger on average than the country as a whole. The median age in the United States is 37. The cost of living in Columbia has averaged about 6 percent below the national average for the last 10 years.
Makes Scents has memorable gifts to surprise and delight everyone on your holiday shopping list. Nuturing ingredients and essential oils relax, revitalize and purify in Distillations by Crabtree & Evelyn ($16-20). Gift certificates are always a perfect gift and available in any amount.
19 S. Ninth St. 573-445-1611 www.makesscentsonline.com
Make her holidays sparkle with jewelry from McAdams’ Ltd. This dazzling necklace and bracelet are from the collection of Jorge Revilla, one of Spain’s leading jewelry designers who is renowned for his sophisticated yet surprisingly affordable creations. Whether he is blending silk with silver, engaging colorful gemstones, adding a touch of yellow or rose gold or simply playing with textures, Jorge Revilla will wow you! The Jorge Revilla line is available exclusively in Columbia at McAdams’.
32 S. Providence Rd. 573-442-3151 www.mcadamsltd.com
Give the gift of good taste this holiday. Hoss’s Market & Rotisserie offers gourmet items such as Columbia’s largest selection of cut-to-order artisan cheeses and exceptional wines paired with chic wine accessories for under the tree or on the table. A Hoss’s Market customizable gift basket makes a one-of-a-kind present, stocked full of tasty specialties that will be used and remembered. Hoss’s Market & Rotisserie products are also perfect for holiday entertaining.
1010A Club Village Drive 573-815-9711 www.hosssmarket.com
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parting thoughts Over the past few years, Columbia has seen significant growth. What areas pose challenges to Columbia as the city continues to expand? Most of us feel like Columbia has grown a lot in the last 20 years or so, yet 2 percent annual growth really is not spectacular — more on the order of modest and steady. One of the statistics that makes it seem like the city has grown faster than it has is the 74 percent growth in households. Let’s look at where this growth is occurring. The southwest part of town has continued to grow but the area of town that has expanded the most in the past 10 years is the northeast quadrant. Clearly, the growth rate north of Interstate 70 has surpassed the growth rate on the south side of town. It looks like the southeast quadrant (the area bounded by I-70 and U.S. 63 South on the west) could be the next growth quadrant to watch. What are the business sectors where growth would be most beneficial to our economy? The Columbia economy is highly dependent on the educational engine.
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Today, we have approximately 52,000 students in town (led by the University of Missouri with 31,000 and Columbia Public Schools with 17,400). The rest consists of students at Columbia College, Stephens College, and the private elementary and secondary schools. Columbia’s economic growth was helped by growth in the educational institutions here. MU has record enrollment that continues to increase, Columbia Public Schools posts record enrollment, Stephens College has been resuscitated, and in many ways Columbia College is the most successful. We have good growth in the private schools, which provide an alternative to public schools. While there are budget issues associated with most of these institutions, Columbia is still quite dependant on this segment of the community to be a special player in the local economy. The medical business, which accounts for approximately 16 percent of the nation’s gross domestic product, is big business in Boone County. The growth in the medical community has been significant and steady in the past 20 years. While health care
reform legislation may bring significant change to this industry, it will continue to be a major engine in our community. Boone Hospital Center is going through a major investment, as is University Hospital. The Columbia Orthopedic Group recently completed a gem to the east of downtown. Columbia is the medical provider of choice for mid-Missouri. Although the retail job sector receives criticism from some, Columbia is the retail hub for the center of the state. By remaining a leader in this sector, Columbia benefits when nonresidents help the city generate sales tax revenues for use in the betterment of services to the community. The growth in other service businesses such as insurance has been significant, as we have grown the number of insurance companies in town. State Farm Insurance (despite its consolidation) built its new location south of town around 1990 and has quietly grown its operations business; Shelter Insurance Cos. has grown and prospered; the Columbia Insurance Group has thrived; Missouri Employers Mutual was born and raised here; Cornerstone
