SUMMER 2019
GET TING SMARTER Metro’s CIO sees investments paying off
CLOSURE ISSUES Construction’s impact on roads, sidewalks grows
All-Star Board Building Something
Our latest pick of advisors to help you get better
BIG Built is one of a bundle of emerging stars turning Nashville into a fintech hub
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5/9/19 2:20 PM
Room for Possibilities From Music Row to North Gulch, WeWork provides refreshing workspace, powerful community, and meaningful business services to forward-thinkers locally and around the world. With 2 new locations opening this fall, give your business the space to grow with WeWork. we.co/nash
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5/9/19 12:56 PM
SUMMER 2019
TECHIE
8
YOU SHOULD KNOW HUSO boss sells ‘antitechnology technology’ to fight stress
9
DATA BANK Assessing demand, job qualifications and venture capital priorities
10 SMART CIT Y, REVISITED Metro’s attempts to add tech efficiencies advance despite hiccups
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GROWTH BLUEPRINT Booming Built looks to capitalize on its early successes
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SUMMER 2019 | NASHVILLEPOST.COM
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ERIC ENGLAND
5/9/19 2:50 PM
S PON S OR E D PROFIL E
Hiring & consulting–the human way.
COMPA N Y PROFIL E Vaco is a talent & solutions firm, providing expert consulting, permanent placement, and strategic staffing for companies around the world, in the areas of accounting, corporate finance, technology, operations, administration and more. At its core, Vaco’s mission is to connect people to their dream jobs and help leading companies find talent to grow their business.
A talent & solutions firm.
vaco.com 615.324.8226
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When Vision Turns into Reality Jerry Bostelman founded Vaco with a few simple ideas in mind: to create a place where the talented malcontents of the world could be free to do work they love, where smart companies could connect with exceptional humans, and where people would work hard, have fun, and never want to leave. Just your typical every day, lifechanging stuff. Vaco’s previous offices haven’t always been able to reflect the spirit of the company, but the energy that each Vaconian brought to the office was able to transform our office environment into more than just your typical corporate office. Throughout the years as the company has grown in employees and revenue, Vaco has expanded its office to accommodate the passionate outlaws who call Vaco home. Eventually, Vaco outgrew its office space and needed a new place to house our fierce entrepreneurial spirits. Faced with the opportunity to be able to design a space from scratch that fully epitomized the essence of Vaco, plans were made to create
an office to exemplify everything that Jerry Bostelman envisioned for the company from the beginning. The 17 years of experiences and memories fueled the planning of every detail from when you walk into the reception area to the artwork on the walls. Jerry’s scrappy entrepreneurial flame burns bright at the heart of everything in the new office. Since its founding in 2002, Vaco has grown to serve 40 offices across the globe, 800+ employees, more than 4,300 consultants and $500M in revenue. Vaco has been named to Inc. magazine’s list of the fastestgrowing private companies for the past 12 years and was ranked #4 on Forbes’ 2018 list of America’s Best Professional Recruiting Firms. From founding until now, Vaco is dedicated to developing long-term relationships, life-long careers and creative client solutions. The new space will serve as an area for entertaining all the clients, candidates, and consultants who have helped Vaco get to this place.
Website: www.vaco.com Phone: 615.324.8226 Twitter: Global: @vacoglobal Nashville: @vaconashville Facebook: Global: @vacoglobal Nashville: @vaconashville LinkedIn: www.linkedin.com/ company/vaco Instagram: @vaconashville
S PE C I A LT IE S Tap into Vaco’s vast global network and deep local relationships to find talent with the right skill set and best culture fit for your business. ACCOUNTING AND FINANCE From CFO searches to temporary contract positions, Vaco does the legwork for you. TECHNOLOGY Get top tech talent that’s ready to hit the ground running. HEALTHCARE IT Vaco delivers top business solutions to solve all your Healthcare IT needs. HR/ MARKETING/ SALES Build long-term relationships, lifelong careers and creative business solutions in a flash. OPERATIONS AND ADMINISTRATION Vaco delivers the right talent at the right time to keep your business growing strong.
5/9/19 12:58 PM
LEADERS
37 SUPPORT AND CHALLENGE Veteran advisor Tony Heard on what makes boards better
38 ALL-STAR BOARD We pick six local leaders for our sixth edition
18 AN INVESTING SWEET SPOT Joe Maxwell sees big things for fintech investing
18 SMARTER SAVINGS SavvyFi prepping wider launch of college tool
19 ADDING ALTERNATIVES
34
THE COST OF DOING BUSINESS City wrestles with constructioncaused sidewalk, road changes
Account aggregator Wealth Access is on fire
20 PAYMENTS PEOPLE The new generation of local processors, business software rollups
21 INJECTING AWARENESS Sertainty’s software addresses security questions
22 SAFE AND SECURE Health IT officials stress the importance of combatting cyber fraud
24 CYBER PREPARED Identity theft insurance now a near-must
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Overcoming psychological barriers that limit transformation
42 BRINGING AI TO THE WORKFORCE A look at social recognition software’s growing role in HR FINANCE
Alto’s growing platform opens up options for IRAs
19 TARGETING A TRILLION
40 BEHAVORIAL CHANGE
VITALS
25 THE NEW REALIT Y Post-acute specialist Playmaker growing quickly
26 LITMUS TEST VR innovators focus technology on applications
28 HEALING SPACES Facility designers contribute directly to patient satisfaction BOOM
31 NO LONGER OBSCURE High-profile developers descend upon WeHo
32 THREE QUESTIONS Kelty Commercial Real Estate’s Travis Kelty
44 LOCKING THE M&A BOX Weighing the pros, cons of a working capital approach SPORTS
46 SELLING $MASHVILLE These folks work to give Preds fans merch, memorabilia
48 VANDY BOYS ’Dores skipper sees growing number of ex-players, coaches now in pros FAVORITES
52 PUDDING PRO Marketing expert on the dessert that rivals her grandmother’s
DANIEL MEIGS
5/9/19 2:50 PM
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5/9/19 3:45 PM
OPEN
editorial
Another stool leg Spend five minutes with just about any Middle Tennessee technology pro who isn’t in health IT and chances are you’ll hear a variation of, “Don’t get me wrong, those people are great. But it sure feels like they suck the oxygen out of the room for the rest of us.” Look for that perception to change soon because reality already has. Middle Tennessee is making its mark as a rising financial technology hub, adding to a booming IT sector that, yes, is still dominated by health care but also will grow further with the addition of Amazon’s logistics/operations hub. Our package of profiles covers a lot of ground but there are numerous other companies we didn’t get to. Artificial intelligence firm Digital Reasoning and software developer Ncontracts, for instance, are reaching deeper into the finance sector. And, oh by the way, AllianceBernstein is bringing a lot of New York knowhow to town. They and others speak to the breadth of fintech’s rise in Middle Tennessee and add to the reasons to be very optimistic. Diving into the planning process for our third-quarter magazine that will lead with growth and development topics, there’s a lot to chew on. Housing, transit and governance continue to be top of mind for many even as earthmovers and orange barriers become ever more permanent parts of our daily scene. As always, we welcome your input as we sift through ideas. Speaking of daily: As I write this in early May, the Post’s web traffic is up 21 percent year to date — and that’s on top of a 2018 in which pageviews grew 31 percent. If you’re reading this issue but don’t yet subscribe to our daily emails, hop on for the ride. As with so many parts of Middle Tennessee, our team is firing on all cylinders. And as we say in the introduction to our cover package, there is much, much more to come.
EDITOR Geert De Lombaerde MANAGING EDITOR William Williams CONTRIBUTING EDITORS Felicia Bonanno, Nancy Floyd STAFF WRITERS David Boclair, Stephen Elliott, Kara Hartnett CONTRIBUTING WRITERS Lena Anthony, Bill Lewis, Megan Seling
art & production ART DIRECTOR Christie Passarello STAFF PHOTOGRAPHERS Eric England, Daniel Meigs PRODUCTION COORDINATOR Matt Bach GRAPHIC DESIGNERS Mary Louise Meadors, Tracey Starck
publishing ADVERTISING DIRECTOR Daniel Williams DIRECTOR OF MARKET STRATEGY Jennifer Trsinar BUSINESS DEVELOPMENT DIRECTORS Heather Cantrell Mullins ACCOUNT EXECUTIVES Maggie Bond, Robin Dillon, Michael Jezewski, Carla Mathis, Mike Smith, Stevan Steinhart, Penny Williams, Keith Wright SALES OPERATIONS MANAGER Chelon Hill Hasty ACCOUNT MANAGERS Rachel Hellewell, Gary Minnis
marketing EVENTS DIRECTOR Olivia Moye EVENTS MANAGERS Ali Foley, Caleb Spencer
circulation SUBSCRIPTION MANAGER Gary Minnis CIRCUL ATION MANAGER Casey Sanders
business Geert De Lombaerde, Editor gdelombaerde@nashvillepost.com
On the cover Chase Gilbert Built Technologies Photo by Eric England
PRESIDENT Frank Daniels III CHIEF FINANCIAL OFFICER Todd Patton CREATIVE DIRECTOR Heather Pierce IT DIRECTOR John Schaeffer SPECIAL PROJECTS COORDINATOR Susan Torregrossa
FW Publishing, LLC OWNERS Bill Freeman and Jimmy Webb 210 12th Ave. S., Suite 100 Nashville, TN 37203 nashvillepost.com
Nashville Post is published quarterly by FW Publishing, LLC. Advertising deadline for the next issue is Wed., Aug. 14. For advertising information, call Daniel Williams at 615-744-3397. For subscription information, call 615-844-9307. Copyright © 2019 FW Publishing, LLC.
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ChamberEffect_PostAd.pdf
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We are excited to announce a new way to explore what the Chamber does for business leaders, entrepreneurs, community members and the region as a whole. We call it “The Chamber Effect.� The Chamber Effect is the impact our programs, initiatives and members have on the region. This includes education, small business programming, economic development efforts, advocacy in local and state government, talent development and more. Keep an eye out for some interesting reminders from Chamber champions within the region. In the meantime, we want to hear from you! You can participate by answering this question: "What does the Chamber do for you?" Visit us online at nashvillechamber.com/effect to tell your story and share the impact the Chamber has had on your life, business or community. We're excited to be raising awareness of what the Chamber really does in Nashville.
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5/9/19 2:21 PM
TECHIE
YOU SHOULD KNOW
Bill Flanagan HUSO CEO sells ’anti-technology technology’ to help fight stress
AT THE INTERSECTION OF SCIENCE and cultural healing sits Nashville startup HUSO — short for human sound — which draws harmonic frequencies out of Tibetan healing songs and uses them for deep relaxation and antistress treatments. The four-year-old company is run by acupuncturist Bill Flanagan and Lily Whitehawk, who can best be described as a Swiss army knife of sound healing and therapy. Whitehawk created the technology used by HUSO today and united her decades of experience in sound healing and indigenous cultures for this venture. HUSO’s frequencies are transmitted through a sound therapy device that delivers enhanced toning through headphones and pads placed on major acupuncture meridians, allowing the user to experience the full scope of sound. The company markets an at-home device for individual use as well as a more sophisticated professional version used as a supplement to other treatment options by providers. The devices come with a selection of playlists targeted toward conditions such as sleep deprivation and attention deficit hyperactivity disorder, as well as nervous system and other physical performance concerns. The playlists are recorded in local music studios with the help of Tibetan and Native American healers — and no instruments. “It’s a very new spin to a very old and traditional healing model,” says Flanagan, the company’s CEO. “Yes, it’s technology. But it’s anti-technology technology. It helps you disconnect from those outside influences.” Flanagan and his team hit about $1 million in sales in 2018 and are preparing for their second funding round — for an undisclosed amount — aimed primarily at developing a mobile application, bringing services in-house and beefing up advertising initiatives. The idea to take HUSO into the app arena, he says, was consumer-driven. It won’t be as effective as the at-home or professional models, but it will feature a growing playlist of sound therapy options.
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DANIEL MEIGS
5/9/19 12:28 PM
TECHIE
WHERE THE DEMAND IS
Data Bank MIDDLE TENNESSEE’S tech scene is buzzing with activity and growth. Health care continues to play a very important role across the region and remains a sought-after destination for venture capital dollars. Here are some data points showing the regional activity and some national trends.
In the recently released ‘Healthcare Tech Middle Tennessee’ report, MTSU professor Amy Harris says Middle Tennessee employers posted more than 38,000 online job openings last year. Here are the organizations, ranked by unique postings, who were most actively looking for talent in 2018, whether in health care or not. Deloitte ..............................................1,364 HCA ....................................................1,342 Vanderbilt .............................................768 Anthem .................................................768
MONEY FLOWS
Vaco ...................................................... 712
Venture capitalists still look to internet-focused companies for nearly half of their deals; over the past four years, the web’s share of investments has remained steady around 45 percent. But general software startups have drawn more attention and risen to become the fourth area accounting for at least a tenth of all transactions. Here’s a snapshot of how the number of U.S. VC deals have shaken out in each of the past four years’ first quarters.
Asurion ................................................. 668
20%
OCCUPATIONS AND QUALIFICATIONS
Internal Data Resources ....................657 Robert Half International ................. 548 Teksystems .......................................... 498
Regional employers last year posted more than 4,000 openings for three occupation groups as defined by the Bureau of Labor Statistics. Four others topped 2,000 openings.
15% Mobile/telecom
10%
5%
Software developers, applications Computer user support specialists
4,612
Computer occupations, all other
4,209
Management analysts
3,242
Marketing managers
3,241
2019
2018
0 2017
UNIQUE POSTINGS
Software*
Consumer
2016
OCCUPATIONS
Health care
5,729
Computer systems analysts
3,141
Network, computer systems administrators
2,849
Web developers
1,919
Market research analysts
1,697
Computer, information systems managers
1,261
*Excluding internet and mobile investments
Many of those openings require applicants to come to the table with some specific skills. Here are the most commonly mentioned. Another possible trend to watch? The shrinking average dollar size of deals for young companies not purely in the internet space. Here are those numbers from early this year and last. Q1 2018
Q1 2019
Internet
$13.2M
$18.9M
Health care
$31.5M
$24.0M
Mobile/telecom
$25.2M
$18.9M
Software
$18.4M
$9.9M
$9.5M
$8.8M
Consumer
Source: PwC/CB Insights MoneyTree Report
SQL ......................................................7,711 Agile Software Development......... 5,111 Java ................................................... 3,443 JavaScript ......................................... 3,350 Operating Systems ..........................3,152 Business Requirements ................. 2,940 Business Process ..............................2,763 .NET Framework ............................. 2,606 Information Systems ...................... 2,599 Software Development.................. 2,538 Source: Healthcare Tech Middle Tennessee (technologycouncil.com)
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TECHIE
Smart city, revisited Metro’s attempts to add technological efficiencies progress despite some hiccups BY STEPHEN ELLIOTT
etro Nashville’s recent attempts at making the city function more efficiently through smart city technology have so far been defined by fits and starts. It started with a whimper: The U.S. Department of Transportation did not pick Metro to participate in its Smart City Challenge in 2016. But then-Mayor Megan Barry decided to work on some of the goals outlined in the city’s application anyway.
