Talk Business & Politics March/April 2015 by Talk Business & Politics

March/April 2015

Tourism Takes A Front Seat Catching Up With Charles Morgan John Brummett An Interview With the Senate Majority Leader Women At Work At the State Capitol Class Project Governorâ&#x20AC;&#x2122;s Cup Business Plan Competition Serial Entrepreneurs John James & Unni Peroth

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Contents March/April 2015 5 Publisher’s Letter Commentary

6 Amy Whitehead Inside the Numbers

9 Matthew Glass

God Save the Delta

57 Justin Allen

The New Lobbyist

58 Robin Bowen

Higher Education Pays Off Profiles

10 Unni Peroth Serial Startup Entrepreneur

14 A Woman’s Touch 32

38 44 48 50

5 Female Legislators On Life At The Capitol Oaklawn Big Gamble Pays Off

Industry Timber Is The Housing Rebound Enough? Trade The Wal-Mart Supplier Workforce Tightens Agriculture Grainster Going Global Trucking Recruiting Millennials

60 Hometown, Arkansas El Dorado Anchored By The Big Three

65 66

Regional Northwest Arkansas NWA Council Gets A New Game Plan John James: Fueling Entrepreneurship

68 69

Northeast Arkansas Jonesboro Looks Good in Burgundy Nucor Saves A Community

Insights The State Of Media CJRW’s Brian Kratkiewicz

80 Leadership Sixth Sense: Realizing Potential

20 Cover Story: Tourism Takes A Front Seat It’s been a wild ride for Parks & Tourism leader Richard Davies. He takes a look at the state of tourism and what’s to come.

Features The Evolution Of Jim Hendren John Brummett interviews the Senate Majority Leader for clues on principles and pragmatism.

72 More Than A Class Project The Governor’s Cup business plan competition has been prepping a generation of entrepreneurs for life outside the classroom.

82 Executive Q&A The Life & Times Of Charles Morgan www.talkbusiness.net

Entergy Arkansas’ rates are lower than the state and national averages. And here’s our plan to keep them low.

At Entergy Arkansas, we work not only to ensure reliable power, but also to make sure that power remains affordable. That’s why Entergy Arkansas customers have rates below the average for Arkansas and the nation – and why we are committed to keeping costs down while creating value for customers now and for years to come.

1. Providing reliable power. Our plan includes strengthening the electric grid from transmission lines to substations to transformers – to prevent storm outages by planning and maintaining a more robust network.

2. Lowering costs. Keeping a balanced mix of energy resources is an important ingredient to providing customers with clean, reliable, and affordable electricity. Entergy Arkansas also joined the Midcontinent Independent System Operator (MISO) several months ago. And we’re already seeing monthly savings by having access to a large power market that allows us to further reduce costs.

3. Generating jobs. Entergy Arkansas is reaching out to major companies around the world to put Arkansas on the top of their lists for new facilities. Then we work with them to make sure we have the infrastructure they need to power their business – adding more customers to share costs and putting more Arkansans to work.

4. Investing in sustainable communities. The health of our local communities drives our quality of life as a state. Training, education and infrastructure are vital not only for economic development, but also for building a stable society for generations to come. We’re committed to helping our state grow, strengthening communities, supporting non-profits and improving education.

To learn more, visit EntergyArkansas.com.

TALK BUSINESS & POLITICS | MARCH/APRIL 2015

From the Publisher

The Charles Morgan Experience Talk Business & Politics is owned by River Rock Communications and is published six times a year. For additional copies, to be included in our mailing list, or for information about advertising, contact Katherine Daniels at katherine@talkbusiness.net. March/April 2015 Publisher & Editor-in-Chief Roby Brock roby@talkbusiness.net Art Director Bryan Pistole DesignMatters LLC bryan@designmattersllc.com Editor Bill Paddack bill@talkbusiness.net Contributing Writers Larry Brannan Steve Brawner Jeanni Brosius Wesley Brown John Brummett Kerri Jackson Case Michael Cook Rex Nelson Casey Penn Bob Qualls Kim Souza Michael Tilley Jason Tolbert Michael Wilkey Photographers Trey Ashcraft treyark@yahoo.com Stephanie Dunn dunnmsteph09@yahoo.com Tim Rand pix@trand.com Bob Ocken bob@ockenphotography.com Kat Wilson katographic@gmail.com Vice President Operations Stephanie Baker stephanie@talkbusiness.net Vice President Sales & Marketing Katherine Daniels katherine@talkbusiness.net

After 15 years in the business of reporting on business and politics, I’ve seen a lot that has intrigued me. So it’s time for me to reveal a little bias. I’ve always enjoyed doing an interview or having a conversation with Charles Morgan, the former iconic leader for Acxiom. And not just enjoyed the interview – but looked forward to it with anticipation in advance and rehashed parts of it with friends and colleagues afterward. Morgan is one of those larger-than-life personalities that you don’t come across everyday in the arenas I cover. That says a lot considering the showmanship one can experience in my field. His latest book, a memoir titled “Matters of Life and Data,” is a great read for anyone looking to learn more about the history of an Arkansas-based company that found its space in the world. I described the memoir a few weeks ago as Evel Knievel meets James Bond meets Bill Gates, and I highly recommend you get your hands on a copy. One reason I find Morgan so fascinating is because as a college kid in Conway at Hendrix, I spent one summer waiting tables at the Conway Country Club. It was the only nice place for an executive lunch or dinner in the mid-’80s. The time period was a real heyday for Acxiom, known then as CCX. It had just gone public and Morgan would fly bigwigs from New York into Conway on a private jet, tour the facilities and bring them to the club for lunch. They’d sketch out numbers on the back of a cocktail napkin, laugh and shake hands, then leave for the return flight. I’d go over to the table after serving them and look over those napkins – a bunch of numbers with a lot of zeroes on them. I knew I was looking at a multi-million dollar deal, but I was too green to understand the calculations. Morgan was also a 20% tipper, so he earned my appreciation for that, if nothing else. But the real reason I so enjoy a Charles Morgan encounter is because it involves everything I love about the work we do at Talk Business & Politics. Every Charles Morgan interview – and I mean every one of them – always has three key ingredients. With Morgan, you always get news substance. He has always shared his business thoughts on the record in a meaningful way. He is an iconoclastic guy, which inevitably leads his interviews to having a different perspective on what might be a predictable subject. Finally, Morgan has always been willing to show you his personality. While I’m sure he was guarded in many instances – and after reading his book, I know he was – he was still never afraid to reveal a side of himself that helped you understand his decision-making process and leadership style. Did Morgan have his warts and are his detractors justified in disliking him? You bet. I suspect he would even agree that most of their criticism is warranted. But I’ve never had to interact with him on that level. I lucked out and have only experienced many of his good qualities. Please check out our Q&A in the back of this publication and go online to watch our full interview about his new book and many other subjects. It will give you a glimpse of the man who, though far from perfect, ranks up there among the most perfect of interviews. Sincerely,

Printer Democrat Printing & Litho River Rock Communications 8308 Cantrell Road Little Rock, AR 72227 501.529.1737

Roby Brock Publisher & Editor-in-Chief

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Commentary

Inside the Numbers: Checking Economic Activity in 12 Cities By Amy Whitehead Amy Whitehead is the director of UCA’s Center for Community and Economic Development and the Community Development Institute. Data support provided by UCA’s Shelby Fiegel and Ella Selfridge.

ow did 12 cities in Arkansas fare on key economic indicators from June to November in 2014? How does this compare to where they were in 2013? Nationally, the post-recession outlook for unemployment, consumer confidence and other economic indicators seems to have improved. In Arkansas, unemployment rates are down, home sales are positive and sales tax collections are up. In this edition of Inside the Numbers, we’ll do a data dive on some key economic indicators for 12 of Arkansas’ largest cities for a six-month time period, June-November 2014 and 2013. LABOR FORCE, UNEMPLOYMENT Bentonville, Springdale, Fayetteville, Conway, Jonesboro, Rogers, Fort Smith, Little Rock and North Little Rock all reported unemployment rates lower than the state and national rate of 6%, which is the average unemployment rate for the six-month time period being analyzed. Hot Springs (6.77%), Texarkana (6.84%) and Pine Bluff (9.49%) all had unemployment rates that surpassed the average state and national unemployment rate for the sixmonth study period. Across the board, all 12 communities decreased their unemployment rates in a year-on-year comparison, though the labor force contracted in all cities except Jonesboro. Nationally, concerns remain about long-term unemployment, underemployment and stagnant wages.

Across the board, all 12 communities decreased their unemployment rates in a year-on-year comparison, though the labor force contracted in all cities except Jonesboro.

TALK BUSINESS & POLITICS | MARCH/APRIL 2015

HOUSING SECTOR The continuation of low interest rates for 30-year mortgages appears to be a strong factor in the rise of home sales in all cities save Pine Bluff, which saw a 5.3% decrease when comparing June-November 2014 to the same six months in 2013. Little Rock (12.6%), Hot Springs (12.8%) and Texarkana (29.9%) all saw double-digit increases in the number of new home sales. Over the six-month period we analyzed, Arkansas posted an overall 7.79% increase in home sales. The value of home sales was up in 10 cities, ranging from a 3.9% increase in Hot Springs to a 17.4% increase in Texarkana. The National Association of Realtors indicated demand from first-time homebuyers in the U.S. should grow in 2015. Single-family residential permit data send mixed signals on new housing starts. In a year-on-year comparison, the number of new permits was down in over half of the cities, while the value of the permits was down in half of the cities. Little Rock, Conway, Fort Smith, Rogers, Bentonville and Texarkana all had a greater than 10% gain in the value of home starts compared to 2013 data. According to a report issued by the Federal Deposit Insurance Corporation (FDIC) in October 2014, the first three quarters of 2014 showed a decrease in the number of new single family permits issued in Arkansas compared to the same quarters in 2013. COMMERCIAL SECTOR Six cities recorded gains in the number of commercial permits issued during June-November 2014 – Pine Bluff, Rogers, Conway, Fayetteville, Bentonville and Little Rock. Pine Bluff (200%), Rogers (154.5%) and Conway (68.8%) all had an increase of more than 50% in the number of permits, though Pine Bluff’s increase is a result of the city going from one permit in 2013 to three permits in 2014 – not a substantial increase in real numbers. The value of permits increased significantly in Conway, with a 596.3% gain in permit value over 2013. The jump is due in large part to a $60 million dollar permit for a new 96-bed Baptist Health Hospital, which is estimated to have a total project cost of $130 million. Permit value also increased substantially in Rogers, with a 288% increase over 2013. A development in Rogers during this time was a permit valued at $29

2013 vs. 2014 million for the Hunt Towers, a 10-story office building being constructed near Pinnacle Hills Parkway. The first tenant should be able to move in by November 2015. Springdale saw the largest dip in commercial value at -71.3%. SALES TAX REVENUE Sales tax collections were up in all cities, with the top three gains posted from Northwest Arkansas. Springdale, Bentonville and Rogers had increases of 14%, 6.5% and 6.4%, respectively. Collection increases were negligible in Pine Bluff (+0.5%), Texarkana (+0.6%) and Hot Springs (+0.8%). These three communities also had the highest unemployment rates of any of the 12 cities included in the analysis. To view the complete data for each of the 12 cities, visit www.talkbusiness.net/insidethenumbers.

Home Sales

29.9 TEXARKANA

LITTLE ROCK

% 12.6% HOT SPRINGS

Sales Tax Revenue SPRINGDALE

INCREASE

BENTONVILLE

12.8%

INCREASE

ROGERS

14% 6.5% 6.4% INCREASE

INCREASE

Unemployment Rates HOT SPRINGS

TEXARKANA

PINE BLUFF

6.77% 6.84% 9.49%

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TALK BUSINESS & POLITICS | MARCH/APRIL 2015

Commentary

God Save the Delta By Matthew Glass Matthew Glass is president and CEO of Fidelity Insurance Group in West Memphis.

early 10 years ago, while sitting in the lobby of a school in the

Combine that with the highest poverty rate in the state and an

Helena-West Helena School District, I witnessed a life abandoned. A

educational model that has made a high school diploma worthless and

life that I and everybody else knew was over. Not over in the literal sense

you have created nothing more than an incubator for future entitlement

like death, but over in the sense of something much worse. This was a life

recipients.

that had zero shot at success in any of the ways that society measures it.

A 2010 study conducted by the Woodrow Wilson School of Public &

This was the life of a 15-year-old African-American kid who had just

International Affairs along with the Brookings Institute suggests that the

walked into school over two hours late. When quizzed by an administrator

biggest indicator of success in any child’s life is being born into and raised

in the office about why he was late, the student responded that he simply

in a two-parent household. Continuing to educate our children using the

had no ride. Every piece of clothing he had on was filthy. Sweat pouring

premise that our students have two parents at home should be criminal.

Continuing to educate our children using the premise that our students have two parents at home should be criminal.

down his face. I would

This is a problem that everyone understands, yet nobody does anything

later learn that this

about it.

15-year-old kid who

We can’t change the number of children born out of wedlock in the

had zero shot at success

Delta or elsewhere, but we can change how we educate those children.

in life had just walked

The model that exists today is to take students who come from a two-

two miles to a school

parent home and prepare them to score well enough on a college

that would no more

entrance exam to gain admission. That’s great for the small minority of

prepare him for success

kids in the Delta who live in two-parent homes, but it’s either a prison

in life than a 30-year

sentence or a SNAP enrollment form for the remaining number of kids

stint in prison.

who come from a one-parent home.

Over the last three

The recent takeover of the Little Rock school system by the Department

decades, some of our

of Education is nothing new to schools in the Delta, and it further

state’s brightest minds

illustrates the point that our entire state’s educational model is wrong.

and deepest pockets

Instead of schools being taken over by the Department of Education,

have come together

maybe the Department of Education should be taken over. In his inaugural

to form a variety of

address, Gov. Asa Hutchinson stated that “today is a new day.”

coalitions and initiatives to combat the plight of the Delta. All of these

If the governor means what he says, then I can think of no problem

programs and people have been well focused and intentioned, but in my

greater than overhauling our state’s educational system. This governor

opinion they will never achieve the level of success needed to revive the

and this Legislature have the opportunity to ensure that the fate of one’s

Delta with an educational system that relies on a two-parent household.

success or failure is not cemented by the circumstances they were born

According to the Centers for Disease Control & Prevention, the number

into, but rather by the opportunities that can bring them out of them. God

of children born out of wedlock has risen by more than 300% since 1960.

Save the Delta.

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Profiles Service PHOTO BY BOB OCKEN

Unni Peroth at The Arkansas Venture Center

From India to Silicon Valley to Arkansas IT specialist and serial startup entrepreneur Unni Peroth is excited about being a part of the growing entrepreneurial energy and activity in Central Arkansas. By Wesley Brown 10

TALK BUSINESS & POLITICS | MARCH/APRIL 2015

here are probably not many startup risk-takers who would boast about leaving the comforts of Silicon Valley to chase their dreams elsewhere. Yet Bfonics co-founder and CEO Unni Peroth has found a perfect place in Central Arkansas to test and grow his entrepreneurial mettle. A self-described serial startup entrepreneur, Peroth has spent the last 15 years of his globe-trotting career as a much soughtafter software architect and information technology expert. Nearly eight years ago, he made the decision to move his family to the Little Rock region, away from the venture-capital friendly San Francisco area, the literal center of the startup and technology universe. Today, the India native, who has worked in seven countries, laughs about the fact that he had to explain to his friends across the globe why he was moving to Maumelle. “When I said I was moving to Arkansas – they asked me, ‘what are you going to do there?’” Peroth said. “For me, [Arkansas] is a good place for family and I felt there are a lot of good things going on in the technology sector in other places outside Silicon Valley.” During his career, the 36-year old Peroth has worked for technology giants IBM, Samsung and Hewlett-Packard (HP) while on the West Coast. Despite those demanding corporate day jobs, he still managed to moonlight and stay actively involved in startup and early stage ventures. When he moved his wife Sreeja and daughter Esha to Arkansas, Peroth also immediately began seeking out early stage business opportunities, although he found a corporate position as a systems manager for Transamerica Employee Benefits, a Little Rock life and health insurance provider. While there, beginning in 2007, he was responsible for information technology strategy and the overall effectiveness and efficiency of the workplace benefits provider’s IT systems and operations. In late 2014, Peroth decided to exit the Little Rock voluntary benefits company and put his full energy into a myriad of emerging business opportunities and volunteer activities in Little Rock’s growing startup community. TIES TO FIVE STARTUPS Peroth said he is excited about what is

taking place in Central Arkansas, and wants to be part of the burgeoning entrepreneurial energy and activity, fostered by the development of the Main Street Corridor and the Little Rock Tech Park, along with the grassroots efforts of the Arkansas Venture Center and Argenta Regional Innovation Hub. “I want to contribute to the success of what’s going on here,” Peroth said. “I don’t know what brought me or is keeping me here, but I would like to give something back. That is my future – I want to create some jobs and help people out.” He added: “If I need to, I can get a [corporate] job any time, but that is not my focus now.” Currently, the list of early stage companies the former Silicon Valley IT specialist is involved with is quite impressive. His name is currently tied to the creation or development of at least five startups or early stage development companies in the Little Rock area, including Bfonics, LenDen, nFonics Solutions, MedicusConnect and Bid4Time. He also serves as a mentor at the Arkansas Venture Center and the ARK Challenge, the statewide accelerator program for technology startups. MARKETPLACE APP Still, there is no doubt that birthing and breathing life into an infant or early state technology firm is what gets Peroth excited. At nFonics, he is chief strategy officer for the software service consulting firm with operations in the U.S., India, the Middle East and Europe. As co-founder of LenDen, he was behind the development of a neighborhood marketplace app that helps consumers buy, sell, exchange and give away things in their own neighborhood. “It is a location-based app that is working great in India and the Middle East,” he said. Peroth has also put his experience to work in the venture capital side of the tech sector. He and partners in India created a “first seed” fund and incubator firm called Your Seeder, where the goal is to provide early stage, seed funding for innovative business ideas with “high value growth opportunities.” But it is at Bfonics where Peroth sees a

thriving technology firm with accretive earnings over the next five years. He said he is a big fan of former Gov. Mike Beebe’s strategy that the way to build a local economy is by adding highly skilled and good-paying professionals through smaller companies that add a few employees at a time. “It is not only about the jobs, it is the confidence gained by others to start a business,” Peroth said of startup companies and small business development. “That is where the real value is. Everyone knows that HP [Hewlett Packard] has been around for a long time, but to a kid who wants to get in business that may not be the model that you want to show them.” That said, Bfonics’ short-term goal is to be a significant technology firm in Arkansas with revenues up to $10 million in five years and a payroll that supports 50 to 60 employees. Today, the Little Rock startup has four full-time employees and five consultants on the payroll, besides the company’s four founders – Peroth, Romy Mathew, Arun Raj and Binoy Mathew. As Bfonics’ chief executive, Peroth’s key role in the company’s early development is successfully explaining to potential business customers and partners how Bfonics adds value to retailers and shoppers in the growing consumer and shopper engagement sector. He also has to make sure that his investors get the maximum return on their investment as the company seeks to grow. “Bfonics is here to help those retailers to engage those shoppers real time and in-store, which can lead to more sales and improved return on investment for store owners,” he said. “Our proximity marketing platform allows retailers to deliver highly targeted mobile experiences when it matters the most to the customers. For shoppers, they get real-time deals, dynamic pricing and personalized messages real time, which may lead to more shopping.” POWERED BY APPLE TECHNOLOGY As a licensee of the latest iBeacon technology from Apple, Inc., Bfonics plans to take the computer and technology giant’s new Bluetooth-enabled and location-based mobile tool to the next level. The company is already testing several products and www.talkbusiness.net