Insurance is going through some growing pains, but has promise for the future. Speaking of the future, what is the No. 1 economic opportunity for Columbia? The stars are really aligned for the University of Missouri and the community to begin to harvest the commercialization of some of the research being done here. We have Discovery Ridge Research Park, the new business incubator and Missouri Innovation Center, and the Centennial Investors Angel Network; the university is committed to get this done, and has added economic development to its mission statement. It is time for these activities to yield big harvests for Columbia. I think the university brought in some $10 million in licensing income last year with much higher goals to come. How would you characterize Columbia’s political climate as it pertains to business? For the last 20 years, the political climate in Columbia has not been particularly pro-business. Today, we have record unemployment, record foreclosures, little real estate activity, declining retail sales and the concomitant declining sales tax revenues, just to mention a few negative economic indicators. Because it is the holiday season and we should all embrace the spirit of giving, the City Council should find ways to address these issues. We arguably have the biggest need we have ever had to spur economic development in this community but we have a system that does not believe in incentives for business. It is time to do what needs to be done in the way of incentives, tax abatements, etc., to get this local economy going again. The communities we compete against have the incentives and we should be able to play on an even playing field. What is in the economic forecast for Columbia? The Columbia economy has been a model of consistency over the years. We are going through a difficult time. Nonetheless, it looks like the real estate adjustment has bottomed out. A word of caution, however: The recovery will be slow. Happy times are not here again and it will be awhile until we return to the robust days of the mid-2000s. That said, Columbia should recover sooner than most other communities because of our mix of primary employers. winter 2010
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success story
Sweet Success Spicewine Ironworks’ Winning Sauce Is A Recipe For Sales by ANITA NEAL HARRISON photo by L.G. PATTERSON
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ay Curry was more than a little excited when he won the “World’s Best Sauce” prize at the American Royal Barbecue contest in Kansas City this fall. “He put his beer down, unzipped his coat, threw it on me, and like a little boy, ran up there to get his award,” says friend Brian Johnson. Curry is one of the owners of Spicewine Ironworks, a company that manufactures and sells custom barbecue smokers. Co-owners are his brother, Steve Curry, and their longtime friend, Randy Ham. The trio, joined by Johnson, makes up the Spicewine Ironworks competition barbecue team. All four teammates cook at competitions, but Jay Curry is the one in charge of developing the sauces, rubs and other seasonings. “It was kind of overwhelming,” Jay Curry says about the American Royal win. “It was really special.”
Better Than Expected For those who aren’t familiar with the savory world of barbecue competitions, an American Royal win is “really special” indeed. As the contest’s Web site proclaims, “With nearly 500 teams competing in four culinary contests, The Royal is the largest barbecue contest in the world.” Spicewine Ironworks won top honors in the mild category for commercial sauces 70
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The Spicewine Ironworks team of (l to r) Randy Ham, Jay Curry and Steve Curry can brag about being “World’s Best” for a second time. The trio have taken top prize at the American Royal with their Heffer Dust and Blue Collar products. with its “Blue Collar” sauce. This thick, “hard-working” sauce beat out 63 other entries and was 19 points ahead of second place, “which is really good,” says Jolene DeMoss, a spokeswoman for American Royal. It was the second “World’s Best” win for a Spicewine Ironworks product, as Curry’s “Heffer Dust” won top honors in the rub contest in 2007. Not bad for products developed to fill space on a Web site. “The whole way we got into sauces and spices,” Jay Curry explains, “we were building our Web site, and it seemed empty. So I thought I would try my hand at doing some sauce recipes and different things like that.” That idea has proven very profitable, especially now. As soon as Curry got back from the American Royal, he ordered some new “Blue Collar” labels announcing the sauce’s award-winning status and had them placed on all Spicewine Ironworks’ stock, as well as on bottles already delivered to local stores. Ever since, it’s
been hard to keep shelves stocked. Even better for Spicewine Ironworks, hits on the company Web site have jumped from an average of one hit every few days to about one a day. “The first thing customers are going to see on the Web site is the cooker, and that doesn’t hurt anything,” Curry says, adding most of the visitors attracted by the sauce are competition barbecue cookers looking to gain an edge in competitions — the very group Spicewine Ironworks targets for smoker sales.
