March 2013 In Business Magazine

MAR. 2013

Roundtable: Can a Company Survive the Fall of an Iconic Leader?

Surviving Healthcare Finding the Best Course for Businesses

Power Lunch By the Numbers Business Calendar $4.95 INBUSINESSMAG.COM

This Issue National Association of Women Business Owners Business Healthcare Services Guide

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preventable.

31%

81%

w/o insurance

with dental insurance

visit the dentist 2x or more annually

MEET THE VARGAS FAMILY The Vargas family had the following dental services performed in the past year: Father: 2 preventive visits and 1 periodontal service Mother: 2 preventive visits and 1 crown Son: 2 preventive visits and 1 filling Daugther: 2 preventive visits

EvEry SmilE mattErS. GEt DElta DEntal .

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At Holmes Murphy, we think providing you with innovative answers to the ever-increasing challenge of rising healthcare costs is one

In Business Magazine is a collaboration of many business organizations and entities throughout the metropolitan Phoenix area and Arizona. Our mission is to inform and energize business in this community by communicating content that will build business and enrich the economic picture for all of us vested in commerce.

Partner Organizations

of the most important things we can do to affect your company.

That’s why we take the time to get to know your company’s challenges and consult with you to provide the highest-quality, lowest-cost solutions — tailored especially for your business.

Rick Murray, CEO Arizona Small Business Association Central Office (602) 306-4000 Southern Arizona (520) 327-0222 www.asba.com

If you are looking for an advisor who understands the complexities of Employee Benefits and a partner who helps you develop the right financial solutions, call Holmes Murphy — the nation’s 22nd-

14850 N. Scottsdale Road, Suite 280 Scottsdale, AZ 85254 480-951-1776 | 877-951-1776 holmesmurphy.com

HOLMES M UR

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DES MOINES | CEDAR RAPIDS | DAllAS | DAvENPORt KANSAS CIty | MADISON | OKlAhOMA CIty | OMAhA PEORIA | SCOttSDAlE | SIOux FAllS | St. lOuIS

Steven G. Zylstra, President & CEO Arizona Technology Council One Renaissance Square (602) 343-8324 • www.aztechcouncil.org

Lynda Bishop, President NAWBO Phoenix Metro Chapter (602) 772-4985 • www.nawbophx.org

Learn more about how Holmes Murphy will be a trusted advocate for you — visit holmesmurphy.com. ©2012 Holmes Murphy & Associates

* Business Insurance, July 2011

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Mary Ann Miller, President & CEO Tempe Chamber of Commerce (480) 967-7891 • www.tempechamber.org Our Partner Organizations are vested business organizations focused on building and improving business in the Valley or throughout Arizona.

As Partners, each will receive three insert publications each year to showcase all that they are doing for business and businesspeople within our community. We encourage you to join these and other organizations to better your business opportunities. The members of these and other Associate Partner Organizations receive a subscription to In Business Magazine each month. For more information on becoming an Associate Partner, please contact our publisher at info@inbusinessmag.com.

Associate Partners Ahwatukee Foothills Chamber of Commerce www. ahwatukeechamber.com Arizona Chamber of Commerce & Industry www.azchamber.com Arizona Hispanic Chamber of Commerce www.azhcc.com Chandler Chamber of Commerce www.chandlerchamber.com Economic Club of Phoenix www.econclubphx.org Glendale Chamber of Commerce www.glendaleazchamber.org Greater Phoenix Black Chamber of Commerce www.phoenixblackchamber.com Greater Phoenix Gay & Lesbian Chamber of Commerce www.gpglcc.org Mesa Chamber of Commerce www.mesachamber.org North Phoenix Chamber of Commerce www.northphoenixchamber.com North Scottsdale Chamber of Commerce www.northscottsdalechamber.org Peoria Chamber of Commerce www.peoriachamber.com Westmarc www.westmarc.org

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M a r c h 2013

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MAR. 2013

IN BUSINESS MAGAZINE

Contents

Roundtable: Can a Company Survive the Fall of an Iconic Leader?

March 2013

THE NEW HEALTHCARE

Surviving Healthcare Finding the Best Course for Businesses

MARCH 2013 • inbusinessmag.com

24

Power Lunch By the Numbers Business Calendar $4.95 INBUSINESSMAG.COM

This Issue National Association of Women Business Owners Business Healthcare Services Guide

Surviving the New Healthcare: Finding the Best Course for Business

With huge changes underway in healthcare insurance, access, delivery and responsibility, how are businesses — employers, health insurance companies and healthcare providers — responding? RaeAnne Marsh sought out businesses on the insurance and provider sides of healthcare to get answers.

Departments Features

Don Rodriguez explores technological advances that impact care and cost in the business of healthcare.

30 Phoenix is Magnet for Foreign Direct

Investment

Bankers and other investment professionals share with Amy R. Handler why Phoenix is attracting foreign investors.

38

Pietro Micheli, Ph.D., examines the flawed assumptions that undermine the success of much performance management advice.

36 Strategic Business Structuring Can

Save Assets

Lewis and Roca attorney Thomas Morgan opens this threepart legal series with a discussion on strategies of business structuring.

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Three Risks to Your Retirem How to Cover Your Assets ent and

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14 Briefs

40

18 By the Numbers

42 Power Lunch

22 Trickle Up

View from the top looks at how Chef Eddie Matney turns commitment to customers and creativity in the kitchen into success.

31 Books

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M a r c h 2013

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45 National Association of Services Guide

of servi

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Special Sections

53 Business Healthcare

years

40 Assets

Noted business and community leaders Lynn Blake, Nancy Dougherty and Dave Elrod respond to IBM’s burning business question of the month.

In Business Magazine breaks down some of the numbers in the Patient Protection and Affordable Care Act that are perplexing business owners.

Business Education

ng 28

12 Feedback

National Kidney Foundation of Arizona Scottsdale Training and Rehabilitation Services

Mercedes Benz S550 Luxury Sedan Plus: iPad App-cessories to build business

“A Source for Bids,” “Trending Complaints,” “The Key to Healthy Employees,” “Small Business Prospers in the Global Village,” “Healthy Living,” “Slowing Down Pays Off in Franchise Expansion,” “Hot Growth in Flexible Office Space Solutions “ and “Meeting a Uniform Need to Build Sales”

38 Myths of Performance Management

Celebrati

32 Nonprofit

Betsey Bayless, president and CEO of Maricopa Integrated Health System, introduces the “Healthcare” issue.

20 Technology in Practice

30

11 Guest Editor

• nawbo

phx.org

Presents

New releases explore commerce in the global economy.

Nocawich Plus: Golf clubhouses that welcome the lunch crowd

66 Roundtable

“Can an Organization Survive the Fall of an Iconic Leader?”

On The Agenda

33 Spotlight

Power of the Purse Luncheon and Report The New Healthcare: A Business Owner’s Summit

7

Three Tips to Protec Reduce t Yourse Financ lf and ial Stress Today and more...

1

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Associati

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Governm Dent ent Employe al Insurance e Bene fits Cons ultants Hospitals Individua l & Grou p Heal th Insu rance Workplac Urgent Care e Bund led Heal Workplac th Prog rams e Ergo nomics Workplac e Well ness

34 Calendar

Business events throughout the Valley

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March 2013 • Vol. 4, No. 3

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HOW OUR SERVICE WORKS:

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We provide all-inclusive prices with easy billing options We provide same-day and off-hours service, including weekends We are fully insured, including general liability and Workers’

Editor RaeAnne Marsh

Compensation Our teams are professional and uniformed We offer fully customized solutions and North America-wide

Trusted since 1989

coverage 61% of materials we collect avoid landfill through reuse, recycling and waste-to-energy (incineration).

Art Director Benjamin Little Contributing Writers Ray Benedetto, D.M. Amy R. Handler Mike Hunter Pietro Micheli, Ph.D. Thomas Morgan Don Rodriguez Alison Stanton

Photographer-at-large Dan Vermillion

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More: Visit your one-stop resource for everything business at www.inbusinessmag.com. For a full monthly calendar of business-related events, please visit our website.

Inform Us: Send press releases and your editorial ideas to editor@inbusinessmag.com.

President & CEO Rick McCartney Editorial Director RaeAnne Marsh Senior Art Director Benjamin Little Financial Manager Donna C. Mitchell, CPA

Corporate Offices 6360 E. Thomas Road, Suite 210 Scottsdale, AZ 85251 T: (480) 588-9505 F: (480) 584-3751 info@inmediacompany.com www.inmediacompany.com

Vol. 4, No. 3. In Business Magazine is published 12 times per year by InMedia Company. POSTMASTER: Send address changes to InMedia Company, 6360 E. Thomas Road, Suite 210, Scottsdale, AZ 85251. To subscribe to In Business Magazine, please send check or money order for one-year subscription of $24.95 to InMedia Company, 6360 E. Thomas Road, Suite 210, Scottsdale, AZ 85251 or visit inbusinessmag.com. We appreciate your editorial submissions, news and photos for review by our editorial staff. You may send to editor@inbusinessmag.com or mail to the address above. All letters sent to In Business Magazine will be treated as unconditionally assigned for publication, copyright purposes and use in any publication, website or brochure. InMedia accepts no responsibility for unsolicited manuscripts, photographs or other artwork. Submissions will not be returned unless accompanied by a self-addressed, stamped envelope. InMedia Company, LLC reserves the right to refuse certain advertising and is not liable for advertisers’ claims and/or errors. The opinions expressed herein are exclusively those of the writers and do not necessarily reflect the position of InMedia. InMedia Company considers its sources reliable and verifies as much data as possible, although reporting inaccuracies can occur; consequently, readers using this information do so at their own risk. Each business opportunity and/or investment inherently contains certain risks, and it is suggested that the prospective investors consult their attorney and/or financial professional. © 2013 InMedia Company, LLC. All rights reserved. No part of this magazine may be reproduced or transmitted in any form or by any means without written permission by the publisher.

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Betsey Bayless, President and CEO, Maricopa Integrated Health System

Guest Editor

Spanning the Healthcare Divide

Since taking the helm of Arizona’s only public hospital system in 2005, Betsey Bayless has led a financial turnaround of the organization and implemented numerous significant changes. Professional recognitions include the Arizona Hospital and Healthcare Association’s 2011 “Honoring Our Professionals for Excellence” Healthcare Leader Award.

Bayless’s career in public service includes Arizona Secretary of State and board chairman of the Maricopa County Board of Supervisors.

Active in community service, Bayless received the 2005 Valley Leadership Woman of the Year Award and is a member of the Greater Phoenix Leadership and numerous boards of directors.

The healthcare landscape of Arizona is undergoing a dramatic change. Whether you are an individual recipient of healthcare benefits or an employer weighing the best healthcare options for your business, the bottom line is we are navigating uncharted waters.

While there has been much speculation on how President Obama’s Patient Protection and Affordability Care Act will impact businesses, the State of Arizona and a number of hospitals have already begun to prepare for the implementation of PPACA on January 1, 2014. At our hospital recently, Governor Brewer announced the need for Arizona to expand coverage under the state’s version of Medicaid known as the Arizona Health Care Cost Containment System. The approach of expanding coverage under AHCCCS would have a direct impact on cutting the number of uninsured in the state and lowering insurance costs for businesses. Additionally, an expansion will cut uncompensated care that is currently being absorbed by hospitals and ultimately passed on to consumers. Such an expansion would also have the effect of injecting nearly $8 billion into our economy over the first four years alone. This means thousands of quality jobs in every part of our state.

The proposed expansion of AHCCCS would be funded by a provider assessment, which cannot be passed along to patients or insurance policy holders. This approach would free the State’s General Fund dollars which otherwise would have been directed to AHCCCS. With State Medicaid expansion, the funds could then be redirected to other state government priorities such as education and public safety without the need to raise taxes. This fiscally responsible approach will further strengthen Arizona’s reputation as a top choice for businesses to locate.

The opinions of health insurance carriers, benefits brokers, medical associations and physician practices are additionally featured in this issue’s cover story by In Business Magazine editor RaeAnne Marsh. Healthcare is also the topic of this issue’s technology feature with Don Rodriguez, who examines the impact of technology’s role in advancing healthcare.

This issue’s finance feature also looks at how foreign direct investment is impacting our local economy, where writer Amy Handler takes an in-depth look at Phoenix as one of the nation’s hot markets.

In his article on performance management, Pietro Micheli, Ph.D., examines the often flawed assumptions business owners make in applying performance management advice. Doctor of Management Ray Benedetto’s “Roundtable” discusses the fallacy of “hero leadership” and how an organization can succeed when its leader suffers a public fall from grace. And in the first of a Legal education series, Lewis and Roca attorney Thomas Morgan provides legal insight into common corporate structure issues. This issue also features the In Business Magazine Healthcare Guide!

With the magazine’s broad coverage of issues and topics important to business owners in all sectors, I am pleased to be the guest editor of this month’s In Business Magazine “Healthcare” issue.

Very truly yours,

Betsey Bayless President and CEO • Maricopa Integrated Health System

Healthy Employees Mean Higher Cost?

Connect with us:

This is the year we will all be questioning our efforts when it comes to health insurance and looking at employee benefits as we prepare for the mandates in 2014. While it is conventional wisdom that much of the burden has been placed on businesses, it is also becoming clear that, with the Affordable Healthcare Act, there will be some “efficiencies” and some “incentives” to change healthcare services, introducing a dose of “smart thinking.”

Story Ideas/PR: editorial@inbusinessmag.com

inbusine ssmag.com

Betsey Bayless is a strong voice for Arizona health and healthcare and we thank her for directing this healthcare issue of In Business Magazine. Her command of the subject and her effective leadership will make a big difference in Arizona and, as a champion of business, will ensure progress on healthcare issues for our business community.

—Rick McCartney, Publisher

Business Events/Connections: businessevents@inbusinessmag.com Marketing/Exposure: advertise@inbusinessmag.com Or visit us online at www.inbusinessmag.com

M a r c h 2013

11

Feedback

Valley Leaders Sound Off

Executives Answer

A centerpiece of the Patient Protection and Affordable Care Act is wellness care. Employers have long recognized the positive impact of healthy employees on their bottom line, as healthy employees are more productive. Wellness is now gaining traction for its potential to decrease health insurance premiums. How is wellness care impacting your business?

Lynn Blake

Nancy A. Dougherty CEO Rest Assured, Inc. Sector: Storage, Transport & Installation

Director of Compensation & Benefits Phoenix Children’s Hospital Sector: Healthcare

Rest Assured, Inc. being a small company (20–30 employees), it’s been tough at times to find health insurance solutions that are affordable for both the business and the employee. We currently offer a choice of three health insurance plans of which the business pays 50 percent of the premium, a dental plan that is covered by Rest Assured 100 percent and a supplemental option at employee cost, should they choose it.

We give employees a bonus full- or half-day of PTO if they schedule their annual medical physical and a dental check-up back-to-back. Several years ago, an employee survey indicated that most people were not taking advantage of the free aspects of the plans they’d signed up for. This bonus day is meant to encourage individuals to take an active and early role in their own wellness.

We also implement health and wellness solutions and keep our ears open for what is new and viable for us in the healthcare arena. While we have no actual data, we care about our people and understand that healthy individuals make for a healthy and thriving work place.

Phoenix Children’s Hospital has always recognized the positive impact of wellness programs for our employees, with several health fairs and screenings offered every year. In 2011, our Human Resource Department began a more concentrated effort to help employees get healthier physically, mentally and financially, and keeping in mind that healthier employees, fewer claims and less absenteeism combine to make a difference in the bottom line.

Six hundred employees participated in a wellness survey in July 2011, and biometric screenings with blood and cholesterol checks offered to employees at no cost. In 2012, a weight loss challenge was sponsored with 200 participants.

New programs have been added and more are scheduled for 2013 that include Yoga sessions, stress management and healthy meals. The wellness programs are fairly new and we don’t have any benchmark or comparison figures to share just yet but will start measuring ROI this year. All show high employee satisfaction with increased participation in all programs, and we have been recognized by the American Heart Association as a Fit Friendly Company, which was quite an accomplishment as well.

Rest Assured, Inc. restassuredinc.com

Phoenix Children’s Hospital phoenixchildrens.com

Lynn Blake is co-owner of Rest Assured, Inc., the leading delivery and installation firm for interior designers in the Greater Phoenix area. She manages marketing, public relations and finance for the company that has specialized in the delivery and installation of highvalue furnishings and fine art since 1989, using a hands-on approach and direct customer involvement to enhance and evolve its services.

Nancy Dougherty oversees the design, management and administration of PCH’s benefit and retirement plans; manages the wellness program; and audits compensation and benefit programs. She designed and implemented an employee incentive plan and has implemented changes resulting in more than $2 million of annual savings. She received a Master of Management in human resources and marketing from the J. L. Kellogg graduate school of Management at Northwestern University and a B.S. in Finance at Northern Illinois University.

Dave Elrod Regional Manager DPR Construction Sector: Construction As noted in the question, wellness is made up of many aspects. DPR Construction believes the environment where people work affects their health and personal well-being — physically and mentally — so DPR is investing in this nationwide in all our offices. The work environment naturally evokes a culture of “just do it” and you can clearly feel no one is holding you back in reaching your potential or maintaining a healthy, growing lifestyle. Employees are encouraged to take time to keep a balanced

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life — physical and mental fitness, taking time in the middle of the day to hit the Zen Room (nap room), burn off energy in the in-office gym, ride the light rail to lunch in Downtown Phoenix or Tempe, come in early and leave early, manage their own work — meeting deadlines and any commitments they self-motivate and commit themselves to do. DPR knows we must continue to hire, inspire, develop and grow the best people in the industry and to do so we need to have a healthy, innovative, motivating environment. We see investing in our people and their work environment as a direct correlation to investing in our business.

DPR Construction dpr.com

Dave Elrod, regional leader for DPR Construction’s Phoenix office, offers more than 25 years of construction industry experience. Leading DPR’s commitment to be an integral part of the local community, he is a board member of Alliance for Construction Excellence and the Phoenix Biomedical Campus Advisory Council, a member of the Arizona Builders Alliance Legislative Review Panel, a guest lecturer at ASU and also involved with SAARC and Future for Kids.

