PBJune 2013-1 by Prairie Business Magazine

June 2013

A Day With Gates Bill Gates shares insight with college students, community as part of Concordia College celebration pg. 26

ALSO Retention Strategies How to hire and keep the best employees

pg. 30

Check Your Morals Why social morals matter in business

pg. 22

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|INSIDE| June 2013 VOL 14 ISSUE 6

DEPARTMENTS

FEATURES

6 Editor’s Note BY KRIS BEVILL

The little things 8 Business Advice BY MATTHEW D. MOHR

Selling from the top 10 Finance BY JOE WITT

Banking industry consolidation continues 12 Research & Technology BY DWAINE CHAPEL

Training programs essential for workforce development 14 Economic Development BY HAROLD STANISLAWSKI

‘Talent Community’ being developed to connect workers, employers 16 Prairie News

Atlassian co-founder and co-CEO Mike Cannon-Brookes entertains attendees of Cultivate.you with a light-hearted look at his company’s straight-forward core values. PHOTO: KRIS BEVILL, PRAIRIE BUSINESS MAGAZINE

20 Prairie People 22 Business Development Encouraging entrepreneurial values

32 South Dakota Rapid City startup sets sights on safe water

EVENT

A Dedication to Remember Bill Gates speaks to students, public at Concordia College business school dedication

34 Western North Dakota The price you pay 36 Technology Seeing is believing

WORKFORCE

Get Them and Keep Them

37 Business to Business

Tips to finding and retaining the right workers for your business

38 Energy 42 By the Numbers

Bill Gates discusses his passion for technology, education and philanthropy during a question-andanswer session at Concordia College in Moorhead, Minn. PHOTO: JOHN BROSE

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Next Month The July issue of Prairie Business magazine will evaluate the increasingly high cost of land throughout the region and its impact on local economies and businesses. The issue will also highlight a unique financing approach used by a local organization to bring its project to fruition and will provide readers with a first-hand account of a day spent touring the Bakken region.

Prairie Business Magazine June 2013

|EDITOR’S NOTE|

The little things ew things are as important to a business as hiring and keeping quality employees, particularly in this region, where unemployment is low and businesses are steadily expanding their workforces. Competition for workers is fierce and, in some cases, there simply aren’t enough workers available to fill demand. If your business is not aggressively addressing its recruitment and retention strategies, you may soon find that you’re not able to fill open positions, if you’re not already. So how do you attract and retain the best staff possible? There is no silver bullet answer to that question, of course. The specifics depend on your industry, your location and the age of your workers. Generally, though, the most successful employers have put in place a solid, consistent interview process to identify the best candidates and follow up at the early-employment stage with frequent check-ins, providing identifiable and achievable goals, and utilizing a mentoring system that ensures both the employer and employee’s job expectations are met. From there, companies that appreciate the need for employees to manage a work/life balance and recognize their professional achievements are likely to retain the best staff. We highlight a few examples of this in the article, “Get Them and Keep Them" (page 30). Each company is unique, and what works for one business may not fit with another, but more often than not, it’s the little things that make the difference between a decent place to work and a great place to work. It may be half-day Fridays, or frequent get-togethers to celebrate work achievements, or allowing employees free time to dedicate to community projects. It’s up to each company to determine what works with its culture and industry, but employee retention should be a work in progress, and needs to be regularly re-evaluated to make sure it matches current employee needs. This month’s issue also addresses several current trends in desirable workplaces. Access to technology is increasingly important to all workers, but specifically for young workers who are accustomed to incorporating technological advancements into all aspects of their lives. In “Seeing is believing,” we highlight the use of video communications to bridge the gap between dispersed workers and allow opportunities for employees to work remotely. This month’s Business Development article, "Encouraging entrepreneurial values," (page 22) provides insight on the importance of moral values and social entrepreneurialism in business today. Those topics were perfectly addressed during a public event held in Fargo by Arthur Ventures which included inspiring and entertaining presentations from Forbes publisher Rich Karlgaard and global technology firm head Mike Cannon-Brookes. Finally, our cover story offers an overview of Bill Gates’ recent visit to Concordia College in Moorhead, Minn., to commemorate the college’s newly renovated business school. Gates spent more than an hour on stage answering student questions on nearly every topic imaginable, from technology to agriculture and vaccine distribution in third-world countries. I think everyone was impressed with the poise and intelligence of the youth who shared the stage with the man recently named the richest person in the world. In turn, Gates was engaging, surprisingly funny, and genuinely enthusiastic about answering each question he received, leaving little doubt that he truly believes in the innovation of youth and the next generation’s potential to positively impact the world. It’s up to the business world to embrace them and let them shine.