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That included hiring Robyn Mace as the city’s first chief data officer. She was tasked in part with coordinating the open data efforts of all Metro departments and educating city employees on how to use some of the new technology, work for which she was featured on the cover of this magazine in 2017. But last year, she was laid off in what Metro Chief Information Officer Keith Durbin called a budgetary move. Durbin promised that her work would continue in some capacity under new Mayor David Briley. Now, nearly a year after Mace’s departure, Durbin paints a picture of a city smarter than ever. Metro’s new constituent services system, hubNashville, was launched under Barry in late 2017, and it has picked up steam in recent months. The system is on pace to handle about twice as many requests as it did in 2018 and Metro is handling the requests — which can include pothole fixes, misplaced trash can alerts and calls for other city services — at a
quicker pace. Durbin says the average request took 11.78 days to complete last year, and it’s now down to 7.24 days. Pothole request fulfillment dropped from 5.81 days to 3.21 days, he says. Metro employees have “got a groove,” Durbin says. “They know what’s expected of them.” The city also recently launched NashDigs, a mostly internal dashboard that helps Metro departments such as Public Works and Water coordinate disruptive infrastructure projects. Instead of repaving a street one month and then tearing it up again the next month to install a water line, the two departments could use the platform to do the work simultaneously. “It’s duplicating cost. It’s duplicating aggravation to the public. It’s basically a waste of money,” Durbin says. “NashDigs is allowing these disparate departments and agencies who had previously coordinated, but not necessarily at the depth they needed to, on invasive right-of-way projects.”
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TECHIE
‘We’re not willing to accept a 50-percent failure rate. Things that we’re going to spend money on need to be successful.’ KEITH DURBIN, METRO
The city is working on adding private-sector firms such as AT&T, Comcast and Piedmont Natural Gas to the NashDigs network to further coordinate infrastructure disruption. But anyone who has tried to navigate conflicting road closures in The Gulch in recent months can attest that such coordination remains a work in progress. Another new issue that has surfaced since Mace’s departure: scooters. The electronic devices have proliferated since they were introduced (for a second time after a short moratorium) last year, to the chagrin of some residents and law enforcement and to the delight of visitors and other downtown denizens. Seven different scooter companies currently have the devices deployed on Nashville streets, operating under regulations put into place by the Metro Council. The rules include restrictions on how many scooters each company can have out at a time, which neighborhoods they can operate in and where they should be parked. The city, through its data hub, collects information from six of the seven companies — with the seventh on the way — in an effort to track compliance and inform future transit and infrastructure decisions. It’s a work in progress, but Durbin says the information is invaluable. Metro is continuing its partnership with the Vanderbilt Institute for Smart Cities Operation and Research, an interdepartmental research group that has worked on several
projects with the city, including on emergency vehicle deployment decisions. Work on one of the original smart city initiatives, traffic signal prioritizations, continues, too. Durbin wants to replace traffic signals with ones that can be controlled remotely. His team also is working on a project to add air quality sensors to e-bikes. Durbin says that — despite the loss of Mace — the city’s commitment to work on smart city initiatives has remained steady since Briley took over for Barry last year. He says that within six months or a year officials will seek to re-establish what he calls an internal group of data gurus, data-minded officials from different Metro departments who coordinated cross-department work under Mace. That push plus progress on existing projects has Durbin optimistic about Nashville’s future as a so-called smart city. But he is not promising that Music City will be on the front lines of technological progress. He’s leaving that to neighbors. “When you look at my peers in other cities, there’s a lot of leading-edge experimental work that is happening,” he says. “We are less in that mode than, ‘Let’s see what innovation technologies are out there that can help us meet very specific existing goals.’ We’re not willing to accept a 50-percent failure rate. Things that we’re going to spend money on need to be successful, and that’s not the model everywhere.”
STARTING TO CLICK Metro’s hubNashville constituent services system, launched in October 2017, is picking up the pace when it comes to fulfilling residents’ calls for services. Average request
11.78 DAYS 2019 7.24 DAYS
2018
Pothole request
5.81 DAYS 2019 3.21 DAYS 2018
Source:Metro
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5/9/19 12:54 PM
IGA V A N TE
A PODCAST POWERED BY THE NASHVILLE ENTREPRENEUR CENTER
Learn how successful Nashville entrepreneurs built their businesses, and meet the people and places supporting entrepreneurship in Music City.
SUBSCRIBE AT EC.CO/PODCAST NASHVILLE ENTREPRENEUR CENTER
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5/9/19 12:59 PM
TECHIE
F I N T E C H’S MUSIC CITY MOMENT MIDDLE TENNESSEE’S financial technology heritage goes back a long way, building on a foundation laid down by the core operations groups once housed at the old First American, Third National and Commerce Union headquarters downtown. Since then, we have — among many other things — seen Bank of New York Mellon build a tech center home to several hundred people, benefited from fleet management
and payment processing heavyweights Comdata and Fleet One seeding a fintech talent network that has fanned out across the region and watched as Confirmation, Brian Fox’s idea that it absolutely had to be easier to verify companies’ financial data, grow its reach into 170 countries. Today, a new crop of entrepreneurs as well as a handful of seasoned operators — Comdata alumnus Greg Daily is now on
round three with i3 Verticals — are adding their names to (or solidifying their places on) that list and announcing themselves as players on the national stage. The opportunities are vast, the funding more plentiful than ever before and the ideas sharp as a tack. On the pages that follow, we begin to paint the picture of a booming subset of Middle Tennessee’s tech scene. There is much, much more to come.
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TECHIE
A BLUEPRINT FOR GROWTH The team at Built Technologies has proven there’s a massive market for its software. Now it has Goldman backing and ambitious plans to ‘focus on other parts of the problem.’ BY GEERT DE LOMBAERDE
ou know you have something good on your hands when you need to halt an office space buildout halfway through because you’ll have outgrown that space before the paint on its walls has dried. Having one of the biggest names on Wall Street sign up to lead an investment round also isn’t a half-bad endorsement.
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Since formally coming to market less than four years ago, Built Technologies has grown into one of the more promising technology companies to come out of Middle Tennessee in some time, particularly outside of health care. Its software automates large parts of the construction lending process, turning developers’ plans, inspectors’ notepads and bank-
ers’ spreadsheets into an intuitive system that streamlines on-site approvals and loan draws. The result: Builders get their money more quickly and lenders have a better sense of the state of the projects they’re funding. Built’s leaders in late April said they had completed a $31 million Series B fundraising round led by Goldman Sachs and joined
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TECHIE
‘We’re looking at a 50-year play here. There will always be a market for helping money move more safely and efficiently.’ CHASE GILBERT, BUILT TECHNOLOGIES
HOCKEY STICK Built Technologies’ platform last year tripled the volume of loans it was handling.
by Regions Bank, among others. The raise brought the company’s total capital raised to $55 million and sets the stage for it to continue to grow at a rapid pace. One of the first steps for CEO Chase Gilbert and his team: Moving across the street from their current offices in Grassmere to a 30,000-square-foot space, about three times what they now take up. The company employs about 105 people, a number that is projected to grow past 120 this year, and the new space will be able to house about 200 at capacity. Built has amassed a client base of more than 80 institutions — including local heavyweights Pinnacle Financial Partners and Franklin Synergy Bank — and last year grew revenues more than sixfold. Gilbert declines to share detailed financials but says the company’s core service is profitable; the need to keep iterating its services and staff up to work with customers means it has a way to go to get into the black. There is a massive market to exploit, and that has Gilbert and his team thinking long-term and putting money to work to build scale and enhance products. “It would be irresponsible to not invest in areas where we know we can invest. We’re looking at a 50-year play here,” he says. “Will ephemeral messaging apps like Snap be around then? Who knows. But there will always be a market for helping money move more safely and efficiently.” A lot of people agree with that statement and the idea that there are tremendous opportunities to remove friction from the financial system. On the pages that follow, we shine the light on a few other local entrepreneurs targeting inefficiencies in accounting systems, investing and other areas. Like Built, many of them have attracted funding from all over the country. The interest level is growing quickly:
Fintech venture capital invested in U.S. companies rose 52 percent in 2018 to $10.6 billion, according to Innovate Finance. Globally, investment rose 148 percent to $36.6 billion, with the median deal size growing significantly across seed-, early- and later-stage companies.
LOAN COUNT
VOLUME OUTSTANDING ($M)
2016
4,052
$1,889
2017
8,440
$4,442
2018
21,450
$13,106
Source: Built
Growing traction Built’s priorities for its newly invested money are adding client onboarding and service team members as well as product development, with a particular emphasis on integration with systems. Gilbert and his lieutenants also are focused on being able to drill down into the specific segments — residential, commercial, infrastructure, industrial and more — of construction lending beyond simply providing a software platform. Those moves appear to be paying off. It took Built about 15 months — from August 2016 to November 2017 — to grow its volume of loans processed from $2 billion to $7 billion. That pace picked up to nearly $1 billion per month in 2018, which Built finished with $19 billion in total loans processed, and has since quickened further: In the first three months of this year, total volume processed grew to $23 billion. Active loans on the platform are nearly triple what they were a year ago. (See chart.) A big driver of that growth is Buit’s ability to turn a beachhead at banks into a larger presence. An institution might initially sign up to use the service only for a specific lending group but quickly roll that out to other teams or to banks it has acquired. The result: Built typically triples its per-client revenue run rate in the first 12 months of a relationship. Those trends have Gilbert and his team brimming with ambition: The company’s announcement of the Goldman-led round spoke of looking to “serve the entirety of the construction lending ecosystem.”
SIZING UP The median fintech VC investment has grown steadily in recent years. SEED
EARLY
L ATER
2016
$1.1M
$4.5M
$12M
2017
$1.6M
$4.3M
$13M
2018
$2.0M
$7.0M
$20M
Source: Innovate Finance
“With success, you earn the right to focus on other parts of the problem,” Gilbert says. That could mean pushing in payments or slicing and dicing the masses of data Built customers have pumped into the company’s system. Amass enough information about builders, contractors, inspectors and others involved in the building process and it becomes easier to see who stands out — positively and negatively — when it comes to cost overruns and change orders. When stakeholders begin to act on those conclusions, the entire system becomes — bit by bit, lender by lender, city by city — more efficient and housing affordability has the chance to improve. “What we found in construction lending is happening elsewhere,” he says. “If a client is doing something in a spreadsheet, I want to know about it.”
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NTC Celebrates 20 Years of Greater Nashville Area Growth & Prosperity
Celebrating its 20th Anniversary, the Greater Nashville Technology Council’s mission is to strengthen and advance the technology sector by helping business grow and helping to build a skilled tech workforce. Our members span the technology sector of Middle Tennessee from Fortune 500 companies, such as Microsoft, Amazon, and Dell, to the many small tech service providers that support the implementation and management of technology. The Greater Nashville Technology Council is the leading voice and advocate for the $6 billion information technology ecosystem; and the more than 50,000 technology professionals who design, implement, manage, and safeguard the technology that powers our region’s economy. 500 Interstate Blvd. S, Suite 200, Nashville, TN 37210 Website: https://technologycouncil.com Twitter: @NashTechCouncil
The history of the Greater Nashville Technology Council dates back to 1999 when a group of business leaders came together to address the need in Nashville for better paying tech jobs and improved capital investment in technology start-ups. Today, the NTC supports the local technology industry and its 460+ member companies, by actively developing local tech talent, connecting professionals to cultivate a collaborative community, uniting around policies that nurture expansion and attract both talent and businesses, and promoting Middle Tennessee as the nation’s creative tech destination. In the past year, the NTC produced, promoted, or hosted 458 unique events -connecting more than 18,000 participants in the local community. The Nashville Analytics Summit is one of the NTC’s most successful programs, seeing 488% growth since its inception in 2013. Attendees can engage in hands-on workshops and learn from expert speaker presentations from a spectrum of industries. On September 9-10 at the Omni Nashville Hotel, the 2019 Nashville Analytics Summit will expand with a healthcare data analytics track in partnership with TN HIMSS.
The NTC’s Tech Hill Commons community venue successfully hosted everything from product launches to tech meetups and networking events, inviting more than 16,490 visitors into the space last year. In 2019, the Nashville Cyber Range Event Center launches at Tech Hill Commons.
Facebook:
Last fall, the NTC Foundation launched Apprenti TN, the first technologyfocused apprenticeship program in Tennessee for locally developed entry level tech talent. The program is focused on skilling-up the underemployed through a combined 15 month educational boot camp + onthe-job training with a hiring partner. With the help of community partners with constituencies from overlooked segments of our population, the program has attracted 500+ individuals who have successfully tested for the aptitude to learn a tech skill. Of those, 24% are women, 43% are veterans and 58% are from other minority segments. Clearly, Apprenti TN has the potential to change the face of our tech community by growing a more inclusive tech workforce.
Number of Employees: 9
With the goal of doubling the size of Middle Tennessee’s tech workforce by 2025, the Greater Nashville Technology Council invites partners, influencers and champions to align in the effort to make Nashville a better place for all.
https://www.facebook.com/ NashvilleTechCouncil LinkedIn: https://www.linkedin.com/company/ nashville-technology-council https://www.linkedin.com/ groups/51917
Number of Company Members: 460+ Founded: 1999 Contact: Phone: 615.873.1284 Email: info@technologycouncil.com
S PE C I A LT IE S Apprenti TN The NTC launched Apprenti TN in 2018, the first technology-focused apprenticeship program in Tennessee for locally developed entry level tech talent. Learn more: ApprentiTN.com Community Programming: The NTC hosts 85+ community events a year, on topics including: professional development, tech education, BI & analytics, tech marketing, business development, cyber security, health tech, and policy and more. Learn more: Technologycouncil.com/ events
5/9/19 1:05 PM
TECHIE
Joe Maxwell
AN INVESTING SWEET SPOT Joe Maxwell and FINTOP see big things ahead for fintech investing BY GEERT DE LOMBAERDE
he way Joe Maxwell sees it, market trends are flowing his way. Finally. “I love being the non-health care guy,” says the founder and former CEO of Investment Scorecard and CapControls, two locally based financial technology firms he helped build and sell to large industry players before turning his attention to investing in the next set of big ideas. Maxwell and his team at FINTOP Capital aim to work with serial operators who know the grind it takes to build a company — “entrepreneurs who will stay awake at night thinking about other people’s money.” To that end, he says, FINTOP won’t seriously consider ideas that aren’t yet generating revenues or whose backers expect sky-high valuations more likely found on the coasts. Their ideal investments have tech that eliminates friction or addresses an emerging need in the way local success story Capital Confirmation, which markets online audit confirmation services, boomed following the financial crisis of the late 2000s. “We specialize in boring stuff that you can’t unplug once it’s in,” Maxwell says. “And then
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we love to partner with organizations who have a need or distribution channels.” For such ventures, the FINTOP team will look to put to work $3 million to $5 million and ideally seek an exit within three to five years. A big part of FINTOP’s value proposition to investors is a focus on the early work of strategizing, building boards of directors and structuring companies’ financing. “We’re really good at calling timeout and working on strategy so that companies can run in 90-day sprints,” Maxwell says. The firm’s portfolio of 12 investments includes two local firms — systems software developer Core10 and nonprofit donor-focused Kindful — as well as Boston-based small business lending automator Numerated and Beanworks out of Vancouver, which streamlines accounts payable processes. The FINTOP team closed its first fund at about $50 million in 2017 and is raising money for its second vehicle, from which it already has begun investing. Finch’s window is growing bigger in part because, Maxwell says, many large financial services providers have given up on the idea of developing proprietary tech and are turning to plug-and-play services that easily integrate with existing systems. Internal development has over the years been shown to take too long, cost too much and not meet enough of the needs for which it was originally designed. “The big names have laid down their weapons,” Maxwell says. “We’re seeing great companies come to us and the degree of sophistication we see here in Nashville is inching up every month.”