Profile: Unni Peroth solutions that help retailers use cost-effective mobile technology to connect with their customers and offer customized deals. Google has also announced plans to debut a new “Nearby” service that triggers actions based on device location awareness for Android devices, according to industry reports. That new feature is expected to be a rival to Apple’s iBeacon, although nothing has officially been released. Like many industry experts and analysts, Peroth believes iBeacon technology and similar location-based technology will be the “next big thing” that hits the growing smartphone marketplace. In fact, at this year’s international Consumer Electronics Show (CES) in Las Vegas, the huge technology trade show in that the New York Times called “Woodstock for nerds,” several companies announced major developments involving the emerging location-based technology. The way the Apple-branded “beacon” technology works is that platform users are able to send location-based messages or prompts directly to a smartphone or tablet. What excites just about everyone is that the GPS-enabled technology is based on hardware that is relatively cheap, battery-friendly and low-energy. The beacon hardware, about the size of an Oreo cookie, is also small enough to attach to a wall or countertop and can be deployed for a multitude of possibilities and endless mobile applications, Peroth says. For example, at a grocery store, shoppers might be reminded by the retailer to check their shopping list app upon entering a store, or receive text messages offering coupons and daily specials based on their online profiles. Or a local manufacturer could use a beacon app to detect and locate workers at a large factory, removing the need for a standard time clock or the need to keep track of the employees’ hours for payroll. TESTING THE TECHNOLOGY Currently, retailers, galleries, restaurants, museums, public spaces, health-care providers and enterprises across all sectors are testing the technology in their workplaces. According to an analysis by Business

Insider Intelligence, there is an estimated 30,000 active beacons in the U.S. today. Within four years, the same study reports, the number of installed beacons is projected to grow 287% to 5 million (4 million of those are expected to be in use by retailers). At this year’s CES show, which was held Jan. 6-9, several companies also gave demonstrations of new applications, products and developments that were powered by the iBeacon technology. And just before Christmas, the emerging technology got a big boost when a McDonald’s franchise in Columbus, Ohio, announced that it was partnering with a San Diego-based beacon provider to give its customers “a new and better dining experience.” The California tech firm, called Piper, offers iBeacon technology that will allow franchise owners to easily deliver coupon offers, timely alerts, job opportunities and surveys to any customer with a McDonald’s app that walks through the fast food giant’s door. Piper’s technology will also support the latest iPhone and Android platforms, something that Bfonics’ customers will enjoy, too, Peroth said. HELPING RETAILERS For now, the enterprising India native said his startup will initially focus on working with local retailers and helping them to engage personally with shoppers. He said the Bfonics platform is designed to leverage beacon technology by enabling the delivery of marketing messages to consumers in real time via their mobile devices, and also provide marketers the opportunity to customize and change messaging or offers “at the touch of a button.” “With our smart beacons and platform, we are moving forward with one goal – helping retailers [both brick and mortar stores to major chains] engage their customers in a better way, in-store and real time,” he said. “We are going to help them to convert a moving mass of consumers to loyal customers.” Currently, Peroth said that Bfonics is in negotiations with two large corporations in Arkansas that may test the company’s technology sometime in the first quarter.

TALK BUSINESS & POLITICS | MARCH/APRIL 2015

Once retailers and shoppers are able to actually see the new technology in action, he believes the company will experience dynamic growth in just a few years. “We are also in the process of building an iBeacon-based network to cover busy city streets, malls, airports, metro rails and more,” he said. “Don’t be surprised when you get some information – it can be a deal, information about weather, traffic, events or anything you prefer to receive – to your smartphone when you walk through the Little Rock River Market or in the Hot Springs downtown in the near future.” The next step for Bfonics is to actively market its technology to potential customers in Arkansas, then target markets across the U.S. and abroad. Peroth readily admits that he is not a natural salesman and at some point, he may have to turn the CEO reins over to someone who is better able to take the company to the next level. KNOWING WHEN TO LET GO “This is a technology company, but it is also a sales organization. And if you would ask me if I am the most capable person to run a sales organization, I would say no,” Peroth said. “I am about creating things, refining it and taking it to the next big level and then handing it over to someone who can sell it better than me. “The moment I have such a person, the moment I have the resources, the moment I have sustainable income and revenue stream, and I have completed my commitment to investors – then it would be better to give it over to someone else,” he said. He added that he has birthed at least eight other startups in the past, some great successes and others “not so much.” But, he said, all of his “babies” have taught him important lessons about developing early stage tech firms, as well as giving him the necessary experience to know when to let go. “I have had eight babies,” he said wistfully of his former startup ventures. “But I also like to figure out and do new things.” When the time is right, Peroth said he already has some great ideas that he would like to pitch to investors for his next venture.

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Sen. Missy Irvin studies an issue

A Woman’s Touch Female legislators – busy during the ongoing 90th General Assembly – have risen in numbers, prominence and influence over the past several decades. Are there still many steps to climb in the stairway to equality? By Steve Brawner

TALK BUSINESS & POLITICS | MARCH/APRIL 2015

STATE REP. MARY BROADAWAY State Rep. Mary Broadaway is a secondterm Democrat representing Paragould in the House. She is an attorney in the law firm of Broadaway and Broadaway with her husband, Brad. They have three children. TB&P: It’s 2015, and women make up only 20% of the Legislature – 20 members in the House and seven in the Senate. Why does the percentage still not mirror the general population? MB: I still think it’s sociological. It’s been very interesting that there have been studies done of children ... men are much more likely to identify themselves as people who are likely and interested in taking on a role in politics and leadership and government. I wish that I had the percentages, but I was astounded at the gap between little boys and little girls – at least 15 to 20 percentage points. And I think that carries on through. It has also been studied that the number one reason that women run for public office is because they are approached and asked, that they often don’t think about it or consider that a primary goal. Women still, I mean, we’ve come so far, and women are professionals and they have jobs and they are tremendously successful, but we still also consider our biological clocks and parenting and raising children as a very high priority. And so as you look around, there are not that many women that have small children that are in the Legislature. A lot of women that choose to run, run later in their lives, and so I think that there is still the disparity for how we’re wired and sociological reasons. TB&P: On the campaign trail, do you feel you have to overcome a bias against you, or does being a female actually help with voters? Or does it even matter? MB: That’s hard to tell. I did not feel a bias at all. I thought in some ways that it was

helpful to me. I think women are excited about female candidates, and I think that men often view women as fresh and want to have a female perspective. So when a woman finally makes a decision to run, I think it’s often very helpful to be a woman. The other thing that you have to look at it is what you have done in the community. And I lived in the community where I ran for 20 years. I was involved in every civic organization in all kinds of leadership roles, and so people knew me as a person, not necessarily as a woman or a man. TB&P: Do the skills of persuasion you use to win a case as an attorney translate to the Legislature, or do you have to use an entirely different set of skills to compromise and get legislation passed? MB: I have found that being an attorney is extremely helpful to me in the Legislature. Certainly on the most basic level, I’m used to reading the law. And I think one thing that’s really helpful is that you can look at laws and kind of see unintended consequences sometimes of very well-intentioned legislation. And so the part of being a lawyer that helps you analyze is very important. Now as far being able to get your legislation passed, which I think is what your question actually goes to, I think that’s helpful as well. I think when someone is confident in the well, is confident speaking in front of people, you are persuading just like you’re making an argument to a judge or a jury. And so absolutely I think those skills are helpful. Also, as an attorney, one negotiates and compromises, and that is such an integral part of legislation. It’s rarely a bill that is not amended or discussed or some kind of compromise is made before it actually becomes a law. So I think that it is enormously helpful being an attorney. STATE SEN. MISSY IRVIN State Sen. Missy Irvin, R-Mountain View, is serving her second term in the Arkansas Senate. A doctor’s wife who works in their family practice, she’s well-known for her positions on health-care-related issues such as the private option, which she initially supported and then opposed. Among her current bills – unsuccessful so far – is Senate

Bill 273, which would prohibit the Department of Human Services from carrying out portions of former Gov. Mike Beebe’s Health Care Payment Improvement Initiative, which rewards medical providers that keep costs below certain levels for so-called “episodes of care” and penalizes them if costs are too high. TB&P: Is it time to get past the perception that women legislators, or other working women, are “juggling” motherhood and professional duties? Should we even be having the conversation in this day and age that women have to sacrifice something to be able to serve in the state Legislature? MI: I would say we don’t need to have that argument or discussion anymore. There are so many women here that deal and are on the front line with their kids, whether it be public school education or curriculum or small business owners. There are so many women out there who are so active in our state. And their voices aren’t really heard up here. That’s why it’s important to have women legislators up here because we bring a different perspective, we bring a different voice to it. TB&P: You’re the co-sponsor of the Fair Sentencing for Minors Act, which would make it possible for a minor sentenced to life in prison to be eligible for parole after 28 years. What made you decide to sponsor that act? MI: As I reviewed the Supreme Court cases, it looked to be a judgment that came down that I thought we needed to pay attention to. I also looked at my time as serving as chair of the Children and Youth Committee, the different things that I learned about our [Division of Youth Services] system and [Division of Children and Family Services] system, and really trying to understand. www.talkbusiness.net

Profile: A Woman’s Touch I think a lot of time, when you’re talking about a minor, you’re talking about someone who is still under the roof of their parents. ... And so I think when you look at that, a lot of times, children are, they’re definitely results of their circumstances in many, many occasions, and I’m a parent of four children, and I see that I’m responsible for them. And so when I looked at the situation, when I looked at that, I

really thought that it was absolutely worthy to be able to begin the dialogue about this issue, given the Supreme Court cases, given the different states that have gone down this path – particularly [former Texas Gov.] Rick Perry’s comments and his advocacy of this in Texas. TB&P: Do you think that female legislators see faces when discussing policies, where

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male legislators sometimes see just numbers? MI: Yes, I would agree with that. I think that women legislators, we’re process thinkers. We try to process through how that policy is going to affect the people in the state in a more personable way, I think. Not to take away from any of my male colleagues, but they’re definitely numbers driven. And I think with women, particularly an issue that I brought up last week [was] the health reform that Gov. Beebe has put in place. In theory and in practice, yes, we want to cut budgets, we want to save money, and we want to do those, but at the end of the day, when you do it at the expense of people, the citizens of our state, and you’re holding people accountable, in this case doctors accountable for something that’s beyond their control, then I tend to look at that and say this is worth a lot more debate and a lot more discussion. I think women legislators have compassion. I do; I guess I can speak for myself. When it comes to Medicaid, and when it comes to this issue, there can be a point where you say we’re just going to find every single way to save money, even though you’re holding the doctor responsible for the fact that the parent of that Medicaid child didn’t pick up their antibiotic or didn’t give them the full regimen of their antibiotic or hasn’t bathed them in a week and a half. I’ve been somebody who’s actually given a child a sponge bath in the clinic before, so this is real life when it hits that point. The same is true in education. I have four kids in the public school system, and I can tell you when my child has been one field-tested for the [Common Core] PARCC test, I can tell you how crazy that stupid test is, because I’ve experienced it and I know it. So I think we bring a very different perspective because we’re the ones on the front lines with a lot of the policy and how it’s implemented and how it just actually meets real lives, at least for me. When you have kids in the public school system, or when you are married to someone who’s treating a lot of Medicaid patients, then I feel like I have a front row seat to where that policy really hits real life.

STATE REP. CHARLOTTE DOUGLAS State Rep. Charlotte Douglas, R-Alma, a seondterm legislator, is a retired anatomy and physiology teacher. She represents Crawford County and parts of Sebastian County in District 75. TB&P: You’re a former educator who now sits on the House Education Committee. What perspective do you bring because of your background? CD: I bring a 360-degree perspective that is very unique. I taught in public schools. I have a brother that is a private school administrator and another brother who is a retired public school superintendent. Six of my grandkids are homeschooled, and my father taught and coached in higher ed. Our dinner conversations can be very intense. This has given me the passion to fight for the best education for all kids. One size doesn’t fit all. We have to be able to form partnerships across these battle lines for education to be effective for all children. TB&P: Do you ever find yourself having to go against your inclinations as a teacher, such as with budget issues? CD: As citizen legislators we all bring different perspectives to the table. Our conversations and questions in committee allow us to see issues through the eyes of all Arkansans. As we gather that data we realize that what is good for all Arkansans is usually also good for each of our districts. I try to stay true to teacher issues because that group is shaping the next generation of Arkansans. We need to support them and give them worth. They deserve more respect than they are presently getting. TB&P: Your dad, Ouachita Baptist University basketball coach Bill Vining,

could be a tough guy even though he had a heart of gold, and I know you had some high-testosterone brothers. Did that prepare you for the mostly male world of the Legislature? CD: We competed with each other in every sport. I was sure I could hit that baseball just as far as my brothers. And even if I didn’t, I usually was able to convince them I did. My five brothers and sisters are all

tremendous public servants. Our example was our parents. My dad was the diplomat. Very measured, never met a stranger. But my mom was the one we learned courage and confidence from. There are a lot of old (Arkansas Intercollegiate Conference) officials who still remember her scathing indictments of their officiating skills. Growing up in the Vining home was great preparation for the skills

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Profile: A Woman’s Touch I have needed in the predominately male world of a legislator. Just ask my brothers!

to settle everybody down so business can get done? What ways do you use your classroom skills at the Capitol? LC: I use my classroom voice to gain control of the committees that I’ve had the opportunity to chair. One of my colleagues often tells me that I talk to him like a teacher. I think that is a good thing because I believe that provoking discussion is critical, and allowing full participation is essential. You can’t do that without order. TB&P: You’re also a former Little Rock School Board president. What is the one thing that needs to happen for that district that would be effective but also doable? LC: I believe that we need to concentrate on growing our own superintendents, much like North Little Rock does. We have brought too many folks into Little Rock who have no knowledge of the history of the district and no cogent plan to move it forward. When I was president of the board, I pushed to hire a superintendent with Arkansas ties. Fortunately, we hired Don

STATE SEN. LINDA CHESTERFIELD State Sen. Linda Chesterfield, D-Little Rock, who served three terms in the House and is in her second term in the Senate, is a retired educator and past president of the Little Rock School Board. She also was president of the Arkansas Education Association and served on the National Education Association’s executive committee. TB&P: You’re a former educator. Do you ever find yourself using a teacher’s voice

Roberts. TB&P: You’re an African-American female Democrat from Little Rock who once was president of the AEA. A lot of people would read that description and make the assumption that you are pretty liberal. But I’ve heard you say things through the years that give me the impression that you don’t like being placed in a box. Is my impression a fair description, and if so, how do you stay out of that box? LC: I agree with your perception of who I am. I don’t like being put in a box, and I do not judge my colleagues by labels assigned to them. I just always figured that, ‘When two people agree on everything, somebody is not thinking.’” STATE REP. JULIE MAYBERRY Freshman state Rep. Julie Mayberry, R-Hensley, is perhaps best known as the former co-host of KATV’s morning news show, “Daybreak.” Her husband, Andy,

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TALK BUSINESS & POLITICS | MARCH/APRIL 2015

held the legislative seat before she did. Mayberry’s career has been spent in media and advertising. After leaving TV news in 2001, she was a television spokesperson and the owner of Mayberry Advertising with her husband. The couple also founded I CAN! of Arkansas, which provides extracurricular opportunities for children with disabilities. TB&P: You now occupy the same seat your husband occupied. Should people have a problem with that? JM: No. Andy served two terms in the House of Representatives. While he was there, I helped him behind the scenes. And now that I am there, he is helping me. That

is just what makes our marriage work. We do everything together. I think voters in District 27 know that and felt comfortable with me taking his place. They knew they were getting the same team. No one ran against me in the primary or the general election. I believe that’s because they know and trust that they would be represented in a similar way. It certainly has helped me as a freshman understanding a little more of the process because I witnessed Andy go through it. TB&P: You’ve gone from reporting on the news to making it. Does it feel empowering to be in a position to actually make changes, rather than just presenting information and hoping it makes a difference? JM: The media can at times be an even more powerful force than a legislator. I value both roles. They both have a place in the process. I do believe that my background as a reporter has helped to prepare me for the job I am now doing. As a

reporter, you are asked to cover a variety of topics. Very quickly, you have to know who to ask questions, what questions to ask and be able to decipher fact from fiction or opinion. Then you have to take that information and share it in a concise manner. You are also trained to know that there are always two sides to every story and it’s important to look at the issue from different perspectives. TB&P: You’re a pro-life legislator who sponsored a bill to prohibit tele-abortions. When you hear abortion called a “women’s issue,” what is your reaction? JM: Abortion is a “people’s issue.” Preventing abortions saves baby boys and girls. It also affects both the mother and father. HB1076 and SB53, which will prevent webcam abortion from starting in Arkansas, are sponsored by Sen. Missy Irvin and me. Being pro-life means I value life from conception... Notably, every female in the House (from both parties) supported this bill.

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TALK BUSINESS & POLITICS | MARCH/APRIL 2015

ILLUSTRATION: SHAFALI ANAND

Cover Story

Tour de Force Richard Davies is set to retire later this year after 42 years of helping to promote – and grow – the tourism industry in Arkansas. By Roby Brock www.talkbusiness.net

Cover Story: Tour de Force

ichard Davies certainly knows his way around Arkansas. State government, too, for that matter. As executive director of the Department of Parks and Tourism, Davies oversees development and operations of the parks and all the people and duties that go along with that. He’s worked for the Richard Davies department for 42 years, been director of the department for 20 and has served under eight governors. Along the way, he’s been named State Parks Director of the Year by the National Association of State Parks Directors, and has been inducted into the Hall of Fame by both the Arkansas Game and Fish Foundation and the Arkansas Hospitality Association.