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Get to know the

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The Key to Healthy Employees Keas combines social

Small Business Prospers in the Global Village

Small and medium-sized companies (SMEs) engaged in international markets are twice as likely to be successful as those operating only domestically, according to a recently completed study by IHS that was commissioned by DHL Express.

IHS studied SMEs in the blocks of countries referred to as G7 (United States, United Kingdom, France, Germany, Italy, Canada and Japan) and BRICM (Brazil, Russia, India, China and Mexico) and found that 26 percent of companies trading internationally significantly outperformed their market, in contrast to 13 percent of those operating only in their home market.

IHS’s analysis of the relative strengths of G7 and BRICM business landscapes shows that SMEs in the U.S. benefit from a relatively efficient business environment, where labor productivity, for example, is higher than the G7 average. They also prosper from higher levels of R&D and innovation than the G7 average.

Overall, most of the better-performing SMEs identified in the study employ more than 50 people, underscoring the importance of resource in overcoming barriers to international growth.

However, the research also revealed that SMEs founded in the last five years were more likely to have international business operations than older SMEs despite having had less time to grow their businesses.

The primary stumbling blocks identified are an information gap on international trade, establishing contacts with foreign partners and an overseas customer base, and high customs duties. Key benefits of this international approach cited by SMEs are access to new markets as well as to know-how and technology, and diversification of their products or services, and the majority of SMEs who had out-performed their markets over the past three years indicated that they also plan to increase the percentage of exports in their turnover over the next three years despite the uncertain economic environment.

—RaeAnne Marsh

media and online games to create happier, healthier and more engaged work forces all focused on becoming more productive.

Engaging workers at companies of all sizes, this online health and wellness program may be what business owners are looking for in creating a wellness program that is both cost-effective and team-building. keas.com

DHL Express dhl-usa.com

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Seeing Is Believing Healthy Living

Blue Cross Blue Shield of Arizona and ABC 15’s

“Sonoran Living” are working together to provide viewers with health and wellness information aimed at improving the lives of Arizonans. Each Wednesday on “Sonoran Living” (Channel 15, 9 a.m.), an advisor from BCBSAZ’s Good Health Panel shares information on important health

Visit our “Briefs” link online.

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topics in the work place and at home. about.azblue.com/good-health-panel

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Photo courtesy of xxxxx

Go online for more!

Briefs

Quick and to the Point

Slowing Down Pays Off in Franchise Expansion

The first thing Rissy and Jack Sutherland did when they bought into the Honest-1 Auto Care franchise in 2008 was have the company take a year-and-a-half hiatus from expanding its franchise network. Drawing on their experience as owners of individual franchises, Rissy says, “We looked at what was important to us as franchisees, from our franchisors … and chose to take everything from the ground up: logos, concept, training, sales processes and the franchising program.” Since implementing the changes, the Scottsdale-based franchise has come back strong. Samestore sales growth from 2011 to 2012 averaged 36 percent, and it has 15 stores in the queue to add to its nationwide network that ended 2012 at 28 stores.

The analysis conducted during its franchising hiatus — to determine the franchise’s ideal demographic and what it wants — brought to light the fact that the auto care customer base in the last 10 years has changed from more than 70 percent male to 68 percent female — and the female customer values a different experience. Bringing together both her own sensibility as a woman and former experience in the auto industry, Rissy incorporated into the newly designed franchise a new business model with a focus on relaying information in a way its female base of customers could understand, a vital element in laying a foundation for trust; eco-friendly auto care practices because “taking care of the environment was, hands down, important”; and a family-friendly waiting area “so they don’t have to worry about bringing their kids.”

—RaeAnne Marsh Honest-1 Auto Care honest-1.com

Meeting a Uniform Need to Build Sales

Making custom “one offs” for neighbor businesses on Tempe’s Mill Avenue, Brand X CEO Charles Goffnet recognized a new market for his six-year-old T-shirt business. B.Y.O.U. (Buy Your Own Uniform), newly launched out of Brand X, aims to give business owners a solution for brand control. To its standard stock of T-shirts, tank tops and polo shirts it has added button-downs, scrubs and chefs coats — with access to virtually any type of apparel through distributors worldwide. “Keeping staff looking sharp all the time is a really frustrating experience,” says Goffnet, speaking as one whose career includes having managed several restaurants. Freeing businesses from having to maintain their own inventory of uniforms, B.Y.O.U. not only gives businesses flexibility as to whether they or their employees pay for the branded attire, but lets the employee “buy as many as they want to accommodate their laundry schedule,” Goffnet offers.

“As an entrepreneur, I love talking to other business owners,” says Goffnet, explaining how B.Y.O.U. “happened organically” to accommodate neighboring businesses’ employee turnover as well as special events where “the more appeal a bartender has, the more attention he gets and the more drinks he sells.” Goffnet says he’s used to people coming in frantic with an immediate need, and can usually get a single-shirt order done in one hour, orders of around five turned around in the same day, and orders of a couple dozen completed in six to eight business days. In addition to the 1,400-square-foot store on Mill Avenue, Brand X has a 2,000-square-foot space for backstock and offices and another 1,600 square feet for screen printing that Goffnet has equipped with new presses and printers.

—RaeAnne Marsh B.Y.O.U. brandxtshirts.com

In a commercial office market still posting high vacancy rates, executive offices leader Regus recently opened its 15th full-service business center in the Greater Phoenix area at Frank Lloyd Wright Blvd. and Scottsdale Road. This is up from eight centers last year, and on the way to 20 by the end of 2013. Demand is coming from Fortune 500 companies down to start-ups, according to Phoenix market director Greg Waddington. “If they have a small footprint in a city,” Waddington explains of Fortune 500 companies, “rather than committing to a long-term office solution and significant capital expense to set the office up with furniture and build-out, they can lower their risk in securing office space.”

Able to accommodate a variety of shapes of office space for individual professionals up to 20 people, the business centers are usually 14,000 to 15,000 square feet and include 3,000 square feet of common area that offers meeting rooms, a business lounge and stocked kitchen area, and reception area. Regus’s Businessworld membership provides access to the business center for those who don’t need actual office space, “replacing the need for the mobile worker to work with his laptop on his knees at the local coffee shop,” says Waddington, noting that most workers today have some level of mobility in their job. Phoenix is currently one of the highest-growth areas of the country for Regus.

—RaeAnne Marsh Regus regus.com

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Photos courtesy of Brand X (top), Regus (bottom)

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10/25/11 3:29 PM

By the numbers

The Affordable Care Act: Where Do You Stand?

Many employers are feeling overwhelmed by a flurry of new regulations governing their benefits packages, taxes and methods of compliance as required by the Patient Protection and Affordable Care Act. Fortunately, many organizations are aware of this and are gearing up to make 2013 the year of information. The new healthcare reform law includes a number of new taxes and fees that employers will need to become familiar with as well.

While there are many more regulations and compliance elements to the Affordable Care Act for businesses, below are some highlights within each of the four categories by which businesses must identify themselves.

Self Employed: Self-employed individuals must have the basic health insurance coverage (known as “minimum essential coverage”). Self employed will have a choice of four levels of benefits packages that differ by the percentage of costs the health plan covers. Plans will be in effect January 1, 2014, with open enrollment beginning October 1, 2013.

by Mike Hunter

Metrics & Measurements

Key Indicators

Employers with Fewer than 25 Employees: Small businesses may take advantage of a Health Care Tax Credit to offset the mandated costs. This is targeted at those businesses with low- and moderate-income workers. The Small Business Health Options Program will offer small businesses increased purchasing power to find lower-cost programs and a better choice of high-quality coverage.

Key indicators for our state economy are provided in each issue to identify those key numbers that give readers a sense of the health of our local economy.

Economic Indicators (Arizona) Unemployment (Dec. 2012)

Businesses that fall under the requirement to provide healthcare coverage but don’t provide it will pay a penalty: Take the total number of employees in the company (χ), subtract 30, and multiply that result by $2,000. That’s how much they will pay.

χ÷120

The number of full-time equivalents is determined by taking the total hours worked in a given month by non-full-time employees (χ) and dividing that number by 120.

To determine whether the status of a “variable-hour employee” is full time or part time, take the total hours worked over the course of 12 months and divide by 52. If less than 30, the employee is part time. If 30 or more, the employee is full time.

Starting the coverage year following a dependent’s 26th birthday, employers are no longer required to allow employees to sign up their children for the company healthcare plan.

0.01

No. of Housing Permits (Dec. 2012)

2,365

130.73

Consumer Confidence (Q3 2012) (Arizona)

71.3

32.04

Average Hourly Earnings (Dec. 2012)

$22.82

0.03

Retail Sales (in thousands)

Oct. 2012

Nov. 2012

Total Sales

$6,588,229

$6,872,355

7.03%

5.47%

Retail

$3,973,952

$4,295,797

Food

$1,011,261

$1,029,972

Restaurants & Bars

$842,616

$817,069

Gasoline

$760,399

$729,515

Contracting

$873,795

$837,120

Change Y0Y

Explaining some of the key figures in the Patient Protection and Affordable Care Act

Eller Business Research

Full-time employment is defined as at least 30 hours per week.

Real Estate Commercial: Office*

If a job-based healthcare plan costs 9.5 percent or more of an employee’s income, the employee is eligible to purchase a health insurance plan through the exchange.

Q4 2011

Q4 2012

Vacancy Rate

27.9%

25.7%

Net Absorption (in SF)

92,786

1,256,546

Rental Rates (Class A)

$23.45

$23.27

Commercial: Indust.*

Q4 2011

Vacancy Rate Net Absorption (in SF)

For-profit businesses with fewer than 25 employees may take a tax credit of up to 35 percent of the cost of their healthcare plan to help offset the cost of company healthcare insurance; percentage is set to increase to 50 percent in 2014.

If a family’s household income is in the range of 100 to 400 percent of federal poverty level, the family qualifies for a tax credit to reduce the cost of healthcare coverage purchased through a health exchange.

2,512.1

Retail Sales (Arizona)

United States Small Business Association sba.gov

(χ-30)($2,000)=PENALTY

0.02

Eller Business Research

Employers with 50 or more Employees: Beginning in 2014, employers with 50 or more full-time/full-time equivalent employees must offer affordable minimal essential coverage to all employees. Employers are required to provide employees with a standard “Summary of Benefits and Coverage” form explaining what their plan covers and what it costs.

When a business has at least 50 employees — full-time plus full-time equivalents, averaged over 12 months — it is required to offer healthcare coverage.

YOY % Change

7.9

Job Growth (in thousands) (Dec. 2012)

Employers with Fewer than 50 Employees: The Small Business Health Options Program benefits these employers as well and manages cost by pooling risk. By 2016, employers with 100 employees will be able to participate in SHOP.

Breaking Down the Numbers

Number

Rental Rates (General Industrial)

Residential:

11.2%

2,853,602

1,776,184

$0.51†

$0.46†

Jan. 2012

Total Sales Volume Total Median Sale Price

Q4 2012

12.3%

Jan. 2013

6,373

6,463

$128,121

$170,000

New Build Sales Volume

447

743

New Median Sale Price

$223,000

$260,969

Resale Sales Volume Resale Median Sale Price

5,926

5,720

$121,500

$156,550

* Cassidy Turley Arizona †

Industrial rents are expressed as triple net.

Latest data at time of press

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M a r c h 2013

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19

Tech

Innovations for Business

Technology in Practice

Advances impact care and cost in the business of healthcare While new technology is blamed as a reason affordable healthcare seems a thing of the past, some Arizona organizations are using such innovations to make medical care accessible on a number of fronts: patient records available immediately, links between rural physicians and urban specialists, use of wireless devices that even patients can afford, and, yes, a life-saving creation that costs less than the cable bill.

For some 18,000 physicians, physician assistants and nurse practitioners, their move from paper to electronic health records (EHRs) means the state’s switch is slightly better than the national average rate of 72 percent, says Melissa Rutala, CEO of Arizona Health-e Connection (AzHeC). This is happening despite prices on EHR systems varying widely and financial considerations that can include not only hardware and software costs but also implementation costs such as IT consulting and legal assistance.

To help with the conversion, AzHeC operates the Arizona Regional Extension Center, one of 62 programs nationally that

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provide primary care providers and critical access hospitals support that ranges from selection of an EHR vendor to workflow redesign — all at no charge, she says. Also helping are Medicare and Medicaid offering financial incentives to providers who adopt EHRs, with more than $150 million rendered to Arizona providers and hospitals to date.

There are two ways to securely exchange health information here. AzHeC helps connect providers with a point-to-point exchange called Direct Exchange, which offers secure email between providers. A more robust exchange is offered through the Health Information Network of Arizona (HINAz), a community-based nonprofit that enables a provider to securely view records from hospitals, labs, pharmacies and other providers, says Executive Director Kalyanraman Bharathan. He notes that, as this system advances and matures, “HINAz will let health information follow patients [at no cost] wherever they choose to go for care.”

As records become available nearly anywhere, so will medical care itself. Helping

is the Arizona Telemedicine Network, made up of 160 sites in 60 communities with the “primary focus on education of healthcare workers,” says Ronald S. Weinstein, M.D., director of the Arizona Telemedicine Program, which maintains the network from the University of Arizona Health Sciences Center in Tucson. While the network is relatively early-stage, there already are groups formed to help one another. For example, there is a teleechocardiography program for newborns, with partners in more than 25 rural hospitals in Arizona and New Mexico and on reservations, Weinstein says.

There are also situations that put specialists within reach to save lives and even money.

Weinstein offers a scenario of someone in Bisbee suffering what may appear to have been a stroke, with options for fast treatment often calling for a helicopter flight to Phoenix for evaluation and treatment. Through the network, a doctor in the Valley can perform a physical exam by video and check MRIs of the brain. Besides making a call on which type of stroke occurred so the right treatment inbusine ssmag.com

Photo courtesy of McCarthy Building Companies

by Don Rodriguez

Photos courtesy of Avnet, Inc. (top); McCarthy Building Companies (bottom)

“Last Year Named Best Economic Outlook Event!” is prescribed, the physician can determine whether a stroke even happened. If that flight had been taken unnecessarily, Weinstein points out, “there goes $25,000 to $30,000 down the drain.”

Although telemedicine is still considered in its infancy, there already are major changes happening. To start, “we’re moving away from the word ‘telemedicine” to ‘telehealth,’” says Weinstein, reflecting it’s not being used just for treatment after the fact. And the technology is evolving to more affordable tools. “Any medical meeting I go to, doctors around the table have tablets for looking at patient charts,” he says. With smartphones becoming more sophisticated, a survey done at the UofA has found “interest in tablets has migrated to smartphones,” Weinstein says.

Another device with wireless capability has been developed in a research lab at the Arizona Center for Innovation in Tucson. One of the features of the pump created by Medipacs to continuously deliver injectable drugs can be a wireless chip set that sends information about treatments to patients’ EHRs, “all falling into play in the future of medicine,” says Mark Banister, chief technology officer and founder of the company.

At the heart of the pump is a polymer that Banister invented with an expandable nature that allows a prescribed drug to be precisely injected over the course of 15 minutes up to two hours. Unlike the legion of pumps available now with nearly as many programming codes, there are fewer Medipacs pump codes, eliminating the risk of lethal doses, he says. But it’s the expected pricing that has people excited.

For example, an electronically controlled pump run by battery can be sold for about $100. A non-electronic version with a set control rate will be about $25, Banister says. And either one can be used once then thrown out, unlike the more costly pumps that carry the extra expense of maintenance.

Add to that the savings that hospitals will experience because nurses will spend less time on the many steps currently required to dispense medications, since a pump can come with the dose already in it. “The response from nurses is, it will change their lives,” Banister says.

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21

Trickle Up

A View from the Top

Chef Eddie Matney: Restaurateur with Panache Matney turns commitment to customers and creativity in the kitchen into success

As Chef Eddie Matney can attest, from the series of restaurants to his credit, adjusting to a new group of regular customers after opening a restaurant is important. The regulars who now frequent Eddie’s House, in downtown Scottsdale among a host of art galleries, is a much different group from those he served at Eddie Matney’s, a previous restaurant that was located in the financial district at 24th Street and Camelback Road in Phoenix.

What he’s learned first-hand over the years — from the day he opened Steamers in 1986 to today when he goes to work at Eddie’s House, which opened in the fall of 2008 — being a successful restaurant owner involves much more than keeping up with the latest food trends. One of the main factors, he says, is figuring out how to make each and every one of his customers feel important.

“I greet them all in the restaurant when they come in and acknowledge them, and I get to know my regular customers,” Matney says. This includes making it a point to remember the specific preferences and traditions of the diners he sees frequently. “It’s the personal things like this that matter, like remembering that one of my female customers likes to celebrate her birthday month and not just her birth day.”

While being aware of what foods are currently being discussed and are in demand is

a good idea, Matney says it is not what sustains a restaurant year after year. “I’m not discounting this at all. There are definitely times when you’ll hear customers saying something like, ‘Oh my God, I hear that kangaroo is the new white meat!’” Matney says. “But the amount of people who do this is actually very small.” Food, in fact, plays only a part in bringing customers back to his restaurant. The host or hostess who greets them in a friendly way is important, as is easy access to the restaurant and ample parking.

Matney also makes sure his restaurant’s phones are forwarded to a live person. Even when his restaurant is closed — including late at night — if a customer calls, Matney, himself, may pick up the phone. “There have been times when guests have called me up at 11 o’clock at night to say they have company coming in and they ask if we can take care of them and I say, ‘Of course.’

It’s about making people feel like they have a restaurant at their fingertips.”

Matney also believes strongly in keeping in touch with his customers on a regular basis. In addition to social media, he has found it effective to send out weekly emails that have some type

In the Kitchen with Chef Eddie Matney ■■ Eddie Matney came to Arizona in 1986 to open Steamers in the Biltmore Fashion Park.