Jeffrey Hull
EYEING SMARTER SAVINGS THE RISING TIDE of student debt has become a recurring political and financial headline. Vanderbilt University Owen Graduate School of Management grad Jeffrey Hull and veteran business builder Steve Cretin are trying to make sure the conversation sounds very different when today’s toddlers head off to college. Hull and Cretin formed Savvy Financial, SavvyFi for short, in late 2017 to build a college savings model that’s less intimidating from a research perspective — it offers only age-based options — as well as more intuitive technologically and easier to share with friends and family members wanting to contribute. The duo last year raised about $250,000 from some local investors to build out SavvyFi’s website. The product has been in test mode and Hull says it should soon be ready for a full public release. “The importance of saving has risen to the top for young parents,” Hull says. “This is a hot topic now; the preventative conversation is part of it.” > GEERT DE LOMBAERDE
ERIC ENGLAND
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ADDING ALTERNATIVES Alto’s growing platform opens up options for IRAs ERIC SATZ is convinced stocks, mutual funds and exchange-traded funds aren’t going to deliver most Americans a comfortable retirement savings cushion. It will, he says, take alternative assets — think real estate, hedge funds, commodities and even startups — to generate the needed returns. Enter Alto, which Satz helped found in 2015 to streamline investors’ access to a broader range of investment classes. The company markets what it calls The Alternative IRA to give them access to a marketplace and to give investment advisors a platform to manage clients’ diverse assets more efficiently. “The world has changed in terms of alternative investments,” Satz says. “We were lucky enough to have seen it coming five years ago.”
Eric Satz
Alternative assets have long been viewed as too difficult or too expensive for anyone but ultra-high-net-worth investors to reach, particularly through their retirement accounts. But the advent of online platforms and the proliferation of crowdfunding and syndication services — AngelList, for example, has handled more than $1 billion of investments through private,
TARGETING A TRILLION Account aggregation platform Wealth Access is booming DAVID BENSKIN and his team at Wealth Access are on quite the rocket ride. After a 12-year career at Merrill Lynch, Benskin launched Wealth Access in 2011 on the premise that it ought to be easier for highnet-worth investors to merge and analyze their holdings in one online place. The account aggregation venture finished 2018 with $190 billion worth of what it calls wealth under measurement, assets that have been compiled for reporting on its service. That was up an impressive $90 billion from the year prior and up from $20 billion in mid-2015. Just in the first quarter of this year, customers pulled another $84 billion onto the Wealth Access mobile-first platform.
David Benskin
“We’ve been successful for a while with independent advisors,” Benskin says. “In the last few years, we’ve grown into the enterprise space.” Thanks to some partners that help package and sell its products, tech upgrades that make for smoother dashboard integrations with other systems and the patience to let notoriously slow banks make their decisions on in-
single-deal venture capital funds and EquityZen has created a viable marketplace for trading pre-IPO shares of more than 150 companies — have opened the door to wider participation. The Alto team early this year closed a $2.8 million funding round — pushing the company’s total money raised to $3.8 million — from a group that includes NerdWallet co-founder Jake Gibson and an early-stage fund from Silicon Valley VC giant Sequoia Capital. Satz says the funding is helping his team — which now numbers about a dozen but could grow to 20 by this time next year — add development and customer support expertise. Part of the recently raised funds also are going to Alto’s first real consumer marketing efforts, which primarily consist of retargeting past visitors to the company’s site. Another focus area is refining Alto’s programming interface, which integrates with investment platforms such as AngelList, Groundfloor and YieldStreet. “This is really just the tip of the iceberg of what’s possible,” Satz says. “We want to provide customers with access to the best fund managers that have access to the best deals.” > GEERT DE LOMBAERDE
vestments such as this, the 20-strong Wealth Access team has now attracted hundreds of individual investors, investment advisors and institutions. Among its bank clients are Pinnacle Financial Partners — Avenue Bank, which Pinnacle bought in 2016, was Wealth Access’ first bank customer — Commerce Bank out of Kansas City and Bank OZK, the former Bank of the Ozarks. The level of buy-in once clients come aboard is impressive: On average, investors working with their advisors migrate more than 62 percent of their total assets to Wealth Access. And the company says a recent study of active clients showed that Wealth Access helps advisors grow revenue per client by $2,000. Taking stock of his crew’s momentum, Benskin doesn’t think it’s outrageous to aim at ending the year with $1 trillion of assets housed on Wealth Access. “These are massive numbers but the reality is we’ve built the technology to where it’s completely scalable,” he says. “The growth rate we’re seeing is picking up.” > GEERT DE LOMBAERDE
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PAYMENTS PEOPLE A look at some of the new generation of Nashville-based processors and business software aggregators
i3 Verticals This is getting to be old hat for Greg Daily. Seven years after launching i3, the payment processing veteran has the company listed on the Nasdaq, worth more than $600 million and with plenty of financial ammo to continue an acquisition spree. The story sounds a lot like the trajectory Daily took with PMT Services two decades ago and iPayment in the 2000s, but i3 is bringing a little bit of a twist to the model: The company is building out an array of proprietary software services — focused primarily on the education, property management and government agency sectors — that facilitate traditional payments. That group pales in sales relative to pure merchant services, but it drops a much higher percentage of its revenues to the bottom line.
Sphere
Celero Commerce
Waud Capital Partners, which in 2005 founded Acadia Healthcare and later joined forces with the team led by Joey Jacobs to grow that behavioral health care venture, formed Sphere in early 2017 with Nashville native Andrew Rueff, who last decade co-founded TransFirst Holdings — which TSYS bought in 2016 for more than $2 billion — and was looking for his next project. Sphere soon snapped up Texas-based TrustCommerce and merchant acquirer Anoxia Payments to build its base and this spring invested in Qgiv, a Florida company specializing in online fundraising for nonprofits. In addition to its Nashville home office, Sphere runs a tech center on the West Coast, an operations hub at Anovia’s former HQ in Dallas and an executive office near New York City.
Sphere’s deal for Anovia produced another Nashville-based startup looking to roll up parts of the payments and business software space. Last last year, Philadelphia-based LLR Partners said it was backing Kevin Jones, who co-founded Anovia in 2013, to build Celero on the back of a stake in merchant acquirer UMS Banking. Jones is aiming to build an “integrated commerce solutions provider” that pairs processing with other software and data intelligence services to give small and mid-sized businesses an analytics edge in understanding their customers. Early this year, Jones’ team bought a Minneapolis company that specializes in apps used in HVAC repair, home security systems and other field service sectors.
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Injecting awareness Promising local software venture Sertainty could have many of the answers to today’s cybersecurity questions BY GEERT DE LOMBAERDE
What planet are you from thinking you can do this?” That was the message Sertainty Chief Strategy Officer Amir Sternhell received at a business leadership forum a few years ago after presenting the idea behind Sertainty’s security software. At another presentation, an executive interrupted to say, rather forcefully, that he doubted the Sertainty team could follow through on its claims. And the CIO of a large health care company once said bringing the startup’s tech in-house would be like furnishing his IT team with “crack cocaine.” Today, Sertainty is primed to emerge as something of a silver bullet for business and government leaders concerned with risk management, data protection and governance as well as regulatory compliance mazes. (So, essentially every leader among us.) The company’s groundbreaking technology embeds itself into individual files or groups of documents and becomes the controller of those files, giving them the ability to react and adjust to their environment. CEO Greg Taylor likens Sertainty to the injection of a medicine that works its way into every corner of a patient’s body. IT administrators can use the company’s toolkit to outline a set of access controls that safe-
Greg Taylor
guard information. Those files can then, for example, alert their creator that an unknown or unauthorized user is trying to access or change them. Or, in the case of many financial or health care records, it allows creators to program files to destroy themselves at a specified point of time — solving a lot of potential governance and compliance headaches. In an era increasingly marked by news of data breaches, hacks and other negative cybersecurity headlines, such capabilities are finding many more attentive audiences than in the recent past. “Nobody throws us out of their office anymore,” says Taylor, an entrepreneur with experience in executive search, data processing and merchant banking, among other things. “They don’t say this is pixie dust or snake oil anymore.” Taylor and his growing team of 22 haven’t
yet signed up a huge number of customers, but they are optimistic about their pipeline. They won’t name names just yet but say that among those on board is “an international provider of financial services technology” a lot of people will recognize. Others are in the pipeline or in beta testing and close to being moved into full revenue relationships. To help capitalize on that expected momentum, the Sertainty team also is preparing to step out more publicly to raise some outside capital. Until now, the company’s funding has come from what its CEO describes only as “a very wealthy Middle Tennessee family.” With some more financial muscle and expected client wins in the near future, Taylor sees big things ahead. “We’ve been very well hidden,” he says. “But we’re fixing to step onto the global stage. We are leading the conversation on data.”
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From left: Lane Sullivan, Debbie Gordon, Susan Richards, Sarah Kennedy
Safe and secure Health IT officials stress the importance of implementing cybersecurity BY KARA HARTNETT
ealth care companies across the nation are embracing industry changes that are the result of emerging technology such as artificial intelligence, blockchain and telehealth. And those companies are seeing strong gains in those areas. However, health information technology experts say the industry is lagging with regard to what it needs the most: cybersecurity. Cyber crimes are costing the typical health care company upwards of $12 million a year, a lot of which could be saved through basic user education and awareness. “When you talk about how much money is spent in cybersecurity, believe it or not, most
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of that is on the remediation side after an attack,” Lane Sullivan, director of IT security for Ingram Content Group, told a crowd of about 100 attendees during a panel discussion recently hosted by Women in Technology in Tennessee (WiTT). “Most of that can be saved if you put the right controls and processes in place with the right people processing tools. But if you don’t have those tools in place, they can’t do anything for you.” According to Scott Augenbaum, a retired cyber division supervisory agent with the Federal Bureau of Investigation, who moderated the panel, 90 percent of attacks are preventable. Much of the malware seen in today’s attacks infiltrate a system’s data through unsuspecting workers — such as physicians, nurses and other health care providers — and can expose ample amounts of data with just the wrong click of a button. Augenbaum said many of these attacks are coming from foreign powers, and the health care industry is their number one target. China is among the greatest threats to domestic health care companies, he says, citing that country’s five-year strategic plan to be the world’s leading innovator in health care technology. “They have allocated no money for research or development,” Augenbaum told the
WiTT audience. “How do you become the world’s leading innovator without spending a dime? You steal it.” The need for data security has not gone unaddressed, with many cybersecurity companies developing software to help protect businesses’ data, developing cyber attack simulation training and even creating a small market of cybersecurity insurance. Various health IT experts, though, say their focus is less on the shiny, new technology and more on everyday users. “People first,” Debbie Gordon, CEO of Cloud Range, told the WiTT crowd. “People are the first line of defense and the last line of defense. There are all these new technologies and all these new companies getting involved in cybersecurity — but the one thing that remains constant is the people. That’s what everyone has control over but everyone overlooks.” HCA understands this well. Sarah Kennedy, senior security vulnerability engineer at the Nashville-based company, said HCA initiates basic user training with physicians as its first priority. It helps them identify malicious emails, software and pop-ups that are commonly used to infiltrate the company’s computers. The HCA security team also sends phishing tests to physicians and mid-level pro-
KARA HARTNETT
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25th Annual
‘People are the first line of defense and the last line of defense.’ DEBBIE GORDON, CLOUD RANGE
viders for on-the-job testing. If someone fails the test, she or he re-enters the training program and could potentially have Internet access revoked. Kennedy said that may sound ridiculous, but if physicians don’t embrace cybersecurity precautions, it could be a major threat to their patients. Once hackers have access to a hospital’s system, they could potentially alter patients’ care plans. “Somebody can put the wrong drug in or wrong dosage, or set a pacemaker at a particular thing because it’s a Bluetooth and somebody didn’t feel like patching the day before it went live,” she told the WiTT audience. It’s not all on providers, though, as Kennedy said companies need to take asset inventory and prioritize how to protect their data. “Know what you have and then you will know how to protect it and how you should protect it,” Kennedy said. “And if it is not important, maybe don’t worry about it as much as something that if it went down and caused a problem you’re going to lose all your business. That is your biggest [consideration] and you need to know where it exists.” Regarding a company’s cybersecurity team, understanding those assets and processes is the main challenge. In a system as intricate and convoluted as that of health care, understanding what makes sense to mitigate is key to protecting its data. What would help that is if everyone has some form of security awareness, according to Susan Richards, information security director at Change Healthcare. “Every IT person will need to have some sort of cybersecurity background and every business person will need to have some sort of cybersecurity training — because you have to have those human firewalls at every step of the organization,” Kennedy said. “Understanding your risks, doing that first risk assessment and prioritization based on that: the likelihood, threat landscape, on how serious of a business problem it’s going to be.” In short, when faced with an attack, the best defense a company can deploy is preparation. As such, that company can bolster an industry that might eventually no longer have to focus on reacting but, instead, protecting.