The Arkansas Broadcasters Association named him Arkansan of the Year in 2004. He can recall experiences, adventures and improvements with the best of them. Talk Business & Politics Editor-in-Chief Roby Brock sat down with Davies in February to discuss his long career in Arkansas tourism. TB&P: Tell me how you got started in this industry. Davies: Actually it was an accident. I was a journalism major and had gotten out of the University of Arkansas and Army active duty and was looking for a job. Bill Henderson, who was another journalism graduate from the University of Arkansas, was the director of Parks and Tourism. He was looking for an administrative assistant who could write about not so much tourism but what the department was doing. That was in the days when [Gov. Dale] Bumpers had put a lot of money into state parks in places like DeGray and Toltec and the Folk Center and those places were just

coming online. So I was writing about what the department was doing, and it became more and more administrative and less and less writing. I ended up over at State Parks for 14 years and back here for another 25. TB&P: How big was everything back in the day then? It had to be a lot more of a skeleton crew than it is now. Davies: It was a lot smaller. There were probably 15 or so less state parks; the tourism budget for a promotion might have been $600,000 or $800,000. The park system now makes about 25 million bucks. And I remember when the first year we made a million. TB&P: When was that? Davies: That was probably back in the ’70s. TB&P: Were you just hooked? Davies: Yeah. There’s a family tie. My grandfather was the first director of State Parks and my dad worked at Petit Jean when

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they were building that. And I don’t know if it’s in the blood or what, but you get hooked from both the Parks side and the Tourism side. When people ask why I like it, it’s that you have no clue what’s going to happen tomorrow. You may have a list, you may think you know what you’re going to do, but it’s extremely diverse and you can’t ever count on anything. We’re really fortunate that we’ve got gorgeous places in Arkansas. Not just the state parks, but a lot of the Corps of Engineers areas and the forests and private areas as well. And the good thing about it, there’s some very good people in the industry who honestly do feel like they’re Arkansas’ front door, that they have a responsibility to make people welcome, to make them like Arkansas. One of the things I like hearing on emails or comment cards or whatever is when they say everybody in Arkansas is so nice. TB&P: I’m pretty sure your New York counterpart doesn’t get that same type of email there. Davies: Yes, but besides the gorgeous scenery and the resources, we really do have really nice people here. TB&P: Let’s go prior to the eighth of a cent sales tax. What happened from your time in the system before the passage of that tax? What were the struggles, what were the assets that you had to work with? Davies: The issue with state parks literally from the very beginning is that there’s generally more support to build them than there is to take care of them. And if you look at the history of state parks, you’ll go through these growth spurts. Then when it comes time to take care of them, it’s suddenly time to cut government back. You know the joke around here is that everybody wants to build statues, but nobody wants to clean up after the pigeons. So if you look at our history, it was about a 20-year cycle. Dale Bumpers called the state parks system a statewide embarrassment when he became governor. And he invested more money in State Parks in his www.talkbusiness.net

Cover Story: Tour de Force administration than had been spent in all the time back to the 1920s when Petit Jean was established. So we were in this great expansion, and were hiring all these young college kids, and were all working together and growing up together. Then suddenly it’s time to cut back on government. And we were given a lot of parks we didn’t even ask for in some cases and no money to take care of them. Suddenly you’ve got more babies than you can feed. We were into that cycle again. And so prior to the eighth of a cent, the hole had gotten so deep there was no way the Legislature would ever have enough money to pull it out. So basically, we had a legislative committee, and Game and Fish did, too. There were sort of parallel issues. And we took around legislators to all the parks and said, “Guys, we’re not lying to you, take a look at this stuff.” We literally were taking siding off the back of a building and putting it on the front if it looked better. And so they said, “Well, yes, we agree you’ve got a problem but we don’t have any money. So you’re just going to have to go get it yourself.” Steve Wilson at Game and Fish and I got together and decided we should get into a coalition, so to speak. We decided to add the Department of Heritage because they had the Old State House and the natural areas and all that, and Keep Arkansas Beautiful, which at that time was an executive agency out of the governor’s office. We just went out to the voters and said here’s the situation: How do you want your parks to look? How do you want your game and fish areas to look? How do you want your historic buildings to look? I think at that time one-eighth of one cent came to $10 a taxpayer per year. We also found out that … people would do things for their kids that they wouldn’t do for themselves. So the slogan was “Save it for the Kids.” And, of course, you remember, we had to do it twice because it wasn’t advertised by the secretary of state correctly. So in ’96 we finally got it passed and it saved us, I mean, literally. TB&P: So take me back to the backstory – where did the idea for an eighth of a cent

as the funding mechanism come from? Were you guys in a backroom at Doe’s one night? Davies: No. TB&P: Who was the brainchild? Davies: Missouri. Missouri had done it. And I don’t know if theirs was constitutional. Ours had to be constitutional because of Game and Fish. They couldn’t accept general revenues. So we had talked to them about what they had done, what they had learned. One of the

“The issue with state parks literally from the very beginning is that there’s generally more support to build them than there is to take care of them.” – Richard Davies jokes up there was that Missouri, I think, ended up on one election with a sixth of a cent. The people of Missouri thought that a sixth was less than an eighth, you know. So they said, “well heck, we should have gone for a quarter.” Anyway, what we did, though, is we went to the Legislature and we backed into a one-eighth of a cent. In other words they said, “OK, what have you got now? From all sources, whether it be general improvement

TALK BUSINESS & POLITICS | MARCH/APRIL 2015

funds, whether it be the real estate transfer tax, whatever. OK, you’re not going to fix it all at once anyway, so if you took 10 years and spread it out, how much would you need?” So we had our money calculated, and literally we backed into one-eighth of one cent that would generate the amount of money we needed. The only thing wrong about that was that as soon as we got it, the natural inclination of governors and legislators is, “well, you’ve got your own money, now you don’t need that [the other fund sources].” I said, “Wait a minute, that wasn’t the deal.” TB&P: We would’ve asked for more if we’d known, so… Davies: That’s right. Or give us a sixth and we’ll give you all of it back. So that’s the only thing that bothers us about the sustainability. … We can’t overbuild to the point that the funds we have can’t take care of it. And that’s the monster in the closet in the park business. TB&P: Yeah. So you’re coming up on 42 years? Davies: I started in ’73, so, yeah, 42. TB&P: Is that eighth of a cent conservation aid the biggest thing that you think has catapulted the tourism industry? Davies: There is no question. If somebody said what’s the best thing you had anything to do with, it’s the eighth of a cent. Because of it – the theory on it was on the front end, and it’s still working this way – is most of that money is going to go to fixing and replacing things. And over time, if you take care of it you won’t have to do that much of that. So over time that fund eventually will become more of a maintenance fund than it will be a capital fund. It’s working pretty well. But … as you know, it would be very easy to spend more on building things and then someday saying, “Daggone, I can’t pay the light bill again.” TB&P: In your 42 years you’ve seen the tourism industry evolve into a more than $6 billion industry. Could you have in your

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Cover Story: Tour de Force industry has gotten organized. Technology has changed everything. It used to be that tourism research was fairly simple. You’d put an ad in Southern Living and you’d get a coupon back and you’d know how many people answered the ad. There were no such things as websites, Facebook, Twitter or blogs. I guess the product has changed because the demand has changed. I can remember, for instance, if you Davies receives an award at the 2013 Arkansas Governor’s Conference on Tourism went to Petit Jean, and they had a trail, you might walk it. industry. I’ve always called it the “Rodney But that’s not why you went. Dangerfield of economic development.” Now people go to hike the trail and if Everybody loves factories, but tourism you’ve got a cabin they’ll stay in it. If you employs almost 100,000 people. see what’s happened, it’s completely turned What has happened over time is the wildest imagination thought what has happened would happen? Davies: When I started, tourism was just asserting itself that it was in fact an

around. The activities are driving the visitation a lot more than it did. Back in the ’70s, how many adult bicyclists did you know? I remember my wife putting down the paper one day and saying, “Do people really ride bicycles down mountains?” I said, “Yes, on purpose.” Motorcycles. We just reprinted 100,000 motorcycle guides. And we can’t keep them. Go to Mount Magazine, Petit Jean, any of the places in the Ozarks, the resorts on Ouachita, and there are motorcycles everywhere. So things have changed. The Clinton library. I grew up in Little Rock. I used to tell people that the River Market’s where you went to get murdered, not get a drink. It’s just transformed. Look what Crystal Bridges has done up in Northwest. Everything has drastically changed. The industry, to their credit, is doing their best to keep up with it all. TB&P: You’ve seen a lot in four decades. What’s your vision for where the tourism industry goes next?

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Davies: If the trends continue, it’s going to become more and more specialized. It used to be when we promoted, you could talk in vast generalizations.

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TB&P: The Natural State. Davies: Exactly, the Natural State. But now if you have a specific interest, you want specific information on that specific interest. TB&P: So you will leave this agency on Nov. 30 of this year. What are you going to do in retirement? Davies: Probably play with grandkids, hunt, fish, go to the family place and mow grass and fix fences. Somebody said do nothing but that kind of stuff for six months and then figure out if you like it or not. TB&P: It’s been a good ride. Davies: It has been a good ride. I mean, it’s like family. That may be the hardest part. I love my family and wife, but all my friends – and some are all over the state – I’m not going to be seeing them every day.

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Cover Story: Tour de Force

City, Town & Country Arkansas’ diverse attractions provide a range of opportunities for tourists. By Talk Business & Politics Staff

hether you want city life, country life, something in-between or a little bit of both, Arkansas’ tourism destinations offer you choices. As Richard Davies mentioned in his interview, the products have evolved and adapted to consumer needs and desires, while still capitalizing on the natural resources and man-made creations that appeal to visitors. Whatever the magic formula is, it’s working. Tourism has been on a tear the last three years – really for more than a decade despite the blip of a slowdown during the Great Recession years that crushed a lot of vacation spots. In 2014, the travel and tourism sector in most Arkansas cities and for the state saw healthy gains in tourism tax collections, the broadest measurement of visitor and travel activity. Collections of Arkansas’ 2% tourism tax needed only 11 of the 12 months of 2014 to set a new annual record. Collections of the tax during the first 11 months of 2014 totaled $12.866 million, up 7.51% compared to the $11.967 million during the same period of 2013. The 2% tourism tax set a record in 2013 with $12.716 million, and once tallied the 2014 numbers should surpass $13.5 million. Tourism tax collections in Northwest Arkansas’ four largest cities were up a combined 8.2% for the first 10 months of 2014. Hospitality tax collections in Fort Smith and Van Buren were up 4.2% and 1.4%, respectively. Conway saw similar collections increase 4.35% in 2014. Hospitality tax revenue was up 2.3% and 2.1% in the tourism towns of Eureka Springs and Hot Springs, respectively. Collections were up 5.26% in Little Rock during 2014.

Industry jobs are also increasing. Arkansas’ tourism sector (leisure & hospitality) employed 113,900 during December, up from 110,400 during November, and above the 106,900 during December 2013. The December number, if it stands, marks a new record for employment in the sector. Employment in the sector is up 23% in the past 10 years. So with all that going for it, are tourism officials resting on their laurels? Hardly.

The 2% tourism tax set a record in 2013 with $12.716 million, and once tallied the 2014 numbers should surpass $13.5 million. BRIGHT LIGHTS, BIG CITY Little Rock marked another year of progress for Central Arkansas. The capital city celebrated the 10th anniversary of the Clinton Presidential Center, which has far surpassed expectations for attendance. Gretchen Hall, CEO of the Little Rock Convention and Visitors Bureau (LRCVB), can recite a litany of statistics to highlight the presidential library’s impact on Central Arkansas, but two truly stand out for their significance.

TALK BUSINESS & POLITICS | MARCH/APRIL 2015

“It put us on the map … As we look back 10 years ago, our annual tourism visitation has increased 33%,” Hall noted. “Our tourism tax – our A&P [advertising and promotion] tax – in Little Rock has increased 65%. So you’ve seen massive increases in the tourism product and the tourism numbers. Still, Hall says if she were a teacher handing out grades, she’d give Little Rock a B+. “Always room for improvement,” she says. Hall said there have been several tactical decisions her group has made that have benefitted tourism recruiting efforts in Central Arkansas. Efforts include targeting meetings and conventions for travel writers, meeting planners and tour operators in order to showcase the city to decisionmakers in the meeting/convention industry and to gain more media exposure from travel journalists. “Awareness continues to be an issue,” Hall says. “We always exceed expectations once people visit, but often we are trying to overcome the fact that they have no perception, recognition or awareness of the destination.” Little Rock’s positives, according to Hall, go far beyond the Clinton Library. She touts continuing development of Main Street as a creative corridor, the addition of hotel rooms in the city and national recognition of local restaurants. The Main Street revitalization should pick up the pace in 2015. New restaurants and building renovations are coming online and the offices and rehearsal space for the Arkansas Symphony Orchestra and Ballet Arkansas should be finished in the first quarter of 2015 near the existing Arkansas Repertory Theater. The $70 million renovation and expansion of the historic Robinson Center is set to give Hall another asset to market in 2016.

The theater will be brought into the modern age and a conference center will be added to the backside offering spectacular views of the Arkansas River. It will be a highly marketable product for attracting meetings and travelers as “a major arts and entertainment destination.” A LOOK TO THE FUTURE There are challenges too. Massive construction projects involving I-30 and the Broadway Bridge will make travel “orange barrel” miserable, but the payoff should be worth it. Sporting facilities is also likely to enter the conversation as a concern, Hall says. Sporting event attendees are the biggest generator of hotel room traffic for the city. While the numbers are solid, eventually they may not hold. “We are unable to bid on certain sporting events because of the lack of facilities or the lack of upgrades to current facilities,” Hall says. But a study is already underway to look

for possible solutions. The LRCVB retained Crossroads Consulting to conduct a feasibility study for a potential indoor, multipurpose, sports facility in 2014. The final study should be presented mid-year and will evaluate the overall economic potential and quality of life impact of sporting events, as well as provide an analysis for building and operating such a facility. EUREKA! Pivot to the tiny Northwest Arkansas hamlet of Eureka Springs. The Ozark Mountains getaway is a resort, spa and honeymoon town to some. It sports an artisan population of a little more than 2,000, and is the hub of some of the most unique motorcycle and car cruising events in the country. Some say time stands still in Eureka Springs, which boasts significant Victorian architecture in its homes, businesses and buildings. It became a boomtown in the late 1800s due to the area’s “healing waters,” or springs.

Eureka Springs

But it hit its stride primarily as a family vacation resort in the 1970s and 1980s when the Christ of the Ozarks statue, the Great Passion Play, Thorncrown Chapel and the revitalization of its downtown district put Eureka “on the map” for tourism. At the time, it had proximity to Branson and the now-defunct Dogpatch. By the ’90s, the city began to cater more to visitors focused on the arts, culture and dining. “The tourism industry, like the world we live in today, is ever-changing and the pace that things change picks up every day,” notes Mike Bishop, president and CEO of the Eureka Springs Chamber of Commerce. “We are always aware of preserving our historic designation, our architecture, and the traditional attractions and activities that have defined us for years, and yet we realize we must change with the times and trends. I believe we are doing that.” With the draw of nearby Crystal Bridges in Bentonville, Bishop says Eureka Springs has renewed focus on its artistic roots and it has stepped up its game with galleries,

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Cover Story: Tour de Force shopping, dining and nightlife. Known for its quirkiness, Eureka Springs is marketing its tours of two haunted hotels and the rise in popularity of upscale motorcycling has brought opportunities to the town nestled along the scenic Pig Trail – a highly popular top-ride destination. Bishop says the diversity of Eureka Springs and what it offers gives town leaders an opportunity to flow with the changing tastes of travelers. “I know it sounds braggadocios, but we really have so many options of things to do, types of vacations and reasons to visit that it is hard to settle in on a single identity,” Bishop said. “I believe Eureka Springs is the ultimate vacation destination in Arkansas. For a weekend getaway, a family vacation, a group outing, a wedding, a family or military reunion, a business meeting, convention or conference, whatever it might be, Eureka Springs can fill the bill.” HERITAGE TOURISM A mailbox sitting in front of the Johnny Cash boyhood home near Dyess is a place where messages are often left to honor the music legend. Dr. Ruth Hawkins, executive director of Arkansas State University’s Heritage Sites program, says another message has been left – tourism has had an impact in communities like Dyess, Tyronza, Piggott and Lake Village. During a recent talk at the ASU Agribusiness Conference, Hawkins said the group’s sites – the Cash boyhood home, the Lakeport Plantation in Lake Village, the Hemingway-Pfeiffer Museum and Educational Center in Piggott and the Southern Tenant Farmers Museum in Tyronza – draw visitors from around the country and the world. The Hemingway-Pfeiffer Museum honors author Ernest Hemingway, whose in-laws at the time lived in the Piggott area. The Hemingway-Pfeiffer Museum includes a barn studio associated with Hemingway and the family home of his second wife, Pauline Pfeiffer. During the 1930s, the barn was converted to a studio to give Hemingway privacy for writing while visiting Piggott, and he wrote portions of “A Farewell to

Arms” there. The Southern Tenant Farmers Museum looks at the history of one of the first integrated unions in the country, Hawkins said. It strives to enhance knowledge and understanding of tenant farming and agricultural labor movements in the Mississippi River Delta, in an effort to preserve the history and promote the legacy of sharecropping, tenant farming and the farm labor movement. Built in 1859, the Lakeport Plantation house at Lake Village is the only remaining Arkansas antebellum plantation home on the Mississippi River. The Greek Revival

Lakeport Plantation

structure – one of Arkansas’ premiere historic buildings – was added to the National Register of Historic Places in 1974. DYESS COLONY RESTORATION The newest site in Dyess is drawing visitors as well. The Dyess Colony, created in 1934 as part of President Franklin D. Roosevelt’s New Deal to aid in the nation’s economic recovery from the Great Depression, has been resurrected through restoration of several historic buildings. The Dyess Colony Administration Building houses exhibits related to establishment of the colony, lifestyles of typical colonists and the impact that growing up in the tiny Mississippi County hamlet had on Cash and his music. The Johnny Cash Boyhood Home is furnished as it appeared when the Cash family lived there. “It is kind of interesting and amazing with the number of foreign visitors,” Hawkins said of the Cash home, which opened last August. Many of the visitors will head to Memphis and visit places like Graceland and Sun Studios first before heading across

TALK BUSINESS & POLITICS | MARCH/APRIL 2015

the river to visit the Cash home, Hawkins said. Recently, a group from Ireland toured the home and Hawkins said nearly two-thirds of the messages left in the mailbox are from international visitors. TYRONZA BENEFITS About 800 people live in the Poinsett County town of Tyronza, which has two restaurants, a gas station, a bank, a garage and a funeral home among its businesses. Keith Forrester, co-owner of Tyboogies, one of the restaurants in town, said his eatery gets several out-of-town visitors each week. Some of the customers will go to the museum or the Cash home before eating at the restaurant. Forrester said a group from Buffalo, N.Y., recently paid a visit, but a lot of the visitors are also from the Memphis area, he said. The revenue from the town’s one-cent sales tax has also benefitted. The town received $36,580 from its sales tax in 2014, up slightly from the $33,000 the sales tax collected in 2013. For 2014, the sales tax averaged about $3,000 a month. However, the monthly sales tax revenue nearly doubled from May to June 2014. The town collected about $4,700 in June of last year, compared to around $2,600 the month before, numbers showed. One possible reason for that increase involved the town’s festival – the Stars and Stripes Festival. Several Vietnam-era veterans were honored at the event, with a miniaturized version of the Vietnam Veterans Memorial on display for nearly a week. ‘3-3-SLEEP’ PRINCIPLE Hawkins said the sites have not only helped to educate people about the history of the region, but provided many towns an opportunity. “Tourism is an interesting business because it is not self-contained, like a plant or factory,” she said. She noted that people are looking for the basics when they visit a place. “In tourism, there is the ‘3-3-Sleep’ principle. People want three places to visit, three places to eat and a place to sleep. … Hopefully, we will be able to capture that,” Hawkins said.