KRIS BEVILL Editor kbevill@prairiebizmag.com

Prairie Business Magazine June 2013

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|BUSINESS ADVICE|

Selling from the top BY MATTHEW D. MOHR ost individual business owners believe strongly in the products and services they provide. Businesses are started and usually operated by the people who believe in what they are doing, which often makes the work a â&#x20AC;&#x153;labor of love.â&#x20AC;? Along with believing in what you provide, a business owner is often placed in the position to sell what he has. Customers will question the business owner in ways which put the owner in the position necessary to prove or sell the business. Some business owners are great sales representatives for their businesses, others lack sales skills. One of the criticisms I had early in my career was not selling enough. It was hard for me then, and still is today, to understand why anyone would choose to purchase any product from my competitors. I knew, and believe my business entities treated customers the very best and acted fair and honestly in all dealings. Why

Prairie Business Magazine June 2013

would someone consider any competitor when we are the best? My beliefs were obvious and as a result I appeared arrogant, so I was critiqued as not selling very well and was told to learn to sell better many times. An early Internet start-up asked me for funding to get his enterprise going, but upon meeting him I couldnâ&#x20AC;&#x2122;t see how he could sell his product. I did not invest, he attracted sales talent and has been very successful. His investors must have advised him he needed sales talent. His product and company are well known and his angel capitalists were well-rewarded for their advice and investment. A business owner should believe in his organization, but needs to develop skills to present his products and services in a manner which entices people to want to deal with the business. PB Matthew D. Mohr CEO, Dacotah Paper Co. mmohr@dacotahpaper.com

|FINANCE|

Banking industry consolidation continues BY JOE WITT

any industries have seen significant consolidation over the past few decades. Look at the airline industry. In the Midwest we had lots of carriers that have now merged out of existence. Republic Airlines was taken over by Northwest Airlines. TWA was purchased by American Airlines. Both Western and Pan Am became part of Delta. Northwest and Delta then merged to create the world’s biggest airline. Later, Continental and United merged to become the world’s new biggest airline. Now, US Airways and American Airlines might merge, which would create the latest version of the world’s biggest airline. That same type of industry consolidation is also hitting the banking industry. In 2000, Minnesota had 502 bank charters. That is not the number of bank branches; it was the number of separate financial institutions. As of year-end 2012, the number of Minnesota charters had dropped to just 379. In those 12 years, 25 percent of the Minnesota charters were merged out of existence. The percentages in South Dakota and North Dakota are similar. South Dakota saw a 22 percent reduction, from 101 in 2000 to 79 in 2012. North Dakota saw a 20 percent reduction, going from 113 in 2000 to 90 in 2012. What are the main factors driving banking industry consolidation, and is it likely to continue? There are a couple main drivers. First, banking is a heavily regulated industry. Bank owners, bank boards of directors and bank senior management all understand that they operate within an intense regulatory environment. But the current regulatory burden on banks, and especially on small banks, has become extremely difficult to manage. Over the past 15 years, there have been dozens of new, extremely costly regulations with which banks must comply. Most recently, Congress passed the Dodd-Frank Act, which was originally intended to reign in Wall Street abuses and prevent future federal government bailouts. While the small community banks dotted across the Midwest were never the intended targets of this law, they now must comply with thousands of pages of new, costly regulations. Small banks have an especially difficult

Prairie Business Magazine June 2013

time absorbing these new costs. The second driver of banking industry consolidation is unfair competition. Two entities which the banks directly compete against, credit unions and the Farm Credit System lenders, have significant marketplace advantages. Credit unions are completely exempt from both federal and state income taxes, and federal credit unions do not pay state sales taxes. That’s an incredible advantage. Credit unions are also exempt from several important laws with which banks must comply, saving them additional overhead expenses. A mutually owned federal savings bank just completed a conversion to a credit union charter. The president of the new credit union estimated that changing from a tax-paying, more heavily regulated bank to a credit union would save the credit union over $2 million in tax expenses and operating costs per year. The institution did not change its customer base or its products and services in any way. The savings simply came from changing its charter. Farm Credit System lenders also have significant advantages over banks. They, too, have tax advantages. They pay federal income taxes on just a small fraction of their operations, and they are exempt from state income taxes and state sales taxes. They and their borrowers are exempt from state mortgage registry taxes. Farm Credit System lenders also have funding and regulatory advantages. The combination of increasing regulatory burden plus intense pressures from competitors that have significant competitive advantages will mean that further banking industry consolidation will occur. I do not like the idea of further consolidation, as it limits choices for consumers, small businesses and farmers. But it is easy to understand why consolidation is happening. At this point, Congress is picking winners and losers in the marketplace through tax and regulatory policy decisions. And the local banks are clearly not the winners. It is sad to see, but you can understand why the owners of second-, third- and fourth-generation family banks are deciding to get out of the business. PB