■■ Matney relocated here from Massachusetts’ popular tourist area the Berkshires, where he had co-owned and operated the Stockbridge Café.

■■ Other local restaurants Matney has owned over the years include Eddie’s Grill, Eddie Matney’s and Stoudemire’s Downtown.

■■ Matney has been named the “Number One Chef in the Valley” for five consecutive years

by Phoenix Magazine.

■■ Matney has been featured in a variety of well-known culinary publications, including Food & Wine, Bon Appétit, Food Arts and Nation’s Restaurant News.

of theme related to the current specials he is offering. He knows he is reaching people, he explains, by the number of guests who mention the emails when they come in.

A recent example was an email that played on the number four: four of the biggest car shows in the country were in Arizona; four teams were left in the NFL playoffs; there were four more days until the National Hockey League started playing; and Eddie’s House was serving up “notfor-the-kids” berry lemonades for $4. Another email advertized what Matney calls “dueling plates” that tied into that weekend’s NFL football playoff rivalries — diners could choose from selections like “Denver Bronco Filet of Beef with Manning Mashed Potatoes” topped with “Baltimore Raven Crab finished with a Ray Lewis Shallot Ragout.”

Naming entrées and side dishes after football players seems to be beyond the realm of creativity shown by many chefs, according to Matney, but he believes keeping things fresh and new and continually finding new ways to re-create classic dishes has played a role in keeping his restaurants open and the customers coming in. “I love keeping things creative, like when I make a pot pie, I’ll make it upside down, with puff pastry on the bottom, and the filling on top. I think doing things like this will also help contribute to your success.”

When the meal is over and the customers are getting ready to leave, Matney is sure to thank them for coming in. “One message that we convey all of the time is the fact that we appreciate it when people come to us and bring us business. We know they have a choice, and we are grateful for everything people do for us.”

Eddie’s House eddieshouse.com

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M a r c h 2013

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Photo courtesy of Eddie’s House

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23

Surviving Healthcare

Finding the Best Course for Businesses Many of the changes in healthcare coverage are trends that have been growing gradually anyway — but now they’re mandated, regulated and requiring more paperwork.

by RaeAnne Marsh

T

he healthcare coverage requirements coming down from the Patient Protection and Affordable Care Act take effect next year, and the most important message to employers is: The time is now for putting plans and policies in place. Knowing the Affordable Care Act’s requirements is only one piece of the effort; effective planning also depends on an understanding of what health insurance companies are offering as well as changes in the business models of the healthcare providers — hospitals and physician practices.

Ruthann Laswick, president of Blue Water Benefits Consulting, who has been a featured speaker on this topic at events nationwide, calls 2013 “the year of the tax.” Says Laswick, “There’s not a lot going into effect that isn’t to do with taxes.” This includes modifications to existing programs, such as the salary deferral plan that has existed for flexible spending accounts now being limited to $2,500, and a new Medicare tax on high earners that employers will have to deduct (but need not provide matching funds for). Employers also need to look at what information they will be required to report to the IRS in 2014 and get the software in place now to collect that information: name, date, employer ID number, certification as to whether the employer offers full-time employees and their dependents the opportunity to enroll in minimum essential coverage, length of any waiting period, months during the year for which coverage was available, monthly premium for the lowestcost option under the plan, large employer contribution, number of full-time employees for each month during the year, name address and TIN of each full-time employee during the calendar year and the months during which this employee (and any dependents) were covered under any health plans and, as stated in the regulation, “such other information as the Secretary may require.”

With the new law setting 30 hours per week as full-time employment — at which point the healthcare coverage requirement kicks in — some employers may benefit from utilizing the

26

M a r c h 2013

“variable hour” designation. In cases where hourly need may fluctuate, an employer can hire someone as a variable-hour employee and keep track over the course of 12 months to determine whether the position averaged 30 or more hours per week (full time) or fewer than 30 hours (part time). At the end of that year, if the employee is determined to be full-time, he or she can then be put on the usual 90-day wait to get on the healthcare plan. This category especially accommodates restaurants and similar high-turnover employment, explains benefits consultant Bill Weaver, managing partner of Focus Benefits Group.

And there’s that critical number 50. A business with fewer than 50 employees does not need to offer healthcare coverage; a business with 50 or more does. The number does not count only full-time employees but includes “full-time equivalents,” which is calculated by including the hours worked by part-time, seasonal and contract employees.

It’s that number 50 that has sparked heat, and Laswick suggests, “Emotion is overriding good business sense.” She shares a conversation she had with a business owner at a healthcare forum. “He told me he had 48 employees and he was thinking about not growing.”

She pointed out he would be hobbling his business for the sake of maybe a $300-a-month premium, and relates his response was to laugh and say, “Yeah, when you phrase it that way, it is kind of silly.”

Attempting to circumvent the coverage requirement by shuffling full-time positions to part-time may also be short-sighted, as payroll (FICA, etc.) is more expensive than benefits.

Dropping employees’ hours to part time would likely result only in a company needing to hire more employees to keep the same level of work output. “It doesn’t make sense to drop all your benefits, and drop employees so you can,” Weaver says.

Noting that compliance rules are starting to come out on everything, Weaver warns that the Department of Labor will be auditing for compliance and there are two documents they will ask for: the SPD and the SBC. The

SPD (Summary Plan Document) explains employees’ rights under the Employee Retirement Income Security Act and must be given to each employee within 30 days of being hired, and to everyone if the plan changes.

Non-compliance can result in huge fines, as it is calculated per total number of employees in the company and for the period of time from the audit back to the date the infraction began.

The SPD requirement has existed for years.

New from the Affordable Care Act is the requirement for an SBC (Summary Benefits and Coverage form), intended to enable the healthcare user to better understand and compare benefits. Health plans and issuers must provide this, and employers must document that they gave one to each employee.

It also should be noted that employers who continue to offer a Section 125 plan, which is a pre-tax or flexible spending account, must have the plan onsite and update it every year.

Private Plans and the Health Exchange “If you currently have a benefit plan, there’s no reason to get rid of it,” Weaver says — as long as it offers minimum essential benefits, is affordable and is not discriminatory (that is, no employees are restricted from joining it). Some plans may have to be replaced, though: those that were created under special waivers available for a short time only to specific employers, such as ones excluding contraception, which ends in August, Laswick explains. Plans must offer, at minimum, a 60-percent value, but this does not mean employers are required to pay 60 percent of the premium.

Employers may choose to offer more than one level of coverage, as long as all plans are available to every employee. Employers are also required to provide information to their employees about the health insurance exchange, which, here in Arizona, will be a federal program and as of this issue’s printing is still being developed. It’s up to the employee whether to enroll in a healthcare plan through inbusine ssmag.com

the employer or go to the federal health insurance exchange, and the employer will not be fined if employee chooses the exchange.

Penalties revolve around the tax credit. If an employer does not offer any coverage as required, and at least one employee purchases healthcare through the exchange and then gets a tax credit on that premium, the employer will be levied a fine. The employee’s eligibility to receive a tax credit hinges on his or her earnings being 100 to 400 percent of poverty level (this, it should be noted, is a “safe harbor” change made last summer to a calculation that had previously looked at the employee’s overall household income). However, as long as the employer offers an “affordable” plan, the employee cannot get a tax credit.

The amount of the penalty is calculated per a formula that counts the number of employees in the entire company, at $2,000 each. “For companies with 51 employees, it would be cheaper to pay the penalty,” Laswick says, but points out that, for larger companies, it can save millions of dollars to offer a benefits plan rather than suffer the penalty — which is not tax deductible, nor can an employee waive it off.

Many details of the new healthcare regulations are still being defined, including “minimum essential plan.” One of the recently defined terms is “dependent.” For healthcare insurance, the requirement that coverage be available to the employee’s “dependents” refers to children under age 26; it does not include the spouse.

Of concern to Jeff Stelnik, senior VP of strategy, sales and marketing with Blue Cross Blue Shield of Arizona, is the possibility that the federal exchange will not be catered to Arizona but be one-size-fits-all. He shares that BCBSAZ has spent hundreds of hours internally, developing a product portfolio catered to Arizona residents that will meet critical cost considerations but also be compliant with a “tsunami of additional regulation brought on by the law.”

Observing, “The law has a lot of benefits,” Stelnik cites simplicity of coverage levels inbusine ssmag.com

“If you currently have a benefit plan, there’s no reason to get rid of it,” Weaver says — as long as it offers minimum essential benefits, is affordable and is not discriminatory (that is, no employees are restricted from joining it).

— designated in the Affordable Care Act as bronze, silver, gold and platinum — as one of them. “The language helps simplify the purchasing process for an individual or a group.” A trade-off is that it restricts choice, and he further points out that currently in Arizona, many employers’ healthcare plans are below the minimum bronze level.

Changes in Providers’ Business Models Healthcare providers are also being impacted by the Affordable Care Act — not only are their reimbursements shrinking, but they, too, are employers who must meet the Affordable Care Act’s requirements.

Consolidation has been one response, enabling them to achieve an economy of scale as mid-sized businesses rather than operating individually as small businesses. Explains Michael Urig, M.D., president of the board of Arizona OBGYN Affiliates, “One way to provide good healthcare and reduce costs is to join together. We reduced costs at the supply level and IT support.” The affiliation was founded in 2007, bringing together five practices into one with multiple branches and

organized to minimize variance between the branches but allow each to retain autonomy on day-to-day operations. Another dominant trend, according to Daniel Lieberman, M.D., president of the Maricopa County Medical Society, is physicians leaving private practice for employed practice with hospital chains or private money-type of firms (although the latter, he says, has a long track record of not working). “Twelve years ago, when I started my practice, 90 percent of physicians were self-employed and 10 percent were [other]employed. Within the next five years, we should see the exact opposite of that,” Dr. Lieberman says.

Hospitals, for their part, are purchasing physician practices as well as building up more multi-hospital systems rather than establishing individual hospitals, says Pete Wertheim, spokesman for the Arizona Hospital and Healthcare Association. “The general acutecare hospitals of the past that don’t employ a physician group outside the hospital will have a difficult time in the new payment methodology,” he says.

The old payment methodology was based on number of patients consulted and number M a r c h 2013

27

of tests performed. The new methodology coming out of the Affordable Care Act replaces that with an outcome-based reimbursement system. It’s a change of mindset, explains Wertheim, from “If we don’t do 30 CAT scans a day, the machine isn’t profitable” to “If we do CAT scans efficiently and as needed, and not duplicate them, we will save money.” Among situations that give rise to duplication of tests, for example, is a doctor sending a patient to a hospital and attempting to send along scans he’d had performed as part of his care of the patient; some hospitals have not had any protocols for accepting such outside scans.

“The Affordable Care Act has accelerated it, but this change was under development — but at a slow process,” says Wertheim. Offering a viewpoint also iterated or alluded to by everyone else interviewed for this article, Dr. Urig observes, “Fee-for-service isn’t working; it can’t sustain itself.”

Under the change, explains Wertheim, a heart attack patient would be treated under the payment code and the provider would make a profit, but if the patient relapses and must be readmitted — that is, if the outcome is unsuccessful — the hospital is accountable and may be subjected to lower Medicare

payments in the future for all patients until outcomes improve. This approach is built into Medicare and is moving into Medicaid, says Wertheim, also noting the community health insurance market is changing. “If we have true accountability on the part of the employer, the provider and the payer throughout the system, we can develop a true, working, wellness model.” And results can be built into the premium when it’s time to renew the healthcare insurance.

Accountability Accountable Care Organizations is a relatively new option for employers. The payer, healthcare provider and patient are all accountable and incentivized. Not only is it a lower premium if patients stay within the system, but ACOs offer a richer array of benefits — more hands-on patient care and connectivity with the provider because the provider has a financial incentive attached to the outcome. “If all you get paid for is a prescription or a test or a visit, the more you order the more money you can make, but there’s no incentive to make sure the patient gets the care,” explains Wertheim.

Another dominant trend, according to Daniel Lieberman, M.D., president of the Maricopa County Medical Society, is physicians leaving private practice for employed practice with hospital chains or private money-type of firms.

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UnitedHealthcare’s network in Tucson includes an ACO, Arizona Connected Care, and Jeri Jones, president and CEO of UnitedHealthcare, says UHC is working with primary care and hospital groups in Phoenix, as well, to change how they deliver care.

The goal is to change the dynamic behind increases in reimbursement rate by moving toward a performance-based component.

“They will earn back a rate increase in areas that reduce utilization and, therefore, cost to the whole pool — lower the incidence of infections that people get in the hospital, lower the readmission rate, lower the number of emergency room admissions.”

Speaking as a businessman, Dr. Urig believes transparency is important in the area of reimbursement and that the physician’s practice should share the benefit of reducing cost. “We have clinical protocols that have made a dent in the cost of healthcare, but I don’t think it’s getting passed on [from the health insurance company] to patients, and I know we’re not getting more reimbursement.” Among the protocols are in-office procedures that previously were done in outpatient surgery or in the hospital, but he notes that such a change, while ultimately much less expensive, initially requires the physician practice to expand its offices and hire more staff — an increased outlay that circles back to the need for greater reimbursement.

Physician groups are also finding it mutually beneficial to work directly with employers.

Dr. Lieberman’s practice, Surgical Specialty Hospital, offers a bundled payment model to large employers that are self-insured which covers all elements of the procedure: the hospital, the surgeon and assistant surgeon, lab work, pathology and anesthesiologist. “Even if a company is self-insured, it subcontracts through an insurer to get a network of providers. That network is expensive; this is lower cost.” Dr. Lieberman cites Walmart’s contract with Mayo Clinic for spinal care as a similar arrangement.

David Berg, M.D., CEO of Arrowhead Health Centers, has recently taken a model inbusine ssmag.com

that has worked for his practice and begun offering it to other businesses. “It is generally accepted that 10 to 15 percent of a company’s health plan members will spend 65 to 85 percent of all the healthcare dollars. Identify these people before they get sicker [through low-cost data analytics software monitoring and tracking], give them a personalized plan of action and then the support that they need so that they believe they can actually execute their plan, and keep them out of the hospital, and huge savings result every time,” he says.

Citing his practice as example, he says in 2007 healthcare costs were 6 percent of his expenses, with premium increases that had been 20 to 25 percent annually. Since 2007, even with a greater number of employees, healthcare costs have dropped 10 to 20 percent every year and they now account for 1 percent of the business’s expenses. The model, formally launched last month as Redirect Health, of which Arrowhead Health Centers is one of the vendors, also helps companies in the selection of their coverage and plan design.

If the business owners and their employees work together, Dr. Berg believes, they can significantly affect healthcare costs. Key to that is improving outcome, and key to that is making sure patients have the resources to follow their physician’s recommendations.

Wertheim notes the Affordable Care Act also offers innovation grants to find what works to improve outcome, and shares a program one local hospital is finding successful: “John C. Lincoln is hiring returning [military] veterans — medics — and, because of the level of respect they receive as war heroes, patients [pay attention when they ask], ‘Do you need a ride to your appointment?’ or ‘Did you take your meds?’”

Other ways Wertheim is seeing to reduce the cost and improve the quality of healthcare are team meetings of physician groups that don’t normally talk to each other, cost sharing and real-time patient reviews. “There’s no turn-key system,” he says. “The biggest challenge is the human element, changing physician behavior and patient behavior and the business model of hospitals.” inbusine ssmag.com

Accountable Care Organizations is a relatively new option for employers. The payer, healthcare provider and patient are all accountable and incentivized. Not only is it a lower premium if patients stay within the system, but ACOs offer a richer array of benefits.

Increasing Interest in Wellness Programs A lot of education effort is being aimed at the ultimate user, whose healthcare practices also directly impact the cost of health insurance premiums — and of healthcare itself. UHC’s Jones cites two important areas: “educating people on how they buy care and use care, and wellness programs to get people healthier to begin with.” In fact, she says, “Wellness programs are becoming more and more a part of the normal thread of health insurance today.”

Jason Paul, whose company, LifeCore Group, offers a comprehensive wellness program, believes wellness programs involve more than the individual’s efforts but need to be integrated into the business environment. An employer’s return on investment ranges, he explains, from the traditional $3:$1, calculated against programs put into place after an employee has registered an accident or illness, to $15:$1, calculated on overall lifestyle choices.

“If we’re going to change the long-term cost, it needs to be the insurance company, the doctors and hospitals, the employers

and individuals all coming to the table to try to control excess spending. The best way is to educate and empower individuals to understand the healthcare decisions they’re making,” Stelnik, of BCBSAZ, says.

Arizona Hospital and Healthcare Association azhha.org Arizona OBGYN Affiliates aoafamily.com Arrowhead Health Centers arrowheadhealth.com Blue Cross Blue Shield of Arizona azblue.com Blue Water Benefits Consulting employeebenefitcompliance.com Focus Benefits Group focusbenefits.com LifeCore Group lifecoregroup.com Maricopa County Medical Society mcmsonline.com Redirect Health redirecthealth.com Surgical Specialty Hospital sshaz.com UnitedHealthcare uhc.com

For more on wellness programs and interest in incorporating them into businesses’ healthcare benefits programs, see the article that opens this issue’s Business Healthcare Services Guide on page 53.

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Commerce

Cultivating Industry

Phoenix is Magnet for Foreign Direct Investment Metro Phoenix offers attraction to foreign investors and gains a kick for the local economy

by Amy R. Handler Foreign direct investment appears to be the catalyst stimulating Arizona growth, and right now, eyes are on metropolitan Phoenix as one of the nation’s hot markets. “Direct foreign investment in Arizona is high on the priority list of all of Arizona’s economic development organizations such as the Arizona Commerce Authority, GPEC, etc.,” says Ed Zito, president of Alliance Bank of Arizona. “The Canada Arizona Business Council has pursued an excellent initiative promoting cross-border B2B investments. Furthermore, foreign capital investment is critical to Arizona’s capital formation and global business retention, attraction, and expansion.”