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Profiles Service PHOTOS COURTESY OF OAKLAWN AND CJRW

Thereâ&#x20AC;&#x2122;s More Than One Way to Race Electronic gaming, Instant Racing and increased purses have helped Oaklawn Park to continue to gain momentum at a time when a number of other tracks across the country are suffering. By Rex Nelson 32

TALK BUSINESS & POLITICS | MARCH/APRIL 2015

ric Jackson, the longtime general manager of Oaklawn Park at Hot Springs, vividly remembers that trip across the Chesapeake Bay more than 17 years ago. It was February 1998, and it was cold. Jackson and Bobby Geiger, Oaklawn’s director of gaming and wagering, had taken a flight to Baltimore and then gotten on a small boat that was headed to an island in the bay. “It was dark, it was sleeting and Bobby and I just had on our suits,” Jackson says as he sits in his Oaklawn office on a Monday afternoon. “We were freezing. We also knew we had a lot of work ahead of us.” They were bound for Parsons Island, which once was described by the Baltimore Sun as a “bucolic, privately owned island covered in corn and sunflowers and with scattered wildlife.” The 100-acre retreat belonged at the time to Jim Corckran, who along with his brother owned an east Baltimore manufacturer of nails, rivets, nuts, bolts and other fasteners that had been founded in 1865. Corckran had purchased the island from McCormick & Co., the well-known spice manufacturer that had begun doing business in 1889 at Baltimore. Jackson and Geiger weren’t headed to the island to talk about nuts, bolts or spice. They were there to talk thoroughbred racing and ways to preserve the sport in the face of increased casino competition. Two years earlier, brothers John and Jim Corckran had teamed up with Ted Mudge, the owner of a Baltimore-based insurance brokerage who was active in the thoroughbred racing industry, to purchase AmTote International, Inc. Founded in 1932 as the American Totalisator Co., the firm specialized in the equipment used to control pari-mutuel betting at horse racing and greyhound racing facilities. American Totalisator installed its first mechanical tote system at Chicago’s Arlington Park in 1933.

system that allows players to bet on replays of past races. Instant Racing terminals resemble slot machines. “The 1980s had been great for Oaklawn,” Jackson says. “At the time, we didn’t fully appreciate just how great they were. In the late 1980s and early 1990s, we began to face competition from new tracks in Oklahoma and Texas [Remington Park opened at Oklahoma City in 1988 and Sam Houston Race Park opened at Houston in 1994]. “We responded by instituting simulcasting, becoming the first track to offer full cards from other tracks. But while we were looking west toward Texas and Oklahoma, the casinos were being built to the east in Mississippi and to the south in Louisiana.”

we got our teeth kicked in. Simulcasting had been Plan A. The casino initiative had been Plan B. Frankly, we didn’t have a Plan C.” Proposed Amendment 4 in 1996 would have established a state lottery, permitted charitable bingo games and raffles by nonprofit organizations and allowed Hot Springs voters to decide whether to authorize casino gambling at Oaklawn and two other sites in the city. The initiative failed 61 percent to 39 percent. ‘THERE HAD TO BE A WAY’ It was then that Jackson began to play around with the idea of Instant Racing. “I thought that there had to be a way to take past races and put them in a format that people would still enjoy,” Jackson says. “Our advertising agency came up with artwork of what the terminals might look like, and we invited representatives of three companies to come and hear what we had to say. Two of them thought it was a dumb idea. The third person was Ted Mudge of Amtote. He wanted to give it some additional thought.” That was in 1997. Mudge’s interest set the stage for the February 1998 trip to Parsons Island. “It was like a think tank out on that island,” Jackson says. “There were all kinds of people there. We worked for about 36 straight hours. It became known at the Parsons Island Project. You can still find old files around here labeled P.I.P., which stands for Parsons Island Project.” During the 1999 legislative session, the Arkansas Legislature removed the requirement that simulcast races be shown live, opening the door for Instant Racing. The first test terminals were placed on the floor at Oaklawn and at Southland Greyhound Park in West Memphis in January 2000. There were 50 machines at each track. By 2002, the concept was taking off in Arkansas. “For the longest, Instant Racing was just here in Arkansas,” Jackson says. “We then started to get into other states. Louis Cella has been what I call our Fuller Brush salesman. He has gone all over the country talking about Instant Racing. He’s the reason it’s in other states.”

“Gaming now pays the light bill here, but racing is our passion. It’s in our DNA.”

INSTANT RACING Besieged by the proliferation of casinos in Mississippi and Louisiana, Oaklawn’s Jackson had come up with the concept of Instant Racing, an electronic gambling

– Eric Jackson

A ballot initiative that would have allowed some casinos in Arkansas – including one at Oaklawn – was tossed off the ballot just before the November 1994 election. Oaklawn made another run at it in 1996. “We got sucker punched about a month before the 1996 election,” Jackson says. “We had gone into it with the idea that the companies operating casinos in Mississippi would not oppose us since two casinos would be allowed at Hot Springs in addition to what happened here at Oaklawn. Then they came after us. The ads were brutal, and

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Profile: Oaklawn ALL IN THE FAMILY Louis Cella is the son of Charles Cella, who has been at the track’s helm since 1968. Charles Cella’s grandfather and great uncle, Charles and Louis Cella, were among the founders of Oaklawn and were investors in racing ventures across the country in the early 20th century. Charles Cella’s father, John Cella, led Oaklawn into the modern era and was the track’s president for many years until his unexpected death in 1968. The fourth generation of the Cella family operating Oaklawn – Louis A. and John G. Cella – both serve on the board. Louis is a 1987 graduate of Washington and Lee University in Virginia and received his law degree from the University of Arkansas in 1990. John is a 1985 graduate of Vanderbilt University in Tennessee and is a thoroughbred owner. Both men inherited their father’s passion for the Hot Springs track. And both have confidence in Jackson, a Hot Springs native who grew up playing golf on the three-par course that once was on the Oaklawn infield. Jackson graduated from

Hendrix College at Conway with degrees in business and economics and has been with Oaklawn since 1978. He was the director of operations from 1978 until he was promoted to general manager in 1987. Jackson became the general manager following the death of the legendary W.T. “Bish” Bishop, who had taken over in July 1972 from the equally legendary J. Sweeney Grant following Grant’s death. Grant had been the general manager since 1954. In other words, Oaklawn has had just three general managers in the past 60 years. ‘GAMES OF SKILL’ Oaklawn celebrated its centennial year in 2004. A year later, Oaklawn Park and the Cella family were awarded the Eclipse Award of Merit, the most prestigious award in racing. But no longer was Instant Racing enough to keep up with casinos in Mississippi, Louisiana and Oklahoma. The track needed additional relief from the Legislature and got it when the Legislature passed an act in 2005 permitting Oaklawn and Southland

to install “games of skill” such as electronic blackjack and electronic poker if approved by the city or county. Gov. Mike Huckabee allowed the bill to become law without his signature. More than 60 percent of West Memphis voters approved the games at Southland. In late 2006, work began on a $40 million expansion that included a new main entrance to the dog track, a 55,000-squarefoot gaming room, a 400-seat special events center, a 150-seat nightclub, a 280-seat buffet and additional restaurants. Last year, a $37.4 million expansion was announced, including dozens of new gaming machines and the addition of Sammy Hagar’s Red Rocker Bar & Grill. In Hot Springs, meanwhile, a public referendum to allow expanded electronic games at Oaklawn passed by just 89 votes in November 2005. Litigation ensued. In September 2007, the Arkansas Supreme Court upheld the law authorizing Oaklawn to add expanded games of skill. On the day after the Arkansas Derby in April

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2008, Oaklawn began construction on a 60,000-square-foot, two-level structure to house the electronic games. Things have taken off from there: • In August 2012, Oaklawn announced that there would be a record $20 million in purses for the 2013 race meeting. The purses, in turn, attracted a higher quality of horses. When Rebel Stakes runner-up Oxbow won the Preakness Stakes at Baltimore in May 2013, he became the 10th Triple Crown race winner to have come from Oaklawn in 10 years. • In June 2013, Oaklawn announced plans for an expansion to its gaming area that would increase capacity by another 50 percent. The work began in early August of that year and ended just prior to the start of the 2014 race meet. • Construction on the additional $20 million expansion resumed the day after the Arkansas Derby last April. • In November, the new gaming area and Silks Bar & Grill opened.

• By the start of this January’s race meet, a high-limits area and a poker room had also opened. “We’re going to have purses of $23 million this year,” Jackson says. “We’ve picked ourselves up off the mat. This is just as much fun as it was in the 1980s, but this time we appreciate it more. We realize that we looked into the abyss and survived. When things were at their worst in the 1990s, Charles Cella insisted that we keep the racing quality up until we could find a lifeline. He was, in essence, underwriting the purses. These days most tracks are owned by gaming companies. We consider ourselves a racetrack that happens to have gaming. We’re the only one who truly uses the gaming proceeds to vastly improve the quality of racing. Gaming now pays the light bill here, but racing is our passion. It’s in our DNA.” MULTIPLE EXPANSIONS David Longinotti, Oaklawn’s director of racing, is a Hot Springs native like Jackson. He began covering Oaklawn when he wrote

sports for The Sentinel-Record. He later helped open Remington Park in Oklahoma City before becoming director of media relations at sister track Thistledown in Cleveland in 1991. Longinotti returned to Remington as director of communications in 1994. He later spent more than a decade handling the Oaklawn account for Little Rock advertising agency CJRW and then joined the Oaklawn staff in 2006. “This is David’s Christmas,” Jackson likes to say of the racing season, which runs from early January until the middle of April. Oaklawn is now among the top five tracks in the country in average daily purse distribution. Race fields were full early in this year’s meet, and there was a lack of stall space. Jackson laughs when asked about the multiple facility expansions that have occurred in recent years. “That’s a clear indication of the poor job that management did with projections,” he says. “It would have been much cheaper if we had done it all at once.” In 2014, Oaklawn and Southland saw

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Profile: Oaklawn combined electronic games of skill wagers of almost $3.53 billion. Oaklawn pulled in $1,359,074,501 and Southland had $2,172,451,426 in gaming wagers. The totals are expected to be even higher this year. Oaklawn had to postpone the first weekend of racing in early January due to extremely cold weather, but Jackson was philosophical. He says at such times, “There’s nothing you can do about it. It’s an outdoor sport.” In the weeks that followed, the track was blessed with warmer-than-expected weather. The Hot Springs track continues to gain momentum at a time when a number of other tracks across the country are suffering. The Fair Grounds at New Orleans has cut purses consistently in recent years. Oaklawn, meanwhile, has been increasing its purses for more than a decade. ‘SOMETHING SPECIAL’ In an interview last year with the Times-Picayune of New Orleans, thoroughbred owner Maggi Moss of Des Moines, Iowa, said of the Fair Grounds: “Nobody

cares, so why would I take the time to care? When I go to Oaklawn, I know people care. You get treated great.” “I don’t think anyone ever expected to see our purses double in just 10 years thanks to Instant Racing, gaming and good racing,” Longinotti says. Off-track handle picked up last year when Oaklawn’s races returned to the racing channel TVG after only being shown on competing channel HRTV in 2013. The track also has benefited from a product known as “OaklawnAnywhere,” an advance deposit wagering site that allows Arkansas residents to bet using the Internet. At age 79, famed trainer D. Wayne Lukas is among those who spend winters at Hot Springs. The Wisconsin native has won more Triple Crown races than any other trainer with 14 (he has captured the Kentucky Derby four times, the Preakness Stakes six times and the Belmont Stakes four times). Lukas already had become a legend in the quarter-horse industry when he made the switch to thoroughbreds in 1978. He says: “Arkansas has something special

Horse racing at Oaklawn

TALK BUSINESS & POLITICS | MARCH/APRIL 2015

going on here. Something happens here that’s now missing at a lot of other tracks. You have real fans here.” ‘GENUINE ENTHUSIASM’ Lukas believes Oaklawn could serve as an example for tracks across the country. That’s because it’s still a place for family outings, a spot where the food and the chance to visit with friends is as much a part of the experience as the betting. He calls Hot Springs “a national treasure,” a resort town where a day at the races is a social event worth getting dressed up for. He says about the only racing towns that can compare these days are Saratoga Springs, N.Y., and Lexington, Ky. “Racing got soft all over the country,” Lukas says. “We became too confident that people would keep coming to the track. Going to the races is still a part of the culture of this state. There’s a genuine enthusiasm for the game that’s hard to find elsewhere. Look at the average daily attendance at Oaklawn. It’s higher than most of the other tracks.”

David Longinotti

Lukas says that he likes the fact that he can walk into a Waffle House for breakfast and have people come over to talk racing. That doesn’t happen in New York, Los Angeles or Miami. Across the American landscape, thoroughbred tracks have become sad, empty places, mere adjuncts to adjoining slot facilities. Oaklawn, though it also now has an extensive gaming center, has been able to remain a bit different. The racing still matters. In a book titled “Crown Jewels of Thoroughbred Racing,” Hot Springs native Randy Moss wrote: “No palm trees line the entrance to this racetrack, and its paddock isn’t one of those botanical gardens that make horseplayers want to fold up their Daily Racing Form and splash on suntan lotion. It doesn’t have a Phipps or a Hancock on its board of directors. Thomas Jefferson never raced there and overalls outnumber neckties by three-to-one in the grandstand. But ask well-traveled horse lovers to recite their favorite racetracks and chances are good that Oaklawn Park will pop up in the conversation. For a little country track in Hot Springs, Ark., on a two-lane road between nowhere and no place, Oaklawn has made quite an impact on the racing world. “During the track’s rapid rise to prominence in the late 1970s and early 1980s, racing executives from throughout the country and even reporters from Sports Illustrated and The New York Times were dispatched here in hopes of determining what made this unlikely racetrack so special. They usually returned home with a hangover and a stretched-to-the-limit credit card, reporting that they couldn’t figure out the

D. Wayne Lukas

John G. Cella

secret formula but sure enjoyed the heck out of the search. But without even knowing it, they knew it. The key to Oaklawn has always been simple. The track is one big party.” Moss, who now works for NBC Sports, related the story of Cuban-born trainer Laz Barrera, who remarked after a race in Hot Springs that he had never been to Oklahoma. Told that he still hadn’t been to Oklahoma, Barrera replied: “Well, wherever we are, it’s a long way from California.”

Charles Cella

Louis Cella

NEW CHAPTER With the glory days of the 1980s and the early 1990s over, Randy Moss wrote in 1997: “Although great horses still are flown in for the Racing Festival of the South stakes, the crowds and enthusiasm have dimmed somewhat in recent years. The Clydesdales have been replaced by a tractor, the infield critters and wagon rides are gone, riverboat casinos in Mississippi and Louisiana have taken away many of the celebrants and some fans now stay home for the convenience of watching the track’s races on simulcast screens in Shreveport, Dallas-Fort Worth, Oklahoma City and West Memphis.” Little did Moss know in 1997 that a new chapter was about to be written at Oaklawn. The old lady of Central Avenue has received a remarkably successful facelift since those words were written. Along came Instant Racing. Along came the other socalled games of skill. Up went the purses. Horses went on from Oaklawn to win Triple Crown races. And the national media noticed. For Oaklawn Park at Hot Springs, maybe these are the good ol’ days. www.talkbusiness.net

Industry PHOTOS COURTESY OF DELTIC TIMBER CORPORATION

TALK BUSINESS & POLITICS | MARCH/APRIL 2015

Cautiously Optimistic Forestry, timber industry hopeful – but still nervous – about the 2015 outlook as the decade-long economic downturn still haunts one of Arkansas’ bellwether sectors. By Wesley Brown

lthough it has been nearly seven years since the end of the Great Recession, the state’s once-thriving timber and forestry sector is still mending from the once-in-a-generation downturn that nearly brought every segment of the industry to its knees. But slowly and surely, there seems to be a quiet confidence that the bellwether industry and top economic engine for South Arkansas has finally turned the corner toward recovery after several false starts following the most severe economic downturn in nearly 80 years. “If there was a way to describe what people are feeling, I would say we are ‘cautiously optimistic,’” said Max Braswell, executive vice president of the Arkansas Forestry Association (AFA). “We feel like there are basic economic indicators out there that would lead us to believe that 2015 has a generally favorable outlook for the forestry community. But we certainly don’t want to get ahead of ourselves in any shape or form.” Braswell says that the current cautious attitude will likely remain for a while because of fresh memories of the past several years, when good news on any front was hard to find. The AFA executive, whose association represents the entire spectrum of the broad forestry and timber industries, said Arkansas was especially hard-hit between 2007 and 2012 and will likely never see those pre-recession record levels of employment and robust economic activity again. He also admits that in 2012 and 2013 – when U.S. housing stocks topped the ideal “1 million housing” level but quickly lost

momentum and fell back to nearly 500,000 – the industry may have been overly influenced by rosy forecasts. “Because of that period when things were as bad as they’ve ever been, we’ve had no direction to go but up,” he said. “Certainly, we have seen improvement because much of our industry is tied to housing, and we have seen some gains there, but they kind of fell flat and lost steam.” UNPRECEDENTED IMPACT The major reason for that, according to University of Tennessee economist Donald Hodges, is because no segment of the southern forestry industry was left untouched from the onslaught of the Great Recession, particularly those sectors most closely related to home construction. According to the U.S. Census Bureau, new home construction as measured by single-family housing starts dropped to just 0.45 million in 2009, 74% below the record 1.72 million starts of 2005. But unlike other sectors of the recovery that were starting to improve, housing starts did not recover after the recession ended, remaining at 0.47 million in 2010, 0.43 million in 2011 and 0.54 million by August 2012, even though real U.S. GDP had fully recovered to prerecession levels by 2011. In a study called “Recession Effects on the Forest and Forest Products Industries of the South,” Hodges looked at the effects of the recession on the southern U.S. by reviewing existing data related to economic and resource impacts, including employment, timber product output, production facilities, state economies, exports, and forest area and management activities.

And what he found was astounding. Between 2004 and 2009, the South’s forest sector’s direct contribution to the regional economies decreased by 24% between 2004 and 2009 as a result of the downturn. Given the importance of the region in providing and processing the raw materials for wood and paper products, Hodges said understanding the effects of the recent recession on the forests and forest-based industries of the southern United States was critical. RECORD-LOW PAYROLLS By far, Hodges said, the most influential part of the recession for the forest products sector was the collapse of U.S. housing construction, which fell by more than 75% between 2005 and 2009. “This resulted in significant losses for many sectors of the southern forest products industry, most notably wood manufacturing and housingdependent industries such as millwork and cabinetry,” he said. In Arkansas, the economic impact to the state’s forestry and timber industry in South Arkansas was palpable. For instance, the number of construction jobs across Arkansas between 2006 and 2013 declined by 20.2% from 56,960 to 45,477. In the all-important residential building sector, employment levels fell even more dramatically from 4,691 workers in 2006 to 2,761 in 2013, a slide of 41% over seven years. And with fewer homes being built across the state, Arkansas loggers and sawmills also saw post-recession payrolls fall to record lows. For example, the number of Arkansas workers employed in the forestry and logging sector and supporting activities www.talkbusiness.net

Industry: Timber peaked at 3,843 jobs in 2006, statistics from the Arkansas Department of Workforce Services show. By 2013, that number had dropped 21% to just over 3,000 workers. EVERY SECTOR AFFECTED Overall, nearly one-sixth of all blue-collar jobs in Arkansas – just over 43,000 – were tied to forest product harvesting and manufacturing before the recession. There were also 2,500 companies in the forest product business, and they supported $1.2 billion in payroll, the largest of any manufacturing sector, state employment numbers show. Additionally, of the two and a half million acres of forestland, private landowners owned 58%, timber manufacturing firms owned 25% and the public owned 17%, largely as national forest. But by the time the recession officially ended in June 2009, every sector had encountered ill-effects of the unrelenting downturn. For example, Georgia-Pacific announced the indefinite suspension of production and the layoff of about 700 workers in its Crossett plants in 2011. Later that year, the Arkansas Forestry Commission furloughed 36 workers due to budget shortfalls tied to declining timber sales. In another area, family-owned Anthony Forest Products Co. of El Dorado announced in the fall of 2010 that it was closing one of its plants following a fire at the company’s sawmill facility in Atlanta, Texas. “After extensive due diligence, there were two major problems,” Audry Anthony Jr. said of the sawmill closing. “First, the exceptional risk of the continuing weak demand for lumber for homebuilding, and second, the daunting financial risk of proposed new Environmental Protection Agency regulations related to industry boilers using wood waste for fuel.” In a company news release, Anthony expressed how difficult the decision was to cut those 78 jobs from the El Dorado sawmill operator’s payroll for the first time in the company’s storied history – which goes back to 1916. “This [was] a sad day for us, our family of employees, our business partners and the

community of Atlanta, Texas,” said Anthony, who sits on the AFA board. But Anthony’s story could have been the headline at any local newspaper across South Arkansas between 2007 and 2012, Braswell said. Since 2009, thousands of Arkansans in South Arkansas communities that depend on the industry’s economic vitality have been laid off. Altogether, there are currently nearly 28,000 jobs in

“We believe pricing is expected to strengthen as housing starts move above the 1.2 million starts level.” – Plum Creek CEO

Rick Holley the forestry industry with payrolls of $1.36 billion annually, according to the AFA. That represents a total loss of more than 12,000 jobs in the past decade, state employment statistics show. EXPECTATIONS FOR CONSTRUCTION Despite those depressing numbers, Braswell’s “cautiously optimistic” assessment is not uncommon today. In late January, University of Arkansas economist Kathy Deck offered some good news and hope for the industry when she gave the state forecast at the 21st annual Business Forecast Luncheon in Rogers. Deck, director of UA’s Center for

TALK BUSINESS & POLITICS | MARCH/APRIL 2015

Business and Economic Research, told nearly 1,000 business leaders and executives that construction industry employment between November 2013 and the same period of 2014 had outpaced all other sectors with growth of nearly 9%. And just as surprising was the fact that the mining and logging sector was the second-fasting growing sector with job growth of nearly 4.1% year-over-year. “Construction continues to be brisk at both the public and private level,” Deck said, adding that the industry was “on fire” compared to the past several years. However, Deck warned that industry leaders should pay close attention to the same overbuilding woes that caused a supply glut in the years ahead of the recession. Meanwhile, several corporate-owned certified family forest owners that operate in Arkansas have also expressed hope that housing markets are rebounding and key industry sectors are stabilizing. In a fourth quarter conference call with analysts, Potlatch CEO Michael Covey said the nation’s ninth-largest lumber producer expects housing markets gains from last year to continue well into 2015, thus improving the company’s short-term outlook. “In 2015, we expect about 1.1 million total housing starts and anticipate that lumber prices and log prices will be modestly higher than 2014 with some bumps along the way due to weather, inventory levels, currency and other factors,” Covey said. Potlatch is a Real Estate Investment Trust (REIT) with nearly 1.6 million acres of timberland in Alabama, Arkansas, Idaho, Minnesota and Mississippi. Currently, the Spokane, Wash.-based trust owns nearly 410,000 acres of forestland in Arkansas. Timber harvested in Arkansas is sold to the Potlatch mill in Warren, and to other area lumber and paper manufacturers, company officials said. PRICING EXPECTED TO STRENGTHEN Plum Creek Timber Co. also offered a similar outlook for 2015. In the company’s fourth-quarter earnings release, the Seattle-based REIT said it expects U.S. residential construction activity to grow

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Industry: Timber at a measured pace during 2015, resulting in approximately 1.1 million to 1.2 million housing starts. Although Plum Creek’s timber prices improved in each of its operating regions during 2014, the timberland owner believes the improvements in the South represent only the early stages of recovery in the region. Currently, Plum Creek is one of Arkansas’ largest private landowners with 714,000 acres of forestland in 23 counties. “We believe pricing is expected to strengthen as housing starts move above the 1.2 million starts level,” said Plum Creek CEO Rick Holley, who gave back his $2 million stock bonus in December because he said shareholders did not receive a return on their investments. Closer to home, El Dorado-based Deltic Timber is also hoping for a turnaround in 2015. In the previous quarter, CEO Ray Dillon offered a nuanced picture of the company’s real estate, a key indicator for the strength of the Central Arkansas housing market.