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238% The Middle Tennessee projected growth in information security analyst positions from 2008 through 2028, when there are expected to be 875 such jobs here. It’s the highest among tech job categories. Source: EMSI
june 20th *rain date
Elmington Park M O V I E S S TA R T AT S U N D O W N Food trucks, games & fun start at 5 p.m. N A S H V I L L E M O V I E S I N T H E PA R K . C O M
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Respondents to a recent survey said only architecture design positions are harder to fill regionally than cybersecurity jobs. Source: The Research Center, Nashville Area Chamber of Commerce
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$13,513 The shortfall between the median annual earnings (adjusted for cost of living) of a Nashville-area information security analyst and the national median. Source: EMSI
Athens Family Restaurant Banh Mi & Roll | Ben & Jerry’s Daddy’s Dogs | Early Eats Funk Seoul Brother | Little Cancun Pizza Perfect | Retro Sno AND MORE! Blankets will be available for purchase from The Nashville Blanket Project
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TECHIE
Be cyberprepared by planning ahead Identity theft insurance is now a near-must for businesses BY JEFFREY ZANDER
any people have experienced personal identity theft. According to a recent study by Javelin Strategy & Research, more than 16.7 million people suffered identity fraud in 2017 alone. In recent years, business identity theft has reached similarly frightening levels. The IRS reported 4,000 cases of business identity theft in 2016, for which estimated damages were $268 million. That number soared to more than 10,000 in 2017. Business identity theft occurs when cyber thieves commandeer business accounts and credit by using information like employer identification numbers and state registration records, which are both available to the public. Unfortunately, according to 2017 Verizon report, more than 61 percent of data breaches that occurred in 2016 affected small and midsized businesses. To make things even more difficult, the law does not require banks and creditors to cover these types of losses. A simple way to begin protecting your company is to stay on top of business filings with the Secretary of State. Notify local law enforcement authorities of any unauthorized activity and always get certified copies of fraudulently filed documents, as these may be used as evidence in court. Monitor your business’ credit profile and keep sensitive paperwork in locked cabinets. If you do not already do so, consider using a password protection system for sensitive files being stored online.
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Business owners can also take more obvious steps to prevent identity theft, such as refraining from sharing account information via email and shredding or destroying business records before disposing of them. Finally, all business owners should consider business identity theft insurance. A number of entities offer a variety of comprehensive programs to safeguard companies’ most valuable assets. Through surveillance and monitoring services, these organizations can track the trading and selling of business-related information and alert you when you may be at risk. If your business were to become a victim, some companies even offer unlimited recovery services to help you get back on your feet in the shortest amount of time possible. It is also beneficial for business owners to protect their company against cyber breaches. Because these types of theft are not 100 percent preventable, it is best to be prepared for the worst. Many insurance programs will assist in limiting damage, delivering legally mandated notifications to your affected customers and helping protect against costly lawsuits. Finally, business owners should consider a group ID theft protection plan. If your busi-
ness’s identity were to be stolen, your employees would be nine times as likely as an average citizen to become victims of personal identity theft. You can help protect your team against the stress, anxiety and loss of productivity this type of activity causes. Last year, the IRS issued a warning to employers and small business owners alerting them to the growing threat of business identity theft — and for good reason. Just last year, more than 500 million Starwood hotel customers’ personal data was accessed by cyber thieves. Marriott released a statement saying that up to 327 million customers’ stolen data included some combination of name, address, phone number, email, passport number, date of birth, and more. Some included payment card numbers and expiration dates. To make matters worse, this information may be retained and used over many years by cyber thieves. Don’t become a statistic — protect yourself and your company today.
Jeffrey Zander is CEO of Zander Insurance Group in Nashville. zander.com
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VITALS
The new reality Post-acute tech company Playmaker leans on data partnerships to drive growth BY FELICIA BONANNO
echnology is quickly changing the face of health care, from telemedicine apps to remote, nonclinical services that provide professionals with the data they need to improve patient outcomes. Although post-acute care is the fastest-growing sector in the industry, its technology is lagging behind, with companies only now waking to the possibilities in telehealth; that is, except for Franklin-based PlayMaker Health. With competitors that provide bits and pieces of post-acute care, PlayMaker markets itself as offering everything in one platform, playing a pivotal role in helping post-acute providers tap into the industry’s growth using technology. “We are the only CRM that has been built just to support the needs of the post-acute care industry, which is very important because post-acute care workflows are very different from B2B workflows, and it’s critical that post-acute care companies are capturing what they need in order to be productive out in the field,” says PlayMaker Vice President of Sales and Marketing Holly Miller, calling PlayMaker Health “the new post-acute reality.” PlayMaker’s main purpose is to give customers, whether they are a hospice provider or a broader health care company, a full understanding of their respective markets. This means providing data on where their business
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is coming from, who else is getting business, how they rank against competitors, where they can grow and how they capture more business. In its 11 years, the company has tracked more than 2 million completed sales activities. According to Miller, there are three key components to a full solution for customers. First is CRM, which PlayMaker accesses through mobile relationship management tools that allow clients to engage with customers and monitor business data, even while out in the field. And this ease of communication and data-sharing through increased technology is vital to improving the health care system as a whole, according to Andrew McDonald, a fellow of the American College of Healthcare Executives and a shareholder and practice leader at Healthcare Consulting. “It’s everybody’s struggle, the Great Divide, as they say,” he says. “Truthfully, that’s going to be the key for true population health, affecting our health care systems instead of our sick care systems. The more we can talk to each other, the better off we’ll all be, especially the patient.” A second component is market data. “We have the most comprehensive and current set of market data that’s available,” says Miller. “That is such an important factor right now in this market because it’s changing and evolving and shifting; so the data is updated and refreshed quarterly to provide the best insights so that everyone from the C-suite to the sales team can make smarter, data-driven decisions.” That data is pulled from multiple servicers, including Medicare Parts A and B, Medicare Ad-
vantage, Medicaid, and Commercial, and could include, for example, claims information for home medical equipment and Infusion services. Where the magic truly happens, though, is with electronic health records, the third client solutions component. The platform can build an integration with a company’s EHR so that information from its workflows goes straight into PlayMaker’s growth platform. “For example, if we have a home health agency that is wanting to use our solution, and their EHR is WellSky, we can build an integration so that the order information from their workflows goes straight into our growth platform,” Miller says. “From a relativity standpoint, that means if someone is using our growth platform, they can log in and look at their market data and understand the whole market and see where their specific business is coming from, what business they’re not getting and what they want to go after. That’s where the executive team can say, ‘Let’s build a strategy to see who we’re not getting so that we can reach them.’” The platform aims to be as intuitive and user-friendly as possible so that users can prioritize efficiencies in their given markets, a value most pronounced by the fact that PlayMaker has a comprehensive, web-based mobile app. Thus, post-acute sales reps and marketers — who in the past have spent time taking notes while working in the field and then logging in that data at the end of each day — can now record information in real-time while out in the field. PlayMaker focuses on partnerships across the complete continuum of post-acute care, from EHRs to associations. In 2018, the company teamed with viaDirect Solutions, WellSky and Brightree, and it recently signed a partnership with the National Partnership for Hospice Innovation, as well as with Vital Care to provide support for all of the latter entity’s franchise locations. “We’re at a really exciting time for our company,” Miller says. “We’re continuing to innovate our current productions, and we do that with the voice of the customer in mind. We work with our partnership groups, listen to our advisory boards and build and enhance our products based on the feedback of the market we serve. There will be a lot of exciting enhancements and innovations coming from us in the next year.”
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Litmus test VR innovators seek to focus reality technology on applications via which it can thrive BY KARA HARTNETT
irtual and augmented reality technology is phasing through the slope of enlightenment, as local health technology executive Dov Hirsch puts it. Specifically, he is referring to the Gartner Hype Cycle, a model that interprets a balanced ratio of consumer expectations over time for emerging technologies. When AR/ VR technology was first introduced, it seemed the possibilities were endless — but what comes up must go down. Since the initial hype of mixed reality experiences, health care technologists have been putting virtual and augmented reality through a litmus test, according to Hirsch. Now, it’s up to innovators in the field to centralize the technology around applications where it can thrive. “We have identified where this technology lends itself uniquely well to solving problems and where it doesn’t,” Hirsch says. “We also have identified what the technology can do.” Emerging technologies often face a high level of scrutiny in health care. If clinicians are going to adopt a new technology, it needs to improve the patient experience, improve the clinician’s workflow, provide an enhanced quality of care and reduce the cost to providers and consumers.
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At Immersive Health Group, a subsidiary of VR/AR innovation incubator The Glimpse Group, Hirsch says their technology has to do all of the above. Hirsch is the general manager at IHG, a gig he’s been working at since early February. “The reason why that is so important here is because in many ways AR/VR/mixed-reality is [an] emerging technology, and health care is a really great stress test for emerging technology because health care doesn’t tolerate things that are simply shiny and do a lot of cool stuff but don’t add measurable value. Health care just has zero tolerance for that, because it’s a high-risk industry, and it shouldn’t tolerate those things.” At IHG, they have pinned down three applications for virtual and augmented reality within the industry: patient education, digital health and clinical simulation. Their work started in patient education for pediatric practice when they pinpointed a de-
mand for a digital solution that was fun for the patients while keeping them involved in their treatment. What they soon found is that patient education turned into patient distraction — nurses were using the educational tools as a way to keep kids distracted while administering shots, leaving them virtually stimulated so they could remain calm during treatment. “In its simplest form, it is distraction therapy,” Hirsch said. “It is simply serving a distraction that in turn reduces patient anxiety, so it provides a better experience, and it creates a better clinician experience. And it saves money because they can be far more effective and efficient.” Virtual reality can also give clinicians space to learn. Simulation training is not new to health care, but its relatively hefty price tag and the relative difficulty of getting a large number of providers through the system drag down its efficiency. Virtual reality changes that. Software developers are able to build simulation environments and training programs
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‘[The technology] still has a long way to go, but the trajectory is where it needs to be.’ DOV HIRSCH , IMMERSIVE HEALTH GROUP
that only require a headset, with more real-life scenarios than the capabilities of a generally used mannequin. Suddenly, a student doesn’t have to go anywhere to learn how to work a new procedure or diagnose a patient — they can do it from the comfort of their own home or classroom. Not only that, virtual- and augmented-reality technology now have the operability to measure the competency of clinicians while they are in the training simulations, giving providers-in-training the freedom to make mistakes — and learn from them. Upon the hiring of Hirsch, IHG identified Nashville as the key market for their success in virtual reality within the health care industry. With him leading their local office, they hope to adapt their technology to be implemented in the city’s mature health care market. “As a company, essentially the conversation internally was if we are going to be in health care, we are going to do it right. Evidence-based, sustainable,” Hirsch says. “Nashville represents a phenomenal place as a health care company; the big challenge now is we cannot hire technologists fast enough.” IHG’s parent company, New York Citybased The Glimpse Group, was founded on the idea that virtual reality, augmented reality and artificial intelligence are the next generation of computing. The organization was convinced these emerging innovations are the next generation of computing and are going to have a profound impact on society — they just didn’t know what industry. They acquired and built AR/VR/AI companies across the spectrum of industries and developed an ecosystem of collaboration and data sharing to accelerate its development. “[The technology] still has a long way to go, but the trajectory is where it needs to be,” Hirsch says. “The technology just keeps getting better.”
In local academia, virtual reality is being used in clinical psychology. Noah Robinson, a third-year doctoral student in clinical psychology at Vanderbilt University, has been researching how virtual reality can be used when applied to counseling and rehabilitation settings. “A lot of people assume when people talk about using virtual reality in mental health intervention they think of exposure therapy, where you are taking pre-existing stimuli and creating negative experiences for someone that will help them overcome those experiences,” Robinson says. “What we are focused on is creating positive experiences for someone so that they can regulate their mood so that the virtual reality can be an alternative to drug use in the moment that someone is having a craving.” He started his work at an inpatient rehab facility working with a patient with a history of severe trauma. The patient was living in a hotel room with a family of six, many of whom were using heroin, and was being forced into prostitution for drug money. She had attempted suicide and survived and was admitted into the facility. On the third day of her detox, she was upset and withdrawn — after introducing her to virtual-reality treatment, she immediately started smiling and looking around. Her mood changed drastically. That triggered an almost 300-patient study at the facility that quantified significant boosts in mood after virtual-reality treatment. According to Robinson, the ultimate findings in that study are about to be published. The impact his research could have on psychology in practice could be profound, as the technology shows evidence of improved patient outcomes. “What would normally take five to six weeks of therapy for someone to get to the point of being able to use cognitive behavioral
skills, we are seeing patients get to that point in just one or two sessions,” Robinson says. Using virtual reality, Robinson is able to regulate a patient’s experience and mood, but he wanted to take it a step further. Instead of using games as a distraction and mood booster, he wanted to create simulations and programs that actually allow patients to cope and objectively learn about their mental-health disorder. “Pre-existing games help regulate the mood, and they may feel a bit better afterwards, but it doesn’t teach them skills they can use in the real world,” he says. “It is kind of an escape instead of making them feel better. What we are doing is to nurture skills that they use in the real world to actually be able to handle negative emotions without needing the virtual reality.” Last year, Robinson landed a $50,000 grant that supports researchers in transforming their work into a commercial opportunity. With it, he founded Very Real Help, where he plans to build a platform to deliver therapeutic intervention for mental health disorders like substance use, social anxiety and more. The company currently staffs two full-time software engineers who are developing various environments geared toward specific mental health solutions. Going forward, Robinson hopes to continue to build the company into a clinical research platform. He says the technology still faces scrutiny in health care, even among peers, so he wants to create an opportunity that measures the outcomes and helps clinicians better understand the process. In the future, Robinson envisions virtual reality as a supplementary tool psychologists can rely on to better regulate a patient’s mood and provide an environment that better helps them cope with reality. “People are taking their realities with them, and they have all of these automatic thoughts,” Robinson says. “What we are seeing is when we put someone in the virtual world you’re reducing the availability of these thoughts and putting them into a different state. Then they are much more open, and when they talk about their experiences and problems in the real world, they are kind of doing it from afar, from a distance, and they are able to objectively observe themselves and learn about how to control those thoughts — or challenge them.”
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Healing spaces Health care facility designers are increasingly able to contribute directly to outcomes and patient satisfaction BY KARA HARTNETT
rchitects of the nation’s health care facilities are collaborating more tightly than ever with providers to design evidence-based structures that play a role in patient outcomes and facilitate workflow interoperability. The work of designing hospitals, outpatient facilities and various other types of clinics is now immediately tied to trends in the industry, with health care consumerism at the front.
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Designers rely heavily on patient satisfaction surveys and HCAHPS (Hospital Consumer Assessment of Healthcare Providers and Systems) survey scores to better adapt their design concepts to real-life applications. That can include goals such as reducing hospital-associated infections to letting in more natural daylight and incorporating gardens. Rebecca Donner, principal at Inner Design Studio, says the shift to patient-centered design is relatively new and has sparked many in the health care design industry to do a lot of research. “If we wanted to back up to 10 years ago, meetings with the C-suite were always to talk about the budget,” Donner says. “Now we are kicking off meetings talking about the patients and the patients’ family.” With a portion of hospital Medicare reimbursements linked to patient satisfaction scores and unnecessary readmissions, a top priority for most health care facility designers is finding ways to reduce hospital-associated infections (HAIs). In 2015, the CDC estimated 3 percent
of U.S. patients, or 687,000 people, had one or more hospital-associated infection. That year, such infections killed 72,000 people. At least that number is moving in the right direction. Pushed by the shift to more consumer-centric models following the adoption of the Affordable Care Act in 2010 as well as other initiatives aimed at stifling HAIs, hospitals have cut the number of cases roughly in half. Associated deaths have fallen nearly 30 percent over the past decade or so. Hospitals are not reimbursed for treating patients readmitted with an HAI so there’s a big incentive to put more money into prevention efforts, including those offered by health care facility designers. But finding solutions within the built environment for infection control is merely a sliver of the growth of evidence-based design, a wide-ranging approach that covers billions of dollars in annual spending and is being shaped by new research. The evidence-based design movement is centered around the idea that a better built envi-
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Evidence-based design has had a big impact in an unsuspecting place — the waiting room. Facility designers are now looking to design the spaces with patients and their families in mind, implementing various features that in turn can help reduce stress and anxiety. A top priority among all designers today is allowing as much natural light as possible, thus the expansive windows and high ceilings. Waiting rooms are also becoming more tech-friendly by including places to plug in and charge devices, various seating options for comfort and even private business centers such as those found in hotels. There is also evidence supporting the use of art throughout the space and adding color to the generally mundane walls. Doing so relaxes patients and their family members more than leaving the walls bare.