While the biggest players in Arizona appear to be the Canadians and Chinese, other areas of the globe are also represented. “German companies support 5,800 Arizona jobs and own approximately $1.7 billion in Arizona assets — including over $500 million in Arizona real estate,” says Jeff Shumway, CEO of Scottsdale-based Frontier Applied Sciences, Inc., which develops technologies to convert fossil fuels to cleaner energy, and exports to Germany. Greg Wing reports that his company, Green Card Fund, helped locate funding for a charter school, Odyssey Preparatory Academy, to be built in Casa Grande; its investors are comprised of six Chinese, one Australian, one Nigerian and one Russian. Another Green Card Fund project is the Green Valley Medical Center, which required 104 foreign investors to raise $52 million.

Wing’s company works with EB-5 investors, a designation that refers to the Immigrant Investor Program, which was first established by the Immigration Act of 1990. The program allows a foreigner to obtain a green card if investing at least $500,000 in “targeted employment areas” of unemployment and providing at least 10 jobs for U.S. workers.

Noting that 80 percent of the EB-5 money comes from China, Wing explains, “Most foreign investors feel more comfortable putting money into places that they know.” Two hundred thousand Asians have a community in Phoenix, and that makes Phoenix attractive to Asian investors, he says.

Zito notes, “At Alliance, the largest locally headquartered bank in Arizona, we are witnessing — and involved in — numerous deals and relationships in which foreign capital is involved. This ‘deal flow,’ both commercial and industrial — as well as commercial real estate — has been increasing as the Arizona economy regains strength!”

Canadian Glenn Williamson, CEO of Nest Ventures, L.L.C., sees Canada as a major influence on Arizona. He says the company’s initial goal was to increase bilateral trade between Canada and Arizona, from $2.5 billion to $5 billion, but that foreign direct investment became a second goal that evolved from the first. “We started watching and working with all our capital banks and connections, to help facilitate introductions to the Canadian capital markets, for Arizona,” says Williamson. This is crucial to Arizona, which, he says, “cannot continue to grow organically, and is always seeking outside investment.”

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It appears that what attracts foreign direct investment to Arizona is opportunity — the fact that companies and real estate here are available for purchase and the economy is seen as one that will grow.

“Seventy-five to eighty percent of everything that Canada sells is sold to the U.S. So money goes from the U.S. to Canada, natural resources are purchased, then Canada comes back in again. It’s a wonderful ecosystem,” says Williamson.

Noting that Nest Ventures studies real estate trends, Williamson reports that, in 2011, Canadians with a minimum of 25 years employment ahead of them purchased 11,400 homes in Arizona. But the real numbers come from foreign direct investment. “I’m chairman of a multi-billion-dollar power company called Epcor, out of Edmonton, Alberta. We came to Arizona and bought a water company for $500 million, and now we’re the largest private water supplier in the State of Arizona,” says Williamson.

Canadian purchases of Arizona banks are prevalent. “The Bank of Montreal bought M&I Bank for $4.9 billion. We don’t have the money in the U.S. to pay for infrastructure, but the public-private partnership law in Canada allows Canadian companies to privatize Arizona banks and help put the infrastructure in place.” Williamson’s company and others like it expend billions of dollars knowing it will work its way up in 10 to 20 years. According to Williamson, TransCanada Pipelines, Ltd. built a half-billion-dollar plant in Arizona for a peaking facility (such facilities generate power only during peak or high-demand times) for APS, and they manage it. And Montreal’s Couche-Tard owns and manages the Circle Ks in the Phoenix area. inbusine ssmag.com

Books Attorney Don Miner, of Fennemore Craig, works in business, creditors’ rights and real estate. He cites several aspects of the Phoenix real estate market that “make it an attractive investment opportunity”: the combination of low interest rates and deflation of the Phoenix economy that resulted in lower prices, and the anticipation that Phoenix is expected to continue to have substantial gains in real estate over time.

Miner represents several foreign investment groups, and has seen much Asian investment in the purchase of vacant land for development as well as distressed shopping centers for redevelopment into warehouses and offices. They’ve also invested in regional shopping centers. Miner hasn’t seen Asian investors particularly motivated to attract foreign clientele, but merely to establish their businesses in highly trafficked areas. And he notes this all creates employment for Phoenix locals.

Chad Tiedeman is a commercial investment broker at Phoenix Commercial Advisors, which represents 75 national, high-profile retailers in Arizona such as Bed Bath & Beyond, Starbucks and TJ Maxx. “The Canadians have a positive effect on sales at a micro level in Arizona. But from an investment perspective, they impact the dynamics as well,” Tiedeman says. “These investors can afford to pay more money for expensive commercial properties here because they’ve already seen a positive return.” Naturally, the communities in Phoenix benefit as well — as does the overall value of real estate in surrounding areas. And, of course, the overall local economy is jumpstarted, which is no small thing.

Tiedeman does see a possible downside, however, when local prospective buyers are pushed aside by the more liquid foreign investors. But Tiedeman says, “New-home builders either won’t sell to investors, or limit the number of homes they will sell them.”

This regulatory method protects builders from maintaining vacant investment developments, and has the secondary effect of protecting local prospective buyers.

Doug Bruhnke is president and CEO of Scottsdale-based Growth Nation, which works with local companies and foreign investors in business development and financing, with the goal to help businesses grow globally. He observes that there is a part of the local population which fears they will be pushed out by foreign investment in Phoenix, but says the majority “look at foreign investment [as something] that creates higher-paying jobs [and opportunity]. China, investing in the U.S., has a big stake in the U.S. outcome and wants to see the U.S. succeed. It’s a really great idea to have foreigners invest in the U.S.” It may even be a catalyst for domestic improvement. Bruhnke offers Japan and the automotive industry as an example. Bruhnke’s been involved with the U.S. automotive industry for the past 25 years and hasn’t seen domestic companies as strong as they are now. He believes this is due to Japanese foreign investors that taught by example and enabled America’s strength in the industry. He anticipates Asian foreign investment in software and mobile technology will continue to strengthen in the Phoenix area in 2013.

Alliance Bank of Arizona alliancebankofarizona.com Fennemore Craig fclaw.com Green Card Fund greencardfund.com Growth Nation growthnation.com Nest Ventures, L.L.C. nestventures.com

A Global Economy

China’s Silent Army: The Pioneers, Traders, Fixers and Workers Who Are Remaking the World in Beijing’s Image This is the first book to examine the unprecedented growth of China’s economic investment in the developing world, its impact at the local level, and a rare hands-on picture of the role of ordinary Chinese in the juggernaut that is China, Inc. Beijing-based journalists Juan Pablo Cardenal and Heriberto Araújo crisscrossed the globe from 2009 to 2011 to investigate how the Chinese are literally making the developing world in their own image. What they discovered is a human story, an economic story and a political story that is changing the course of history and that has never before been explored, or reported, in depth and on the ground.

Juan Pablo Cardenal, Heriberto Araújo and Catherine Mansfield (translator) $26 • Crown Publishing Group • On shelves and online

Global Dexterity: How to Adapt Your Behavior Across Cultures without Losing Yourself in the Process Being a global worker and a true “citizen of the world” today goes beyond merely acknowledging cultural differences. It means being able to adapt one’s behavior to conform to new cultural contexts without losing one’s authentic self in the process. Not only is this difficult, it’s a frightening prospect for most people and something completely outside their comfort zone. But managing and communicating with people from other cultures is an essential skill today. Most collaborate with teams across borders and cultures on a regular basis, whether they spend time in the office or out on the road. What’s needed now is a critical new skill, something author Andy Molinsky calls “global dexterity.”

Andy Molinsky $25 • Harvard Business Review Press • March 2013

Global Tilt: Leading Your Business Through the Great Economic Power Shift Ram Charan has spent more time than anyone else on the ground observing and analyzing the tilt, or the power shift, of the global economy.

Here, he gives business leaders the tools to detect trends that cut across not just industries but also countries, rethink the economic and business principles they rely on, and adapt to the speed of innovation and unprecedented needs of the new global economy. With Global Tilt, he provides the essential, practical playbook for strategizing and succeeding in a tilted world.

Ram Charan $28 • Crown Publishing Group • On shelves and online

Phoenix Commercial Advisors phoenixcommercialadvisors.com

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NonProfit

by RaeAnne Marsh

Actions to build Community

National Kidney Foundation of Arizona: Founded on Patient Aid

National Kidney Foundation of Arizona anticipates more than 1,000 walkers and community supporters will participate in the upcoming third annual Charity 5K Walk on April 7 at Chase Field Ballpark. Last year’s 1,000 walkers was well up from 600 its first year — “far surpassing expected attendance,” says CEO Jeffrey Neff.

“The Walks are extremely important to our Arizona kidney community and our foundation as well, because they offer an opportunity for the people we serve to get together with others who share their story,” says Neff. “The Walk gives kidney patients, donors, recipients, family members and friends a unique venue in which to meet others with similar experiences, expanding a valuable network of support and camaraderie for hundreds of Arizonans.”

The $100,000 that the Kidney Foundation hopes to raise will support patient aid programs as well as public awareness campaigns. Among them is the Kidney Early Evaluation Program, a free health screening program targeting those at risk of developing chronic kidney disease.

“An estimated one in nine Arizonans, or over 620,000 residents, are currently suffering from some stage of kidney disease — and only 10 percent know it,” Neff says.

Snapshot

■■ The National Kidney

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■■ ■■

National Kidney Foundation of Arizona azkidney.org

Foundation of Arizona was founded in 1963 to help Arizona dialysis patients pay for their treatments.

Patient aid programs provide assistance to lighten the financial burden for those already suffering with kidney disease.

Twenty-six million American adults are estimated to be living with Chronic Kidney Disease (CKD). This is one out of every nine people in the population. In Arizona, more than 600,000 people have some stage of CKD. Ninety percent of people with CKD are not aware they have the disease, as early stage kidney disease is typically without symptoms.

Snapshot

■■ STARS serves individuals who have

some level of intellectual disability, whether related to disorders such as Down Syndrome or autism or caused by brain injury due to an accident.

The teen Transitions Program offers one-on-one counseling with families to help them navigate a child’s posthigh school life. By helping teens get connected to programs at the time they graduate, Korte explains, “we don’t see a fall-off later” in skills and knowledge they learned in high school.”

Two hundred youth will be eligible to graduate in the next two to three years who have some kind of development disability.

In addition to the teen program, STARS serves about 200 people in its day programs and vocational services. Day programs include life skills, arts and cooking classes. Vocational services include on-site work centers and job support and coaching for individuals employed in the community.

“STARS is reaching out beyond Scottsdale’s borders to work with surrounding communities to expose our services to individuals who can benefit,” says Korte.

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Scottsdale Training and Rehabilitation Services’ annual Fiesta de las Madrinas fundraiser gets a change-up this year as the organization celebrates its 40th year. Recalling STARS’s beginnings in 1973, this year’s Throwback Fiesta offers a ’70s theme from its entertainment to its food and drinks, which will include the era’s ubiquitous “Shake ’n Bake” Chicken, salmon croquettes and (although not finalized at time of press) wine spritzers and wine coolers. The boutique environment for the Fiesta’s silent auction will even include a Tupperware party. A further “throwback” aspect is the event venue: the Scottsdale Stadium, which was the Scottsdale Rodeo Grounds when STARS began out of a trailer on the property.

Aiming for a more lighthearted and fun event, STARS CEO Virginia Korte says they hope guests will get in the spirit with bell-bottoms and platform shoes. Those too young to have been there, says Jennifer Dangremond, director of development, “will love the novelty of pretending to be in the ’70s.”

Throwback Fiesta revenue will support Transitions, STARS’s newest program, which, unlike its other programs, is not covered through Arizona’s Department of Vocational Rehabilitation. The goal this year is to net $150,000.

Scottsdale Training and Rehabilitation Services starsaz.org

In business to do good for the community, nonprofits enrich the lives of those who contribute as well as those who receive. In Business Magazine showcases two nonprofits in each issue, focusing on their business organization and spotlighting an upcoming fundraising event.

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Photos courtesy of National Kidney Foundation of Arizona (top), Scottsdale Training and Rehabilitation Services (bottom)

STARS: Helping the Intellectually Disabled toward Independence

www.inbusinessmag.com

March 2013

O n t h e Ag e n D a

Photo courtesy of Center for Entrepreneurial Innovation

A listing of Greater Phoenix business organizations and their events. Visit www.inbusinessmag.com for an expanded monthly calendar of educational, networking and special business events.

Arizona Hispanic Chamber of Commerce

In Business Magazine

2nd Annual Power of the Purse: Celebrating Women Doing Business Luncheon

The New Healthcare: A Business Owner’s Summit

Fri., March 8 — 10:30a – 1:00p

In Business Magazine is bringing together top healthcare professionals, providers, insurance companies, legal and government officials to inform business owners, their clients and staff on the Patient Protection and Affordable Care Act in a three-panel discussion and luncheon event.

Guests will hear from experts on three different panels. Each panel will address a particular aspect of the Affordable Care Act, providing critical information on what employers can expect in preparation for the various mandated stages throughout 2013 and 2014 and beyond.

Panel 1 — Insurance: Hear from top insurance companies on changes employers can expect to see in available healthcare packages and services. Members of the panel include experts from Blue Cross Blue Shield of Arizona and Delta Dental.

Panel 2 — Providers: Hear from healthcare providers, including local hospitals, medical associations and doctors themselves, on the many changes in healthcare services, technologies and incentives woven into the new healthcare to heighten system efficiencies and lower costs.

Panel 3 — Regulations: Hear from experts on the many compliance requirements, fees and tax issues that will be implemented beginning in 2014. The panel will be comprised of representatives in government, the financial sector and the legal profession.

Taking place at the Arizona Biltmore, this comprehensive event will include a gourmet lunch, many take-away products, guides and information meant to assist companies of all sizes in their preparation for what is to come with the new Affordable Care Act set to begin January 1, 2014.

—Mike Hunter

Arizona Hispanic Chamber of Commerce’s “Power of the Purse: Celebrating Women Doing Business” luncheon on March 8 at the Downtown Phoenix Hyatt is really two special events in one.

It will start with a mini expo featuring about a dozen AZHCC members and corporate sponsors. “It will be different from the usual tabling and brochures,” says Monica Villalobos, AZHCC vice president. Among the attractions will be the Phoenix Mercury offering an experience they’re calling “Hoops and Heels.” And Mary Kay Cosmetics will have another of the booths, offering a corporate imaging photo shoot that attendees can use for their own marketing.

Program for the luncheon that follows the expo revolves around the release of the 2013 “Arizona Women-owned Business Enterprise Report,” part of a series of studies commissioned

by AZHCC in cooperation with Arizona’s Minority Business Development Agency Business Center. Recognizing the significant economic role of minority-owned businesses — documented in the most recent U.S. Census at about 5.8 million in 2007, a 46-percent jump over 2002 figures, which demonstrates a growth rate more than three times faster than white-owned businesses — this latest study was designed to explore challenges, barriers and successes experienced by women business owners. The last report of its kind was prepared in 2007, so this, says Villalobos, “provides a good preand post-recession analysis.” Each attendee will receive a copy of the new report.

The event is co-hosted by the Hispanic Chamber’s Latina Business Enterprises group and Women’s Business Enterprise Council – West. Emceed by ABC 15’s Iris Hermosillo, the event will also feature speakers Lisa Urias, chairman of the board of AZHCC; Olga Aros, chairperson of the Latina Business Enterprises group; and Pamela Williamson, Ph.D., president and CEO of WBEC – West.

Registration for AZHCC and WBEC members is $20; for non-members, $30. Students are welcome at $10.

—RaeAnne Marsh Arizona Hispanic Chamber of Commerce azhcc.com

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Fri., March 22 — 11:15a – 1:30p

In Business Magazine inbusinessmag.com

Notable Dates This Month Sun., March 17 St. Patrick’s Day Wed., March 20 Vernal Equinox Agenda events are submitted by the organizations and are subject to change. Please check with the organization to ensure accuracy. See more events online at www.inbusinessmag.com.

Go online for more!

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O n t h e Ag e n d a ACG — ARIZONA Breakfast Meeting Tues., March 12 7:00a – 9:00a

Speaker: Darl Andersen, executive advisor to the president and chairman of the board of Bashas’ Family of Stores.

Members and sponsors: $49; nonmembers: $69; at the door: add $10 Arizona Biltmore Hotel & Spa 2400 E. Missouri, Ave., Phoenix acg.org/arizona

AHWATUKEE FOOTHILLS CHAMBER OF COMMERCE Mind, Body, Spirit Expo & Luncheon Tues., March 26 10:30a – 1:30p

Women in Business presents a health expo. Luncheon speaker: Michelle May, M.D., founder of the Am I Hungry?® Mindful Eating Workshops, and blogger at “Eat What You Love, Love What You Eat.” Members: $30; guests: $40 Arizona Grand Resort 8000 S. Arizona Grand Pkwy., Phoenix ahwatukeechamber.com

ARIZONA HISPANIC CHAMBER OF COMMERCE 2nd Annual Power of the Purse Fri., March 8 10:30a – 1:00p

The Latina Business Enterprises and Women’s Business Enterprise Council host a mini expo followed by Power of the Purse Luncheon and release of the 2013 Women Business Enterprises Report. Every attendee will receive a free copy of the WBE Report ($50 value).

AZHCC and WBEC members: $20; nonmembers: $30; students: $10 Hyatt, Downtown Phoenix 122 N. 2nd St., Phoenix azhcc.com (See article on page 33.)

ARIZONA SMALL BUSINESS ASSOCIATION Creating Your Effective Networking Commercial Tues., March 12 2:00p – 3:00p

Craft a unique and attention-grabbing commercial for networking events and when meeting prospective customers for the first time at this hands-on workshop.

Members: free; non-members: $10 ASBA’s Business Education Center 4600 E. Washington St., Phoenix asba.com

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March 2013

Fast + Curious Speed Networking™ Tues., March 12 3:00p – 4:30p

Meet other businesses at 3-minute intervals.