“Residential lot sales are projected at 15 to 35 and 60 to 80 lots for the fourth quarter and year of 2014, respectively,” Dillon said. “Commercial acreage in Chenal Valley continues to receive interest from potential buyers, but due to the volatile nature of commercial real estate transactions and the significant number of factors related to any sale, it is difficult to anticipate future closings.” EQUIPMENT EXPENSES Meanwhile, Larry Boccarossa, executive director of Arkansas Timber Producers Association (ATPA), said he is hopeful that the larger industry players like Deltic Timber, Plum Creek and Georgia Pacific start ramping up capital spending again so independent producers and loggers can get back to work. “I represent the producers, logging contractors and small independent guys who hung in there after the [recession], and are now looking for long-term work that will help them pay for their equipment invest-

TALK BUSINESS & POLITICS | MARCH/APRIL 2015

ments,” Boccarossa said. He added that the key issue for the small producers and loggers with crews of five to 10 workers is paying for the expensive equipment used to cut and harvest timber for private landowners. In the previous legislative session, Arkansas lawmakers approved a tax break where the first $50,000 of the purchase price of equipment is exempted if the business owner’s primary activity is harvesting timber. Boccarossa said his organization is preparing for its annual expo in June and that excitement is building about new equipment that John Deere and manufacturers will showcase at the Hot Springs event. His said the expo will also be a chance to get a feel for how the industry is doing across the board and, hopefully, for independent loggers and producers to sign some longterm deals. “We are optimistic that things are going to get better,” the ATPA executive director said. “I see some signs we are finally starting to come around.”

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Industry PHOTO BY KAT WILSON

Team members at Cameron Smith Associates, including, from left, Cameron Smith, Mike Whittington, Denise Natishan, Scott Crossett and Jim Mikula, help consumer products companies fill key positions. PHOTOS COURTESY OF WALMART CORPORATION

TALK BUSINESS & POLITICS | MARCH/APRIL 2015

Wal-Mart Suppliers Scouring For Talent Experts describe the battleground for employees to work for and service the world’s largest retailer. By Kim Souza

COURTESY OF THE CITY WIRE

he “Vendorville” ecosystem that has cropped up around Wal-Mart Stores Inc. continues to add jobs and positive contributions to the region and state’s economy. But, anywhere from 80 to 100 jobs remain unfilled at any given time, according to Cameron Smith, CEO of Cameron Smith & Associates of Rogers. Corporate recruiters on Cameron Smith’s team describe the talent pool as “tight” despite consolidation of teams resulting from mergers taking place in the consumer packaged goods (CPG) sector such as Tyson Foods and Hillshire, and Heinz and 3G. The Tyson Foods and Hillshire merger likely had the biggest impact but General Mills had significant restructuring last year that cost between 5 to 10 local jobs, which was about 13% of their local team, according to Scott Crossett, partner and senior recruiter with Cameron Smith & Associates. He said the Heinz acquisition by 3G caused job displacement, and CocaCola is going through a restructuring in the next couple of months. On the flip side, restructuring at Kimberly Clark brought a small team back to Northwest Arkansas. KEEPING PACE The recruitment experts said these shifts in local numbers are nothing new, but overall the number of jobs in the local sector continue to increase as many of the teams are adding positions to keep up with changes at Wal-Mart. “Some supplier teams have expanded their local organizational structures in the past year bringing shopper marketing in-

house and adding small format specialists to their teams,” said Denise Natishan, senior partner at Cameron Smith & Associates. “The small format is brilliant on Wal-Mart’s part and suppliers are taking it very seriously because it affects shelf space and inventory replenishment changes.” The recruitment experts estimate local supplier jobs increased by 4% to 5% annually with the bulk of that being the growth in third-party service providers such as technology and data analytics firms. Atlas Technology Group, for instance, expanded its staff from six to 42 employees over the past two years keeping pace with demand for analytical data and weather-related content desired by suppliers and retailers. “This type of third party supplier growth is happening across the area and I expect it to continue throughout the next few years as real-time data collection for consumer marketing becomes more mainstream,” Smith said. By some estimates the supplier, marketing, third-party service and packaging jobs account for as many as 15,000 jobs in Benton and Washington counties. The annual payrolls of these firms exceeds an estimated $1 billion, given the starting pay for college graduates is around $47,000 and top managers pull down a minimum six-figure income, the recruiters said. Smith said the growth in this sector prompted him to increase his staff by 5% over the past two years to 25 employees. His company revenues are also up 18% from a year ago.

CAPACITY CONSTRAINTS Natishan said suppliers value professionals with astute Wal-Mart knowledge and there are opportunities to move up the ladder regardless of age as long as the employee brings knowledge and experience to the table. That said, Natishan said the team structures of many companies are somewhat siloed which means professionals may have to change companies if they want to move up to other roles. For instance, a small food company has a lean team of just six professionals, ranging from one director, two business managers, two customer service managers and one business analyst. Smith said when teams first locate to the region to do business with Wal-Mart they may only send one or two sales executives to lay the groundwork. Over time, the new teams that do business with Wal-Mart will ramp up to at least six people, maybe more. The organizational chart for a typical CPG (consumer packaged goods) supplier of cleaning products or frozen foods is likely to have added at least one national account manager who works below the director, a supply chain manager and two shopper marketing managers in addition to the business analyst. “There are plenty of one person teams calling on Wal-Mart. The account manager does all their own analytical work,” said Mike Whittington, senior partner at Cameron Smith & Associates. “Teams can range from one to 200 members.” The smaller teams outsource some of their service needs to third party firms, www.talkbusiness.net

Industry: Wal-Mart Suppliers which also has helped fuel the demand for indirect suppliers. Natishan said it’s easy to see that there are relatively few places to move up the chain within these tight organization structures, which is why there is frequent movement between suppliers for the average professional. It’s not uncommon to see recruits who locate to Northwest Arkansas with one company, jump ship two or three times to move up the ladder or sometimes just to remain in the region. Tim Marrin, associate director at Proctor & Gamble, has said getting people to relocate to Northwest Arkansas from Cincinnati used to be challenging but not nearly as hard as it was to lure them back to the home office once they got acclimated to Fayetteville and the rest of Northwest Arkansas. The medium-to-large teams working in the region typically have a minimum of four at the vice president level. There are an average of six senior directors ranging from insights to sales managers and sales

directors. Teams also have at least two category managers and two category analysts in addition to six replenishment experts and six junior sales managers over specific geographic regions. JOB CHURN Crossett said there is a lot of churn in the category manager positions because it’s a growing discipline and there are less qualified candidates than other disciplines. “There is a high burnout rate of job candidates in category managers who are wanting to get out and move into sales, Crossett said. He said the highest turnover position is in replenishment jobs – people who work with Wal-Mart to keep the shelves stocked. Crossett cites heightened expectations at Wal-Mart for “Must Arrive By Date” fines as the retailer is slowly rolling out its new “Global Replenishment System” program known as Retail Link 2.0. He said GRS has caused companies to become more demanding of their supply chain and

TALK BUSINESS & POLITICS | MARCH/APRIL 2015

replenishment employees. Natishan said there has been more movement from Wal-Mart employees into supplier jobs in recent years, something once considered taboo. She said the larger teams are sensitive to recruiting from Wal-Mart’s talent pool, but that’s usually not the case with smaller vendors. “The need is to hire the best for your best customer. It remains a candidate driven market. Having experience and understanding of knowledge gives a credibility that many younger candidates do not have,” Natishan said. She said most of the candidates she places are sourced locally from the available talent pool. On occasion, Natishan said she finds recruits elsewhere that have former WalMart expertise, which is crucial to most every placement. “There is some poaching by the request of the suppliers looking for talented candidates who are local,” senior recruiter Jim Mikula added. The experts also said some companies

steer away from hiring from the unemployed pool of applicants, which also keeps the talent pool tight. And that pool remains tight even with the NorthWest Arkansas Community College graduating about 50 each year through its Certified Retail Analysts program. The college said over the past 15 years it handed out 630 certificates to students who had an 87% job placement rate in the local supplier community. UNIQUE MARKET Smith said the local supplier community is unlike any other vendor ecosystem in the world. Even though Wal-Mart does not require its suppliers to have an office in Bentonville all the major vendors do so because a significant amount of their business is with Wal-Mart. Greg Foran, CEO of Walmart U.S., told suppliers at the retailerâ&#x20AC;&#x2122;s Year Beginning Meetings in February that they needed to have their â&#x20AC;&#x153;best and brightestâ&#x20AC;? talent calling on Wal-Mart. He said the retailer is looking to suppliers for shared innovations and

insight and that will require the most talented professionals be seated at the table. Smith said even though Wal-Mart has

â&#x20AC;&#x153;The need is to hire the best for your best customer. It remains a candidate driven market.â&#x20AC;? â&#x20AC;&#x201C; Denise Natishan. never demanded a local presence, the retailerâ&#x20AC;&#x2122;s buyers encourage it which has been enough motivation for many. â&#x20AC;&#x153;Even though we have hundreds of teams

represented in the region, we are not close to scratching the surface of Wal-Martâ&#x20AC;&#x2122;s expansive global supplier network,â&#x20AC;? Smith said. He said suppliers tend to move to meet Wal-Martâ&#x20AC;&#x2122;s latest initiative, whatever it is, from selling more beer and wine to focusing on smaller formats. In 2013 when Wal-Mart made a conscious effort to sell more adult beverages, at least three liquor companies brought in local sales teams, creating more jobs in this region. Whittington said even if no more new suppliers opt to move into Northwest Arkansas the future for the supplier jobs market remains bright. With Wal-Mart developing more store formats, incorporating more e-commerce and digital services, revamping its replenishment system and wooing Millennials and Hispanics, the opportunities will continue to grow for suppliers and those who service the suppliers. â&#x20AC;&#x153;It is a win-win for all of Northwest Arkansas,â&#x20AC;? he added.

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Industry PHOTO: SHUTTERSTOCK

TALK BUSINESS & POLITICS | MARCH/APRIL 2015

Tools of the Trade Tech startup Grainster puts it all online so grain dealers can buy, sell and negotiate over the Internet. By Michael Wilkey

ayne Fortenberry said he feels like his business has the opportunity to make history by trading grain everywhere from Bay, Arkansas to Brazil. Fortenberry, who owns and founded the grain trading website Grainster.com, said the business has been a labor of love with an idea to match. “I have had the idea for eight years. I worked first as an auction site but four to five years in, it was not the model I was looking for,” Fortenberry said of his idea. “It is $500 a year to trade all the grain you want.” Although based in Little Rock, the tech startup will have potential customers all over the Arkansas Delta and far beyond. The business allows customers to buy, sell, trade and negotiate online for grain. Currently, they deal in corn, soybean, wheat and rice, Fortenberry said. Grainster.com touts itself as a private marketplace and it’s hoping to disrupt the current way farmers and grain brokers do business. A user creates an account, edits his profile, and then has access to view offers, add offers or search for buyers or sellers of commodities. CHANGING INDUSTRY The grain industry has had its share of problems in recent years. In addition to prices dropping, controversy hit last year when questions about Turner Grain Merchandising emerged. Farmers who traded with the Brinkley-based company reportedly lost as much as $50 million for their crops, Arkansas Agriculture Secretary Butch Calhoun told Talk Business & Politics in November. For his part, Fortenberry said his

company gives consumers an opportunity to trade in a clear, above-board manner. “It was kind of ironic. The situation with Turner Grain happened on a Wednesday and we went live on that Friday,” Fortenberry said of the timing. He said he knew a lot of folks who traded with Turner Grain “who were not so lucky.” However, he said people have to check with whom they are doing business and that the industry has definitely changed. “It was done with handshakes 100 years ago,” Fortenberry said, noting that traders often conducted business on a logistics manner. “Now, with this, you can trade in Texas or the tip of South America.”

The website also tracks the price of cattle – a major user of grain – as well as rice and corn among others. And Fortenberry and his partners are

“Now, with this, you can trade in Texas or the tip of South America.” – Layne Fortenberry

FEEDBACK KEY Fortenberry said his new venture has gotten support and interest from agricultural publications and officials alike. He said the business is building itself from the ground up. “It has been all organic on the marketing. We are getting interest on the capital and are looking for a long-term approach,” Fortenberry said, noting he is the only full-time employee. “I have the rest working 1099.” The long-term approach also involves updating its website, planning for logistics and building more interest, he said. Fortenberry plans to implement a 24hour, seven-day a week call center in the future to help customers with questions. Right now, the business has a website – www.grainster.com – that allows it to help customers in a variety of ways.

adding analytics features that they say have “never before been available on such a large scale.” “Today, farmers and traders alike look to futures prices that are based on a wide variety of data and speculation to establish what their crops are actually worth,” notes the Grainster website. “With Grainster analytics, buyers and sellers have access to real-time cash pricing based on actual transactions worldwide.” www.talkbusiness.net

Industry PHOTO: DOLLARPHOTOCLUB

TALK BUSINESS & POLITICS | MARCH/APRIL 2015

Trucking Firms Must Be Creative to Appeal to Millennial Drivers By Steve Brawner

rucking companies facing a worsening driver shortage have a potential large labor force available to them among members of the millennial generation, but they will have to find creative ways to appeal to those young people. That was the message of Little Rock native Max Farrell, co-founder of the employer consulting firm Create Reason and an organizer of Arkansas’ first Startup Weekends, where entrepreneurs attempt to launch small businesses over a weekend’s time. Farrell, 25, himself a member of the millennial generation defined as Americans born between 1980 and 2000, gave an outsider’s perspective to the Arkansas Trucking Association’s Safety Management Council at a mid-February industry conference. The trucking industry faces a severe trucking shortage – 35,000 drivers currently, according to the American Trucking Associations, with that number possibly growing to about 240,000 by 2020. The workforce is aging, overwhelmingly male, has high obesity rates and faces a shortened life expectancy. Turnover is 97%, according to the ATA. ALTERNATIVE PATHS To attract millennials to the industry, motor carriers must overcome a number of obstacles and traditions. Many want to hire drivers that are no younger than age 23, when many millennials have already started their first career, Farrell said. But millennials represent a potentially

large driver pool if carriers know how to appeal to them. Many millennials earned college degrees that haven’t led to good jobs and feel deceived, and after experiencing the 2008 crash are not loyal to corporations. Many younger millennials have taken notice

“Millennials do want to work with purpose. They want to be a part of a bigger picture, whatever that bigger picture may be.” – Max Farrell

and will be looking for alternative paths to college. Unlike with previous generations, money is not the primary motivating factor for many millennials. They instead are more interested in having experiences, having stories they can share and having a job with a purpose, Farrell said. A study by the Intelligence Group

business consulting firm found that 64% would rather earn $40,000 a year at a job they love than $100,000 a year at a job they find boring. That’s why Oscar Mayer, seeking to hire 12 Wienermobile drivers, attracted 2,000 applications from college graduates. EMPHASIZE THE EXPERIENCE “Millennials do want to work with purpose. They want to be a part of a bigger picture, whatever that bigger picture may be,” Farrell said. Truck driving can fulfill those needs, but the industry needs to know how to tell its story, he said. In preparing for his speech, he built an experimental website, Travel for America, where he touted truck driving as a career where applicants can earn up to $60,000 a year exploring new places, make an impact on communities nationwide, meet people across the country, and improve themselves by taking audio courses while on the road. In seven days, the site had 156 signups – 38% of them female and 12% of them international. Farrell told attendees they could entice millennial drivers by emphasizing the truck driving experience and the industry’s purpose, tying the job to causes such as donating a penny to a charity for each 10 miles they drive, offering constant feedback, helping drivers along a career path and offering more driver rotations so drivers spend more time at home even if they make less money. www.talkbusiness.net

Feature PHOTOS BY BOB OCKEN

Senate Majority Leader Jim Hendren

TALK BUSINESS & POLITICS | MARCH/APRIL 2015

Politics

The Evolution of Jim Hendren It takes a special personality to survive and thrive in the world of fighter aviation – and in the Arkansas Legislature. The state Senate majority leader is the product of his training. By John Brummett The author of this article is a regular columnist for the Arkansas Democrat-Gazette. e said it matter-of-factly, as a simple and fateful observation, not with dread or lamentation. Air Force fighter pilots don’t usually do dread or lamentation. Jim Hendren, state senator from Benton County, nephew of Gov. Asa Hutchinson and former F-15 fighter pilot – and not necessarily in that order – sat in his fourthfloor office at the state Capitol a few feet from the Senate’s east gallery. He peered at the wall and said, “You’re going to David Sanders me and Duncan Baird me.” Veteran Arkansas political observers will understand instantly the meaning of David Sanders and Duncan Baird as verbs in that context. You could use John Burris as a verb in that context as well. As a supposedly liberal columnist for the statewide newspaper, I have, from time to time, favored Republican legislators with greatly deserved complimentary publicity, even endorsements, also known in some quarters as kisses of death. Sanders, a former colleague in punditry, has been lauded by me for uncommon command of the private option. Baird, a former state representative now serving as Hutchinson’s budget director, has been extolled for pristine personal ethics. Burris, a former state representative and now an “adviser” and surely transitioning lobbyist, got hailed for performing more ably as a legislator than anyone I’d covered since a state senator named Mike Beebe. None of that did those fine young men any favors among conservative constituencies. Sanders got necessarily pushed aside by the Hutchinson administration on the private option debate because he was a lightning

rod among conservatives. Baird got beat for the Republican state treasurer’s nomination. Burris got defeated when he tried to move from the state House to the state Senate. HIS TURN So there sat Hendren, yesterday’s hardright conservative and today’s pragmatic one, sponsoring this time a temporary continuation of the private option form of Medicaid expansion that he had led the way in opposing only a year before. And he was observing smartly, by my questions and the apparent theme of what I was preparing to write about him, that he might be the next to come down with a case of columnist cooties. He sensed I was getting ready to applaud his growth and maturity as a public servant. And there would go the invitation to the tea party. Just that day, Hendren had spoken at lunch in the state Capitol basement to the so-called Conservative Caucus, a Tea Party outfit, some members of which, he said, would never be satisfied until he passed a bill saying the private option form of Medicaid expansion was evil and absurd and would be killed – not in 2017, or tomorrow, but yesterday. In his new pragmatic incarnation, Hendren was limiting his concurrence with the Conservative Caucus on the private option to “absurd” and “killed, yes, but not until 2017.” Uncle Asa came in next to speak to the right-flank assembly in the Capitol lunchroom. “I told him I was the bad cop and he was the good cop,” Hendren said. That’s actually not a bad strategic deployment of their personalities. Hendren, 51, can be abrupt, cranky, candid and combative. Uncle Asa, younger brother to Hendren’s mom and 13 years older than