Smokin’ Hot Business Adding barbecue sauces and seasonings to the Spicewine Web site was not the first time Curry used innovation to fill a void. That’s how he started his smoker manufacturing business. An avid cook, he tired of “babysitting” his old smoker. The thing was so poorly insulated, Curry says, he had to check the temperature every 15 minutes or so, and it used a lot of fuel.
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success story “I wasn’t satisfied,” he says, “so I decided to build one for myself.” He didn’t do much research — just had an idea, drew up some plans and started putting things together. He did enlist the help of his co-owners at Columbia Welding, Steve Curry and Randy Ham, the same men who are now his partners at Spicewine Ironworks. The three of them built the smoker at Columbia Welding, and it caught the attention of customers. “People coming into our shop would ask what we were building,” Steve Curry says. “When we would tell them, they would say they wanted one, and we started getting a few orders. Finally, after a couple of years, Jay got his.” Three years, actually, says Jay Curry. “We kept selling them as fast as we could make them,” he explains. At the time, the Curry brothers and Ham were still fairly new business owners at Columbia Welding, though Jay and Steve Curry have worked there for around 25 years (their father, Jesse Curry Sr., owned the business for about 40 years) and Ham has been there for 19. The three of them bought the business in 2001 and built that first smoker in 2003. By 2004, their accountant was recommending they split the smoker manufacturing into a second business, which they did in 2005. The men played with their last names to come up with the business name. “Curry is a spice, and Ham is swine,” Jay Curry explains, “so we just combined the two and came up with ‘Spicewine.’ ” Last year, Spicewine Ironworks sold around 70 smokers. “For a lot of people, the convenience is what makes all the difference,” Jay Curry says. “We try to keep everything simple and easy to use. One chimney of charcoal will last four hours. Also, our cooker is going to cook the same whether there’s a foot of snow on top or it’s 95 degrees outside. They’re so well-insulated, you don’t have to worry.” Spicewine Ironworks has four distributors scattered across the country: in Florida, New York and Iowa, and one just getting started in California. When looking for distributors, Curry, who has a bachelor’s degree in business administration from Columbia College, 72
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relies on his network of barbecue competition friends. He finds The BBQ Brethren Forums Web site, with its more than 2,000 active members, particularly helpful. He also visits contests across the country; discovering how many teams are competing gives him a feel for potential markets. “I try to get to emerging markets where there’s not a whole lot of commercial cooker activity going on just yet,” he says. “That way you can get in first and have people talking about your cookers.” Jimmy Brod, the Spicewine Ironworks Florida distributor, says he wanted to partner with Spicewine Ironworks because the smoker’s design is so impressive. “It’s just a great cooker,” Brod says. “It’s very efficient, and it’s made heavy-duty. It’s a custom-made piece of equipment, a rare thing in this day and age.” Brod adds he was also impressed with Jay Curry. “One of the things that convinced me was him,” Brod says, explaining he likes Curry’s down-to-earth and open manner. “Jay is willing to listen to ideas the user has; he’s always wanting to make the product better. That’s important to me as a salesperson.”