Members: free; non-members: $25 ASBA’s Business Education Center 4600 E. Washington St., Phoenix asba.com

Developing a Nonprofit Enterprise Tues., March 19 3:00p – 6:00p

Presenter Tom Fraker has started four nonprofits from scratch. He is the past CEO of Special Olympics and Arizona Small Business Association and was formerly with Goldman Sachs Members: $20; non-members: $25 ASBA’s Business Education Center 4600 E. Washington St., Phoenix Jamie Low, jlow@lowjohnson.com

ARIZONA TECHNOLOGY COUNCIL Maximizing Your Company’s Value Workshop Wed., March 20 7:30a – noon

Four-hour workshop to help you prepare your company for growth, capital infusion and eventual sale is presented by Frank X. Helstab, a nationally recognized authority on mergers/ acquisitions and maximizing corporate value, and founder of The Institute for Strategic Development.

Free ASU SkySong 1475 North Scottsdale Rd., Scottsdale aztechcouncil.org

Council Connect: The New Gold Rush — Capitalizing on Growth Markets Wed., March 20 11:30a – 1:30p

Presented by TechTHiNQ, this panel discussion will be an interactive forum to discuss how Arizona’s technology businesses can leverage their existing core capabilities to effectively grow and expand into emerging market sectors such as HealthTech, CleanTech and InfoTech. Lunch is included.

Members: $35; non-members: $55 Seasons 52 2502 E. Camelback Rd., Phoenix aztechcouncil.org

CENTRAL PHOENIX WOMEN Luncheon

Mon., March 11 11:30a – 1:00p

Speaker is Susan Bitter Smith, commissioner on the Arizona Corporation Commission. $75 The Ritz-Carlton, Phoenix 2401 E. Camelback Rd., Phoenix centralphoenixwomen.org

ECONOMIC CLUB OF PHOENIX Luncheon

Tues., March 19 11:30a – 1:30p

Speaker: Doug Davis, VP and general manager of Arizona Fab/Sort Manufacturing Site for Intel Corp.

Non-members: $75; advance registration required JW Marriott Desert Ridge Resort 5350 E. Marriott Dr., Phoenix econclubphx.org

GLENDALE CHAMBER OF COMMERCE S.C.O.R.E. Appointments

Mondays, March 4, 11, 18 9:00a – noon, by appointment

Meet with a SCORE consultant.

Free Glendale Chamber of Commerce 7105 N. 59th Ave., Glendale (623) 937-4754

Members: $15 (prepaid online); guests: $20 (prepaid online); at the door: $25, cash only Moon Valley Country Club 151 W. Moon Valley Dr., Phoenix bit.ly/XePPo4

Business Networking Luncheon Tues., March 26 11:30a – 1:00p

Luncheon sponsor is C & R Tire and Automotive.

Members: $15 (prepaid online); guests: $20 (prepaid online); at the door: $25, cash only Location tbd bit.ly/TQuzqX

SCOTTSDALE AREA CHAMBER OF COMMERCE Airpark Forum

Tues., March 12 7:30p – 9:00p

GREATER PHOENIX BLACK CHAMBER OF COMMERCE

Members: $20; non-members: $30; at the door: add $5 Scottsdale Thunderbird Suites 7515 E. Butherus Dr., Scottsdale scottsdalechamber.com

Awards Banquet

Scottsdale Forward

Annual awards presentation of the Chamber’s coveted for Corporate and Small Business Members of the Year.

Members: $200; non-members: $250 Ritz-Carlton Phoenix 2401 E. Camelback Rd., Phoenix phoenixblackchamber.com

Community economic development symposium. Keynote speaker is ASU President Michael M. Crow.

Other speakers are Kimber Lanning, director, Local First Arizona; Gordon McConnell, assistant VP for innovation, entrepreneurship and venture acceleration, ASU; and Rachel Sacco, president and CEO, Scottsdale CVB. $15 Scottsdale Community College, Performing Arts Center 9000 E. Chaparral Rd., Scottsdale scottsdalechamber.com

Fri., March 22 6:00p – 10:00p

NATIONAL ASSOCIATION OF WOMEN BUSINESS OWNERS — PHOENIX NAWBO University Wed., March 13 9:30a – 11:00a

“Financial Order for Business Growth: Masterful Money Habits for Business Leaders” presented by Karen Russo Members: free; non-members: $30 Phoenix Country Club 2901 N. 7th St., Phoenix nawbophx.org

NORTH PHOENIX CHAMBER OF COMMERCE Business Resource and Networking Luncheon Tues., March 12 11:30a – 1:00p

Guest speaker this month is Gordon Parkman of Achieve Results Consulting, LLC. Luncheon sponsor is C & R Tire and Automotive. Lunch is included.

Thurs., March 21 7:15a – 10:00a

SURPRISE REGIONAL CHAMBER OF COMMERCE Business Education Seminar: Copywriting Cures for Boring Marketing Materials Fri., March 22 8:30a – 10:00a

Presented through the Chamber’s partnership with Greater Phoenix SCORE. If you can’t instantly grab your prospects’ attention, any piece you use to promote your business becomes instantly invisible. During this presentation, you’ll discover copy-writing strategies you can use to maintain your prospects’ attention, keep them engaged and, ultimately, get more sales.

Free; advance registration required Communiversity @ Surprise 15950 N. Civic Center Plaza, Surprise Mary Orta, (623) 583-0692

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Please confirm, as dates & times are subject to change.

TEMPE CHAMBER OF COMMERCE

WOMEN OF SCOTTSDALE

Networking @ Noon

Luncheon

Learn the art of relationship building, enjoy a fantastic lunch and have fun promoting your services at this “speed dating for business” event.

Members: $25 in advance, $30 day of; general public: $35 Lucky Break 1807 E. Baseline Rd., Tempe Sachiyo Ragsdale, sachiyo@ tempechamber.org

$35 The Westin Kierland Resort and Spa 6902 E. Greenway Pkwy., Scottsdale womenofscottsdale.org

Thurs., March 14 11:30a – 1:00p

WEST VALLEY WOMEN Tues., March 5 11:30a – 1:00p

$35 Arizona Broadway Theatre 7701 W. Paradise Ln., Peoria westvalleywomen.org

The New Healthcare — a Business Onwer’s Summit

“Create a Plan for Content that Builds Trust, Educates and Closes” presented by Leap Innovation and New Angle Media.

Free; advance registration required New Angle Media — Grand Canyon Conference Room 2601 E. Thomas Rd., Phoenix Donovan Hardenbrook, Leap Innovation principal, (480) 264-9009

Get informed on the new healthcare regulations: how they affect your bottom line, state and federal regulations, new policies and programs, and legal and financial implications. $65 Arizona Biltmore Resort 2400 E. Missouri Ave., Phoenix inbusinessmag.com (See article on page 33.)

Thurs., March 14 11:30a – 1:00p

Fri., March 15 11:30a – 1:00p

OTHER BUSINESS EVENTS Center for Entrepreneurial Innovation — Lunch and Learn Thurs., March 14 11:30a – 1:00p

March 14: “Every Second Counts: The Importance of Lean Manufacturing,” presented by Jim Godfrey, project manager and Lean expert. Lunch is provided.

Free The Center for Entrepreneurial Innovation at GateWay Community College 275 N. Gateway Dr., Phoenix ceigateway.com

“Spirit of the West Valley”

Innovations in Marketing Seminar Series

Center for Entrepreneurial Innovation — Lunch and Learn Thurs., March 21 11:30a – 1:00p

March 21: “Running Lean: How to Develop a Lean Canvas,” presented by Sean Tierney, founder of Grid7. Lunch is provided.

Free The Center for Entrepreneurial Innovation at GateWay Community College 275 N. Gateway Dr., Phoenix ceigateway.com

If your event is directed to helping build business in Metro Phoenix, please send us information to include it in the In Business Magazine events calendar.

Email the information to: events@inbusinessmag.com.

Fri., March 22 11:30a – 1:30p

Seminar: How to Improve Your Business’s Cash Flow by Collecting Delinquent Accounts Thurs., March 28 4:00p – 6:00p

City of Peoria Economic Development Services presents this workshop led by Karen Taylor of New Destiny Marketing to cover preventing delinquent accounts — steps, methods, examples; why customers don’t pay and what you can do about it; reasons, solutions, choices for handling delinquent accounts; how to know if your business needs help collecting past due accounts.

Free City of Peoria Point of View Room 9875 N. 85th Ave., Peoria debbie.pearson@peoriaaz.gov

Cross-training for your business

Special Sections

Events Online

Email Magazine

Your company deserves to be fit.

Performance Marketing: Print. Online. Email. Social Media. Events.

(480) 588-9505 inbusine ssmag.com

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info@inbusinessmag.com M a r c h 2013

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Education

Education series on legal matters

Strategic Business Structuring Can Save Assets Focus on the details, and slow down to go fast

by Thomas Morgan So you’re ready to open a business. You have 15 solid years of experience. Your first customer is waiting. A contract manufacturer is ready to start production. You’ve decided on an L.L.C. for your business structure and you’re ready to conquer the world …

The best advice for someone in the above scenario is to slow down. Choosing the right entity for a business is important, but it’s just one consideration in the larger context of an overall organizational structure. In the frenzy of start-up mode, few entrepreneurs realize that how they structure their business can make them vulnerable to losing everything or it can ensure their assets and future earning potential are protected if they lose big in a lawsuit.

The Terrible 2 Here’s how strategic structuring works using a real but anonymous client of ours. Let’s call him “Jack Martin” — a creative soul with annual sales in the tens of millions. When we first met Jack, his business was comprised of two entities: him (as an individual) and a single corporation that contained all of his businesses. If he were an artist who simply sold his unique works to a distributor, this structure would have been just fine.

But Jack’s business involved much more: thousands of creative works, leased retail locations in several states, media projects and online sales. Here he was — smart, talented and wealthy — but structured to lose everything. If he or the entity were sued and insurance couldn’t cover the judgment, his

Legal

the Education Series

q March: Strategic Business Structuring Can Save Assets q April: Intellectual Property: Protecting a Core Business Asset q May: Contract Pitfalls to Avoid To reference published segments, please access the archived “How-to” articles on the In Business Magazine website, www.inbusinessmag.com..

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entire empire could potentially crumble. His current and future earning power was at risk.

From Two to Multiple Entities Together, we re-structured his business to isolate him from personal liability and to isolate certain parts of his overall business from potential liabilities arising in other parts. We focused on three areas: intellectual property, real estate and business operations.

Intellectual Property. Jack’s cache of creative works — his IP — represents both current and future income. We separated this completely from the rest of his operations. Regardless of what a person does for a living, a lawsuit can decimate his or her company. Strategic structuring can safeguard the unique works, products and services that enabled the success in the first place. If the worst happens, he or she can start over in the same line of business with future earnings from the protected IP still intact and away from the reach of creditors.

Real Estate. We put each of Jack’s retail locations into a separate entity to minimize risk per location. If an incident at one location results in a huge loss, the others are insulated and protected from that loss. Likewise, our client is insulated from personal liability. Each retail location is covered by its own insurance policy as well.

Business Operations. Jack’s business operations were restructured into several corporations.

The media portion is separate and distinct from the retail, design and creative works portions, and so on. Structure also impacts taxes. Careful analysis of business lines and locations can

yield ideas for optimum income preservation. A consultation with an experienced tax attorney can help in structuring a business for the best tax-advantaged economic results.

In the “pre-revenue” stage, many entrepreneurs hesitate to consult with an attorney on the details. But the up-front cost is worth it. Fiercely protecting a business’s IP is smart. Tax-efficient structuring saves money.

The longer the company operates under a protective structure, the more credibility it has if legal or tax questions arise.

“Better late than never” applies here. If the business is paying taxes twice because the company pays on earnings and pays again after taking a distribution, restructuring may make sense. Similarly, analyzing the business’s property holdings and how its IP is protected or exposed is worthwhile — the sooner the better.

Multiple corporate entities does create more administrative work. Accurate records and appropriate business practices are essential.

Co-mingling funds, insurance policies or bank accounts can jeopardize the purpose of protective structuring.

Strategic business structuring can shield and strengthen a business. It’s the cheapest insurance a business owner can buy for safeguarding his or her future. As Jack’s experience exemplifies, it’s important to “slow down to go fast” when building that very important foundation for a business.

Lewis and Roca, L.L.P. lrlaw.com

Thomas Morgan, a partner in Lewis and Roca’s Phoenix office, practices corporate, securities and tax law.

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COMMERCIAL REAL ESTATE LOANS

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With a Commercial Real Estate Loan from BBVA Compass, you’ll enjoy: • Low fixed rates for the entire term • No balloon payments • 80% LTV for owner-occupied property; up to 95% LTV with SBA financing Act now and save with these limited-time offers: • Up to $5,000 off closing costs on loans $1 million and up • Up to $1,000 off closing costs on loans under $1 million Plus, you can trust the commercial lending experts at BBVA Compass to make your loan experience simple and easy. Offer expires December 31, 2012.

For more information, or to apply, visit any of our 46 branches in Phoenix.

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Application must be received between 09/20/2012 and 12/31/2012 and loan must be booked by 03/31/2013 to be eligible for this special offer. All loans subject to eligibility, collateral and underwriting requirements, and approval, including credit approval. Special closing costs offer available for a limited time only on qualifying commercial real estate loan applications received and booked within the specified offer dates. Up to $5,000 off closing costs on loans $1 million to $5 million; up to $1,000 off closing costs on loans under $1 million. Your actual closing costs discount may vary based on several factors. Offer applies to qualified types of owner-occupied commercial real estate and qualified borrowers. Offer not valid in conjunction with any other discount or offer. Customer is responsible for any closing costs and fees outside of any special promotions and reimbursement of any third party costs if loan is paid off within 36 months of loan closing. All promotions and offers subject to change without notice. Please contact a BBVA Compass banker for details. BBVA Compass is a trade name of Compass Bank, a member of the BBVA Group. Compass Bank, Member FDIC. #1027

Focus

Our Subject In-Depth

Myths of Performance Management

Flawed assumptions undermine the success of much performance management advice

by Pietro Micheli, Ph.D. Investments in performance measurement and management systems have been steadily increasing over the past two decades, and there is no sign this trend will change in the future. Leaders and managers in both private and public organizations regard such systems as a key means to implement and communicate strategy, support decision making, align behaviors, and, ultimately, improve performance.

While measurement and management systems can, indeed, help organizations achieve all these fundamental aims, current practices show that managers are consistently making mistakes which prevent them from reaping the benefits of their investments. While their intentions are usually positive, our research shows that, in fact, they often encourage exactly the behaviors their organizations neither need nor want.

Myth: Numbers are objective A performance measurement system enables organizations to gather, analyze and communicate data on both organizational and

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individual performance. And we want such data to be objective, right?

Not necessarily. The quest for perfect, objective data is likely to leave us frustrated and disappointed. My research shows that performance data is, in fact, ambiguous and open to interpretation, and its use and impact on performance depend on commonality of interpretations. Therefore, while it is important to have data that is robust and relevant, managers’ efforts should be devoted to fostering similar interpretations through leadership and communication rather than trying to remove individual views (or, worse, assuming that numbers are “objective� and therefore speak for themselves).

Myth: Accuracy and precision are paramount Once a performance measurement system is introduced, we want information to be as accurate and precise as possible. Or do we?

Research conducted in both private and public sectors shows that organizations invest billions of dollars in measuring and managing their performance. They should treat this as an investment in which inbusine ssmag.com

benefits outweigh costs, rather than something that should be of the best possible quality. This balance can only be ensured by connecting measures to objectives. So the crucial question is not “Is our data as accurate and precise as possible?” but, rather, “Are we getting data that is good enough for our purposes?”

Myth: Data is value-added Few would challenge the assumption that gathering and analyzing data is a value-added activity. But, actually, those few would be right.

Value is generated when data is used, but we know that performance data is very rarely used within organizations. In U.S. federal departments, for example, while managers recently reported having more performance indicators than they did 10 years ago, their use of performance information to make decisions has stayed virtually the same. Results in the private sector are no different. There are too many indicators and reports, and loose connections between strategy and measures often make measurement systems very expensive pieces of furniture.

Myth: Top-down alignment produces good results Managers and employees should be aligned to achieve the main organizational goals. Sure. But the typical way in which managers try to create alignment ends up generating bureaucracy and negatively impacting on staff morale. Recent studies show that, while organizations are making considerable efforts to align behaviors and actions, their results are often dismal. Cascading measurement systems in a top-down fashion, and rigidly connecting objectives, targets and indicators ends up generating an infinite sequence of unintended consequences. Instead, while designing and implementing performance measurement systems, sufficient discretion should be left at every level to make decisions over which indicators to use and which targets to aim for.

Myth: Targets and rewards result in effective motivation Performance targets, indicators and rewards are often utilized to focus attention and engage and motivate staff. On paper, it’s a great idea. In practice, levels of engagement in many organizations are falling (this is also because of the incorrect uses of performance management systems). Despite all good intentions, organizations often generate a vicious cycle of performance management. The starting point is usually a difficult situation in which performance has decreased or is deemed unsatisfactory. The usual reaction is to quickly introduce a series of measures to gather “objective” data, and attach rewards to specific targets in order to incentivize employees to do their best. Unfortunately, as a result of this, people get “measure fixated”: They are very clear about what they have to do to hit the target, but they often miss the point, i.e., they forget about the underlying objective. Even worse, over time a culture of performance measurement starts to emerge: Employees will blindly follow what they are measured and rewarded on, often at the expense of their organization’s success. To avoid this vicious cycle, organizations should involve people as much as possible while introducing a new system, carefully monitor its use, and introduce rewards — if necessary — only once the system has been tested.

Myth: Tightly aligned performance measurement systems enable change The introduction of new performance targets and indicators can kickstart the implementation of new strategic objectives and promote different inbusine ssmag.com

ways of working. While this has certainly been the case for various organizations, from Continental Airlines in the mid-1990s to Nokia in recent years, when it comes to organizational change, measurement systems have often acted as obstacles rather than enablers. Particularly when a system is pervasive and consists of a large number of indicators, organizational inertia may arise. This may not be a major problem for organizations operating in relatively stable markets, but it could become a serious issue for firms competing in very dynamic environments. These organizations should adopt an empowering and flexible approach to the design and use of measurement systems. While alignment processes are needed to ensure that performance indicators and behaviors are in line with the organization’s strategic priorities, empowerment at the individual manager’s level is needed to build sufficient dynamism into the system.