Hendren, is ever cautious, usually gracious, seldom altogether candid and seemingly less likely than Hendren to slug you in the face. People say that understanding Hendren is mainly about understanding the superiority complexes ingrained by training in Air Force fighter pilots. A former Senate colleague – a friendly one – said that dealing with Hendren always puts him in mind of his college professor who once told him fighter-pilot training was a four-year program in being made to think you’re better than everyone else. Hendren said that was wrong. F-15 training is a two-year program. And thinking you’re better than everyone else is, he explained, a mere byproduct of actually being made better than everyone else. He was joshing. Kind of. DEFINING PRESSURE He said fighter pilots tend to stick together because of the shared experience. “I’ll admit fighter pilots are not known for their humility,” he said. But he argued they get a bit of a bad rap for egomania. But then he’ll say something like the following: He doesn’t get as emotional and fatalistic about legislative issues as some of his colleagues. A looming deficit in the teacher health insurance system, which Hendren led the way in addressing last year, is not pressure, he said. Hopping in an F-15 in Alaska and jetting out to intercept a Russian plane that is flirting with your nation’s air space without permission or announcement, and flying beside your Cold War counterpart as you and he exchange waves and perhaps other hand gestures, each of you knowing that it’s all a mere exercise in preparation for a potential nuclear incident, but that both pilots must www.talkbusiness.net

Feature: Jim Hendren be primed and ready for a real fight just in case . . . well, Hendren explained, making a decision to take a few thousand non-teaching and part-time personnel off the teacher health insurance plan was comparatively less stressful than that. But coolness under legislative pressure does not necessarily mean serene in all situations. In Hendren’s case, it does not mean that at all. Legislators still talk about the dinner attended by about a dozen of them at the Copper Grill in downtown Little Rock in 2013. A calm debate about government spending and taxation became personal and tense when Hendren, who owns and runs a 60-employee plastic products plant in Gravette and makes good money, challenged Burris, the 20-something former fast-food restaurant manager whose legislative talents and accomplishments exceed his private sector ones. Hendren told Burris the issue might come down to “whose taxes are you talking about – mine or yours?” Burris didn’t appreciate the slight and, having a combative streak, shot back. Hendren didn’t appreciate the returned fire. The exchange became more heated. The table became awash in testosterone. It was tense. There were no fisticuffs, quite, but a ruined dinner. One source, speaking not for attribution, analyzed the incident this way: “Burris has the ability to get under people’s skin. And Jim has the ability to have his skin gotten under.” A BLOODY INCIDENT Then there was the bloody incident the day in late January when Hutchinson gave his private option speech and Hendren got a little over-excited. He was at the airport preparing to leave Little Rock when the governor’s chief of staff, Michael Lamoureux, called him and said the private option bill, which Hendren was sponsoring, needed to be filed that day. Hendren hopped in a cab and was in such a hurry to exit the taxi in the Capitol tunnel that he conked his head on the car door. He

bloodied himself so badly that the Senate nurse’s bandaging couldn’t stop the bleeding and he had to get treatment at UAMS. Like nearly all Hutchinson and Hendren children, owing to the dominance of their lives by the Bible Church they attended (and where Uncle Asa led singing), Hendren journeyed after high school to South Carolina to attend the extremely right-wing religious school called Bob Jones University. Interracial dating was prohibited there as late as 2000. Uncle Asa graduated from there. Hendren lasted a semester, after which he enrolled at the University of Arkansas in Fayetteville.

He said he left because his interest was in engineering and Bob Jones was weak in that field. But he related that when fellow fighter pilot trainees complained about the strict discipline of their training, he told them they should have tried a semester at Bob Jones. After graduating from the UA with a degree in industrial engineering, Hendren joined his dad, Kim, in co-managing the plastics operation in Gravette. The styles are different for father and son, who are both serving in the Legislature. Kim, now 77, was an early Democratic state representative from Benton County, before the county went all-in Republican. The senior Hendren ran abysmally for the Democratic nomination for governor against Bill Clinton in 1982 and then served as a state senator from 2003 to 2011. He’s currently the state representative for District 92, which includes a portion of Benton

TALK BUSINESS & POLITICS | MARCH/APRIL 2015

County. As a veteran state legislator, Kim is pretty much a backbencher given to a combination of fiery and common-sense rhetoric. He files bills to require public schools to teach kids to make change and to master cursive writing. The son is more conventional and reserved, more given to a leadership role than a backbench one. PICTURES ON THE WALL For whatever reason, Jim was interested that hot July day when he heard from the Air Force recruiter who had started calling him in his senior year of college. Hendren went to the recruiting office in Fayetteville. The recruiter wanted to talk about Air Force opportunities in engineering. Hendren kept looking at the pictures on the wall of the fighter pilots. “What about that?” he asked, and the recruiter replied that, well, we’ll need to put you through some tests if you’re interested in that. “It changed who I was,” Hendren said. Even now, Hendren is a member of the Missouri National Guard. Last year he was deployed to the Middle East for a coordinating role in an exercise he can’t talk about. Publicly, that is. Let’s say this much: He was in a supervisory job in a command center for a major offensive. His pilot service spanned the late 1980s and early 1990s, meaning the end of the Cold War. As he put it, he was intercepting Russian pilots one year and escorting them to a Canadian air show the next. After military service, he returned to Gravette – actually to a home a few miles away in Sulphur Springs. He took over sole management of the plastics plant, now converted from Styrofoam products to more profitable flotation devices. And he got the family-inflicted urge for politics, getting elected in 1994 to the state House of Representatives, serving until 2000. In those days he was in a merry band of badly outnumbered conservative Republicans who got dubbed “Shiite Republicans” by their own party’s governor, Mike Huckabee. Hendren’s three terms were notable mostly for the strict anti-abortion bills he sponsored.

Hendren ran for Congress unsuccessfully in 2001, and then built the plastic products business and returned to the Legislature as a senator in 2013. Immediately he became de facto leader of a hard-right contingent in the Senate that held out against the private option form of Medicaid expansion. PLAYING QUARTERBACK In the fiscal session of 2014, Hendren was front man for an extreme-right group from both chambers offering a compromise on the private option that wasn’t much of a compromise. It would have capped enrollment by July 2014 and ended the program by March 2015, with the cap requiring a waiver the federal government probably wouldn’t have granted. But Hendren did manage to get himself elected Senate majority leader for this session, coinciding for dynastic purposes with Uncle Asa’s becoming governor. “I think it was just a matter of not knowing each other yet, of not having developed that trust.” That’s Senate President Pro Tem Jonathan Dismang’s explanation for his and others’ occasional friction with Hendren in 2013 – mostly about the private option and with its Republican architects – and a better working relationship in 2015. Is Hendren’s conversion – or evolution, to put it more fairly or accurately or generously – a matter of being majority leader or being the nephew of a governor he wants to help succeed? “Both, but maybe more the latter a little bit,” Dismang said. He speculated that Hendren would have worked toward consensus as majority leader, but perhaps not actually sponsored the private option legislation for a governor other than his uncle. Hendren said he couldn’t possibly answer that question because it would have depended entirely on the identity of that different governor and the nature of what that governor wanted or needed. Mike Beebe or Mike Ross wouldn’t have asked him for anything, he said. A former legislator, speaking not for attribution, of course, cited simple ego. The private option of 2013 was someone else’s

creation and headline-winner. Hendren likes it better when he’s playing quarterback, not sitting on the bench. RESPONSIBILITY TO GOVERN Here is Hendren’s explanation for his evolution: As a House Republican in the 1990s in the Huckabee days, he was in such a distinct minority – of only a dozen or so Republicans – that it was easy to espouse simple conservative principle because he had no governing responsibility. Simply spouting principle and eschewing compromise could neither accomplish nor hurt anything, he explained. But now, he said, fiscally conservative principles have delivered majority status to Republicans and handed

“Sometimes a principle will prevent you from solving the problem.” – State Sen. Jim Hendren them a responsibility to govern. Burris, for example, has explained that, as the leader of a healthy Republican House minority in the fiscal session of 2012, he abandoned an effort to push budget cuts. He did so because, with more than 25 members, the GOP caucus had a responsibility not to get in the way of practical governance, which required a three-fourths majority vote for vital appropriations. If a simple majority had decided spending, you see, then Republicans could have clung to principle and simply accepted being outvoted. In a genuine two-party culture, the three-fourths majority requirement for most spending raises the stakes of raw partisanship. Indeed, the three-fourths majority, while seeming to present an invitation for obstruction, has provided, quite to the contrary, the impetus for vital concession.

Hendren said his training as an engineer and in the military taught him how to forge and accept an imperfect solution to a problem – imperfect in terms of accepting something less than your true and full principles would dictate. “Sometimes a principle will prevent you from solving the problem,” he said. His principle is that the federal government cannot long afford to throw billions upon billions of open-ended Medicaid expansion money at the states, and that Arkansas will not easily afford its eventual share of those expansion costs. But his practical obligation to functioning government was not to take money abruptly from private option recipients, hospitals or the state budget. And it was to avoid a political showdown that could have imperiled the Legislature’s ability to make a budget and keep government operating. Hendren said his constituents seem to understand that. ‘LOOKING AT ANOTHER CLIFF’ As majority leader, Hendren will take a seat on the task force assigned to find Medicaid savings and recommend by 2017 a more fiscally responsible long-term plan for insuring persons now on the private option. He said the task force would look at all aspects of Medicaid, including the costs of nursing home care and mental health treatment. “I hold out the possibility that we can find some other way to cover these people” now on the private option, he said. But he admitted the political fight will be hard and bitter and a threat to the governing pragmatism, indeed tranquility, of the moment. “Let’s face it: We’re looking at another cliff in 2017,” he said. But it’s just a cliff, not a mid-air interception of a Russian plane in the waning days of the Cold War. So far the only known injury of the private option debate has been to Hendren’s forehead, inflicted by his own adrenalinepumped collision with a taxi door. We have a couple of years now – well, 20 months or so – to try to avoid more widespread damage. www.talkbusiness.net

for highest manufacturing employment in the South – National Association of Manufacturers

lowest average manufacturing wage in the Nation – U.S. Department of Labor

lowest cost of doing business

– CNBC Top States for Business, 2013

Pro-gun and outdoors-driven, Arkansas is a perfect fit for bold firearm industry manufacturers that value an ample and capable workforce, low cost of doing business, and dynamic leadership. Are you Arkansas Bold? Visit us at:

TALK BUSINESS & POLITICS | MARCH/APRIL 2015

Commentary

Passage of Issue 3 Ushers In A New Era in Arkansas Politics By Justin Allen Justin Allen chairs the government relations practice group for Wright, Lindsey & Jennings LLP. Biennially, Allen hosts a legislative seminar and publishes a legislative summary identifying selected acts and proposed legislation that may be of interest to business leaders across the state.

ith Republicans holding nearly a supermajority of seats in the General Assembly, all seven constitutional offices and all six seats in Arkansas’ congressional delegation, it is truly a new day in Arkansas politics. And, based on the smooth passage of the governor’s tax cut and the re-authorization of the private option, there is reason to be optimistic that this dramatic partisan shift will bring a new era of cooperative progress to our state. For those working in and with government, the impact of the constitutional amendment known as Issue 3, approved by 52% of the people on Nov. 2, could be just as dramatic. It’s a lengthy measure and it does quite a bit. In my opinion, the most significant aspects are: 1) lengthening of term limits; 2) prohibition of corporate campaign contributions; 3) an increase in pay for legislators, constitutional officers and judges; and, 4) a ban on gifts for elected officials from lobbyists or those that employ lobbyists. While there have been a few questions associated with the various provisions, particularly the term limits and the independent citizens commission, the lobbying restrictions have folks scratching their heads. Elected officials, lobbyists and lawyers have been poring over those provisions in an effort to determine what a lobbyist can do in this new day. The immediate effect of this provision, the uncertainties of the language and the criminal penalties associated with it have led one legislator I know to keep a bottle of water in his suit jacket, so that he will not be tempted to accept even a cup of coffee from a lobbyist.

One legislator I know [keeps] a bottle of water in his suit jacket, so that he will not be tempted to accept even a cup of coffee from a lobbyist.

QUESTIONS ABOUND There are numerous questions about these new lobbying restrictions. Many more than can be addressed in the space allowed for this piece. However, I will highlight a few of them. One question is whether the traditional legislative social functions, such as lunches and dinners hosted by lobbyists and their clients, are still permissible and, if so, how they must be handled. Attorney General Op. No. 2014-125 addressed some aspects of this issue – opining that social functions for elected officials may still be held, so long as the entire “governmental body” is invited to a “planned activity.” What is still unclear is what groups can qualify as a “governmental body.” The AG opinion asserts that a body must be established by “official action” of one of the three branches of government. This begs the question though – may the different branches of government create additional “governmental bodies” that will qualify for this exception? The level of planning that is required to be considered a “planned activity” has also been a point of contention.

WHO IS AFFECTED? There are several open questions about who is affected by the prohibition on gifts. For example, the language of Issue 3 prohibits only the seven constitutional officers, members of the General Assembly and members of the independent citizens commission from accepting gifts. However, some have asked whether the inclusion of cities, counties and other political subdivisions in the definition of “governmental body” is an indication that the prohibition on gifts was also intended to apply to local government. A similar question has been raised about the use of the term “office,” and whether that was intended to extend the prohibition on gifts to all employees of an elected official holding an “office.” Most believe that the answer to both questions is no, but that is far from certain. Some clarity will be provided as the legislature implements Amendment 3 via statute, and the Ethics Commission adopts rules and issues opinions. But, it will take some time for this to play out. In the meantime, lobbyists and elected officials are learning their way around in this new era of Arkansas politics.

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Commentary

The Return on Investment Higher Education Delivers By Dr. Robin E. Bowen Dr. Robin E. Bowen is president of Arkansas Tech University at Russellville. She is the first female president of a public, four-year university in Arkansas.

ach year, the state Legislature is asked to slice up a tax-funded pie. I do not envy the hard decisions legislators must make regarding how to appropriately fund the programs supported by our state government. I value the infrastructure that is provided by our tax dollars; the sidewalks, streetlights and roads. I appreciate the foster care system that provides services for Arkansas children in need of care. And, of course, I am a strong advocate of public education. There is a factor, unique to higher education, which is often overlooked. Higher education makes the pie that legislators must divvy up larger. Allow me to state that again. Higher education makes the pie that legislators must divide to provide services to our citizens larger. How? The more education one has, the higher the income. The higher the income one makes, the more taxes he or she pays. The more taxes paid by the citizens of our state, the more money the state has available to provide services.

I’d certainly invest my money in an entity that gave me almost five times the return rate on an annual basis! While I could not find a similar study for the State of Arkansas, I believe our results would be very similar.

COLLEGE BOARD STATISTICS

In sum, to cut higher education funding is short sighted for a multitude of reasons. I am grateful for our governor’s wisdom in proposing a budget that would maintain higher education funding during these difficult times. I sincerely hope that as our hard-working legislators begin the difficult task of slicing the budgetary pie they will consider not only the potential return on investment of the funds they make available to institutions of higher education, but also the other public goods higher education brings to our great state.

Education also improves the quality of life for those who attain degrees as well as the communities in which they live.

The most recent “Education Pays” report from the College Board found that the average amount of money paid in taxes annually by a person with a professional degree ($23,400) is higher than the entire average take-home pay ($21,000), and almost as much as the total annual income ($25,100), of someone who didn’t finish high school. The State Chamber of Oklahoma recently performed a study regarding return on investment for funds provided to higher education. For every state dollar spent, the return was $4.71.

TALK BUSINESS & POLITICS | MARCH/APRIL 2015

QUALITY OF LIFE Higher education is a private good. More education correlates with a higher income, which allows an improved lifestyle for the individual and his or her family. But higher education is also a public good. Higher education has an excellent return on investment and helps us build our tax base. Education also improves the quality of life for those who attain degrees as well as the communities in which they live. When comparing individuals with a bachelor’s degree to those without, the College Board also found that college graduates are more satisfied with their jobs, are more likely to receive health insurance from their employers, are less likely to engage in harmful habits such as smoking, have more opportunities for exercise and recreation and have lower rates of obesity. In addition, this same report states employed mothers with a bachelor’s degree have 51 percent more time to spend with their children than their peers without a degree. College graduates are more involved in their communities and report a greater understanding of the important issues facing our communities and our country.

CONSIDER WHAT EDUCATION BRINGS

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Hometown, Arkansas Southern Food & Wine Festival Wine Pour Pairings, 2011, Produced by El Dorado Festivals & Events

Bugs Bands & Bikes, 2012, Produced by Main Street El Dorado Deltic Timber Corporation is headquartered in El Dorado

Murphy Oil headquarters

TALK BUSINESS & POLITICS | MARCH/APRIL 2015

Farmer & The Markets, Mayhaw Festival on the Square, 2013, Produced by The South Arkansas Historical Foundation in conjunction with El Dorado Festivals & Events, Inc.