Joe Witt President/CEO, Minnesota Bankers Association Joew@minnbankers.com

|RESEARCH & TECHNOLOGY|

Training programs essential for workforce development BY DWAINE CHAPEL

orkforce recruitment is an ongoing concern for our growing economy. In South Dakota, local, regional and statewide programs have been developed to provide workforce training and development. Dakota Seeds is an internship and assistantship program established to create a pipeline of employees. The internship is directed at undergraduate students whereas the assistantships focus on creating opportunities for graduate students. The program has had excellent success, creating 384 opportunities for students since its inception in 2008. The Governorâ&#x20AC;&#x2122;s Office of Economic Development has also created a training program that encourages wage increases for employees through skills enhancement training. The application is extremely user friendly, allowing the businesses to partner with the state in a dollar for dollar match for its training program. The training is available for new and existing employees. The state may provide up to $1,000 per employee. Regional community colleges and tech schools have also provided accessible development opportunities for business and industry. As an example, Madison, S.D., partnered with Lake Area Tech Institute to develop a community welding lab. This lab has been responsible for certifying over 100 welders, enhancing their skills and increasing their wages. Looking into the future, communities may need to look at a combination of different industry sectors to develop its workforce. A community may need to gather its business and industry leaders to determine common skill sets needed across industry sectors. The process can help determine what skills the available workforce may be lacking and how to raise the skill sets above industry standards. Once the common needs are determined, a baseline of those skill sets can be established. As the data is collected over time, trends can be monitored to assist in continued improvement of the

Prairie Business Magazine June 2013

process. Initially this may appear to be an overwhelming task. However, if data is systematically gathered, the workforce needs of the community can be monitored and aggressively developed. For example, occupational skills training and educational skills training are two key areas of need for most communities. Technical skills to operate computerized equipment are another priority skill set. Workforce software programs exist to assist in the development of this process. One way to understand the workforce development process is to compare it to baseballâ&#x20AC;&#x2122;s minor league development system. The minor leagues provide education, skills training and development of its players (employees) so that they perform more effectively and efficiently in the major leagues. The minor leagues are divided into several classifications: Triple-A, Double-A, and Single-A. Each classification depicts a level of knowledge and ability to play the game. Each classification may represent a progressive increase in responsibility and pay for business and industry employees. A community would also be able to classify its skill set needs accordingly. Training and education can be developed to adhere to each defined classification. The baseline can be developed by business and industry. Community economic development corporations can assist by systematically collecting the data. This type of strategy would provide a clear path to success and long-term recruitment processes. Workforce recruitment is a continuous work in progress for communities. Taking a lesson or two from different industry sectors can enhance a communityâ&#x20AC;&#x2122;s ability to develop long-term plans, and utilization of existing training programs, such as Dakota Seeds, can help provide processes to develop a workforce pipeline. PB Dwaine Chapel Executive director Research Park at South Dakota State University Dwaine@researchparkatsdstate.com

|ECONOMIC DEVELOPMENT|

‘Talent Community’ being developed to connect workers, employers BY HAROLD STANISLAWSKI he cities of Fergus Falls, Brainerd, and Crookston, Minn., are the recipients of a “Talent Grant” being administered by the Minnesota Department of Employment and Economic Development (DEED) with financial support from the Otto Bremer Foundation. With the ongoing challenge of connecting job seekers and employers, the grant will be used to develop and house a Talent Community. The key to this community is using the National Career Readiness Certificate, an on-line method of assessing individuals’ reading, math and problem solving skills and connecting those skills to identified occupations. John Newhouse, president of Lakeland Mold, saiys his company understands the importance and value of the NCRC in assessing current and future employees, adding that it is a tool which can be used to assess potential employees’ skills and focus on what is right for the employee in terms of growth and support. Lona Bach, human resources director at PioneerCare in Fergus Falls, says the health care organization uses the NCRC, along with job shadowing, to assess certified nursing assistant candidates before they enroll in PioneerCare’s training program. “Not only do we have a measurable outcome of their reading, math and problem-solving abilities beforehand, but we believe candidates who earn their certificates are more serious about starting their careers with us,” she says. Job seekers who have earned their NCRC can market that asset to businesses that recognize the credential. The Talent Community project will benefit both employers and job seekers around the west-central Minnesota region. Future workforce for the region is critical to the success of our communities and the Talent Community concept is an attempt to define the