2 Workflow interoperability is among the top priority when designing nurse and physician work spaces. Leading the evidence-based design movement in these spaces is the idea of decentralized work stations, which allow for better flow and fewer obstructions. Keeping providers spread out and giving them their own place to work drives efficiency throughout the entire hospital, and makes often burdensome administrative duties that much easier to complete. All surfaces in this area are generally hard, making them easier to clean in order to combat the spread of hospital-associated infections. This layout is the general practice in designing today’s health care facilities, but that may change drastically as more research goes into onstage/off-stage design models, that give providers their own space to work and patients their own space to heal.
ronment contributes to improved patient outcomes and satisfaction. The concept arose after a seminal research project in 1984 that concluded patients recovering from gallbladder surgery seemed to heal faster when they had a view of nature and the outdoors. Garden areas and light wells are now at or near the top of every health care facility designer’s checklist, along with larger windows in patient rooms and artwork of nature scenes where windows are not an option. A big body of research now says that adding a slice of nature to patients’ environments calms them and puts them in a better position to heal. Blood pressures and stress levels fall and patients often feel less dependent on pain medications than individuals who were not exposed to natural elements. Prompted by these findings, researchers have explored other symbiotic relationships between the built environment and patient outcomes. Elements such as ambient lighting, building acoustics, floor layout and room size all play a role in the patient experience.
‘Immediate relationships to outcomes’ Penny Houchens is one of the people with the hard job of incorporating that research into designs that fit the confines of budgets and standard codes and regulations. “A lot of this is starting to be written into the guidelines, new codes that you have to design a certain way,” says Houchens, a senior designer at Greshman Smith. “We look at best practices and evidence to support our design. We have been doing this work for 50 years. We have a lot of facilities that we have built that we have to reflect back on.” According to Houchens, hospitals are looking to design larger patient rooms — partly to accommodate patients’ families, partly because patients are on average physically larger than several decades ago — that provide more visual access to the outdoors through the use of large windows. Within the rooms, better ambient lighting also adds comfort while acoustics can be improved by adding
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decorations that better absorb sound waves than the hard surfaces necessary to reduce the spread of infection. In more specialized facilities, designers can focus on specific needs for certain care models. Providing a more personalized experience has proven significant in the care for a patient for behavioral health settings, for instance. Controlling the sensory experience — through, for example, background music, aromatherapy or colored ambient lighting — can contribute to a patient’s treatment and overall happiness with their experience. “We see owners today interested in evidence-based design because they want to see that they have immediate relationships to outcomes,” says Lesa Lorusso, health care director of research and innovation as Gresham Smith. “We are seeing the owners really align themselves with this evidence, which is great.” Evidence-based design trends have applications well beyond patient rooms and hallways. Acoustic fine-tuning can also be applied to facility hallways. Donner says even signage, a relatively small feature with no direct impact
on patient care, can play a role. Too much signage in large facilities can decrease a patient’s comfort level, which has led some operators to turn to floor patterns with an intuitive way-finding model that allows patients to navigate the hospital more simply. Designers also have realigned some of the ways they design waiting rooms. Research has concluded there are positive outcomes to be had for patients and guests by including more art, comfortable seating and outlets to plug in electronic devices. When considering floor plans, designers also have to think about providers. With physician and nurse burnout growing as a leading factor in talent acquisition and retention, more hospital leaders are beginning to invest in designs that promote provider interoperability on their way to generating better outcomes. Houchens says designers can configure layouts for workspaces with large collaboration stations to improve workflow while providing break rooms, all-purpose rooms or even a separate quiet room for doctors, nurses and other staff members to find rest.
Some research has shown that designing providers’ workflow to be done in pods, rather than spread out across different stations, has improved workers’ satisfaction as well as operational efficiency. The theory is simple: Fewer steps, less fatigue, happier providers. Lorusso says she thinks patient- and provider-based design can be implemented simultaneously. As the health care industry seeks more help with customer satisfaction strategies from other sectors, facility designers are looking to brands such as Disney for guidance on workflow. “Onstage, off-stage design.” Lorusso says. “When you go to a Disney theme park, you don’t see anything that happens backstage.” Decentralizing work stations and creating back-of-the-house areas that give providers their own space for collaboration and data entry is an increasingly popular model among providers, according to Lorusso. It also sets the stage for an environment that makes patients happier because it makes the work the staff does outside of the backstage collaboration zone more exclusively centered around patient experience and care.
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edgewood-Houston has changed in many ways since Nashville’s postGreat Recession boom. But the single greatest difference between the mixed-use district now and in, say, 2011 might be the number of high-profile development companies involved in it. As the economic slump ended, major players began to eye Wedgewood-Houston. Chicago-based AJ Capital Partners started the process in 2014 with the purchase of the former May Hosiery complex. Since then, more big guns have arrived. Nashville-based Core Development came in 2015, to be followed by Red Seal Homes (Chicago), The Mathews Co. (Nashville), Eagle Rock Ventures (Seattle) and Hines (Houston). Of note, The Mathews Co. and Eagle Rock Ventures are partnering on one project, with Core and Hines to jointly develop two sites. “Wedgewood-Houston is no longer appealing only to low-profile local entities that primarily focus on real estate investing,” says Mark Hollingsworth, a locally based manmade environment enthusiast who serves as president of the Nashville chapter of global placemaking message board and website urbanplanet.org. “Heavy-hitters have discovered the district, and I’m optimistic that will yield positive results while having the area still maintaining its accessibility to artisans and long-time residents.” > WILLIAM WILLIAMS
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Travis Kelty Kelty Commercial Real Estate
TRAVIS KELT Y is president and CEO of Kelty Commercial Real Estate, which he founded in mid-2008. A Saint Louis University graduate, he once worked for Lehman Brothers Holdings as a vice president and business development officer. Kelty drew local headlines seven years ago when he proposed guitar-shaped office tower Strings, a project he would later scrap before turning his focus to developing an elevated site on Division Street. He spoke recently with Post Managing Editor William Williams. You had not undertaken a major development when you proposed Strings in 2012 — an ambitious project that drew skeptics and that you eventually scrapped. What were the positives that came from that effort and time period of your career evolution? The largest deal that I had put together at that time [had a value of] $23 million, quite a bit less than the budget for Strings but still a project with some scale. It was not a high-rise but I believe most developers want their next project to be their biggest and most “notable project” (no pun intended). I did not view Strings as a quantum leap. The dollars were bigger but the processes of site selection, securing entitlements and arranging the capital stack were similar. I already had the experience to put the deal together. All I needed was the correct site and political support. I did not have the latter.
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ERIC ENGLAND
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‘I am very content working quietly behind the scenes and giving my clients the credit.’ The Strings design was certainly a forward-thinking, creative vision. It was polarizing, to say the least, but it was not unrealistic. A similar design has just been built as a component of Hard Rock’s hotel and casino project in Florida and it is attracting visitors from all over the world. You broker various transactions involving properties that are not listed/marketed in a public or direct manner. Did you set out to do that? During 20 years in the business, I have developed a loyal client base that has resulted in a very active brokerage and advisory practice. I generate repeat business and numerous referrals from these clients. This precludes me from having to become very visible and out front to generate new business. So in a way, I do fly under the radar. My clients stem from small business owners to C-Suite executives to private investors, family offices, institutional clients and music industry clients. I do not just provide transaction services but, more importantly, advisory services to help my clients develop a strategy for acquisitions, dispositions and leasing of commercial office, industrial, retail properties and land. Providing competent advice is what often creates the long-term relationships that will perpetuate your business and preserve your existence in this industry. I am involved in numerous deals but most would not know until after a transaction closes. I am often able to source off-market opportunities for my clients due to my extensive network of contacts developed over many years. I am very content working quietly behind the scenes and giving my clients the credit.
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You are now prepping to break ground in Pie Town on Haven at The Gulch and are teaming with Guefen Development Co., local investor Joe Porter and Prescient Co. That project went through various iterations, including the 2015-proposed 23story Crescendo. At 11 stories and with the site’s elevation, Haven should be a statement project. Thoughts? Yes, I would consider Haven at The Gulch a statement piece and a representation of my capabilities as a developer of large-scale projects. It took me a lot of time and patience to get this project off the ground, but my persistence is paying off. Sometimes you need to bob and weave and maybe take a step back in order to move forward. I am not known as one to quit on anything. I believe there are creative solutions to every challenge. My original vision has morphed into a project that the market will support and within the current zoning guidelines. It took some time to assemble my “A Team,” but I have found that with Joe Porter, Guefen and Prescient. We are already searching for a site for our second project. I expect this to be a long-term partnership that should yield multiple projects in the Nashville market. The location of our project is certainly a statement and a landmark on its own, being perched above the Interstate 65/40 split on the southeast corner of The Gulch. You will not miss it as you approach downtown Nashville on I-65 from the south, as you will have a 12 o’clock view of it before the interstate splits.
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The cost of doing business City wrestles with sidewalk, road alterations and closures spurred by large-scale construction BY BILL LEWIS
ould you live in a house while it is being built? If you walk or drive anywhere in or near downtown Nashville, you probably have an idea what that would be like. Blocked sidewalks, closed lanes and unusable street segments are common annoyances as multiple buildings are rising throughout downtown and Midtown. And then there are closures to accommodate special events like
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the NFL Draft or the St. Jude Rock ‘N’ Roll Marathon. The city began rerouting downtown traffic weeks in advance of the draft, and the marathon required closing roads from Green Hills to North Nashville. Almost staggeringly, the Metro Public Works Department issued more than 38,000 permits for road and sidewalk closures last year for a multitude of reasons, says spokesperson Cortnye Stone. “As Nashville continues to grow, there’s more happening than the year before,” she says. In short, the city’s quirky urban core — which even with no construction projects is somewhat challenging to navigate on foot or in a car due to odd street configurations, lack of pedestrian crossings, T-intersections, one-way streets, etc. — has becoming even more problematic for those getting from Point A to Point B. The sheer number of road and sidewalk closures — and the time it takes to complete large-scale developments — has raised concerns among some members of the Metro Council who want developers and Public Works to do more to quickly reopen roads and sidewalks.
“With growth and development, there will be temporary inconveniences. People understand that to up a point. [But] we’re past that point,” says District 26 Councilmember Jeremy Elrod. True, closures may be as brief as a few days or a few hours, such as those for various marathons. But others linger for as long as a building’s construction requires, which can be up to 2.5 years (or longer). In some tightly packed nodes of downtown and Midtown, that timetable can be extended due to efforts to demolish existing structures (and haul off the rubble) to accommodate future towers. For example, the historic Trail West building at the corner of Third Avenue and Broadway was demolished in mid-2015, requiring temporary right-of-way closures along crowded Lower Broadway. For at least a year, a crane required a lane be closed on Fourth Avenue. In June 2018 the owners of the site announced it would be the location of a restaurant and entertainment venue that was later named Kid Rock’s Big Ass Honky Tonk Rock & Roll Steakhouse. With relief to walkers, that four-story building opened in October 2018.
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Demolition and construction projects can disrupt the flow of pedestrians and motorists for months — or years. One prominent example is the Fifth + Broadway development, which consumes the entire block between Broadway (on the south) and Commerce Street (on the north), on the footprint on which the bland Nashville Convention Center building ominously loomed like a bomb shelter for 30 years. The razing of the ex-convention center began in mid-2017. Fast forward two years and work on the massive Fifth + Broadway mixeduse development rising in its place is nowhere near finished. A target completion date of 2020 remains. Until then, a lane on Fifth Avenue will be closed (with no sidewalk), and a lane on Broadway has been altered (with at least an exposed walking option) and a lane on Commerce has been altered (also with an exposed walking option). This is not to reject the importance of the development. In fact, the Urban Land Institute describes the project as “a game-changer for the city, one of the largest mixed-use developments in the history of Nashville and the state of Tennessee.” Being developed by San Diego-based OliverMcMillan (recently acquired by Brookfield Properties Development) and Spectrum | Emery (co-based in Raleigh and Cool Springs), Fifth + Broadway will include 372,000 square feet of Class A office space in a 24-story building, 386 for-rent multifamily units in a 34-floor tower and more than 200,000 square feet of entertainment, retail and dining space. As the future home of the 55,000-squarefoot National Museum of African American Music, “Fifth + Broad will add another vibe to a city already famous for its music,” ULI says in an article about the project. In short, many feel Fifth + Broadway, once completed, will have been worth the pedestrian challenges. Fifth + Broadway aside, no matter what route you take through downtown, it seems to lead through from one construction zone to another. Recent or ongoing projects include the 33-story JW Marriott hotel at the intersection of Eighth and Demonbreun. Catty-corner, work is now underway on an Embassy Suites and One Hotel project. A few blocks to the west, Austin-based Endeavor Real Estate Group and Dallas-based Granite Properties are at work
on the three-tower Gulch Union development bordered by McGavock and Demonbreun streets on the north and south and by 12th and 13th avenues on the east and west. Steps away, Endeavor is developing the 12th & Broadway mixed-use tower, which will feature apartments and a Whole Foods grocery. Nearby on 11th Avenue North, Highwoods Properties is developing two office buildings that will provide approximately 551,000 square feet of space for Asurion. Across the CXS railroad tracks from the future Asurion home, San Diego-based Southwest Venture Partners is developing the $1 billion Nashville Yards project. “Just a few years ago, we’d have one or two big projects downtown or in busy areas, but now it can be five to 10 big projects in a very small area — making entire streets and sidewalks unusable. With the city’s growth unlikely to slow down, Metro needs to update and modernize how we handle closures,” says Elrod. The councilmember believes Nashville has not adequately responded to its explosive growth. “We have policies and staffing for a city of about 450,000-500,000, but we’re a city of 700,000 and growing,” Elrod says. “Nashville isn’t a small city anymore, and we should modernize how we handle closures. The Metro Council has tried to address it in many different ways, but we need a more comprehensive approach from not just the council. Or else it’s not going to get addressed the way it should. This is just another way Metro isn’t handling the city’s growth the way it should.” Metro Public Works, the department responsible for issuing and regulating permits for right-of-way closures, often takes the brunt of citizen complaints. But the department has long been understaffed. Of note, it has requested permission to hire two additional inspectors. Meanwhile, the department visits construction sites and reviews permits on a monthly basis to be sure they are still justified, says Stone, adding that road closures are listed on the department’s website. “We’re not going to write you a blank check for time,” she says. To get a permit, a developer must visit the department’s offices and submit a plan explaining the need for sidewalk and street closures. “We meet and look at the timeline and how it’s going to affect the businesses around them. That’s a crucial point. We have to give access to
existing businesses, a path to travel,” says Public Works Project Manager Rick Kirkpatrick. Developers pay a fee for right-of-way closures. In most of the city, that figure is $55 for five days and $10 per day after that. For downtown projects, the fee is $100 for five days and then $20 per day. The fee structure was created by the state Legislature, says Stone. Those fees are too low, says District 19 Councilmember Freddie O’Connell. “Frankly, our fee structure for right-of-way closures is insufficient to motivate [developers and construction crews] to hurry up and get out of the way. It’s inevitable that the pace and scale of growth will limit some access, but it happens too often and with too little cost recovery in Nashville right now,” O’Connell says. Charlotte, one of Nashville’s peer cities, takes a different approach. For sidewalk or street closures of 30 days or fewer, the city does not collect a fee. If the closure is longer than 30 days, the developer has to lease the right-of way from the city. “The cost of the lease is based on a percentage of the value of the land adjacent to the right-ofway,” says Amy Mitchell, spokeswoman for the Charlotte Department of Transportation. It is worth noting, the Metro Council took a step to protect the safety of residents, business people and tourists who have to walk through construction zones in downtown and Midtown. The Don’t Block My Walk law requires contractors to provide safe accommodation for pedestrians and bicyclists. “This can be [as simple as] just placing the ‘sidewalk closed ahead’ sign in a location that allows a pedestrian to safely cross at a crosswalk to get to a sidewalk on the other side of the street,” says Burkley Allen, District 18 Councilmember. “I believe it has resulted in a number of projects providing either a protected, covered sidewalk or creating a new sidewalk with temporary barriers,” she adds. “You can see some of those projects on Commerce Street.” The bottom line, says District 11 Councilmember Larry Hagar, is that Nashville is dotted with construction sites and special events like the NFL Draft, and they require road and sidewalk closures. “It’s just a growing pain,” he says of road and sidewalk closures. “It’s a necessary evil, but a temporary inconvenience. What are you going to do?”