Big Companies in a Small Town

Deltic Timber, Murphy Oil and Murphy USA have had a huge impact on El Dorado, its success and its quality of life. By Jeanni Brosius

fter oil was discovered in the 1920s, El Dorado was known as Arkansas’ Original Boomtown. As with many towns during the oil boom, over the years its economy gradually waned. But with continual backing and support from its corporate community, including three large publicly traded companies that call the town home – Deltic Timber Corp., Murphy Oil Corp. and Murphy USA, Inc. – El Dorado is booming again. The growth stems from noteworthy investments into its economic development and education of its children. Things began to transform in the 1980s when Main Street El Dorado was incorporated. Since then, the city has seen a major uptick in its economic development, education and the arts, and the impact of Deltic, Murphy Oil and Murphy USA can be seen throughout the town of a little more than 18,000 residents. EDUCATION PROGRAM As with many small South Arkansas towns, El Dorado has laid out a strategic plan for economic development. One of its five goals includes education. Working hand-in-hand with Murphy Oil, the El Dorado Promise Scholarship Program has made history. Allison Parker, general manager of global communications at Murphy Oil, said her company believes it is part of its corporate responsibility to give back to the communities in which it operates. Because one of the city’s most precious resources is its children, ensuring a good education seemed a logical focus. The El Dorado Promise is a scholarship

program established and funded by Murphy Oil Corp. The program provides students who graduate from El Dorado High School scholarships that cover tuition and fees to any accredited two- or four-year public or private college in the United States. The scholarship’s maximum amount would equal the highest annual resident tuition to a public university in Arkansas. Since its launch on Jan. 22, 2007, more than

“Our large employers have allowed our local economy to weather the bad economic times better than most.” – Austin Barrow

President & COO El Dorado Festivals and Events 1,500 students have received Promise scholarship funding. El Dorado Mayor Frank Hash said there is absolutely nothing exactly like the Promise in any other city. “There is only one other city in our entire nation that has such a generous highereducation program: Kalamazoo, Mich.,” Hash said. “[The Promise] is a $50 million endowment and growing.” Murphy also offers a gift-matching program to its employees and retirees and

is able to direct a large portion of the donations to the organizations of the employees’ choice, Parker said. “I don’t know of any other community that has done so with the same level of success,” said Austin Barrow, president and COO of El Dorado Festivals and Events, Inc. “Beyond the sizable commitment of money, the day-to-day attention that employees pour into education within the community is noted from as early as kindergarten, and seen throughout the entire public school experience.” As a result of the Promise, the El Dorado School District has implemented programs to prepare its students for college, beginning in kindergarten. According to El Dorado Promise officials, the enrollment in the high school has more than doubled since 2005. INDUSTRY INVOLVEMENT El Dorado has always been a city with major industries. Hash said because the town is particularly rich in natural resources, such as oil, timber, brine, natural gas, clean high-quality water and electrical power, it is attractive to industry. The town is also easily accessible through rail, highway and river transportation modes. “Many of these prominent companies were created in El Dorado, and I believe the question might be why did they stay?” Barrow said. “Perhaps the question is what can we, the people of El Dorado, do to make sure they stay? Quality of life is a major factor in many people’s lives when considering where to relocate for a job, and these firms understand that notion. “They understand it, and they fund it. … El Dorado is a bit of an oasis in a sea of www.talkbusiness.net

Hometown: El Dorado pine trees, down here in South Arkansas. Our large employers have allowed our local economy to weather the bad economic times better than most.” Check Murphy USA’s website, for example, and you’ll see that the company believes in making a difference in all the communities it serves. Murphy USA says it hosted more than 250 community appreciation events last year and, since 2011,

has sponsored more than 3,000 youth league sports teams. ARTS AND ENTERTAINMENT “Our major industries are particularly philanthropic to many fine art endeavors and El Dorado has a wonderful Philharmonic Orchestra and Art Center as a result, to mention just a few,” Mayor Hash said. The local businesses also support a host of

TALK BUSINESS & POLITICS | MARCH/APRIL 2015

services, crafts, products, eateries and recreational activities. “El Dorado is fortunate to have a wide variety of publicly traded, nationally headquartered firms that are overly generous when it comes to sponsoring events residing within its borders,” Barrow said. The city is enthusiastically awaiting the development of the Festival City of the South, which is being created by El Dorado Festivals and Events. This will be a $50 million private entertainment district that will be developed in the downtown area, Hash said. “There will be a wonderful world class arts and entertainment venue that will serve the entire South Arkansas and northern Louisiana region,” Hash continued. The goal of the downtown arts and entertainment district is to embrace the spirit of Southern arts and culture. El Dorado was nationally recognized for it in CNN’s 2013 America’s Best Small Town Comebacks. The city also received the 2009 Great American Main Street Award from a nationwide pool of applicants. Barrow said he believes anyone would be hard pressed to point to another southern town with a population of less than 20,000 that can boast about a symphony planning its 60th continuous season, an art center that has just completed its 50th season, and more than a dozen arts and music festivals that have been running each year for more than 20 years. “It’s truly remarkable the level and quality of performances and events that take place in such a small town in the South,” Barrow said. “El Dorado has had many graduates over the past 50-plus years that have grown up in this arts rich environment, and are now working as professional artists around the globe. We have a very high college matriculation rate, and professional artists and teachers make up a sizable portion of those that move into the professional world.” El Dorado is a jewel in Union County with its historic downtown, including the 1920s-era Rialto Theater, 14 structures on the National Registry of Historic Places and a corporate community that clearly believes in giving back.

A Strategy for Growth. Deltic Timber Corporationâ&#x20AC;&#x2122;s growth is based on the vertical integration of Arkansasâ&#x20AC;&#x2122;s most abundant natural resource. The value of our ownership and management of approximately 530,200 acres of Southern Pine timberland, is enhanced through efficient wood-products manufacturing facilities and the environmentally sound development of commercial and residential real estate. These assets combine for a strategy for growth in an expanding economy.

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PEANUTS Closes April 5, 2015

Two great exhibits!

“Pigskin Peanuts”

“Heartbreak in Peanuts”

Forty Two Full Service Restaurant 1200 President Clinton Ave. 11 a.m. – 2 p.m. • Mon. – Sat. Clinton Museum Store Official Store of the Clinton Center 610 President Clinton Ave. 10 a.m – 5:30 p.m. • Mon. – Sat. 2 p.m. – 5:30 p.m. • Sun. Clinton Museum Kiosk 1200 President Clinton Ave. 1200 President Clinton Avenue • Little Rock, Arkansas 9 a.m. - 5 p.m. • Mon. – Sat. 1 p.m. - 5 p.m. • Sun. 64 TALK BUSINESS & POLITICS | MARCH/APRIL 2015 501-374-4242 • clintonpresidentialcenter.org

72201

Regional: Northwest Arkansas

‘Get Moving’ Northwest Arkansas Council sets three-year economic development goals to continue the success of strategic plan. By Kim Souza

COURTESY OF THE CITY WIRE

Business leaders in Northwest Arkansas raised the bar for regional growth and economic performance expctations over the next three years, according to data shared at the Northwest Arkansas Council’s winter meeting at Rogers in January. Mike Malone, the Council’s president, said the lofty goals set are an important layer to the groundwork the region has accomplished since 2011 when the first strategic plan was announced. “We just need to draft more organizations to the cause to help pull off these goals, which will be reviewed in just 1,068 days. Let’s all get moving,” Malone said. Northwest Arkansas completed the five-year plan in just four years, but has now set its sights on competing with the larger metro areas of Austin, Texas, and Madison, Wisc. Ted Abernathy, president of Economic Leadership LLC and the consultant for the regional plan, said competitiveness is a journey rather than a destination. GOALS SURPASSED As the keynote speaker at the meeting, Abernathy shared the “area development rankings” for Northwest Arkansas (NWA), which outpaced peer cities that were outlined in the last plan period. Overall rankings of 379 metro areas: NWA 69, Kansas City 148, Tulsa 183. Workforce rankings: NWA 32, Kansas City 174, Tulsa 175. Year-to-year growth: NWA 45, Kansas City 176, Tulsa 233. In the past four years, Northwest Arkansas grew its population by 7.5% to 505,000. Employment is up 9.3% since 2010 and average wages grew 9.7% since 2009. Unem-

ployment fell to 3.9%, and the regional gross workforce training to high school students. domestic product increased to $28 billion, Abernathy said the region must continue to up 29.8% since 2009. The stellar economic develop a pipeline of workers and continue performance led much of the nation and to attract and retain other talent. was twice the national GDP for the same Malone said workforce shortages are a period. challenge going forward, not just in skilled NWA also increased Northwest Arkansas Council President Mike the number of people Malone discusses the group’s three-year plan 25 or older who have a during the winter meeting in Rogers. bachelor’s degree from 21.5% in 2010 to 27.9% in 2013. Add in the quality of life investments in trails and the additional Interstate highway miles and the region was able to check all the boxes in its former plan. “The five-year plan was an incredible win for the region,” Abernathy said. Looking ahead, he said outpacing the benchmark peer cities over the next three manufacturing but also technology and years represents a big challenge. medical professions. Overall rankings of 379 metro areas: “There’s a lot of good work already being Austin 15, Madison 45, NWA 69. done. We need to transfer that on a broader Workforce Rankings: Madison 2, NWA scale and there is a communication oppor32, Austin 63. tunity to let people know what is working Year-to-Year Growth: Austin 42, NWA 45, well so that it can be adopted elsewhere,” Madison 130. Malone said. “The shortage of available workforce at our low unemployment levels WORKFORCE CHALLENGE is an area of vulnerability for this region Abernathy said the biggest challenge for going forward.” economic developers across the country The Council also plans to work on a today is qualified workforce shortages. 25-year look at infrastructure needs such Northwest Arkansas is not immune. The as highways, added multi-modal mobility, region is working with local school dispreservation of the region’s drinking water tricts like Springdale to get more workers as well as pricing improvement and options in the pipeline sooner by offering skills and for the regional airport. www.talkbusiness.net

Regional: Northwest Arkansas

Moving On Successful Acumen Brands founder John James moves to new role with venture fund. By Kim Souza

COURTESY OF THE CITY WIRE

John James left the comfort of a successful business to lead an intense $100 million venture fund in Northwest Arkansas. Why? Because James says he’s more interested in the journey than the destination. It’s been six years since James and his partner, Terry Turpin, founded Acumen Brands in hopes of selling scrubs to medical professionals. James had ditched a possible medical career to launch Acumen following completion of his medical residency. A self-professed nerd and tech junkie, James says he is far more comfortable starting a business than running the day-today operations of a successful venture like Acumen Brands. Fayetteville-based Acumen grew exponentially in 2012 from its Country Outfitter-branded business that James and Turpin founded in 2011. “It’s a pretty good success story. We started Country Outfitter to sell boots and other western apparel online. We cracked the code on Facebook on Labor Day of 2012 and went from 0 Facebook fans to 7 million in just four months time. The business went from $1 million in 2011 to $15 million in just one month by the end of 2012,” James said at the University of Arkansas Business Forecast Luncheon he moderated in late January. A DIFFERENT ROLE James says he looked up last year to see a company that had grown from three to 200-plus employees in five years and he felt restless in the role of CEO. Though his formal title at Acumen is still founder and he’s a very satisfied investor and board member, James reached out last year to Dr. Steve Graves, an organizational strategist and life coach, to help him transition into a new role. That new role may be larger than just a career change for James. James is working with a group of local

investors to raise $5 million toward funding an entrepreneurial residency program with a goal of creating a viable startup each month. “Given that Acumen is on an upward trek, it has given me the opportunity to look back at the innovation stage of companies, which is what I am most excited about,” James said. “I wanted to get back into the community and mentor some of these startup founders and get some capital funding around them and teach this young class of entrepreneurs about how to start a business.” He said that when students graduate from

“We will try and start a new company every month or every other month with a team of experts around the table.” – John James college they shouldn’t be encouraged only to take a corporate job. He believes entrepreneurship should be more of an option, but it will only be a broader option if there is a supporting community with mentors and funding. “I am working on the final stages of the $5 million funding for this residency program. We will try and start a new company every month or every other month with a team of experts around the table. You need design-

TALK BUSINESS & POLITICS | MARCH/APRIL 2015

ers, developers and people that drive traffic online and someone to lead the company,” he said. James said the residency program will start small but hopes to eventually grow into an incubator-type program that could accept multiple teams. He said there would be resources invested in the team that would raise their chances for success. His vision for the program is based on the medical residency model — See, Do, Teach. $100 MILLION FUND James recently had little more to offer on his plans to raise $100 million in capital venture funds in cooperation with his announced Newroad Ventures. “It’s too early for details, but I will say the region really needs this type of fund and I want to be a part of it however it shakes out. I want to help with the fundraising and the advocacy of it,” James said. He says $100 million is a challenge and he’s more than ready to do his part, adding that there are commitments for almost 30% toward the $100 million. “I don’t want to over-speak now but I promise to provide more updates as the funding toward the $100 million goal takes place,” he said. James has been in the trenches trying to raise capital for his own ventures, and shared that six years ago he could not raise $100,000 to start Acumen Brands. James said when he really needed the early capital to grow the Acumen it couldn’t be found in Arkansas. But once it succeeded the suitors lined up. “We are missing a seed money capital venture fund in Northwest Arkansas. You can’t tell me that with the world’s largest company in our own backyard that we can’t fund our own capital venture pool,” James said.

Identify. Connect. Nurture. Grow.

Weâ&#x20AC;&#x2122;re building the Delta Entrepreneurship Network Are YOU in?

DRA.gov/entrepreneur

@DeltaRegional delta.regional.authority Delta Regional Authority DRAvideos www.talkbusiness.net

Regional: Northeast Arkansas

A Bright Spot Jonesboro stands out in Memphis Burgundy Book collection of economic development activity statistics and data. By Talk Business & Politics Staff An analysis of the Little Rock Burgundy Book, a compilation of quarterly statistical and anecdotal data released by the Federal Reserve Bank of St. Louis, provides a lot of detail on economic activity to all parts of Arkansas except the Jonesboro metropolitan statistical area (MSA). The Little Rock book examines all of the major metro areas in the state except Jonesboro, which is tied to the Memphis Burgundy Book. Memphis dominates the economic activity in the region, so it is possible for Jonesboro and quadrants of Northeast Arkansas to deviate significantly from the data as a whole. UNEMPLOYMENT DROP IN JONESBORO For instance, the latest Memphis Burgundy Book found that unemployment actually bounced higher in the third quarter in the region from 8.4% to 8.5%. In Jonesboro, an unemployment decline led the region with a 6.1% reading, which was the lowest for the different MSAs in the area and was the lowest rate for Jonesboro in six years. As a region, the Memphis zone saw decent gains in transportation and manufacturing employment. Residential housing market conditions were mixed in the third quarter with Memphis residential real estate market conditions characterized as “weak.” However, the Memphis commercial market was strong in the third quarter. Yearover-year growth in asking rents was greater than second-quarter growth in all sectors except for retail.

OTHER HIGHLIGHTS Here are some additional outtakes from the latest Memphis report regarding Jonesboro, which is seeing better statistical numbers than other parts of the region that includes parts of Tennessee and Mississippi. The period covers the most recent quarter of economic activity in the region – the third quarter of 2014. • In Jonesboro, non-farm employment growth continued to be faster than the national rate, led by strong growth in the goods-producing sector. A slowdown in the private service-providing sector was significant, contributing to the overall slowdown in employment growth. • Arkansas banks remain, on average, significantly more profitable than their Tennessee and Mississippi peers. • Average net interest margins (NIMs) still vary widely across Memphis zone states, with a 58-basis-point spread between the highest state average (Arkansas) and the lowest (Tennessee). The average NIM increased slightly in Arkansas and Tennessee and decreased slightly in Mississippi between the second and third quarters; average NIMs were higher in all three states from one year ago. • With the exception of corn in Arkansas and Mississippi, crop production levels surpassed last year’s exceptional harvest by a significant margin. The decline in corn production was primarily driven by about 37 percent fewer farmland acres

TALK BUSINESS & POLITICS | MARCH/APRIL 2015

Arkansas banks remain, on average, significantly more profitable than their Tennessee and Mississippi peers. allocated for corn in 2014 across both Arkansas and Mississippi. • Cotton production for the zone, states, and the nation as a whole surged despite headwinds noted by regional farmers. The full report can be found at the St. Louis Federal Reserve website at research.stlouisfed.org.

Regional: Northeast Arkansas

Real Steel

Nucor Steel has a big reach in the small Mississippi County community it touches. By Talk Business & Politics Staff While the recent focus has been on a brewing steel factory war in Northeast Arkansas, Nucor Steel has been part of the fabric of the region for nearly three decades. Lost in the legal dispute and arguments over whether or not competitor Big River Steel will be helpful or hurtful to Mississippi County’s air standards, workforce and quality of life, Nucor has made significant contributions to the area and helped the community survive when an Air Force Base closure doomed a major employer and economic driver in Northeast Arkansas. The former Eaker Air Force Base, which housed several B-52s and KC-135 planes, closed in 1992. Several thousand people and jobs soon left. Nucor actually came to Mississippi County in 1986, when ground was broken on the first of three mills. It was ramping up and hitting its stride when Eaker closed. “It was a shocker to see 5,000 jobs go away,” said Sam Commella, vice president and general manager of Nucor Steel Arkansas. Today, Commella says Nucor has 1,650 direct jobs with a median wage of $85,000 combined at Nucor Yamato, Nucor Hickman and Nucor Castrip. The mills are located within miles of one another on farmland near the Mississippi River with Castrip and Yamato situated on the same property. CZ and CSC car building sections and rail ties are made at the Yamato plant, while steel used for grain storage and office furniture is manufactured at the Castrip plant. Also, carbon steel sheeting is made at the Hickman plant. The company also has a plant in Memphis where carbon steel is manufactured. Commella said the company pays about $200 million in state and local taxes each

year and that there are about 14,000 jobs that are indirectly related to the company in Mississippi County. EMPLOYEES/WORKFORCE TRAINING The steel industry normally draws people who are interested in science, engineering and math to work. Leon Topalian, vice president and general manager of Nucor Yamato Steel, said the company has “an incredible talent pool” with employees who believe in motivation and desire.

Commella agreed, saying the company needs employees that are well-rounded and are able to think on their feet. “We need people of all stripes, as well as engineering and technical. … With a manufacturing plant, we also need people with a basic understanding of science, English and math,” he said. The company has worked for years with officials at Arkansas Northeastern College on a two-year internship program. The program helps students get an associate’s degree and trains new electricians and mill wrights. Another program has set up flex

scheduling for employees to take classes at ANC. The program has allowed employees to get additional training. The company’s foundation has also set aside $60 million to pay for employees and their families to go to school, Commella said. Commella said he has been active in working with the KIPP charter school in Blytheville. The school – for students in fourth through ninth grade – opened in 2010. The school’s curriculum stresses not only education but character as well, said Commella, who also serves on the school’s board. “There are the educational aspects. They also teach character traits like having a positive attitude and how you carry yourself,” he said. CORPORATE CITIZENSHIP The company has also been active in the Great River Promise program. Commella said it was a seven-year commitment to make sure every child in Mississippi County has the opportunity to get at least an associate’s degree. State Rep. Monte Hodges, D-Blytheville, who represents the district where Nucor is located and where Big River Steel is coming, said he’s not a fortuneteller, but he shudders to think about the challenges that Mississippi County would face without Nucor’s longtime investments. “Nucor has been a great corporate citizen not only for Mississippi County, but the state of Arkansas,” Hodges said. “I don’t have a crystal ball and definitely can’t predict the future, but I think things would have been a lot different economically if Nucor were not in Mississippi County, especially in Blytheville after the Eaker Air Force Base closing.” www.talkbusiness.net

Insights

Q&A

Striking a Happy Medium Agency’s report takes a look at various communication tools and assesses which ones are growing in popularity.

Here are some thoughts on the State of the Media Report from Brian Kratkiewicz, senior vice president of digital and media at Cranford Johnson Robinson Woods. TB&P: What are some of the top-line takeaways from the report? Kratkiewicz: Well, really, the takeaway is that things are changing. They’re changing slowly. It’s not this mad dash into digital that everybody’s talking about. Traditional media is still strong. … People are spending the same time they spent about five years ago with TV. Radio is holding pretty steady. Print isn’t dying like everybody’s talking about. It’s slowly dropping off each year a little more, but it’s going to be around. It’s just going to be a matter of what form print’s going to be in someday. Is it going to be digital? Will there still be printed stuff? Digital is really the thing that is growing out of all the media that’s out there. … It passed television last year. People are spending about five hours and 46 minutes with digital now, believe it or not, hard to imagine; television is about four hours and 28 minutes. Part of that, though, is overlap. People are multi-tasking. They’re watching television, but they are on their phone or their tablet or their laptop. TB&P: This is basically the two-screen age … Kratkiewicz: Exactly. TB&P: Look into the near-term horizon. What’s on the way that people need to keep an eye on? Kratkiewicz: I think the thing that’s going to really have the biggest impact is connected television. Right now they’re out there, most any new television you buy right now is going to have that Internet capability, where it’s got the apps on it, you can go to Amazon on it, you can watch Netflix on it. As that technology advances … I think it’s going to have a huge impact. And when the price starts to drop, that’s when things are just going to go haywire in the advertising world. When you turn on your television someday and it’s really just your computer hanging on the wall, and you’re looking at websites and have all sorts of different entertainment options right there in front of you, it’s going to be a free-for-all. But I think we’ll be ready for it.

he fifth edition of CJRW’s State of the Media Report, released earlier this year, gives us an overview of trends in advertising and media usage, plus some predictions for the future. Digital media continues to grow at a rapid pace, but the report says U.S. adults still spent the majority of their media time in 2014 with traditional media. Six hours and 28 minutes (54%) was spent with traditional media each day versus five hours and 46 minutes (46%) spent with digital media each day. Here’s a quick look at some other stats we found interesting.