In other words, empowerment and HR management can promote dynamism and responsiveness by building flexibility into the system in order to allow for local adaptation of the indicators.

Myth: The system is responsible for improvement The ultimate goal of introducing a performance measurement system is to improve organizational performance. Absolutely. But does this really happen? Our research demonstrates that impacts on performance strongly depend on the roles measurement systems play within organizations. The main role is usually to monitor and report to satisfy requirements, internal or external. While this is important and, to some extent, unavoidable, impact on performance is often nonexistent. Take the case of sustainability measures introduced by an ever-increasing number of companies. While measuring social and environmental aspects is certainly important, most companies are simply reporting information externally — making no difference to either how the organization operates or on its results. Performance measurement systems can, and do, make a difference when they are used to promote learning, for example by establishing a dialogue between headquarters and subsidiaries; between different functions within an organization; and between managers and employees.

Organizations spend considerable amounts of time and money developing and using performance measurement and management systems. They do so to gather good quality data to make better decisions, provide alignment, foster change and improve performance. While these aims are all laudable, in practice most efforts fall short of expectations because they rely on a set of flawed assumptions. Rather than spending months designing the perfect system that can produce objective, accurate and precise data, efforts should be put into communicating to all employees the reasons and benefits of such systems, and connecting strategy, measurement and decision-making. Rather than assuming that a tight set of measures, targets and rewards will lead to alignment, motivation and improvement, managers should empower people at different hierarchical levels, build flexibility in these systems and use them for learning rather than control purposes.

Pietro Micheli, Ph.D., is an associate professor of Organizational Performance and teaches Executive MBA and MSc Management courses in the Warwick Business School at the University of Warwick in England (www.wbs.ac.uk). He is a founding member of a community-of-practice collaborative, based in the United States, on evidence-based management. Among the organizations he has worked with or consulted to are BP, Shell and the United Nations.

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by Mike Hunter

We Value What We Own

Mercedes Benz S550 Luxury Sedan The standard-bearer for luxury, the Mercedes S550 is a base-model sedan by which all other luxury sedans are measured. Style and substance best describes this 4-door, 429-horsepower, technological machine.

Bringing more power to this year’s model is the standard 4.6-liter, biturbo, V-8 engine with advanced twin turbocharging. Advanced design means reduced emissions, fuel consumption and even overall noise.

Other advances include the Attention Assist system that monitors parameters of driving behavior, alerting a drowsy driver with visual and audible warnings.

Safety is a theme with this tech-savvy vehicle, with the Pre-Safe Brake system, a radar-based cruise control monitoring system that assesses speeds of vehicles ahead to detect distances and sudden traffic irregularities. The system can go so far as stopping the vehicle if necessary.

Building for comfort and visual appeal is another of Mercedes’s traits, and elements of the S550 in particular make it a truly advanced model for the luxury automobile manufacturer. Among the features is burl walnut wood trim, a panoramic sunroof and richly grained leather upholstery.

Custom-tailored support in the front seats gives lumbar support, shoulder support and massage options for comfort and even safety. Massage features are meant to help prevent fatigue and, according to the carmaker, can assist in the event of an accident.

Overall performance is impressive, with mechanics that give the driver a sporty command of the road, assurance in braking and comfort when maneuvering curves and road obstructions.

Further enhancing driving enjoyment is the standard Harman Kardon Logic 7® sound system, which fills the cabin with 600 watts of music Mercedes Benz S550 power streaming through 15 speakers with impeccable sound.

City MPG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Hwy MPG. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 0-60 MPH. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.8 sec Transmission. . . . . . . . . . . . . . . . 7-speed Automatic MSRP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $95,000

iPad App-cessories: Tools to Build Business Forget the games and Web surfing and use that tablet for business. The popular iPad is the platform for these great business tools, heightening productivity everywhere business or leisure calls.

Desktop Connect

Go To My PC (or iPad in this case) is an app that allows connection to a desktop computer and all that appears there.

See files and programs, and do business anywhere.

Free Go To My PC gotomypc.com

Spreadsheets & Documents

With the Documents Free Mobile Office Suite, users can access Excel spreadsheets and Word documents to edit and manage files. Works both online and offline.

Free SavySoda savysoda.com

Mercedes Benz mbusa.com

Fax-friendly

Use this device to send and receive faxes with eFax. Receive faxes for free with the eFax service or upgrade to Pro in order to send work, sign documents, email or print using Wi-Fi. Free with service eFax en.efax.com

Storage & Access

Dropbox for iPad will keep files synced with computer, phone and iPadw for reliable access to files.

Keep Excel documents, Word and other files accessible.

Free Dropbox dropbox.com

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Photos courtesy of Mercedes Benz (left), Go To My PC, SavySoda, eFax, Dropbox (right, top to bottom)

ASSETS

THE

Power Lunch

by Mike Hunter

Meals that matter

Let’s Go Clubbin’ Membership has its privileges, but at these Valley clubs, even non-members can enjoy top service, classic dishes and a relaxing lunch.

The Grill at the TPC

Open all day, this all-American clubhouse grill serves up high-quality versions of clubhouse foods, with sandwiches, salads, specialty dishes and some old favorites like the Turkey Pub Club.

17020 N. Hayden Rd., Scottsdale (480) 419-3364 tpc.com/scottsdale-dining

by Mike Hunter

Spreading the techniques, flavors and culinary excellence to the lunch hour five days a week, Eliot Wexler’s Nocawich is not to be missed. This quick-fix lunch spot conjures up much of the greatness that Noca by night is known for.

Dubbed by many as “the best sandwich place,” its menu and location are making Nocawich a hot spot. With its selection of sandwiches, soups, salads, pizzas and pastas, it’d take months to truly get a taste of all it has to offer. The “Sando,” as they are termed, are some of the Valley’s most unique and tasty sandwiches. Try The Gwyneth, made with grilled cauliflower, pickled radish, Manchego, herb pesto and chili pepper crema. A real favorite is The Dolly. This is a fried chicken breast, slaw, parsley, oregano and a spicy aioli. The Meyer Lansky, named for the famed Mob accountant, is house-made Wagyu pastrami with Dijonnaise and a spicy slaw held together in a marble rye. It’s one for the history books.

The Schiacciata, or Tuscan flatbreads, are unique combinations of sweet and savory ingredients that include prosciutto, oregano, arugula, extra virgin olive oil and more which come together as lighter fare with incredible Italian-inspired flavors. The daily specials (one per day on Tuesday through Friday, and two on Saturday) are more robust creations like the Sinner’s Slider , a variation of the daily offering, made with Niman Ranch ground beef, white cheddar, spicy pickles and relish aioli on a griddled Kaiser roll. Saturday’s Lobsta Roll is an attraction itself, with Maine lobster, chilelime aioli, pickled celery and apple brunoise on a brioche. It is a combination that will mean visiting Noca for weekends to come.

Located at 32nd Street and Camelback Road (north of Camelback, hence “Noca”), this lunch option is open Tuesdays through Saturdays only from 11:00 a.m. to 2:30 p.m. A smaller, quaint, modern eatery, this place can get packed, so plan some time and enjoy the incredible tastes of Nocawich.

For a change of scenery, hit this exclusive course-side lunch spot. Overlooking the course and ponds with mountain views, this spot is serene and worth the visit. Amazing salads and burgers, including a classic Caesar and a Mandarin chicken salad, will delight.

7847 N. Mockingbird Ln., Scottsdale (480) 596-7050 camelbackgolf.com

Bernard’s at Ocotillo

Great food and incredible service mean this is a spot to go out of the way to enjoy. Overlooking the incredible grounds of the Ocotillo Golf Resort, this place is something special. Soups, salads, sandwiches and burgers better than expected.

3751 S. Clubhouse Dr., Chandler (480) 917-6660 ocotillogolf.com

Nocawich 3118 E. Camelback Rd., Phoenix (602) 956-6622 restaurantnoca.com

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The Grill at the TPC

M a r c h 2013

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Photos courtesy of Noca (left), Fairmont Scottsdale Princess (right)

Noontime Noca is Nocawich

Golf Grill at Camelback Golf Club

Celebrating 28 years of serving the women business owners of Phoenix

Winter 2013 • nawbophx.org

President’s Message About NAWBO

NAWBO® prides itself on being a global beacon for influence, ingenuity and action and is uniquely positioned to provide incisive commentary on issues of importance to women business owners.

NAWBO Phoenix propels women entrepreneurs into economic, social and political spheres of power.

Visit one of our FREE welcome meetings, held the second Wednesday of each month – for all new and prospective members. This casual, informational opportunity highlights both local and national benefits of NAWBO membership. This is a great place to determine if NAWBO is a fit for you and your business.

Take advantage of this great networking opportunity by bringing business cards and making connections.

For more information, please visit NAWBOphx.org.

Phoenix Metropolitan Chapter of the National Association of Women Business Owners 7949 E Acoma Dr. #207 Scottsdale, Arizona 85260 480-289-5768 info@NAWBOphx.org

With great hope for an increasing economic recovery, the National Association of Women Business Owners kicked off the New Year with a deepened determination for success.

The addition of new programs and opportunities to widen our menu of resources and serve our community are just the beginning; we have something even bigger on our minds and in our conversations. We have begun the year with a greater understanding of what it means to support each other and grow together; not just as business associates, fellow members, or friends, but also to help each other grow financially.

Our mission begins with “NAWBO is an organization that works to: STRENGTHEN the wealth-creating capacity of our members and promote economic development…” and we have taken this to heart by ending the 2012 year with our Lynda Bishop sponsorship of the first inaugural Women Investing in Women President, NAWBO Phoenix Summit in Phoenix, followed by a series of monthly luncheon topics focused on business growth, hiring great teams and access to capital.

It is not enough that women-owned businesses are the fastest growing business segment in the nation, or that Arizona is ranked in the latest Kauffman Index of Entrepreneurial Activity Report (March 2012) report as the top state in the nation for entrepreneurial activity. We want healthy, financially strong, growing, sustainable businesses and that is what NAWBO is here to help create.

I hope you enjoy the following pages from NAWBO focused on financial health and finding business capital.

To your success, Lynda Bishop NAWBO Phoenix Chapter President 2012-2013 lyndabishop.com

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How Age and Ethnicity Influence Women’s Financial Fortitude

Your Financial Wellness: Easy to Follow Month-by-Month Tips

nawbophx.org

Three Risks to Your Retirement and How to Cover Your Assets

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Three Tips to Protect Yourself and Reduce Financial Stress Today and more...

Financial Fitness for the New Year

1

NAWBO NEWS

How Age and Ethnicity Influence Women’s Financial Fortitude

By Debbie Farstead

Debbie Farstead

The need for retirement security cuts across all social, gender and ethnic lines. The fact is, we are all going to age and will need to support ourselves when we are no longer working. Studies show that women approach this issue differently than men, and women of different ethnicities have varying viewpoints when it comes to setting financial goals.

According to Prudential Financial’s latest biennial study on the “Financial Experience and Behaviors Among Women,” significant differences in the financial styles and priorities of women exist based on ethnicity. For example, while women are generally concerned about becoming a burden to their families later in life, this fear is particularly prevalent among African American women.

Other unique differences highlighted by the study include: • 73 percent of Hispanic women consider taking care of extended family a top priority.

• Asian women are most likely (47 percent) to use a financial professional.

• The top financial concerns for African American women include reducing personal debt and the desire to start a small business.

• Of all the groups surveyed, African Americans were most confident that they would not outlive their savings.

• 33 percent of Asian American and 31 percent of African American married women are the higher-income earners, compared with 19 percent of white women.

A New Generation Gap Prudential’s study also shows significant generational differences when it comes to women’s attitudes toward finances. Women under the age of 35 are more likely to feel in control when it comes to financial decision-making, and a significant number (42 percent) recognize they need to take charge of their financial goals. Younger women are also more likely than baby boomers to identify themselves as investment beginners and are less likely to say they are well prepared to make wise financial decisions. One thing everyone agrees on though is the fact that they are way behind or haven’t started planning for retirement, further demonstrating that most women, regardless of age, are very concerned about retirement security.

With so many significant differences in financial priorities based on ethnicity and even age, it is clear financial professionals today need to be knowledgeable and sensitive to the needs of diverse communities. At a

time when women are taking greater responsibility for their own and their families’ finances, clearly women of all ethnicities can benefit from meeting with a professional.

Although it might seem intimidating, a qualified financial professional can offer an unbiased opinion and balanced perspective on your true financial situation. Whether you are young or facing mid-life, single or married, Asian, White or African American, planning for your future can boost your financial fortitude and provide much needed peace of mind.

Provided courtesy of Prudential, official corporate partner of NAWBO. For more information, contact Debbie Farstead, a Financial Professional with The Prudential Insurance Company of America’s Greater Phoenix Southwest Agency located in Phoenix, AZ. She can be reached at 602.667.4775.

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NAWBO NEWS

Your Financial Wellness: Easy to Follow Month-by-Month Tips

By Julie A. Kern, CPA, CFP®, CDFA

Now is a great time to start making some small changes that move you toward financial wellness.

Change can be overwhelming, so here is an easy-toimplement calendar of one tip for every two months of the year to help you reach your goals: January/February: Make this the month for organization. Gather tax documents from 2012 and Julie A. Kern organize them. Set up a simple filing system (paper or electronic). Schedule an appointment with your CPA to have your tax returns prepared.

March/April: Get your tax returns filed and have an estimate of your 2013 tax liability calculated. Work with a reputable CPA and ask them to provide you with some planning ideas each year.

May/June: Set up a system to track your spending. You can’t improve what you don’t measure, so decide on whether you are a notebook and pencil, Excel spreadsheet, Quicken or Mint.com person and start tallying.

Commit to tracking for at least 90 days.

July/August: Create a debt payoff strategy. List all of your current debts from the smallest balance to the largest. Target the smallest balance first and work at paying it off. Once it is paid off, attack the next smallest balance.

September/October: Review your estate planning documents. If it has been more than 3-5 years since they were created, they probably need to be updated. Schedule an appointment with an estate-planning attorney.

November/December: Meet with your insurance agent(s) and review all of your policies to make sure you are adequately covered. One gap in coverage can negate all other careful planning, so be sure to do a thorough review.

After you implement these strategies, you may find that you have some extra cash. It’s a great time to meet with a financial planner to create a strategy to make sure you are on track to meet your longer-term goals.

Julie A. Kern Bridge Financial Solutions bridgefinancialstrategies.com Years as a NAWBO member: 3 Years in Business: 5

Pulse Check. Keep Your Business From “Bleeding Out”

By Laura Shepard

True or False: 1. For a human being to be alive, they must have a pulse.

2. To save a human life, an open wound should be treated to prevent “bleeding out.”

3. Most people have regular checkups with a healthcare provider to verify their physical Laura Shepard wellbeing.

If you answered “true” to these questions, then you share a common perspective on physical wellness. If you own a business, that business is a “being” that also requires constant care and safeguarding. If you want the business to survive and thrive, then you should check its “pulse” and endeavor to keep it from “bleeding out” by conducting regular checkups.

Checkups for a business come in the form of reviewing financial reports called Profit and Loss (P&L), also known as the Income Statement and Balance Sheet.

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NAWBO NEWS

The “pulse check” is to look at the P&L, which shows money in (income) and money out (expenses). By reviewing this report, you will know if your business has more going out than coming in. In other words - is your company bleeding out? If you keep your finger on the pulse of your business by reviewing this information you will know immediately when a problem arises and be able to apply a remedy before it becomes untreatable!

The second “pulse check” is to look at the Balance Sheet, which simply shows what the business owns (assets) and what the business owes in debts (liabilities). The difference is represented in equity. If you have negative equity, your business is unhealthy because you owe more than Laura Shepherd you have.

Stonebridge Bookkeeping laura@stonebridgeus.com Years as a NAWBO member: 1 Years in Business: 12

Three Risks to Your Retirement and How to Cover Your Assets

By Nancy Hetrick, CDFA™, AWMA®

So you’ve worked hard and tried to be more fiscally responsible than the US government, and in the back of your mind, you’re pretty sure that retirement will be a reality for you around age 65. You’ve done some basic planning and are pretty sure that between your savings and 401k plan and maybe a little pension and Social Security, you and your spouse will be able to Nancy Hetrick relax and maybe even go on a little trip once in a while.

Are you sure? Has your advisor talked to you about the demons that are lurking in the shadows of your retirement that could yank that cozy rug right out from under you? Allow me to provide you with a little demon defense.

Divorce - Think it doesn’t happen in retirement? Think again. I see a lot of women between 55 and 65 who haven’t worked in years but are now faced with divorce and the realization that 50% of the assets that were accumulated during the marriage won’t begin to cover her spending needs. Be involved in your finances! Be sure you know what bank balances are and where all the accounts are. Knowledge is power. Then of course, do everything you can to keep the love alive! Divorce is no fun at any age. Cherish your mate.

Health Issues - Health is not guaranteed for any of us. Be sure your health insurance is adequate and will carry you through to age 65. Include in your retirement budget enough for a Medicare Supplement. Let’s face it, Medicare benefits in this country are only going to shrink and premiums rise for the foreseeable future. Be sure you have made a plan for funding the need for long-term care. If you’re not prepared, it can wipe you out.

Behavioral Finance – Your own mind can be your worst enemy. Human psychology makes most of us do exactly the wrong thing at exactly the wrong time with our investments. Use a trusted advisor and listen to them!

When planning for retirement, be sure you expect the unexpected. A trusted advisor is essential to your success.

Nancy Hetrick, CDFA™, AWMA® www.NancyHetrick.com Years as a NAWBO member: 1 Years in business: 1 (15 in the industry)

Ken Blanchard College of Business | College of Education | College of Nursing | College of Arts & Sciences | College of Fine Arts & Production

Campus • Evening • Online

A R I Z O N A’ S P R I VAT E U N I V E R S I T Y S I N C E 1 9 4 9 Get started today! 855.287.0174 | www.gcu.edu/inbusiness Grand Canyon University is regionally accredited by the Higher Learning Commission of the North Central Association of Colleges and Schools. (800-621-7440; http://www.ncahlc.org/ ).