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S PON S OR E D PROFIL E
Join Us In Shaping The Future of Tech COMPA N Y PROFIL E
We are a community committed to promoting women in technology through scholarships, education, community outreach, and networking.
We are a community committed to promoting women in technology through scholarships, education, community outreach, and networking. Whether you want to expand your expertise, connect with other women in tech or donate your time and resources, we invite you to join us in shaping the future of tech.
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Website www.wittn.org All across Middle Tennessee, women in technology are dealing with the same challenges, craving the same opportunities, seeking new ways to grow, and looking for like-minded women to share it with. At WiTT, we connect women with a community that believes in and advocate for them.
Our History Women in Technology of Tennessee began in 1999 as a small group of female leaders in technology in the Nashville area. Since then, WiTT has expanded to include hundreds of members. It grew by word-of-mouth: women telling other women about a community where they can share their experiences, discover development opportunities, and help young women establish their own careers.
Our Mission Through education, networking, scholarships and community outreach, WiTT promotes women in technology and helps carve a path for the next generation. WiTT members contribute to the success of the amazing women in our community. We are committed to honoring those who have come before us and empowering the ones who will come after. Together, we’ll equip women throughout Middle Tennessee to shape the future of technology.
Our Pillars Education
We believe in learning from one another, sharing our knowledge and experiences, and equipping members to succeed in technology-related roles. Our educationfocused events allow members to expand their expertise and grow in their careers. Our WiTT educational events focus on an area of technology and feature a subject matter expert, technology executive from a local company, or a panel of female
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Women in Technology of Tennessee (WITT)
technology leaders. These meetings are great forums for women to educate themselves and learn more about the subject, while connecting with other successful women in IT.
Connection Monthly events and regular happy hours give you the chance to meet other women in technology and discover new opportunities. Learn from the experience of women ahead of you in their careers and lend your wisdom to those just starting out.
Outreach Through community outreach initiatives, we work to get more girls interested in technology —whether that’s introducing them to it for the first time or igniting their existing passion — through coding camps, workshops, internship opportunities, scholarships and more. WiTT gives back to our local community through outreach projects and provides volunteer opportunities for members. We support outreach initiatives such as coding camps, Art2Stem, community involvement, and more through both financial and volunteering commitments.
Scholarships We provide scholarships to help high school and college girls, as well as women returning to school, succeed in technologyrelated fields. By serving students in Middle Tennessee, we foster the growth of female tech talent and positively influence our local workforce. WiTT partners with area businesses and educational institutions to offer a wide variety of scholarships. Our scholarships encourage and enable recipients to pursue technology-related careers and contribute to our local community of women in tech. To foster that community, we provide local scholarship recipients with the pportunity to join WiTT at no additional cost.
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S PE C I A LT IE S Education: Our education-focused events allow members to expand their expertise, grow in their careers, and succeed in technology-related roles. Connection: Monthly events and regular happy hours give you the chance to meet other women in technology and discover new opportunities. Outreach: Through community outreach initiatives, we work to get more girls interested in technology through coding camps, workshops, internship opportunities, scholarships and more Scholarships: We provide scholarships to help high school and college girls, as well as women returning to school, succeed in technology-related fields.
CON TAC T Email: membership@wittn.org
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LEADERS
for new purposes. As noted earlier, it is imperative that board members learn about the company’s industry — read online industry news and publications and study how competitors are performing.
Support and challenge Director, consultant and adviser Tony Heard on what makes boards better ony Heard has seen a lot of organizations from a lot of different angles. A successful private and commercial banking career led him to be regional chairman of U.S. Bank. In the middle of the last decade, Heard transitioned into management consulting — first with NMG Advisers, then with InfoWorks, where he has focused on business processes and technology tools. On the community service side of things, he has been a longtime member of the boards of Saint Thomas Health and the United Way of Metropolitan Nashville and also has helped guide WPLN and The Housing Fund, among others. Heard recently sat down to answer a few questions from Editor Geert De Lombaerde about effective board service and broader governance practices.
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What is your advice to someone stepping into board service for the first time? And is it different in a for-profit business versus a nonprofit? Here are three steps, regardless of whether it’s a for-profit or nonprofit business: • Understand the fiduciary duties of the board and learn how the board is prioritizing its work on key responsibilities such as setting and monitoring long-term strategy, evaluating senior management performance and monitoring organizational achievements. • Get to know the other boards members’ skills and experience to identify some new ways you can help the organization. How can you serve as a subject matter expert?
Tony Heard
• Take time to research and learn about operations, the industry, competitors, the CEO, the staff. Don’t wait to gradually gather that information through board meetings. Think of the most effective boards you’ve been a part of. What sets them apart? • Strong leadership from a board chair and committee chairs, who are more engaged than the other board members and personally understand the strengths and challenges of the organization. • The relationship between the board and the CEO must be strong. Does the CEO understand how to utilize the board to augment his or her skills to grow the business and minimize risks? • The board needs to focus on innovation and strategy and not just oversight of financial results and operational performance. How important is it to have strong industry knowledge, say of health care or banking, of entities where you’re a director? Or is there greater value in bringing a true outside perspective? Any company or organization will benefit from a board with members who have experience in multiple industries and who ask why something is being done differently than what they have seen work successfully. Diverse industry experience is also a key to moving innovation horizontally. Uber and Lyft did not invent new technology for their operational platforms but built alongside mobile phones’ GPS technology and utilized that
What are other skills and experience for a successful board? Every board needs members who cover a matrix of functional skills — finance, technology, marketing, business development, etc. — as well as members who understand what will drive customers to utilize the products or services offered by the business today and in the future. Nonprofit boards may need help gaining access to customers, donors and partners. Consequently, they need a set of members who cover a mix of four leadership traits: • Ideas (creativity and vision) • Power (influence and affluence) • Energy (enthusiasm and availability) • Authority (wisdom and ability) On the for-profit side, should boards look different depending on companies’ size or structure? The criteria for effective governance can vary somewhat based on the ownership structure of the organization. Among for-profit companies, CEO-owned, family-owned, privately owned with shareholders and publicly traded may have different governance criteria. However, best practices for any entity include: • Establish leadership independent of management with outside directors in key board roles. • Ensure optimal board composition with diversity in experience, gender, age and ethnicity. • Create board and committee charters with detailed responsibilities and set term limits. • Structure board meetings to maximize results by providing financial and operational information ahead of meetings. • Encourage board members to visit oneon-one and communicate with one another outside of board meetings. • Proactively evaluate board effectiveness and make changes when required. Every company and organization will benefit from having an engaged and dedicated board of directors. It’s worth the time and effort to assemble a group of leaders who will support and challenge a business to set goals and achieve them.
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John Deane John and Natasha Deane Foundation
THE 2019 ALLSTAR BOARD W HE N W E A S S EM BLED our first All-Star Board six years ago, we were in awe of the tremendous brainpower and inspiring generosity available to local business and nonprofit leaders looking to be better. That hasn’t changed one bit; if anything, those valuable resources are even more plentiful today as Nashville has drawn in new talent from across the country and the world. This year’s All-Star Board definitely fits the bill as a group of people who could help you improve, grow and guide your organizations.
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Deane is steeped in physician practice management like few others in Nashville. After helping build PhyCor in the mid-1990s, he founded Southwind Health Partners in 1998 and sold the business — then home to more than 40 people — 11 years later to Advisory Board Company. There, he built out a consulting group now home to more than 400 people working with some 250 health systems. A year ago, Deane and his wife formally launched another building effort, a foundation that aims to promote civic engagement across Tennessee and is focused on health and well-being, workforce readiness, the environment and racial tension and discrimination.
Vicki Horne Civic leader One of Middle Tennessee’s most accomplished community volunteers and fundraisers, Horne started her professional career in acting and education. Nearly three decades after moving to Nashville from Los Angeles — two years after she launched promotional products company Gifts Not Forgotten — she has built up an impressive civic service résumé that features the American Heart Association, the Nashville Symphony, FiftyForward and a host of other prominent names. In all, the past president of Cable and board president of the Nashville Repertory Theatre has helped raise more than $6 million for a wide range of causes and helped elevate the profile of just as many others.
Ronald Roberts DVL Seigenthaler Finn Partners A veteran communicator, crisis manager and messaging strategist, Roberts led the team that guided DVL Public Relations & Advertising and Seigenthaler Public Relations through their 2015 merger and the firms’ sale to New Yorkbased Finn Partners. The Middle Tennessee State University graduate — after getting a bachelor’s in mass communications, he earned a master’s in education — also has applied communications and change management skills to a diverse group of nonprofit organizations that include 100 Black Men of Middle Tennessee, the Nashville Sports Council and Citizens Bank & Trust. He also is co-chair of the Mayor’s Council on Gender Equity, which was created in mid-2016.
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Loraine Segovia-Paz Casa Segovia-Paz A veteran entrepreneur, Segovia-Paz in 2003 co-founded the La Noticia newspaper with Yuri Cunza and has worked in other ways to build up the region’s Hispanic business community. The U.S. Small Business Administration recognized her business advocacy work and the Nashville Area Hispanic Chamber of Commerce — where she is now a board member — has lauded her leadership and service efforts, which include developing a Latina Leaders training program. Early this decade, she launched her gourmet food service and catering business venture, which specializes in empanadas and has built a network of local retail outlets. Her board service includes stints with the American Red Cross and Comprehensive Care Center.
Yanika Smith-Bartley Asurion A Fisk University (psychology) and Vanderbilt University Law School graduate, Smith-Bartley brings employment and regulatory expertise built by nearly a decade of helping shape Asurion into an organization now home to more than 16,000 employees around the world. But her potential impact for other organizations goes well beyond that. She has been a leader on workplace diversity initiatives going back to her time in the middle of last decade at law firm Baker Donelson. At Asurion, she has built that platform to a whole new level — she was named the device insurer and tech services firm’s first VP of diversity and inclusion in late 2017 — and has helped bring inclusion to the forefront of the Middle Tennessee tech sector.
Our past All-Star Boards 2018 Harry Allen – Studio Bank Frank Bumstead – Flood Bumstead McCready & McCarthy Rebecca Finley – Executive Aura Ray Guzman – Intermedix Jim Varallo – Whitehorse Partners Terry Vo – Comcast
2017 Jean Ann Banker — Civic leader CeCe McCormick-Moore — Soles4Souls Sharon Roberson — YWCA Tara Scarlett — Scarlett Family Foundation Bo Spessard — 1115 Group
2016 Jim Armistead — Regions Bank Tony Heard — InfoWorks Nancy Falls — The Concinnity Company Mark Dixon — USr Healthcare Deb Varallo — Varallo Public Relations
2015 Steve Curnutte – Tortola Advisors Jay Graves – Strategic Solutions for Business Gavin Ivester – Flo Thinkery Betsy Jones – The Countdown Group Scott Kozicki – Brentwood Capital Advisors Sarah Meyerrose – Civic Bank & Trust
2014
Susan West Belmont University Since starting work at Belmont in June 1988 — then as the school’s only African American in a professional position — West has been one of the key people shaping and guiding the explosive growth of the campus. She has been a Belmont VP and President Bob Fisher’s chief of staff since early this decade but before that worked with the university’s admissions team, its special academic programs and the University College. A member of the 2006 class of Leadership Middle Tennessee and the 2014-15 Leadership Nashville class, she is a member of the boards of Habitat for Humanity, Saint Thomas Health and the Middle Tennessee State University Friends of the College of Liberal Arts.
Tawn Albright — Vanderbilt University Jim Lackey — Complete Holdings Group Scott McWilliams — OHL Julia Polk — W Squared Lynn Simon — Community Health Systems Dwayne Tucker — Compass Executives
2013 John Aron — The Pasta Shoppe Jan Babiak — Women Corporate Directors Agenia Clark — Girl Scouts of Middle Tennessee Marc Fortune — Force Five Debbie Gordon — S3 Asset Management Richard Herrington — Franklin Synergy Bank Kevin Lavender — Fifth Third Bank Mike Shmerling — XMi Don Williamson — Compass Executives * Organizations listed are as of publication dates
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Behavorial change Companies seek to overcome psychological barriers that limit transformation BY LENA ANTHONY
2017 report by the Boston Consulting Group uncovered some rather harsh truths about corporate transformations. To stay relevant, most companies need to transform at least once every five years, the report said. But success isn’t guaranteed: “At any one time, about one-third of large U.S. companies are experiencing a severe, two-year decline in their ability to create shareholder value. Within that group, one-third fail to recover within the following five years.”