Another Void To Fill With Spicewine Ironworks flourishing, Curry is contemplating adding another business to his portfolio: a contract bottling business in which he would offer small-batch bottling to other food entrepreneurs. “I feel there’s a need there,” he says. “There is only one small-quantity contract bottler in Missouri. There are a lot of agriMissouri people out there with an idea. We could take them from, ‘I’ve got my grandma’s recipe on the back of a brown paper sack,’ to a packaged product outside the store; it would be up to them to get their product in the store.” Speaking of treasured family recipes, Curry says that is what makes him happiest about his American Royal win. “It’s fine if we can draw people to the cookers, but what this award means to me is it’s something my grandkids can talk about: ‘My pawpaw had the best sauce in the world,’ ” he says. “It’s something I can give them.” winter 2010
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ceo at play
Tech The Halls
A Grab Bag Of Gotta-Get-Em Gadget Gifts For The Holidays … Or Any Day by JESSICA PERKINS Two-Faced Camera
Silver Lining Enjoy your own personal Wi-Fi “cloud” with the MiFi 2200 Intelligent Mobile Hotspot by Verizon Wireless. The slender Hotspot is about the size of a quartered deck of cards, yet it provides high-speed Internet for up to five Wi-Fi enabled devices in any area covered by the Verizon network. Your netbook, MP3 player and camera will rejoice. For details about product cost and monthly service fee, call or visit your local Verizon representative.
It’s true that you might have to repeatedly confiscate the Samsung TL 220 Digital Camera from any Facebook-using adolescents in your household, but with an LCD screen on the front as well as the back, this camera facilitates group photos and self-portraits alike. No more faces cut off at the forehead. Why didn’t they think of this earlier? Available at Best Buy: $279.99
Efficient Road Tripping Have you ever found yourself gridlocked on a highway your GPS claimed would take only five minutes to traverse? Do you miss turns because your GPS’s estimation of 100 yards differs from your own? If so, the TomTom XL 340S LIVE GPS was made for you. Its routes are based upon actual average road speeds rather than speed limits, and it speaks street names aloud. The GPS programming even includes maps of Mexico. Available at Best Buy: $249.99
Crystal Clear Conferences You’ve already upgraded your favorite shows and movies to high definition. Shouldn’t your camcorder enjoy the same treatment? The Sony HDR CX500V Flash Memory Recorder operates in full high definition with 1,080 horizontal scan lines per image, making videos of your meetings and conference presentations super sharp. Available at Best Buy: $999.99
Go-Anywhere Netbook At a mere 2.93 pounds, the Toshiba Intel Atom Processor N280 Notebook is light enough to slip into a briefcase or handbag for on-the-go word processing, e-mail access, spreadsheet analysis and more. Equipped with the N280, the fastest netbook processor to date, this mini-laptop boasts an eight-hour battery life and a starter version of Windows 7. Its 10.1-inch diagonal measurement feels roomy when typing and reading. Available at Best Buy: $399.99 74
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The Sound Of Music Your iPod may be tiny, but the B&W Zeppelin iPod Docking Station delivers your tunes in a big way, with crisp, clear sound as loud as you’d like. Added bonus: Its clean color scheme and elliptical form look nice atop your desk. Available at D&M Sound: $499.95
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Chamber Trip To China 7
Thirty Columbians traveled across the globe on the Columbia Chamber of Commerce-sponsored trip to Beijing and Shanghai. During the 10-day adventure, the group toured the Great Wall of China, Tiananmen Square and the Forbidden City, and took a 300 mph ride on the Maglev train. (Photos Provided By Don Laird)
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1. Glenna Lawson with a soldier at Tiananmen Square 2. The group poses at Tiananmen Square 3. Janet Johnson, Jerry Henderson, Rick and Sandra Henderson 4. Dinah and Ken Pearson 5. Shery Bradford 6. Nick Geiger, Cheryl Draheim, Glenna Lawson and Pat Hostetler 7. Rick and Sandra Henderson 8. Ken Pearson
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Inside Columbia’s CEO
Launch Party