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Financial Fitness for the New Year

By Magaly Masci

You are never too young or too old to feel healthy about your finances.

With new tax laws, volatile markets and an overwhelming amount of information out there, it can be a daunting task for many Magaly Masci to get the process started with many challenges and potential pitfalls.

Women especially have unique needs when it comes to their personal finances.

Studies show women’s income has continually increased over the past decade and their increased net-worth also means that women are facing new challenges when making financial decisions. It is no secret that women live longer than men and planning for their retirement years is a key component of a woman’s financial plan.

Here are 3 easy steps to put anyone on the path to financial security and stability: Step 1: Focus on your short term goals Conducting an audit of your current financial situation and understanding the areas that need your attention are very important. Your shortterm plan will focus on budgeting, understanding how to track your income and expenses and run a cash-flow analysis to evaluate your situation.

Downloading a budget spreadsheet will facilitate this process.

Step 2: The reality check Once you have completed step one, you can now compare your current situation with your ideal situation and reflect on the disparities in your budget. Evaluate if you are on track to meet your financial goals, while gaining a better understanding of your options.

Six Insurance Mistakes Business Owners Make

6

Magaly Masci Morgan Stanley Wealth Management www.famorganstanley.com/magaly.masci Years in NAWBO: 1 Years in Business: 17

By Dawnyel Smink

One of the most costly mistakes business owners make is not having the right kind or amount of insurance in place to protect their business and their income.

Dawnyel Smink Here are 6 common mistakes businesses make with their insurance.

1. Not Buying Insurance — Whether it seems like the benefit doesn’t seem to justify the cost or they don’t realize they need coverage, not buying insurance is the biggest mistake any business can make. Business owners don’t realize that it only takes one lawsuit to wipe them out.

They feel that as long as they follow the rules, operate legally, and do what they are supposed to do, they will be okay. What they don’t realize is that even if they are sued and win, the cost of defending themselves against even an unfounded lawsuit may be enough to bankrupt their business.

2. Buying Inadequate Coverage — Many businesses that do purchase insurance don’t NAWBO NEWS

Step 3: Start planning for retirement Interview and hire the right professional for you to help you reach your goals. If you make the commitment to yourself to make your financial future brighter and more successful, enrolling the help of a dedicated financial advisor will help you ensure financial independence. It is important to gain the information you need to make informed, intelligent decisions. The right financial advisor will not only listen to your concerns, but also help you develop the right plan to fit your personal needs.

When women are financially empowered, they create stronger families, more involved communities, and a better world.

actually buy enough to cover their potential losses. Business owners don’t realize this mistake until it’s too late and they are stuck paying for attorney fees and legal settlements out of pocket.

Purchasing inadequate coverage is only slightly better than not having any coverage at all.

3. Buying the Wrong Coverage — Alongside buying inadequate coverage is buying the wrong coverage. Business owners, who don’t work with an insurance professional to assess their risk and secure the right coverage to protect their business from losses, run the risk of having to cover costs that are not covered by the policy they purchase.

4. Going Without Business Income Coverage — Business income coverage, also called business interruption insurance, provides financial support when something interrupts your ability to conduct business. Going without this coverage can endanger the business as much as going without liability or property coverage 5. Misunderstanding Coverage — Business owners who buy the right amount of the right coverage can still run into problems if they don’t understand what things are specifically excluded

from their policy. Most business insurance policies are full of exclusions and business owners who don’t understand these exclusions can be left holding the bag when they thought they were covered.

6. Carrying Low Deductibles — Business owners can decrease their costs while still protecting their business by increasing the deductible on their policies. Carrying a low deductible on your policy may seem like the better business decision because it offers more protection, but it may not be the right decision for your business. High deductibles reduce your overall operating costs while offering protecting you from the kinds of losses that could compromise your business.

The best way for business owners to ensure they have the coverage and protection they need is to work with a qualified insurance professional.

Their agent or broker can assess their needs and then help Dawynel Smink them find the Canyon Lands Insurance best insurance CanyonLandsAgency.com package to Years in NAWBO: 7 meet them.

Years in Business: 10+

Three Tips to Protect Yourself and Reduce Financial Stress Today

By Joan Laubach

At some point, nearly all women will be responsible for the financial health of her family. Whether it is because of divorce, death of a spouse, choosing to remain single, or any number of reasons, the financial future of her family may rest squarely on her shoulders.

Unfortunately, many women are unprepared for the task. Last summer I met with a couple that wanted some advice before making a financial decision. It was clear Joan Laubach to me that other than signing tax forms once a year, she had no knowledge of the family finances. I encouraged both of them to get her involved saying “you never know when you will NEED to know bank accounts, passwords, insurance and other vital pieces of information”.

Less than a month later her husband died unexpectedly, and she found herself completely overwhelmed. Not only was she dealing with the grief of losing her spouse, she had to instantly get up to speed on paying the bills, tracking down bank accounts and passwords, and the other decisions that could no longer be put on hold.

It seems to be part of the human spirit to believe that we have next week, next month, or a lifetime to do what needs to be done. How many times have you found yourself saying, “I’m busy right now, so I’ll take care of it later?”

What would it mean to your family to know that when something unexpected happened, they would be okay financially? What would it mean to you to know that you took that extra step to protect your family?

A study done in 2012 with AVIVA USA and the Mayo Clinic found that there is a strong correlation between a woman’s stress levels, how she feels about her current financial situation and her overall physical health. Only one third of women are comfortable with their present financial health.

Three Quick Tips You Can Do Today to Protect Yourself: 1. Gather account numbers, passwords and names of banks and put in a safe place.

2. Check all beneficiary forms for IRAs, life insurance policies, etc. and make sure the information is current.

3. Review your Will or if you don’t have one; have one made.

The steps you take today will have a huge impact down the road.

Joan Laubach Your Wealth and Health http://www.yourwealthandhealth.biz/ Years in NAWBO: 1 Years in Business: 2

The latest business news on inbusinessmag.com and on twitter @inbusinessmag

Follow us to build your small business

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NAWBO NEWS

NAWBO PHOENIX Corporate Partners Chairman Corporate Partner Grand Canyon University Presidential Corporate Partners National Bank of Arizona SRP Presidential Media Partner Independent Talk 1100 KFNX Media88 Executive Corporate Partners Allstate Kolbe Corp Larry Miller Toyota Newtek Technology Services Prudential Insurance Snell and Wilmer Southwest Gas Wal-Mart Strategic Media Partners Gravity Webworks Networking Phoenix.com Executive Media Partners Arizona Capitol Times CITYSunTimes Despins Printing Easel Photography InBusiness Magazine Money Radio 1510 AM Business Corporate Partners AmTrust Bank Auto Source Experts by The Car Source/Auto Glass Experts APS Bank of Arizona Benjamin Franklin Plumbing Border States Electric E&J’s Designer Shoe Outlet Infiniti HR Orchard Medical Consulting Schmeiser, Olsen & Watts, LLP State Farm Insurance Wells Fargo

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NAWBO NEWS

Get social with NAWBO Phoenix Utilizing NAWBO’s social media presence not only allows you the opportunity to engage with fellow women entrepreneurs, but also find out what is happening at NAWBO Phoenix.

Through our social media outlets, you can learn about upcoming events, speakers, mentorship opportunities, community service opportunities and more, while being able to engage in forums and other topics with NAWBO members.

Whether you are a NAWBO member or not, you are able to follow us on Facebook and Twitter – for those of you who are not yet members, you may like what you see and want to join us! The benefits of NAWBO membership are abundant. NAWBO is also on Linked In, but is a private group for our members providing a place for collaboration and connections in a platform that allows members to connect beyond our events.

You can find links to all of our social media accounts on our website at http://nawbophx.org or go directly to our Facebook account at http://www.facebook.com/NAWBOPhx and Twitter account at https://twitter.com/NAWBOphx.

NAWBO Board of Directors Executive Committee

Board of Directors

President Lynda Bishop Summit Alliance Solutions, LLC

Director of Communications/ Media Relations Martha Knight Arbonne International

President-Elect Jackie Wszalek Despins Printing & Graphics Finance Director Julie Kern, CPA, CFP, Bridge Financial Strategies Secretary Nancy Sanders Three Dog Marketing Immediate Past President Kristine Kassel Benefits By Design, Inc. Director of Administration Suzanne Lanctot NAWBO Phoenix Metro

Directors of Corporate Partners & Economic Development Amy Bruske, Kolbe Corp Kristine Kassel Benefits By Design, Inc. Director of Membership Services Melissa Debner AE3Q Director of Social Media Kristi Trimmer Orange Dragonfly Media Director of Programs Colleen O’Shaughnessy MetLife Program Co-Chair Kristin Slice Three Dog Marketing Director of Public Policy Ginger Lamb, Arizona News Service/Arizona Capitol Times Awards Chair Magaly Masci Masci Wealth Management MSSB Award Co-Chair Katreena Hayes-Wood Career Services Network

Ambassadors Chair Phaedra Earhart Farmers Insurance Community Service Chair Melanie Dunlap, Peaceful Spirit Enrichment Center Honorary Advisory Council Chair Cynthia Wrasman MJC Solutions, Inc. Mentor Program Chair Pamela Smith Numbers Etc. Mentor Program Co-Chair Cheryl Skummer Meridian Payment Systems NAWBO University Chair Dorothy Wolden Creative Intuition Neighborhood NAWBO Chair Connie Zimmerlich ClickChick Photography Retention Services Chair Joan Laubach Your Wealth and Health Women’s Enterprise Foundation (ex-officio) Peggy Ridgely European Touch Designs

Presents

Associations & Government Dental Insurance Employee Benefits Consultants Hospitals Individual & Group Health Insurance Urgent Care Workplace Bundled Health Programs Workplace Ergonomics Workplace Wellness

Our people make your care the best.

Our ranking makes it official.

Sure, we’re honored to accept a top-five ranking for large health systems from Thomson Reuters. But we’re even more honored to have some of the best caregivers in all of health care working tirelessly to provide great treatment, care and support to you. They’re what make us one of the five best large health systems out of 321 studied nationwide. And it’s their dedication and commitment to greatness that continue to make us the best we can be. Isn’t it time you find out what a top-five ranked health system can do for you?

www.BannerHealth.com Connect with us: FacebookTwitter

Twitter

Business Healthcare Services Guide

Employers Benefit from Wellness Plans and Consumer Accountability

by RaeAnne Marsh

“An employer is making a serious mistake to not offer wellness, whether or not he offers a benefits plan,” says Bill Weaver, managing partner of Focus Benefits Group. To be sure, there is an impact on workers’ compensation, but an employee’s wellness also affects his or her job performance, and Weaver observes the concept goes beyond just not having a cold to encompass overall lifestyle. Wellness, he says, “drives down the cost of benefits.”

Wellness is no stranger to today’s health insurance plans; UnitedHealthcare’s president and CEO Jeri Jones and Blue Cross Blue Shield of Arizona’s VP of strategy Jeff Stelnik both note their respective company’s focus on this aspect of healthcare. And both companies provide electronic tools as part of their healthcare plans to help the individual user access educational information on health issues as well as information about their health plan’s coverage, and even locate a nearby urgent care facility when they are away from home.

But, while wellness has traditionally been defined by what can be offered in the workplace to employees, Jason Paul, president of LifeCore Group, notes, “In reality, time at work is a small part of our lives. ‘Wellness’ is how we take care of ourselves, and care affects an employer’s workplace because stresses from home come with [an employee] to work.” Among wellness options for employers are employee assistance programs whose benefits range from discount programs for a wide variety of products and services to financial help lines to health nurse lines.

Paul also emphasizes the role of the employer in integrating wellness into the business environment. If wellness is part of the culture, it will engage the employees more than if it’s just another task they’re responsible for. And Paul notes, “When employers make employees understand how their actions now impact the future, and give them tools and resources to live a healthier lifestyle, it will cut health insurance costs for the future.”

But, ultimately, the effectiveness of wellness programs depends on the individual users. They must first believe they can access the care. “If you don’t believe accessibility exists, there is a greater chance you’ll end up in the emergency room

— which is five to ten times more expensive than if you saw your primary doctor,” says David Berg, M.D., CEO of Arrowhead Health Centers. And second, individuals must be encouraged and enabled to follow the treatment prescribed. “It has been shown that the success of healthcare depends more on the predictable follow-through with the most basic of medical recommendations than [on] anything else,” says Dr. Berg. This underscores a tenet of recently launched Redirect Health, a healthcare network aimed at improving business efficiency and patient outcome, which Dr. Berg co-founded. Dr. Berg credits medicine in America today with offering “best in the history of the world” healthcare, but says sometimes highercost treatments and the inconvenience of routines and access discourage patients from complying. “Redirect Health’s focus is away from all the high-tech that’s way better than ‘good enough’ and helps them execute better so patients get the benefit of that ‘best in the world’ technology and doctors.”

He sees believable access to preventive primary care as key to allowing the follow-through to actually happen and drive effectiveness and overall health. “Healthier people simply don’t spend as much time and money in expensive specialists’ offices and hospitals,” he says.

Arrowhead Health Centers

arrowheadhealth.com

Blue Cross Blue Shield of Arizona Focus Benefits Group

azblue.com

focusbenefits.com

LifeCore Group

lifecoregroup.com

Redirect Health

redirecthealth.com

UnitedHealthcare

uhc.com

Presents

About this Guide Associations & Government Dental Insurance Employee Benefits Consultants Hospitals Individual & Group Health Insurance Urgent Care

With healthcare front and foremost on the minds of many business owners and executives, and recognizing that healthcare and wellness programs involve the whole community working together, the editorial staff of In Business Magazine has compiled the 2013 Business Healthcare Services Guide. Presented on the following pages are listings of companies in the healthcare industry, organized by category.

Workplace Bundled Health Programs Workplace Ergonomics Workplace Wellness

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Associations & Government

Maricopa County Medical Society

Employee Benefits Exchange

Arizona Dental Association

326 E. Coronado Rd., Phoenix (602) 252-2015 mcmsonline.com

1745 S. Alma School Rd., Suite 210, Mesa (480) 839-6100 ebxaz.com

3193 N. Drinkwater Blvd., Scottsdale (480) 344-5777 azda.org

Employee Benefits Consultants

FBC Services, Inc.

(Many Offer Insurance)

14201 N. 87th St., Scottsdale (602) 277-8477 fbcserv.com

Arizona Benefit Consultants, LLC

Focus Benefits Group

6245 N. 24th Pkwy., Suite 201, Phoenix (602) 956-5515 abcllc.com

4120 N. 20th St., Suite B, Phoenix (602) 381-9900 focusbenefits.com

Benefits By Design

H. A. Mackey and Associates

8631 S. Priest Dr., Tempe (480) 831-7700 benefitsbydesignaz.com

5114 N. 33rd St., Phoenix (602) 595-4476 hamackey.com

Blue Water Benefits Consulting

Horizon Benefits Group

14301 N. 87th St., Suite 306, Scottsdale (480) 313-0910 employeebenefitcompliance.com

6245 N. 24th Pkwy., Suite 216, Phoenix (602) 957-3755 horizonbenefits.com

Breslau Insurance & Benefits Paul Breslau

Dental Insurance

10614 E. Terra Dr., Scottsdale (602) 692-6832 breslauinsurance.com

American Dental Plan

Arizona Foundation for Medical Care 326 E. Coronado Rd., Phoenix (602) 252-4042 azfmc.com

Arizona Health Care Association 1440 E. Missouri Ave., Phoenix (602) 265-5331 azhca.org

Arizona Health Care Cost Containment System (AHCCCS) 801 E. Jefferson St., Phoenix (602) 417-4000 azahcccsa.gov

Arizona Medical Association 810 W. Bethany Home Rd., Phoenix (602) 246-8901 azmed.org

Arizona Pharmacy Association 1845 E. Southern Ave., Tempe (480) 838-3385 azpharmacy.org

Connect Benefits 1818 E. Southern Ave., Mesa (480) 985-2555 connect-benefits.com

1645 E. Bethany Home Rd., Phoenix (602) 265-6677 arizdental.com

Benefits By Design 8631 S. Priest Dr., Tempe (480) 831-7700 benefitsbydesignaz.com

Breslau Insurance & Benefits Paul Breslau 10614 E. Terra Dr., Scottsdale (602) 692-6832 breslauinsurance.com

Delta Dental of Arizona 5656 W. Talavi Blvd., Glendale (602) 938-3131 deltadentalaz.com

JDH Insurance Brokerage Services Heather Wunderle 20403 N. Lake Pleasant Rd., Suite 117-234, Peoria (623) 594-0926 jhdinsurance.com

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“Healthy Employees Are Productive Employees” Reduce Your Companies Overall Healthcare Costs…

• Highly Skilled Medical Practitioners Our Nurse Practitioners & Staff

• On-Site Healthcare Clinics

On-Site Healthcare at Work • 602-424-2101 • www.hcsonsite.com inbusine ssmag.com

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Benefits By Design

Glass Financial Group

Mark Matsock & Associates

8631 S. Priest Dr., Tempe (480) 831-7700 benefitsbydesignaz.com

4455 E Camelback Rd., Suite 260D, Phoenix (602) 952-1202 glassfinancialgroup.com

2930 E. Camelback Rd., Suite 120, Phoenix (602) 955-0200 matsock.com

Powers-Leavitt Insurance 14301 N. 87th St., Suite 209, Scottsdale (480) 348-1100 powers-leavitt.com

Southwest Dental Group 6601 S. Rural Rd., Tempe (480) 456-0821 southwestdentalgroup.com

Blue Cross Blue Shield of Arizona 2444 W. Las Palmaritas Dr., Phoenix (602) 864-4899 azblue.com

Bowman & Associates 16042 N. 32nd St., Bldg. A, Phoenix (602) 482-3300 bowmaninsurance.com

Breslau Insurance & Benefits Paul Breslau

Individual & Group Health Insurance

10614 E. Terra Dr., Scottsdale (602) 692-6832 breslauinsurance.com

Aetna

Cigna

4645 E. Cotton Center Blvd., Phoenix (800) 225-3375 aetna.com

Amenda Insurance Associates Ltd. 5046 E. Redfield Rd., Scottsdale (480) 284-6400 douglasamenda.com

American Family Insurance Multiple Agents Valleywide (877) 777-4804 amfam.com

21020 N. 19th Ave., Phoenix (623) 516-7000 cigna.com

Farmers Insurance Group Kara Anspach 15849 N. 71st St., Suite 255, Scottsdale (480) 998-8070 farmersagent.com/kanspach

HealthNet 1230 W. Washington St., Suite 401, Tempe (800) 289-2818 healthnet.com

Humana Health Insurance of Phoenix 20860 N. Tatum Blvd., Suite 400, Phoenix (480) 515-6400 humana.com

JDH Insurance Brokerage Services Heather Wunderle 20403 N. Lake Pleasant Rd., Suite 117-234, Peoria (623) 594-0926

Powers-Leavitt Insurance Agency Charlene Powers 14301 N. 87th St., Suite 209, Scottsdale (480) 348-1100 powers-leavitt.com

State Farm Arizona Multiple Agents Valleywide (877) 331-8261 statefarm.com

UnitedHealthcare 1 E. Washington St., Suite 1700, Phoenix (800) 985-2356 uhc.com

Hospitals Arizona Heart Hospital 1930 E. Thomas Road, Phoenix (602) 532-1000 abrazohealth.com

Arizona Regional Medical Center 515 N. Mesa Drive, Mesa (480) 898-3333 2050 W. Southern Avenue, Apache Junction (480) 237-3200 myarmc.com

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I’m a three-time national rodeo champion.