Prairie Business Magazine June 2013

existing talent better for our employers. For many there is a very real lack of understanding about what type of skills that exist in our communities, available local workforce and how to close the gap between the skills needed by businesses and our local labor supply. Understanding this problem is our first challenge, followed by growing our local supply of labor to meet our future workforce needs. Goals of the Talent Community include: - Identify talent and build on the assets of the local area by connecting job seekers with employers - Warehousing the project with local organizations to allow for flexibility and agility as technology changes - Allow job seekers and employers to have twoway, real-time communication - Give local economic development organizations the ability to identify the talent available in their communities, giving the community a unique tool to expand or attract new businesses. - Allow individuals and employers to brand themselves - Build consumer confidence for job seekers and businesses for employment opportunities and the opportunity to live and succeed in their regions - Include all job seekers, high school students, college students and individuals from the community In future columns, I will keep you posted as these three communities initiate the “Talent Community” model and relate our experiences with NCRC. In the meantime, job seekers who want to educate themselves on which jobs are in demand can consult iSeek Solution’s overview of West Central Minnesota careers at www.iseek.org/westcentral/index.html. PB Harold Stanislawski Executive director, Fergus Falls Economic Improvement Commission Harold.stanislawski@ci.fergus-falls.mn.us

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Prairie News

Industry News & Trends

Medical device manufacturer attracts ND investors Fixes 4 Kids Inc., a Salt Lake City-based developer of products to treat pediatric orthopedic fractures, is relocating its manufacturing operations to Wahpeton, N.D., to work with Wahpeton-based ComDel Innovation after receiving financial support from a number of local investors, including Linn Grove Ventures and the Bank of North Dakota. The state also provided economic development incentives to the company. In early April, the company had already hired 10 people to work in its Wahpeton location and intends to continue to grow, according to a company spokesperson. “We invested in Fixes 4 Kids as a group of North Dakota investors because we saw significant common values, especially a strong respect for cash efficiency, a strong management team that had a clear understanding of the path forward and the ability to execute, and an opportunity to add value through North Dakota manufacturing and product development at ComDel Innovation as well as employment in North Dakota,” says Dan Hodgson, managing director of Linn Grove Ventures.

Fixes for Kids Inc. has developed a system designed to treat broken elbows in children, dubbed the E-Fix, which eliminates the current practice of manually pulling on the arm, thus reducing additional risk to the patient. PHOTO: FIXES FOR KIDS INC.

Fargo software technology firm opens Stoneridge Software, a technology firm selling and servicing Microsoft Dynamics business software, recently opened in Fargo. Led by founder and president Eric Newell, the firm sells, implements and services Microsoft Dynamics AX and CRM products for mid to large businesses. Prior to founding Stoneridge Software, Newell was employed at Microsoft in Fargo for 13 years, serving most recently as a premier field engineering manager for Dynamics. He spent the last three years focusing on Dynamics AX and has extensive background working with Dynamics GP and Dynamics CRM. He founded Stoneridge Software after discovering a gap between customer expectations and what was being delivered in the market, he says. Other principal owners in the company are Cody Marshall, chief financial officer, and Becky Newell, chief technology officer.

ND delegation visits Iraq to discuss agribusiness A small group of North Dakotans visited Kurdistan, an autonomous region of northern Iraq, in April where they met with Iraqi and Kurdish leaders to discuss agribusiness cooperation, according to the North Dakota Trade Office. “Kurdistan wants to replicate North Dakota’s farming operations, complete from

Prairie Business Magazine June 2013

farm to market,” Dean Gorder, NDTO executive director, says. “The collaboration will provide fantastic opportunities for our state’s exporters and training facilities.” While there, the North Dakota delegation met with sheikhs from the Barzani tribe, one of the oldest and most prominent Kurdish tribes. The sheikhs plan to visit North Dakota this month and tour facilities in all aspects of agribusiness. The Iraqi and Kurdish delegation will return to North Dakota in September for the Big Iron Farm Show in Fargo.

G & R Controls expands to Bismarck G & R Controls, along with Balancing Professionals, has opened an office in Bismarck, N.D., to better serve new and existing customers in the area. The companies provide temperature controls, building automation and testing and balancing for commercial heating, ventilation and air conditioning (HVAC) systems. Trent Jongetjes will serve as the Bismarck division manager and sales engineer. A Canton, S.D., native, Jongetjes holds an electrical engineering degree from the South Dakota School of Mines and Technology and has worked for the company for more than eight years. He previously served as a project engineer in the company’s Sioux Falls, S.D., office. G & R Controls serves as an independent

field office for Siemens Industries. Balancing Professionals is certified by the National Environmental Balancing Bureau. Both companies are locally owned and operated. They also have offices in Sioux Falls and Rapid City, S.D., and Fargo.