We’re celebrating at the top of the town! More than 200 business leaders gathered at Quinton’s rooftop patio on Sept. 15 for the unveiling of the debut issue of Inside Columbia’s CEO magazine. Party-goers sipped on martinis and enjoyed delicious appetizers by Mackenzie’s Prime and Sake, as well as treats by Pink Cupcakes. Inside Columbia’s CEO is produced quarterly by Inside Columbia and provides in-depth coverage of key business issues and personalities in Columbia’s business community. (Photos By Lauren Frisch)
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1. Anna Thrash and Brent Hays 2. Marta Wilkes and Jessica Kratz 3. Tammy Bukowsky and Brant Bukowsky 4. Kat Cunningham and Jay Curry 5. Anne Moore and Charlie Gibbons 6. Andrea Jira and Matt Williams 7. Tracy Thorpe Taylor and Shelley Mayer 8. Mark and Cindy Heffernan, Melody Parry, Rosie and Bob Gerding 9. Cozette Lehman, Kanani May and Jeff Glenn 10. Kathy Frerking and Jill Stedem 11. Scott Atkins and Larry Grossmann
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PUBLISHER’S NOTE
Keeping An Open Mind In The Health Care Debate
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ext to education, health care is the second-most powerful driver in Columbia’s economic engine, pumping more than $2 billion into the local economy each year. Interestingly enough, health care is a unique industry in that the majority of the revenue generated at local hospitals, nursing homes and physician offices comes from outside of our local community. Given that, you can imagine the consternation that occurs when the topic of health care reform — or more specifically, paying for health care — comes up in local coffee shops and in doctors’ lounges. A few weeks ago, a group of local health care executives joined us for a CEO Roundtable Luncheon to discuss the implications of the constantly moving target that is health care reform. It was refreshing to gain perspective from business executives and professionals who are deep in the trenches in the world of health care. This encounter was juxtaposed to most of the conversations I’ve heard (and repeated) over the last six months where hyperbole and innuendo about any type of reform have dominated the discussion. The bottom line is that most people are gravely concerned that our federal government, given its track record in waste and bureaucracy, thinks it has the expertise to step in and “fix” a system that experts argue may or may not be broken. I think you can make a pretty good case that our health care system is broken. Tens of millions of Americans wait until they are chronically ill to seek medical care because they are uninsured. It’s hard for most people to understand how a small pill could cost more than
$30 each while its generic equivalent with the same active ingredient costs only pennies. Reimbursement rates to doctors are illogical and confusing and the average citizen needs a Harvardeducated interpreter to sort through the piles of bills they receive after a short hospital stay. Shortly after our luncheon with local CEOs, I had the opportunity to hear the perspective of Steve Lipstein, CEO of BJC, who along with a larger group of health care CEOs, has played a role in helping the Obama administration sort through the ramifications and possible outcomes of the proposed reform. As you know, BJC Health care manages Columbia’s Boone Hospital Center and 11 other hospitals in the St. Louis metro area. To my surprise, Lipstein’s perspective on Obama’s plan was cautiously optimistic.
supporters of the plan believe that the financial impact will be revenue neutral. I’m skeptical, but intrigued.
The Numbers Game Only 38 percent of the small businesses (fewer than 50 employees) in this country provide medical benefits to their employees. That means the majority of Americans either have to fund their own health insurance or they simply go without. Unfortunately, the number of people who have chosen to go without insurance has grown at an alarming rate in recent years. One underlying premise of the proposed reform plan is that if you can bring the millions of uninsured “healthy” people into the risk pool, the premiums they contribute will be sufficient to bring down the costs associated with carrying those high-risk individuals with chronic diseases. In order for the system to work, there also must be some sort of “penalty” assessed to those who can afford coverage but chose to opt out of the system for whatever reason.