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BCG goes on to outline the key reasons why transformation works at some companies and not at others. Hiring a new CEO, particularly if the leader comes from outside the company, is associated with transformation success. So is spending a lot on R&D and having a long-term strategic outlook. But that’s all for naught if you can’t overcome what Tony Schwartz, founder and CEO of The Energy Project, calls the invisible human barrier. “Transforming an organization requires transforming people’s behavior,” Schwartz explained during a session at Workhuman Live, an HR conference held in Nashville earlier this spring. “But people don’t want to change — even when they say they do. Most human beings hit a certain age and do anything but transform for the rest of their years.” To successfully transform, leaders need to be as tuned into the strategies, processes and technology needed for change — what Schwartz calls the outer game — as they do the beliefs, assumptions, fears and blind spots, collectively known as the inner game. “The problem is that in most organizations and leaders, the inner game is terra incognito,” he says. “It’s a vast, unexplored territory.”
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‘You can’t change what you do not notice, but the good news is that noticing changes everything.’ TONY SCHWARTZ, THE ENERGY PROJECT
So, what can CEOs, leaders and employees do to understand these intangible psychological barriers to change? “You can’t change what you do not notice,” Schwartz says. “But the good news is that noticing changes everything.” And it starts by recognizing that people are vastly different depending on the circumstances. To illustrate this, Schwartz asked Workhuman attendees to think of the four words that describe their best selves and then their worst selves. “For better or for worse, you’re both of these, depending on what’s going on,” he says. For that, we can thank a psychology term known as “allostatic load,” which refers to the wear and tear on the body and brain from being stressed out, when demand exceeds capacity. When allostatic load is reached — a different threshold for each individual — survival mode kicks in, and the worst self comes out. “We recruit the more primitive, survival part of our brain that senses danger,” Schwartz says. “We become impatient, irritable, angry, judgmental, anxious, fearful, worried and self-critical.” In other words, the opposite behaviors needed for a successful transformation. Survival mode is also when the inner lawyer shows up. “When we’re acting badly, we find it nearly intolerable to think we’ve failed,” he explains. “We will do nearly anything to avoid the feeling of discomfort or shame. When we’ve fallen short of our best, our inner lawyer is there to justify, rationalize, avoid, deflect, dissemble and deny. Then it postures, pretends, flatters and self-promotes. Finally, it attacks, blames, judges, disparages and dismisses.” Finally, survival mode can turn employees’ main strengths into their greatest weaknesses. For example, take an employee who is systematic but is now asked to be agile. “Agility is word of the year,” Schwartz says. “It’s the ability to respond on a dime, to move quickly.
But here’s the thing: You haven’t been agile in the past. [Rather], you’ve been diligent, prudent, systematic. And now someone wants you to become agile. But if you do, you’re now incurring more risk. You have a greater chance of failure. It’s terrifying. Who wants to be agile if that’s the potential consequence? So, what do you do? You double down on what you’re already good at.” Suddenly, a systematic employee becomes rigid. When faced with unwanted change, hardworking becomes self-neglecting. Collegial turns into conflictaverse. And candid turns into cruel. “Under pressure, all of us tend to default back to what we know best,” he says. “Any strength overused becomes a liability.” At this point in the presentation, successful transformation seems like an impossibility. But Schwartz still has five minutes left, and he does offer three tips for leaders: • Cultivate your capacity for self-observation: “I’m watching myself be myself in this moment. I’m not judging, not choosing, just watching.” • Constantly challenge your fixed assumptions: “There are so many things we think we know. Literally ask yourself, ‘Is this assumption necessarily right?’” • Lean into your discomfort: “Stress is the only means by which you expand functional capacity.” • Enlist the twin tools of transformation: “Courage and humility are balanced opposites. Humility is about the willingness to acknowledge not knowing and about forever seeking to learn and grow. Courage is about the capacity to tolerate fear and discomfort in the service of learning and growing. Humility requires standing down. Courage requires standing up. We need both in order to transform organizations.” By following these tips, leaders can change their mindsets, “and when a leader begins to change the behavior and it feels real, the organization begins to buy in,” he says.
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Bringing AI to the workforce Companies seek to overcome psychological barriers that limit transformation BY LENA ANTHONY
frequently asked question of predictive analytics is “How many data points are needed?” There is no magic number; it’s based on many factors that are unique to each individual project. But reach a certain level, and you realize you’re probably sitting on a treasure trove of insights, no matter setting or goal. That’s where Massachusetts-based Workhuman, whose cloud-based social recognition software and performance management platform is used by more than 4 million employees in 160 countries, found itself just over three years ago. Those 4 million users had created more than 50 million different recognition moments — team conversations, feedback items and milestones such as anniversary notices — in a structured data set, giving artificial intelligence in HR a whole new meaning. Moving beyond chatbots to answer employees’ frequently asked questions, Workhuman (which early this year changed its name from Globoforce) is using AI to help companies better understand their employees at points throughout their time with the company. From an easy-to-use analytics dashboard, HR leaders can discover how work is being done, where biases exist, who the mentors are and when employees might leave.
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‘Moments of authenticity give us a unique lens that you cannot get with other types of info.’ JESSE HARRIOT T, WORKHUMAN ANALY TICS AND RESEARCH INSTITUTE
Jesse Harriott, executive director of the Workhuman Analytics and Research Institute, says this data stands out in the world of HR. A more traditional HR information system, which has become essential tech for businesses of all sizes, is designed mainly for compliance and control, and emails have too often become a political statement. “But these moments of authenticity give us a unique lens that you cannot get with other types of info,” says Harriott, who spoke about the company’s predictive analytics and AI capabilities at the Workhuman Live conference that took place in Nashville earlier this spring. Applying predictive analytics to Workhuman’s social recognition data uncovered an important factor in retaining new hires: The simple act of recognizing them. The more social recognition new hires receive — especially in the first 100 days of employment — the more likely they are to stay on the job. Using Workhuman data, one company implemented a new hire strategy that included the introduction of a new hire award. Harriott says it led to a 22 percent drop in turnover in employees’ first 100 days.
Finding, fixing granularity in bias Uncovering and understanding bias — one of the biggest barriers facing companies’ diversity and inclusion initiatives — doesn’t just matter in the hiring process. Biases can undermine employee retention efforts, stifle growth and contribute to a toxic company culture. The problem is that bias is everywhere and can be hard to measure. Responding to its discovery
with training on unconscious bias is often a one-and-done approach that does little to remove root causes or improve understanding. So wouldn’t it be better to visualize the bias as it’s happening? Harriott’s team applied machine learning tools to their social recognition messages to uncover biases. By analyzing messages from men and women and to men and women, for example, they discovered some key differences. For starters, men’s social networks — defined by Workhuman as the people you interact with at work — are more homogenous. Men gravitate toward men and tend to collaborate with people on their teams. Women, on the other hand, have networks that are more egalitarian and cross-departmental. There were also differences noted in the way men and women recognize each other. Harriott says recognition messages from men generally are more task-oriented — they include words such as job, effort, leadership and performance — while messages from women tend to be relationship-based, featuring language such as appreciated, dear, support and team. Similarly, Harriott’s research has found, men tend to code-switch when writing award messages to women. They use task-oriented words to praise other men but tend to change their language when praising women. Gender is just one way to slice Workhuman’s data. Dashboard users can also look at differences among age, race and even personality traits, such as extrovert or introvert. The dashboard can also assign teams a bias risk in-
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dex — benchmarked against other companies and other teams — to help leaders identify pockets of bias in an organization. “It opens up a new set of granularity of where bias is happening,” says Harriott. “It can help you understand if it’s a leader, a division, a business process or maybe a hiring practice that’s leading to bias.” The goal, Harriott says, is turning the bias into a teachable moment so you can “move from a diverse workforce to one that feels more inclusive.” Organizations might need additional training or resources or perhaps an individual intervention. In the case of recognition messages, the teachable moment can actually happen in real time — as the bias is occurring. An automated checker can look for biased language in messages being drafted on Workhuman’s platform and alert the writer before the message is sent.
Looking for hidden gems Bias can also lead to promoting practices that aren’t based on merit, but on things more subjective such as politics, friendships and biases. Workhuman’s data trove can produce a more objective approach to finding a company’s rising talent. An analysis of its social recognition messages revealed a list of keywords associated with high performers, which Harriott’s team turned into a “superpower score.” “Some people are described in almost an angelic or magical way — ‘amazing, immediately helpful, blessing, unmatched,’” he says. “It’s like they’re unicorns.” Some of these superstars are already known in their companies. The challenge is finding the hidden gems, which is where the system’s social network score becomes helpful.
“People with low network scores have few connections and/ or a low network influence,” he says. “Combine the two together and you get a short list of people to elevate or leverage.” On the flip side, an employee leaving a company could tell an exit interviewer what went wrong. But by then, it’s too late. Using predictive analytics on Workhuman’s social recognition data, Harriott’s team has developed an employee turnover index that’s a lot like a personal credit score. It can predict how likely an employee is to leave an organization in the next six months. The score is based on dozens of signals from inside the social recognition software, including how often the employee is logging in, how many messages he or she is sending, what the length is of those messages, what words are being used and whether they’re nominating people in other departments for recognition. “It’s a warning sign so that someone can have a human intervention,” he says. “If an employee is feeling like they want to leave and you believe they’re a high performer, this index can prompt you to give more gratitude, surround them with more connections or remind them about the rewards they’ve received in the past.” Harriott says Workhuman’s applications represent the best that AI has to offer HR. But not surprisingly, there have emerged some bad examples of AI in the workplace. Think, for instance, of robots conducting interviews. “The spirit is in the right place because it can remove bias, but it also takes away a prospective employee’s ability to gauge culture,” Harriott says. “AI should enable human interactions, not take them away.”
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FINANCE
Locking the box in M&A Weighing the pros and cons of a working capital approach widely used in Europe, elsewhere BY WAYNE PRYOR
n the past 15 years, those working as transaction specialists have seen a few economic cycles and many changes in the mergers and acquisitions space. In connection, many trends that originated in Europe have recently gained favor in the United States. With so much money pouring into private equity funds, the landscape of buying and selling a company has drastically changed over time. More and more, buyers and sellers are now engaging professional advisors to assist in every stage of the sales process. Many sellers are going to market with investment bankers and engaging reputable CPA and advisory firms to produce branded sell-side due diligence reports to help educate and convey value to buyers. There has also been an increase in the number of businesses being sold through competitive auctions. Another trend that has recently gained momentum is the use of a “locked box” mechanism, which fixes the purchase price of the business based on a predefined balance sheet date. This date is known as the locked box date and generally precedes the sale of the business by 60 to 90 days.
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Working capital tradition For those familiar with buying and selling a business, one of the most contentious issues that plagues a transaction is the amount of working capital to leave the buyer at the time of close. Typically, consensus around this number isn’t easily reached. When both par-
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ties agree on the amount of working capital the seller must provide at the time of closing, that number is drafted into the purchase/sales agreement. Typically, this target amount is determined based on the company’s recent working capital trends, adjusted for any anomalies that have affected the business. Based on the terms of the purchase agreement, the buyer typically has 60 to 120 days after the closing date of the transaction to provide its view of the company’s working capital at date of close. The seller is typically given another roughly 30 to 60 days to confirm or dispute the amount. Differences between the targeted working capital amount per the purchase/sales agreement and the closing balance sheet calculated by the buyer are typically trued up and settled dollar for dollar as an adjustment to the purchase price of the company. To the extent the working capital amount at close is greater than the targeted working capital, there’s a positive adjustment to the final purchase price — and vice versa if there’s a deficiency.
Locked box mechanism Under the locked box mechanism, the purchase price of the company is fixed at signing based on a balance sheet that precedes the actual sale of the company, i.e.,the locked box date. The chosen balance sheet date is usually the end of a fiscal period for which the financial statements have been audited or targeted by both parties relative to the transaction. The purchase agreement is drafted so as to “fully lock” the balance sheet from any leakage or deterioration of purchase price prior to the close of the transaction. Unpermitted leakage includes items such as dividends or distributions paid to shareholders or owners of the company, management fees or transfers of assets prior to close. Notwithstanding, under certain circumstances, the buyer and seller may agree upon certain transactions such as dividends, capital expenditures or asset transfers. Under the locked box mechanism, the seller typically provides various representations and warranties, agrees to various covenants and can indemnify the buyer that they won’t knowingly permit or incur unpermitted transactions from the date of signing to the date of closing. Typically, the seller will provide “first dollar” coverage for any unpermitted transactions that occur.
Wayne Pryor
‘The locked box lets the buyer and seller remain focused on running the business and not be concerned with tune-ups’
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FINANCE
Another caveat that’s often negotiated between the buyer and seller under this mechanism is the lost opportunity costs to the seller. At times, the buyer is required to pay the seller interest expense on the purchase price from the date of signing to the close date of the transaction due to those lost opportunity costs. Although the locked box mechanism generally is considered seller-friendly, it’s commonly used between buyers and sellers in Europe and other parts of the world. Here is a brief summary of the advantages and disadvantages — to the seller and buyer — of using the locked box mechanism. Among the advantages are:
• Certainty of price: This provides a benefit to both parties relative to price certainty at date of signing. • Simplicity: The locked box reduces the risk of any post-closing working capital disputes. Many times, shareholders selling the company will continue as employees post-close. The locked box method alleviates potential disruptions to the business postclose from any financial disputes between the buyer and seller. Also, since there are no post-close true-ups, the buyer and seller can remain focused on running the business and not be concerned with contemplating or settling any post-closing working capital true-ups. • Speed and savings: Locking the box alleviates any drawn-out debate over the method to calculate or settle the working capital mechanism pre- and post-close. • Comparability: Under an auction-related process, the seller is better able to compare offers, as there’s certainty over the purchase price being offered.
Some of the disadvantages are:
• Exclusivity: The buyer is committed to the purchase price before receiving exclusivity to perform any diligence. • Exploitation: There’s an inability to exploit the purchase price by the seller or buyer because there’s no working capital true-up involved. • Control and leakage: Under the locked box mechanism, the seller typically holds an advantage because its executives prepare the locked balance sheet, and the buyer has limited access to the information used to construct such a balance sheet or propose or identify potential items considered leakage. • Change in the business: Because the balance sheet is locked and the seller doesn’t benefit from any increase in the business after signing, the seller may lack incentive to increase the value of the business during the period between signing and close of the transaction. Each party should determine which mechanism is best suited for its needs and consider what could be negotiated between the two parties. As noted above, the locked box mechanism is prevalent in Europe and other parts of the world. It can provide both parties with certainty around the purchase price and alleviate any potential working capital disputes that could arise post-close. Although the locked box mechanism isn’t appropriate for all transactions, it can save both parties time and resources and can ensure the transaction’s completion.