2+ BILLION That’s the number, according to the report, of active social media users worldwide.

74 Percentage of online adults who use social networking sites.

40 Percentage of cell phone owners who use a social network on their phone.

LOWER COSTS As the cost of technology and access to content continues to drop, it will make digital entertainment more accessible to more people. If a quality $50 tablet or “phablet” hits the market, look for time spent with digital to skyrocket.

GREATER AVAILABILITY OF CONTENT As more digital vehicles secure access to entertainment content, more consumers will be drawn to digital to consume their favorite programming whenever and wherever they want to.

WHAT’S THE FREQUENCY? Good news for radio: The report says broadcast radio reaches the greatest listening audience; network radio commercials reach 68% of all Americans; and broadcast radio is still where Americans spend the most time listening.

AD SPENDING PROJECTIONS The report suggests that advertising spending growth will be fairly consistent with 4.9 to 5.9% increases through 2018. Here are some media-specific projections: • Digital media will grow by double digits each year from 2014 through 2018. • Mobile will show the greatest gains with annual increases of 19 to 78%.

• Modest growth is projected for TV, radio and outdoor advertising. • Newspapers will continue to see small losses in ad dollars. • Magazines will see very minor losses through 2015, then slight increases from 2016 through 2018. • Television, projected to have the greatest share of ad dollars by the end of 2014 at 38%, will see that only drop slightly to 36% by 2018. • Digital will grow to have the greatest share, 38%, by 2018.

DIGITAL DATA • Mobile is the driving force behind continued digital growth. • Over 70% of U.S. mobile subscribers now have smartphones. • Consumers spend more time consuming digital content via smartphone and tablet apps than they do via surfing the Web.

LESS TIME ON THE COUCH? Time spent watching TV by adults aged 18 to 24 has dropped from around 25 hours down to around 21 hours each week.

SAGE ADVICE If you’re a marketing executive in charge of promoting your company’s products and services, here’s what CJRW’s report advises: Tailor the media mix for each and every plan, and use the most effective media to reach the specific target audience in question. A more mature target audience may call for a stronger level of traditional media support, while also including digital. A younger target audience may call for stronger levels of digital media support, as well as traditional media. The bottom line is that you need a mix of both traditional and digital media these days to effectively reach just about any target audience. The target audience and product in question will dictate what that should be.

Insights is compiled by Talk Business & Politics Editor Bill Paddack. Possible items for inclusion can be sent to him at bill@talkbusiness.net.

TALK BUSINESS & POLITICS | MARCH/APRIL 2015

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Dr. Carol Reeves, pictured with members from past successful teams, including Biologics MD and Silicon Solar Solutions, has four teams in this yearâ&#x20AC;&#x2122;s competition from her University of Arkansas New Venture Development class that are engaged in worldchanging efforts.

TALK BUSINESS & POLITICS | MARCH/APRIL 2015

Feature

More Than a

Class Project Annual Donald W. Reynolds Governor’s Cup business plan competition gives students a chance to bring their ideas to life. By Steve Brawner

his April 2-3, the state’s best college business plan teams will gather in Little Rock for the Donald W. Reynolds Governor’s Cup, where they will try to win not only a competition but, for some of them, the chance to follow in the footsteps of companies like Picasolar and MoVista.

PHOTOS COURTESY OF SAM M. WALTON COLLEGE OF BUSINESS

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Feature: Governor’s Cup

“To me, one of the greatest skills is just their ability to think on their feet.” – Dr. Carol Reeves Dr. Carol Reeves

Both of those companies parlayed into viable businesses the lessons they learned through the Cup and through Dr. Carol Reeves’ New Venture Development graduate course at the University of Arkansas. Picasolar, which competed in 2013, is marketing a technology developed by its

own Seth Shumate that increases solar cell efficiency while using less silver. With its potentially revolutionary product, the company recently raised $1.2 million and also won an $800,000 SunShot Tier I Incubator Award from the U.S. Department of Energy. MoVista, a 2008 competitor, sells app-driven software that allows companies to monitor the activities and results of

TALK BUSINESS & POLITICS | MARCH/APRIL 2015

outside field staff. This year’s competition has attracted 47 undergraduate teams and six graduate teams so far. In April, the best of those will present for 20 minutes and then answer questions from judges. A total of $154,000 will be awarded, including $25,000 to first-place teams in both graduate and undergraduate categories. The cash prizes are only part of the potential rewards. The judges and audience members aren’t just there for the competition; they’re looking for investment opportunities. Checks do get written. MARKET-BASED IDEAS The Cup was created in 2001 by the Arkansas Capital Corporation’s Sam Walls, who decided Arkansas needed to invest in homegrown businesses because studies were showing the state would have increasing difficulty attracting outside industries. A venture capitalist, he had worked himself through college, been introduced to entrepreneurial concepts as an employee

at Dillard’s, and then become an investor before joining Arkansas Capital. When Walls created the Governor’s Cup, few students were learning how to bring transformative ideas like Picasolar to market. The first state winner in 2001 was a bowling alley. That’s certainly changed. Reeves’ New Venture Development class will enter four teams engaged in world-changing efforts: one offering an online marketplace for biospecimens; one marketing an Alzheimer’s drug; one selling a nutritional shake for pregnant mothers; and one selling solar panels in the Dominican Republic. She said the class averages two actual startups a year. The Arkansas Research Technology Park’s quarterly newsletter recently featured a lot of names that were familiar to her. “I think they highlighted eight companies, and five of them came through our program,” she said. The Governor’s Cup process is meant to help students develop their ideas based ad half page horizontal.pdf on marketAHCA realities. Reeves estimated the 1

Alzheimer’s drug team looked at 200 technologies. Students must also learn to present their ideas to judges who, as potential investors, ask difficult questions. COMMUNICATION SKILLS VITAL “To me, one of the greatest skills is just their ability to think on their feet,” Reeves said. “I would say most adults would not want to go through this. It is brutal. It can be brutal, the Q and A at the competitions. I’ve had so many students tell me they’ll never be afraid of another presentation after going through this.” Those communication skills are vital, said Jeff Amerine, founder of Startup Junkie Consulting, which helps new companies get off the ground. He’s been involved with the Governor’s Cup since 2009. “I would say about 50% of it, aside from doing the really hard work required to validate the business model, is being able to tell the story in a compelling way, and by the time they come out of the end of 12/16/14 9:55 AM that, they’ve got all the skills they need to

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Feature: Governor’s Cup convince customers that they’re solving a problem that they should pay for and to convince investors that there’s a real opportunity for it to be a scalable venture,” he said. The competition’s best year was 2006, when 61 teams were entered. That number had dropped to 34 last year – the result of staff transitions at the Arkansas Economic Acceleration Foundation, the arm of the Arkansas Capital Corp. that manages the program, said Marie Bruno, the Foundation’s executive director. The Foundation stepped up recruiting and made a concentrated effort to dispel a growing notion that entrants had to be hightech like Picasolar. Last year, for example, a team from John Brown University won at the undergraduate level with Arleesa, a company offering custom-made and realistically proportional dolls. The success at the college level led to the creation of Youth Entrepreneur Showcase (Y.E.S.) for Arkansas, with competitions at the fifth-through-eighth and ninth-

OBU seniors, from left, Jared Lantzsch, Jayson Harris, Jonathan Jacks and Tanner Trantham, who call themselves The Boom Doctors, won the joint competition with Henderson State.

through-11th-grade levels. The older group has the most ever teams intending to enter this year, while the fifth-eighth-grade competition involved 242 plans from 35 schools in 14 counties. ENGAGING TOP STUDENTS This is the seventh year that Ouachita

TALK BUSINESS & POLITICS | MARCH/APRIL 2015

Baptist University has competed in the Governor’s Cup. Dean Bryan McKinney of OBU’s Hickingbotham School of Business said the school is intensifying its entrepreneurship focus. He said students “start out with stars in their eyes,” but faculty members help bring them down to reality as they hone their ideas and their

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Good Luck at the

2015 Donald W. Reynolds Governorâ&#x20AC;&#x2122;s Cup Collegiate Business Plan Competition!

Sam M. Walton College of Business Entrepreneurship Teams

Graduate

Undergraduate

BabyBooster BioBridge Kordate Solutions M-Power

Amerus Con Quesos Deed Hilltop Brewery

TALK BUSINESS & POLITICS | MARCH/APRIL 2015

Feature: Governor’s Cup presentations. The school awards cash prizes of $4,000, $3,000 and $2,000 to the first three oncampus winners, and then those same amounts, plus a $1,000 award for the fourth-place winner, are awarded during a joint competition with neighboring teams from Henderson State University. Faculty members are encouraging the creation of interdisciplinary teams with students from non-business majors. “It’s contagious, the whole entrepreneurship thing,” McKinney said. “Our better students are getting engaged in it, wanting to participate, and certainly the money doesn’t hurt.” The entrepreneurship focus may be a natural for the current college generation, whose members spent some of their formative years in the Great Recession. As McKinney pointed out, they “watched their parents lose jobs, and so working for others didn’t always turn out so well for these kids and their families.” Four OBU seniors wearing medical scrubs shared the $4,000 check during the joint OBU-HSU competition: Jared Lantzsch of Rogers, Jonathan Jacks of Monticello, Tanner Trantham of Bauxite and Jayson Harris of Maumelle. Calling themselves “The Boom Doctors,” their idea was to create a medical-themed fireworks stand franchise for college entrepreneurship classes. PRESCRIPTION OF FIREWORKS The idea grew out of a concept that Trantham and Harris incorporated into a fireworks stand they operated in Maumelle last summer. Theirs was the only stand where customers were greeted, diagnosed with a problem – “wild case of pyromania” or “firecracker fever” – and given a prescription of fireworks to cure them of their illness. The slogan was, “Fireworks so loud you’ll need a bed pan.” Lantzsch said members of his generation want to be their own bosses and want their ideas to have an impact. The Boom Doctors’ model is meant not just to create profits but to teach students entrepreneurial skills, like the kind Trantham and Harris learned running the stand. Students are expected to

collect data that they and the parent company would use to increase sales. “We want to give them a leadership experience,” Jacks said. “That’s what we want, because we crave that as students, so we wanted to give that to them.” The team’s members are about to graduate and go their separate ways. For them, this was a class project, and they didn’t expect to do this well. But if they keep having this kind of success, they said they may have to

Across Arkansas. Across America.

reconsider their plans. The Governor’s Cup has been funded by the Donald W. Reynolds Foundation since 2004, but that grant ends after 2016. Bruno said the Arkansas Economic Acceleration Foundation is looking for other donors and is confident the money will be found. “The bottom line is, we’re going to continue the Governor’s Cup, definitely,” she said. “It’s been too good of a thing for our state.”

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Leadership

Sixth Sense:

Realizing Employee Potential In the competitive world of today, recognizing and further developing employee talent and potential are crucial to success in the workplace. We asked six business leaders for their tips on supporting employees’ growth and successfully helping them to realize their potential. By Bill Paddack

Chuong Nguyen

Rodney Shepard

Kelly Whitehorn

At DataRank we call our employees, including the founders, “datawhales,” and the professional and personal development of each datawhale is paramount to our mission of empowering people to make informative decisions with the use of valuable data. Tips you can adapt: Transparency: Be completely open in all aspects of a project, meeting or executive decision. This will increase trust. Get on their level: Interact with your employees as if you are an equal on the team. Challenge them: Ambitious people tend to excel when they are working with others who have strengths that they might not possess or fall short on. Continuing education: Provide resources that will nurture professional and personal development. Community involvement: Whether it be supporting a charitable cause, participating in 5K runs or volunteering at a local soup kitchen, encouraging your team to play an active role in your local community can provide a sense of self-fulfillment for them that can be carried over into the work environment.

An organization’s personnel differentiates it within its respective marketplace, and it’s incumbent on employers to partner with employees and offer growth opportunities. Three ideas: Engage employees: Show genuine concern for them as individuals and nurture their need to be a valued part of the team. Important to that is finding out what their career interests are and aligning their skill set with the organization’s mission. Mentoring plays a vital role to increase employees’ cultural competence by expanding their awareness and networking deepens their relationships with other employees. Invest time and resources in training programs: You will have and see a better, more committed workforce if you afford them the opportunity to continue to sharpen their skills. Challenge employees: Assigning projects that will stretch them facilitates the learning process – employees want their work to be challenging, educational and rewarding. As a leader, I strive to be a role model who shares professional and personal growth with the team.

One of my favorite quotes is, “Good leaders must first become good servants.” I would encourage those in positions to influence others to do so with humor and humility. Remember these two things about leadership: No one ever learned anything by talking. It is very important to listen without interrupting. Micromanaging is not a virtue. It’s OK if people have a few failures; it’s simply part of the learning process. As a leader, model the simple things such as knowing your business and meeting deadlines. Create an environment that values everyone’s opinion, recognizes potential and encourages a healthy balance between work and family life. Finally, it’s very, very important to have a candy jar on your desk. It guarantees interaction, and it gives you a chance to get to know your co-workers on a more personal level. My candy jar has confirmed my suspicions about my colleagues. They definitely have a preference for milk chocolate.

Co-Founder/COO DataRank Inc. Fayetteville

President/CEO Arvest Bank of Fort Smith Fort Smith

TALK BUSINESS & POLITICS | MARCH/APRIL 2015

Director, Corporate Marketing Arkansas Blue Cross and Blue Shield Little Rock

Malinda See

Benny Baker, CHA

Tonja Gibson, SPHR

There are multiple components that support employees in their career growth and assist them in realizing their potential. First and foremost, an organizational culture supporting employee continuous improvement and education is crucial. Realizing that everyone learns differently, employers can support continued education for employees through tuition reimbursement programs, offering both instructorled and online education opportunities, and creating job rotation programs that challenge and educate employees on other aspects of the company. Training managers to offer coaching and conduct candid conversations with employees about their career interests and aspirations is also vital. Employees should be encouraged to explore career paths both horizontally and vertically in the organization. These types of programs can be beneficial for both the employee and the organization. An organizational culture that supports employee growth and development ensures that both the employees and the organization reach their potential.

Staff development is a critical investment for success. My role is to serve as their coach, teacher, mentor and leader. Employees must have the tools and in some cases specialized training to succeed as well as authority to support their responsibility. Everyone has a gift and a special skill set. My goal is to be honest in their evaluations and to let them know what they do well and what they need to improve. Share success as well as failures. They then become the coach, teacher and leader and serve as a mentor to others.

Employee development is the combination of education, job experiences, relationships and assessment of personality and abilities to help employees prepare for the future. Employers need to: Assess Employeesâ&#x20AC;&#x2122; Skill Sets: Gather the data on your employees, including interests and abilities. Mentor and Coach Employees: Help employees develop problem-solving skills and the ability to think by giving them work that will stretch them. Give them the knowledge, skills and tools they need to not only do their job, but also to go above and beyond. Set Goals: Involve employees in setting goals. Specify competencies and knowledge that must be developed. Empower your employees. Provide feedback and ask your employees for their feedback. Follow Up: Measure successes and celebrate those successes. Adjust goals as needed. Share information â&#x20AC;&#x201C; talk about whatâ&#x20AC;&#x2122;s going on in your organization: the good, the bad and the ugly. When you give employees an opportunity to grow, their job satisfaction and your ability to retain them both increase substantially.

Vice President of Corporate Services Southwest Power Pool, Inc. Little Rock

Director of Sales The Arlington Resort Hotel & Spa Hot Springs

Human Resources/Benefits Analyst E.C. Barton & Company Jonesboro

www.talkbusiness.net

Executive Q&A

The Remarkable Journey Of Charles Morgan By Roby Brock PHOTO COURTESY OF CHARLES MORGAN

marriage, motorcycle and auto racing, and ventures from New York to Saudi Arabia.

harles Morgan, the longtime leader of database giant Acxiom, served as its iconic CEO for decades. He’s now got his fingers in a number of new entrepreneurial adventures, such as Conway-based PrivacyStar and Inuvo. Most recently, he’s written his memoir, “Matters of Life and Data – The Remarkable Journey Of A Big Data Visionary Whose Work Impacted Millions (Including You).” Morgan sat down for a one-on-one with Talk Business & Politics Editor-in-Chief Roby Brock to discuss what isn’t a “dull business book.” The memoir is more than just a biography – it’s a combination of Evel Knievel meets James Bond meets Bill Gates. The book features stories of Morgan’s childhood and pre-Acxiom life as well as the starts and failures the company had in its early days in Conway. There are rich details of his personal life, including a challenging

TB&P: What do you want the book to be in terms of a takeaway? Charles Morgan: It’s a memoir. To do the things I did in my life, there was some history. Something may have caused me to do that; there were things that motivated me over time. I wanted people to understand that building a business and doing the things that I did and the whole company did – you don’t just wake up one day and say, “We’re going to do something really cool. We’re going to build a great company, we’re going to make data relevant to the world.” Our journey was a long journey. TB&P: In your pre-Acxiom life, you cut your teeth at IBM, where you had the account of a fledgling retail operation called Wal-Mart. Sam Walton’s early use of data had a profound impact on you, didn’t it? Morgan: It had a tremendous impact… I was also taken by Sam’s leadership style because I got to observe him one-on-one.

TALK BUSINESS & POLITICS | MARCH/APRIL 2015

He was a leader who let his guys do a lot of the work. He did give them a lot of latitude to make decisions. They felt empowered. But, by god, at the Saturday meeting you knew who was in charge – Sam. And if you didn’t use your empowerment to the betterment of Wal-Mart, woe is you. Sam, in his very earliest days, knew that data would be the difference between a failing Woolworth company and a successful Wal-Mart. TB&P: You’ve seen all this growth in data over the past several decades and how it’s being used. Are we in a great time in history in the use of data? Morgan: The more global question is about the capability of all of this technology… We do not have a framework of laws in this country to deal with it. The Internet of things is just getting going and we don’t have any ways to manage all of this today in a legal framework. One last point I would make is that at Acxiom, we realized we had too much data. We had all the bank data, all the credit data, we had data about demographics, psychographics – we had billions of pieces of data about the U.S. population and to write a law or to write a rule inside Acxiom was impossible. We said – and I believe this today – privacy is a state of mind. You have to believe that you want to properly use data and you have to make good, logical decisions about it.

Editor’s note: You can buy Morgan’s book or learn more about it at www.MattersOfLifeAndData.com. Watch his full, unedited interview at www.TalkBusiness.net.

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At Deltic Timber Corporation, we believe in a harmonious balance of environment and expansion. And this philosophy is backed by our responsible management of hundreds of thousands of acres of sustainable forests. All of our communities â&#x20AC;&#x201C; Chenal Valley, Chenal Downs and Wildwood Place in Little Rock, and Red Oak Ridge in Hot Springs â&#x20AC;&#x201C; are designed to embrace nature and sustainability. Theyâ&#x20AC;&#x2122;re also designed to provide the convenience and amenities you appreciate in comfortable living. Why? Because the best communities in the Natural State are the ones that help keep it that way. DelticDevelopments.com | 501.821.5555

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Deltic Timber Corporation is a natural resources company engaged in the ownership and management of timberland. The Company also develops to its highest and best use residential and commercial properties in Little Rock and Hot Springs, Arkansas, through its subsidiary, Chenal Properties, Inc. Deltic is publicly traded on the New York Stock Exchange under the symbol DEL.

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