One day after training I had a seizure.

Tests showed I had a rare brain tumor, and surgery to remove it could have left me paralyzed. Today, I’m back in the saddle.

My answer was Mayo Clinic.

Raley Mae Radomske, New Mexico

Thousands travel to Mayo Clinic each year for treatment, diagnosis, or a second opinion. Mayo Clinic is an in-network provider for millions, and a physician’s referral is typically not required. To request an appointment, visit mayoclinic.org.

Visit mayoclinic.org/arizona

mihs.org

Your Community Depends on Maricopa Integrated Health System A strong public hospital is as much a mark of a healthy community as good universities, modern transportation systems and thriving arts organizations.Yet the Maricopa Medical Center is just the most visible part of the Maricopa Integrated Health System, which includes the Arizona Burn Center, the Arizona Children’s Center, two psychiatric hospitals, 11 neighborhood health clinics and the region’s only HIV/AIDS clinic. Our vital work in caring for patients, preventing disease and training the next generation of physicians reaches across generations and touches nearly every corner of Arizona.

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Business Healthcare Services Guide (Hospitals con’t)

Banner Good Samaritan Medical Center

Arrowhead Hospital

1111 E. McDowell Road, Phoenix (602) 839-2000 bannerhealth.com

18701 N. 67th Avenue, Glendale (623) 561-1000 arrowheadhospital.org

Banner Baywood Medical Center 6644 E. Baywood Avenue, Mesa (480) 321-2000 bannerhealth.com/baywood

Banner Boswell Medical Center 10401 W. Thunderbird Blvd., Sun City (623) 832-4000 bannerhealth.com/boswell

Banner Heart Hospital 6750 E. Baywood Avenue, Mesa (480) 854-5000 bannerhealth.com

Banner Ironwood Medical Center 37000 N. Gantzel Road, San Tan Valley (480) 394-4000 bannerhealth.com/ironwood

Chandler Regional Medical Center 475 S. Dobson Road, Chandler (480) 728-3000 chandlerregional.org

Gilbert Hospital 5656 South Power Road, Gilbert (480) 984-2000 gilberter.com

John C. Lincoln Deer Valley Hospital 19829 N. 27th Avenue, Phoenix (623) 879-6100 jcl.com

Banner MD Anderson Cancer Center

John C. Lincoln North Mountain Hospital

2946 E. Banner Gateway Drive, Gilbert (480) 256-6444 bannerhealth.com

250 E. Dunlap Avenue, Phoenix (602) 943-2381 jcl.com

Banner Thunderbird Medical Center

Maricopa Medical Center

5555 W. Thunderbird Road, Glendale (602) 865-5555 bannerhealth.com

2601 E. Roosevelt Street, Phoenix (602) 344-5011 mihs.org

Cancer Treatment Centers of America at Western Regional Medical Center

Maryvale Hospital

Banner Estrella Medical Center 9201 W. Thomas Road, Phoenix (623) 327-4000 bannerhealth.com

14200 W. Fillmore Street, Goodyear (623) 207-3000 cancercenter.com

Banner Gateway Medical Center

Cardon Children’s Medical Center

1900 N. Higley Road, Gilbert (480) 543-2000 bannerhealth.com

1400 S. Dobson Road, Mesa (480) 412-5437 bannerhealth.com

Banner Del E. Webb Medical Center 14502 W. Meeker Blvd., Sun City West (623) 524-4000 bannerhealth.com

Banner Desert Medical Center 1400 S. Dobson Road, Mesa (480) 412-3000 bannerhealth.com/desert

5102 W. Campbell Avenue, Phoenix (623) 848-5000 maryvalehospital.com

Mayo Clinic Hospital 5777 E. Mayo Blvd., Phoenix (480) 515-6296 mayoclinic.org

Mercy Gilbert Medical Center 3555 S. Val Vista Drive, Gilbert (480) 728-8000 mercygilbert.org

Mountain Vista Medical Center 1301 S. Crismon Road, Mesa (480) 358-6100 mvmedicalcenter.com

Paradise Valley Hospital 3929 E. Bell Road, Phoenix (602) 923-5000 paradisevalleyhospital.com

Phoenix Baptist Hospital 2000 W. Bethany Home Road, Phoenix (602) 249-0212 phoenixbaptisthospital.com

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50 Years of Bringing Great Minds Together

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U.S. News & World Report Top 10 Hospital

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Business Healthcare Services Guide (Hospitals con’t)

Urgent Care Extra

LifeCore Group

Phoenix Children’s Hospital

Multiple Valley Locations urgentcareextra.com

P.O. Box 10264, Glendale (602) 235-2800 myhealthdividends.com

1919 E. Thomas Road, Phoenix (602) 933-1000 phoenixchildrens.com

St. Joseph’s Hospital & Medical Center 350 W. Thomas Road, Phoenix (602) 406-3000 stjosephs-phx.org

St. Luke’s Medical Center 1800 E. Van Buren Street, Phoenix (602) 251-8100 stlukesmedcenter.com

Workplace Bundled Health Programs Arrowhead Health Centers Multiple locations (623) 334-4000 arrowheadhealth.com

Surgical Specialty Hospital 6501 N. 19th Ave., Phoenix (602) 795-6020 sshaz.com

Scottsdale Healthcare Shea Medical Center

Workplace Wellness

9003 E. Shea Blvd., Scottsdale (480) 323-3000 shc.org

Absolute Health

Scottsdale Healthcare Osborn Medical Center 7400 E. Osborn Road, Scottsdale (480) 882-4000 shc.org

Urgent Care Advanced Urgent Care 6 Valley Locations (877) 943-8935 aucgroup.com

Orchard Medical Consulting Robin Orchard 3033 N. Central Ave., Phoenix (602) 472-4700 orchardmed.com

Redirect Health 16222 N. 59th Ave., Suite A-100, Glendale (623) 521-9406 redirecthealth.com

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Alliance Urgent Care 7 Valley Locations (855) 887-4368 allianceurgentcare.com

FastMed Urgent Care Multiple Valley Locations (480) 545.2787 fastmed.com

NextCare Urgent Care Multiple Valley Locations (888) 381-4858 nextcare,com

Phoenix Children’s Hospital Urgent Care 4 Valley Locations (480) 922-5437 phoenixchildrens.com/urgent-care

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Index Index by Name

Elrod, Dave, 12

Micheli, Pietro, Ph.D., 38

Urias, Lisa, 33

Armstrong, Lance, 66

Farstead, Debbie, 46

Miner, Don, 30

Urig, Michael, M.D., 24

Aros, Olga, 33

Goffnet, Charles, 16

Morgan, Thomas, 36

Villalobos, Monica, 33

Banister, Mark, 20

Hermosillo, Iris, 33

Neff, Jeffrey D., 32

Waddington, Greg, 16

Bayless, Betsey, 11

Hetrick, Nancy, 49

Paul, Jason, 24, 54

Weaver, Bill, 24, 54

Benedetto, Ray, D.M., 66

Jones, Jeri, 24, 54

Rutala, Melissa, 20

Berg, David, M.D., 24, 54

Kern, Julie A., 48

Shepherd, Laura, 48

Weinstein, Ronald S., M.D., 20

Bharathan, Kalyanraman, 20

Korte, Virginia, 32

Shumway, Jeff, 30

Bishop, Lynda, 45

Laswick, Ruthann, 24

Smink, Dawynel, 50

Blake, Lynn, 12

Laubach, Joan, 51

Stelnik, Jeff, 24, 54

Bruhnke, Doug, 30

Lieberman, Daniel, M.D., 24

Sutherland, Jack, 16

Dangremond, Jennifer, 32

Masci, Magaly, 50

Sutherland, Rissy, 16

Dougherty, Nancy A., 12

Matney, Eddie, 22

Tiedeman, Chad, 30

Index by Company

Wertheim, Pete, 24, 54 Wexler, Eliot, 42 Williamson, Glenn, 30 Williamson, Pamela, Ph.D., 33 Wing, Greg, 30 Zito, Ed, 30

Economic Club of Phoenix, 34

LifeCore Group, 24

SCF Arizona, 3

1-800-Got-Junk?, 10

Eddie’s House, 22

LiveStrong, 66

5 Arts Circle, 6

eFax, 40

M&I Bank, 30

Scottsdale Area Chamber of Commerce, 34

ABC 15, 14, 33

Epcor, 30

ACG – Arizona, 34

Fennemore Craig, 30

Maricopa County Attorney’s Office, 10

Scottsdale Training and Rehabilitation Services, 32

Ahwatukee Foothills Chamber of Commerce, 34

Focus Benefits Group, 24

Maricopa County Medical Society, 24, 57

Sonora Quest Laboratories, 63 SRP, 9

Alerus Bank & Trust, 19

Gilbert Chamber of Commerce, 14

Maricopa Integrated Health System, 11, 59

Stonebridge Bookkeeping, 48

Alliance Bank of Arizona, 2, 30 APS, 30 Arizona Center for Innovation, 20 Arizona Diamondbacks, 41 Arizona Health-e Connection, 20 Arizona Hispanic Chamber of Commerce, 33, 34 Arizona Hospital and Healthcare Association, 24 Arizona OBGYN Affiliates, 24 Arizona Small Business Association, 34 Arizona Technology Council, 34 Arizona Telemedicine Network, 20

Frontier Applied Sciences, Inc., 30 Glendale Chamber of Commerce, 34 Go To My PC, 40 Golf Grill at Camelback Golf Club, 42 Grand Canyon University, 49 Greater Phoenix Black Chamber of Commerce, 34 Greater Phoenix Chamber of Commerce, 14 Green Card Fund, 30 Green Valley Medical Center, 30 Grill at the TPC, The, 42 Growth Nation, 30

Arrowhead Health Centers, 24

Health Information Network of Arizona, 20

AT&T, 15

Healthcare Solutions Centers, 57

Avnet, 43

Holmes Murphy, 6

B.Y.O.U., 16

Honest-1 Auto Care, 16

Bank of Montreal, 30

IHS, 14

Banner Health, 54

Infusionsoft, 19

Barrow Neurological Institute, 61

John C. Lincoln Health Network, 24

BBVA Compass, 37

Redirect Health, 24

Bernard’s at Ocotillo, 42

Keas, 14

Blue Cross Blue Shield of Arizona, 5, 14, 24

Latina Enterprise Group, 33

Blue Water Benefits Consulting, 24

Lewis and Roca, 36

Mayo Clinic, 24, 59

Stoney-Wilson Business Consulting, 23

Medipacs, 20

Surgical Specialty Hospital, 24

Minority Business Development Agency, 33

Surprise Regional Chamber of Commerce, 34

Morgan Stanley Wealth Management, 50

Tempe Chamber of Commerce, 34

National Association of Women Business Owners – Phoenix, 34, 45

TransCanada Pipelines, Ltd., 30

National Bank of Arizona, 68

United State Small Business Administration, 18

National Kidney Foundation of Arizona, 32 Nest Ventures, L.L.C., 30

United States Department of Labor, 24

UnitedHealthcare, 24

Noca, 42

University of Arizona Health Sciences Center, 20

Nocawich, 42

University of Warwick, 38

North Phoenix Chamber of Commerce, 34

Walmart, 24

Odyssey Preparatory Academy, 30

Warwick Business School, 38

Omni Hotels & Resorts Tucson, 67

Wellness Community, The, 44

Phoenix Children’s Hospital, 12, 61

Wells Fargo, 17

Phoenix Commercial Advisors, 30

West Valley Women, 34

Prudential Insurance Company of America, 46

Women of Scottsdale, 34

Regus, 16

Women’s Business Enterprise Council – West, 33

Rest Assured, Inc., 12

Your Wealth and Health, 51

SavySoda, 40 Scambook, 14

Bold listings are advertisers supporting this issue of In Business Magazine.

Brand X, 16 Bridge Financial Solutions, 48 Canyon Lands Insurance, 50 Central Phoenix Women, 34 Circle K, 30

Check Out the New

Core Institute, The, 64 Couche-Tard, 30 Cox Business, 13 Delta Dental, 4 DHL Express, 14

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DPR Construction, 12 Driver Provider, The, 23 Dropbox, 40

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It's THE Hub to Building Business M a r c h 2013

65

Roundtable

A Candid Forum

Can an Organization Survive the Fall of an Iconic Leader?

Internal perceptions impact a company’s ability to pull through a crisis in leadership

by Ray Benedetto, D.M. Recent revelations by disgraced “hero” Lance Armstrong raised speculations about the future of LiveStrong, the charity Armstrong founded to fight cancer in the aftermath of his own cancer-fighting experience. Although some anticipate a short-term drop in LiveStrong’s fundraising, many believe the nonprofit will survive because its core mission goes far beyond the image of its founder.

Parallel situations experienced by other organizations and companies have also hit the headlines. Although different circumstances existed, core issues are similar: shattered perceptions of a “hero” figure combined with the betrayal of the trust and honor given to a leader who failed to do the right thing. Becoming enthralled with “heroes” based on celebrity, position, wealth or athletic prowess creates a foundation for mental distress because people are human and will make mistakes.

Leaders of well-run organizations understand the disruptions such mistakes can have on mental stability, and put leadership systems in place to counteract the negative effects of such events.

Many people associate strong leaders with the success of an organization, but, regardless of its size or purpose, an organization succeeds through the efforts of many people rather than the reputation of any single person.

Studies by Booz and Company about CEO succession and longevity within large, publicly-held companies show CEOs have a median tenure of about five years, while a quarter of CEOs from 2,500 reporting companies have eight or more years in that role. (CEO tenure in privately-held companies is longer, many times because the CEO is also the founder, owner or primary stockholder.) Regardless of organizational size, CEOs are responsible for company performance, including growth and sustainability.

Leadership shakeups rarely occur when leaders are doing the right things and objectives are being met or exceeded. Shakeups invariably occur when a leader betrays a trust or stakeholders lose confidence in that person’s ability to lead, guide and influence others effectively. Leaders who break or betray a trust lose credibility and, with it, the ability to lead.

Armstrong is simply a very visible example of many more that exist.

Poor performance stems from several factors that build over time and contribute to a company’s demise. Early warning signs of failure are lack of a well-defined vision, high turnover rates, cuts in training programs and core business operations, an exodus of top talent and a series of “quick fixes” by managers fighting a losing battle.

Compared to civilian organizations, the military services match or exceed Fortune 100 companies in size, infrastructure and resources.

The military services are well-known for executing their missions, and do so despite thousands of promotions, retirements, job rotations and replacements each year. How do they do it?

Rather than rely on personality or charisma, the military services have well-defined leadership systems that meld individual character, emotional intelligence, critical thinking and business knowledge with collective commitment — regardless of rank, position or

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responsibilities — to high ideals, teamwork and service to others. We found similar characteristics in the high-performing small to midsized companies we studied. People who share core values and develop positive relationships around those values within the organizational setting are more likely to be committed to their work, especially when leaders set the right example. Leaders develop trust with those they serve by being authentic, honest and forthright rather than setting themselves apart from others.

By modeling the way and teaching others how to lead at all organizational levels — strategic, operational and grassroots — senior leaders develop the talent that will sustain the organization despite external changes and potential disruptors. Surviving any type of leadership change begins long before the event occurs.

The following actions are anchors for surviving leadership changes expected through natural evolution and also for surviving unexpected changes and evaluating existing leadership: Re-emphasize organizational purpose, especially the core values, vision and mission. Regain trust by pursuing moral and ethical “high ground.”

Communicate openly and regularly with employees to regain trust.

Employees at all levels need and want to know what is going on.

They need to be respected for the value each person brings to the organization. Lack of regular communication gives rise to rumor, speculation and distrust, which work against the leaders who remain and continue to carry responsibilities for company performance.

It’s My Company Too!: How Entangled Companies Move Beyond Employee Engagement for Remarkable Results it’smycompanytoo.com

Ray Benedetto, D.M., is a retired USAF Colonel. His doctorate is in organizational leadership, and, in addition to teaching leadership and strategic planning for the University of Phoenix Chicago Campus MBA program, he founded a consulting firm that helps leaders build high-performing, character-based cultures. He is a co-author of It’s My Company Too!: How Entangled Companies Move Beyond Employee Engagement for Remarkable Results.

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