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Wayne Pryor is managing director of BKD’s health care transaction advisory services practice in Nashville. bkd.com
N A S H V I L L E P O S T. C O M
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SPORTS
Levi Jerome and Melissa Beard
Selling $mashville When it comes to merch and memorabilia, Preds fans like it, they love it. Meet the people whose job it is to give them plenty more of it. BY MEGAN SELING
early every inch of Levi Jerome and Melissa Beard’s shared office at Bridgestone Arena is covered in Nashville Predators memorabilia. A hockey team’s worth of player bobbleheads sit atop the filing cabinets, the walls are plastered with championship banners, framed T-shirt designs and autographs. It’s a hockey fan’s paradise.
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“My grandmother thinks it’s hilarious,” says Jerome. “I’ll show her, ‘Hey we made this bobblehead or this T-shirt.’ And I grew up collecting stuff like this, so to her it’s like, ‘Wow, you found a way to get paid to do something that you like doing!’ ” Jerome and Beard are Bridgestone Arena’s retail operations manager and retail manager, respectively. As employees for Delaware North, the global hospitality company that runs concessions for Bridgestone Arena (and serves more than 50 other venues, including New Jersey’s MetLife Stadium and Boston’s TD Garden), it’s their job to stock the Preds’ 4,500-square-foot team store with merchandise that will keep fans coming back for more. And it has evolved into an especially demanding task in recent years. “The year that we went to the Stanley Cup Finals [in 2017], the secret of Nashville got out,” says Beard. “The building, the chants, the energy that the fans brought — I think the secret got out and everybody wanted to be
a part of it. We were already growing prior to that, and I think that just catapulted us to a level that is out of this world. It was crazy.” Since the early years of the franchise — before the Preds made their first postseason appearance in 2004, before Bridgestone Arena expanded its retail space and, yes, before the historic run for the Stanley Cup — the team store has grown its number of stock keeping units, or SKUS, to more than 10,000 products. That’s a number that includes every size, color and style of everything from clothing and accessories to home goods and toys. Team officials are loath to disclose much in the way of financial specifics, but the merchandise boom has no doubt contributed to what Forbes estimates was a 60-plus percent jump in the franchise’s value from 2015 to 2018. (See chart.) After all, sell a few thousand youth jerseys and Central Division champion hats for a combined $200, and the numbers start getting big in a hurry.
DANIEL MEIGS
5/9/19 1:07 PM
SPORTS
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POWER PL AY The Preds’ sales and team value have grown significantly in recent years, helped by the team’s success on the ice, the resulting exposure off it and the scores of nonhockey events at Bridgestone Arena.
$500M VALUE $400M
$300M
$200M
REVENUES
$100M
2018
2017
2016
2015
0 2014
And those are just the basics. Fans can buy just about anything embalonized with a Preds logo. There’s the fancy: a Timex watch, gold earrings and an Adidas jersey customized with dozens of Swarovski Crystals (for just $649.99). There’s the kitschy, such as a P.K. Subban lawn gnome or a Filip Forsberg nightlight. But aside from the ever-popular jerseys, it’s the newer limited-edition merchandise that’s most swiftly flying off the shelves. The idea to make short-run novelty T-shirts started in the 2017-18 season, when Jerome designed a Roman Josi T-shirt that celebrated Josi’s newly designated status as team captain with an homage to the film “Dead Poet’s Society.” “The front of the shirt said, “O’ Captain, my Captain,” and it’s got a bunch of hockey players standing on desks,” says Jerome. More pop-culture-inspired designs quickly followed. On one, a cartoon illustration of Pekka Rinne is standing under an umbrella with his Vezina Trophy as pucks rain down on him next to the words “Rinne is a good thing” — a play on Luke Bryan’s hit “Rain Is a Good Thing.” On another, Filip Forsberg is holding a lightsaber-esque hockey stick under the words “May the Fors be with you.” That design sold out in just a few hours. And when defenseman P.K. Subban told reporters that he was “217-pounds of all-Canadian beef ” after a game against the Montreal Canadiens, that quote was memorialized on a shirt, too. So as Beard and Jerome have expanded beyond the typical number-and-name designs, has a player ever vetoed one of their ideas? “Oh yeah,” says Beard with a laugh. “We had one guy not too long ago, he came into the shop…” “Some guys have real nicknames,” Jerome adds. “And then some guys have nicknames that they are given by other guys that aren’t their actual nickname. We were told, ‘Do not do that. Do not call me that.’ And it was like, ‘Oh, no problem, we’ll head back. Sorry!’ ” Beard declined to out the picky player. Another especially popular item during the 2018-19 season was the new line of personalized bobbleheads. These aren’t the mass-produced freebies handed out as promotional items on game nights. For $54.99 apiece, this collection of nine bobbleheads boasts of much more detail, often incorporating some of the players’ off-ice personalities. The Viktor
Source: Forbes Note: Revenue estimates include non-NHL arena revenue and are net of revenue sharing and arena debt service
“Arrrvy” Arvidsson bobblehead features the forward standing upon a treasure chest and holding a parrot, a nod to his pirate-speak nickname. Ryan Johansen’s toy features his two Instagram-famous bulldogs, Doug and Dozer. And yes, the dogs’ heads bobble, too. “The players have done such a phenomenal job of becoming ingrained in the community,” says Jerome about the increased demand for Preds merch. “People are invested in them, they’re invested in the team. Not just like, ‘That’s the guy that plays hockey on TV,’ but ‘Oh, I was at the dog park today and Yannick Weber and his wife were there with their dogs.’ It’s not even like they feel like they know them, they know them. Because they’re around and they’re doing things with these people.”
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SPORTS
TRIPLE-
A
MINOR LEAGUE PL AYERS
Vandy (coach’s) Boys
2006-08 Ryan Flaherty Cleveland Indians Columbus Clippers 2010-13 Mike Yastrzemski San Francisco Giants Sacramento River Cats 2012-14 Tyler Beede San Francisco Giants Sacramento River Cats
Commodore skipper responsible for ever-expanding number of ex-players, coaches now in pro baseball BY DAVID BOCLAIR
ne of the first things Tim Corbin does each day is check on the progress of his former players now in the professional ranks. Technology aids his efficiency in that pursuit (specifically the statistics provided by Baseball America’s website and highlights from MLB. com). But increasingly, it is a significant task. At the start of the 2019 season, nine ex-Commodores were playing in the major leagues and another 25 were spread among all levels of the minor leagues, with 11 more — their playing days behind them — working as executives, coaches or scouts. Of the 30 MLB franchises, 23 had a direct connection to Vanderbilt via at least one of Corbin’s former players. That doesn’t even take into account seven assistant coaches and staff members who also serve in a variety of roles for professional franchises. “There’s a few, and that’s something we’re proud of,” Corbin says in typical understated fashion. “… I enjoy following them. It makes it nice for us to be able to watch guys impacting the game at another level.” Corbin has been Vanderbilt’s coach since 2003 and, notwithstanding the program’s 2014 national championship, arguably nothing better illustrates the impact he has made than the ability and desire of his ex-players to remain in the sport beyond their college days.
2012-14 Jared Miller Arizona Diamondbacks Reno Aces
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2012-15 Zander Wiel Minnesota Twins Rochester Red Wings
BIN T I M CO R
2013-15 Carson Fulmer Chicago White Sox Charlotte Knights 2014-16 Bryan Reynolds Pittsburgh Pirates Indianapolis Indians
M LB MAJOR LEAGUE PL AYERS
2005-07 David Price Pitcher Boston Red Sox
2009-11 Sonny Gray Pitcher Cincinnati Reds
2013-15 Walker Buehler Pitcher Los Angeles Dodgers
2007-09 Mike Minor Pitcher Texas Rangers
2011-13 Tony Kemp Outfielder Houston Astros
2013-15 Dansby Swanson Shortstop Atlanta Braves
2008-11 Curt Casali Catcher Cincinnati Reds
2012 Drew VerHagen Pitcher Detroit Tigers
2015-17 Kyle Wright Pitcher Atlanta Braves
* Note: Info as of the beginning of the 2019 season; years listed were when players were at VU
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VANDERBILT ATHLETICS
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SPORTS
-A DOUBLE MINOR LEAGUE PL AYERS
2010-12 Sam Selman San Francisco Giants Richmond Flying Squirrels
SINGLE-
A
MINOR LEAGUE PL AYERS
2013-15 Tyler Ferguson Texas Rangers Down East Wood Ducks 2015-17 Jeren Kendall Los Angeles Dodgers Rancho Cucamonga Quakes 2015-17 Matt Ruppenthal Houston Astros Quad Cities River Bandits
2016-18 Maddux Conger Detroit Tigers West Michigan Whitecaps 2016-18 Chandler Day Washington Nationals Hagerstown Suns 2016-18 Connor Kaiser Pittsburgh Pirates Greensboro Grasshoppers 2017 Reed Hayes Baltimore Orioles Delmarva Shorebirds
2012-15 Philip Pfeifer Atlanta Braves Mississippi Braves
2003-06 Matt Buschmann Blue Jays Bullpen coach
2013-15 Rhett Wiseman Washington Nationals Harrisburg Senators
2004-05 Antoan Richardson Blue Jays Outfield coordinator
2014-16 Ben Bowden Colorado Rockies Hartford Yard Goats
2008-09 Caleb Cotham Reds Assistant pitching coach
2014-17 Jason Delay Pittsburgh Pirates Altoona Curve 2015-17 Will Toffey New York Mets Binghamton Rumble Ponies
MINOR LEAGUE PL AYERS
2016-18 Alonzo Jones Oakland Athletics AZL Athletics
F FRONT O
FICE
2002-04 Jeremy Sowers Rays Coordinator of Major League operations 2003-05 Gil Kim Blue Jays Director of player development
2017-18 Justin Wilson New York Yankees Pulaski Yankees
2017-18 Reid Schaller Washington Nationals Auburn Doubledays
2009-11 Jason Esposito Indians Minor league hitting coach
2001-04 Cesar Nicolas Mariners Player development
ROOKIE
EASO SHORT S
S
2002-05 Tony Mandolin Indians Manager AAA
2015-16 Jordan Sheffield Los Angeles Dodgers Rancho Cucamonga Quakes 2015-17 Collin Snider Kansas City Royals Wilmington Blue Rocks
C OAC H E
N
2003-07 Carter Hawkins Indians Assistant general manager 2004-05 Mike Wagner Yankees National crosschecker 2006-09 Nick Christiani Reds Scouting supervisor
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INDEX
A-I
Greg Daily 13, 20
Nashville Predators 46
Greg Taylor 21
Noah Robinson 27
Gresham Smith 30
Penny Houchens 29
Acadia Healthcare 20
Guefen Development 33
AJ Capital Partners 31
Haven at The Gulch 33
Pinnacle Financial Partners 15
Alto 19
HCA 9, 22
PlayMaker Health 25
American College of Healthcare Executives 25
Healthcare Consulting 25
Prescient 33
Amir Sternhell 21
Holly Miller 25
Amy Mitchell 35
HUSO 8
Andrew McDonald 25
i3 Verticals 13, 20
Andrew Rueff 20
Immersive Health Group 26
Arnold’s 52
Ingram Content Group 22
Asurion 9, 35, 39
Inner Design Studio 28
Hines 31
Belmont University 39
Rebecca Donner 28 Red Seal Homes 31 Rich Roberts 20
J-P
Rick Kirkpatrick 35
Built Technologies 14
Jamie Dunham 52
Sarah Kennedy 22
Burkley Allen 35
Jeffrey Hull 18
Savvy Financial 18
Casa Segovia-Paz 39
Jeremy Elrod 34
Scott Augenbaum 22
Celero 20
Jesse Harriott 42
Sertainty 21
Charlotte Department of Transportation 35
Joe Maxwell 18
Sphere 20
Joey Jacobs 20
Steve Cretin 18
Cloud Range 22
John and Natasha Deane Foundation 38
Strings 32
Core10 18
John Deane 38
Core Development 31
Keith Durbin 10
Cortnye Stone 34
The Glimpse Group 26
Crescendo 33
Kelty Commercial Real Estate 32
David Benskin 19
Kindful 18
Tim Corbin 48
David Briley 10
Lane Sullivan 22
Bill Flanagan 8 BKD 45 Brand Wise 52
Chase Gilbert 15
Debbie Gordon 22, 39 Dov Hirsch 26 DVL Seigenthaler Finn Partners 38
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R-Z
Larry Hagar 35 Lesa Lorusso 30 Levi Jerome 46 Lily Whitehawk 8
Robyn Mace 10 Ronald Roberts 38
Susan West 39 The Energy Project 40
The Mathews Co. 31
Tony Heard 37, 39 Tony Schwartz 40 Travis Kelty 32 Vanderbilt University 27, 39 Vicki Horne 38
Eagle Rock Ventures 31
LLR Partners 20
Eric Satz 19
Loraine Segovia-Paz 39
Fifth + Broadway 35
Mark Hollingsworth 31
FINTOP Capital 18
Melissa Beard 46
Wealth Access 19
Franklin Synergy Bank 15, 39
Metro Public Works Department 34
Workhuman Analytics and Research Institute 42
Freddie O’Connell 34
NashDigs 10
Yanika Smith-Bartley 39
Waud Capital Partners 20 Wayne Pryor 44
SUMMER 2019 | NASHVILLEPOST.COM
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COMING IN
SEPTEMBER Nashville’s development surge shows few signs of old age. It is rapidly changing our neighborhoods, our skyline and (some of) our attitudes about growth. The Post’s fall quarterly will lead with features on and perspectives into Middle Tennessee’s real estate development, tackling topics such as infrastructure, housing needs and redevelopment trends. We’ll also include our regular sections focused on health care, technology and leadership.
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FAVORITES
MY FAVO RIT E BANANA PUDDING IN NAS HVILLE Marketing expert and cook-off contestant Jamie Dunham says local dining mainstay comes closest to matching her grandmother
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R E A L LY G O O D B A N A N A P U D D I N G S are usually associated with church potlucks, meat and threes and, of course, your grandmother. My grandmother used to buy stalks of bananas and hang them in the hallway of her old rooming house to ripen them for her famous Sunday-size puddings. Since food is the richest of memories, all banana puddings have a long way to go to stand up to my Big Mama’s banana pudding, which combined creamy custard layered with sliced, not-too-ripe bananas and vanilla wafers and was topped with beautiful clouds of oven-browned meringue. No artificial Jell-O pudding or cool whip allowed.
There are a few restaurants in our city with really good pudding — Loveless, Hattie B’s and Edley’s. But the one that would make Big Mama smile is Arnold’s. Perfect, not-toosweet custard and lovely meringue. So, so delicious and the consummate ending to the world’s best meat-and-three food. The OG of Southern cooking!
Jamie Dunham is the founder of Nashville marketing and research company Brand Wise. She finished second in the National Banana Pudding Festival cook-off in 2016 and was a finalist in 2018. jamiedunham.com
DANIEL MEIGS
5/9/19 12:47 PM
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