The Cost Of Reform
Final Thoughts
The Obama administration’s new plan is expected to cost between $800 and $900 billion over the next 10 years. As of this writing, the government plans to pay for the proposed plan by implementing a new income tax on households earning more than $1 million, placing a surtax on certain types of cosmetic surgery and charging new fees to insurance companies and pharmaceutical companies. The government expects these changes will add 15 million participants to the Medicaid rolls resulting in coverage for nearly 95 percent of the population in the United States. Projections indicate that 392,000 previously uninsured citizens in Missouri alone will be added to the Medicaid rolls. Even with all these new participants,
Let’s cut to the chase: Most experts agree that the problems associated with our health care system are far too complex and politically oriented to be fixed with one piece of legislation. Americans feel a sense of entitlement regarding their health care, but they’ve made no effort to understand the costs or the factors that affect the quality of care they receive. As a result, the debate has been more contentious than perhaps is necessary. It’s tempting to jump on the bandwagon and resist the effort to reform health care. But as I look at the possible upsides and begin to understand the implications of how these changes might impact the community in which we live, I think it’s prudent to keep an open mind. winter 2010
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ADVERTISING INDEX
CLOSING QUOTES
What Columbia’s Business People And Community Leaders Are Saying “Anybody who doesn’t want to be the best, I have no use for them.” — MidwayUSA CEO Larry Potterfield on the quest for excellence in Columbia
“The most difficult part of Internet marketing is getting people to know, like and trust you, because all other things being equal, we all prefer to do business with those we know, like and trust.” — Travis Smith, marketing director for SoccerPro
“The government as the savior scares me.” —Dr. Mark Adams on health care reform
“The city is going to give us an early-morning awning. And at $14 million, we really appreciate the city taxpayers doing that for us.” — Attorney Elton Fay to the Columbia Daily Tribune about the new parking structure that will provide morning shade for his office
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“Stephens College is not a convent.” —Stephens College President Dianne Lynch during a KFRU interview with David Lile
Ad Purpose.............................................................25 Aflac............................................................................ 2 Allison, Dant-Allstate...........................................38 Alpine Park & Gardens.........................................72 American Family Insurance................................23 Boone County National Bank............................... 3 Boone Hospital Center..........................................13 Bright City Lights...................................................69 The Callaway Bank................................................46 Cancer Research Center......................................34 Cartridge World.....................................................26 Central Trust...........................................................25 City of Columbia Water & Light........................32 Coil Construction..................................................76 Columbia Insurance Group.................................43 Columbia Regional Airport................................ 40 Columbia Turf.........................................................76 CORE........................................................................45 Creative Surroundings......................................... 40 D&M Sound.............................................................. 7 Dale Carnegie........................................................... 9 David the Salon.......................................................17 Debby Cook Interiors...........................................34 EyeDentity...............................................................72 Farm Bureau Insurance........................................26 Ford, Parshall & Baker.......................................... 80 Gary B. Robinson Jewelers...................................15 Grizzly Bear Lawn Care........................................36 Grossmann Promotional Products................... 80 Harper, Evans, Wade & Netemeyer..................26 Hawthorn Bank......................................................84 Holiday Wish Book Special Section..................67 Inside Columbia’s CEO........................................... 40 Inside Columbia Custom Publishing.................. 80 Inside Columbia Subscriptions............................23 Joe Machens Ford................................................... 4 Johnston Paint........................................................23 King, Paul................................................................. 75 Kleithermes Homes...............................................71 Landmark Bank...................................................... 73 Line-X.......................................................................43 Lon BrockmeierRaymond James Financial Services...............65 Mackenzie’s Prime.................................................19 MayeCreate............................................................35 Missouri Cotton Exchange..................................63 Moresource.............................................................78 MU Health Care.....................................................83 Naught-Naught Agency.......................................19 Old Hawthorne Plaza...........................................38 Peachtree Banquet Center..................................78 Prime Magazine...................................................... 75 Rickman Conference Center...............................46 Riverview Technologies.........................................17 Sandler Training......................................................19 Schuster, BettyPrinciple Financial Group.................................69 Smart Business Products.....................................46 Smith & Moore.......................................................78 Snapshots Photo Booths......................................30 Southside Liquors.................................................. 33 State Farm Insurance............................................36 Stifel Nicholas........................................................63 Suit Yourself............................................................43 Swan Lake.................................................................17 Templar Security....................................................68 Tiger Court Reporting...........................................30 Tradewind Park........................................................71 UMB Bank.................................................................11 United Country...................................................... 75 University Club.......................................................35 Vicky Shy Realty....................................................63 Wobig, Lynn-Allstate............................................30 Whitworth Law......................................................32 Vintage Falls............................................................ 33 Wilkerson & Reynolds..........................................39 Williams Keepers..................................................67
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