Northwest Minnesota Foundation backs local fish market The Northwest Minnesota Foundation recently approved a loan through its business development program to support a unique local fish restaurant and market concept in Bemidji, Minn. The Marvelous Fish House and Market, owned by Marvin Hanson, is a casual dining facility and market serving products from the Red Lake Fisheries and Red Lake Nation Foods, owned by the Red Lake Band of Chippewa Indians. It will specialize in the sale of walleye and wild rice. “This restaurant is a win-win for Red Lake and The Marvelous Fish House and Market because we are buying product from Red Lake Nation Foods and, in turn, helping my people in every way possible,” Hanson said in a statement. “It’s a dream come true.” NMF is a public, charitable foundation serving 12 counties in northwest Minnesota.

Sanford launches centralized clinical trials website Sanford Health has created a website —

|PRAIRIE NEWS|

NCTC auto service tech program receives master accreditation Northland Community and Technical College’s automotive service technology program has received the National Automotive Technicians Education Foundation master automobile service technology accreditation. The master level accreditation is the highest level of achievement recognized by NATEF. Northland’s program is the first in Minnesota, and second in the nation, to receive this level of accreditation from NATEF under its new standards.

Northland Community and Technical College automotive instructors Norman Halsa, left, and Mark Johnson with the plaque received from the National Automotive Technicians Education Foundation in honor of the program’s master level accreditation. PHOTO: NORTHLAND COMMUNITY AND TECHNICAL COLLEGE

sanfordhealth.org/clinicaltrials — to help potential participants identify trials they may enroll in to gain access to innovative treatments and help advance research surrounding their disease. Website users can search trials by category, read a description of each trial and see who the principal investigator is. Sanford has more than 150 open trials and more than 350 ongoing clinical studies at its locations throughout the Midwest. The organization’s network currently includes 35 hospitals, 140 clinic locations and 1,360 physicians in 81 specialty areas of medicine.

IDEA competition announces 2013 winners The IDEA competition, a northwest Minnesota entrepreneurship award program funded by the Blandin Foundation and the Northwest Minnesota Foundation with contributions from several local partners, named its 2013 award recipients at an awards banquet held April 24 in Thief River Falls, Minn. Winners include: Brian and Coreen Berdahl of Red Lake Falls, for Spot-Knot — a first-of-its-kind slip knot tie device for the fishing industry; Jack Lundbohm of Roseau for Stand Alone Game Calls — a remotely operated elk hunting call; Tim and Jenny Slukynsky of Warroad for Lamplighter Hockey — a hockey stick weight meant to offer an improved hockey

stick training tool compared to other tools on the market, and Jerry Titera of Bagley for Hubmaster Inc. — a tool that helps remove the tapered wheel hub from Bobcat skidsteers for routine maintenance and repair. Each winner receives $10,000 in cash to advance their business idea, plus additional specialized technical assistance.

Paper examines online reviews’ influence on rural buyers Paulsen Marketing, an agri-marketing firm located in Sioux Falls, S.D., has released a thought paper reporting the results of a survey recently conducted to gauge the level at which online reviews impact rural lifestylers’ purchasing decisions. Of 500 acreage owners surveyed who recently made a major purchase, more than 42 percent ranked online reviews or testimonials as “least influential” while about 36 percent of respondents said they were influenced to some degree by online reviews. However, the survey found that the importance of online reviews increased to 58 percent when reviews are attributed to peers, and 51.6 percent when attributed to experts. To see the survey results and complete thought paper, visit www.agribranding.com/category/thought-papers.

Bank of ND records 9th consecutive year of record profits The 2012 annual report of Bank of North Dakota shows a ninth consecutive year of record profits with $81 million in net earnings. Total assets increased to $6.1 billion in 2012, up from $5.3 billion in 2011. BND ended the year with capital of $463 million. The state’s return on its investment at the bank was 17.6 percent. BND is the only state-owned bank in the nation. It is overseen by the Industrial Commission of North Dakota, which consists of Gov. Jack Dalrymple, Attorney General Wayne Stenehjem and Agriculture Commissioner Doug Goehring.

SBDC assistance results in $100 million capital infusion North Dakota Small Business Development Centers provided complimentary one-on-one consulting to 284 small business owners in 2012, resulting in more than $104 million in capital infusion, according to a recently completed annual report. North Dakota SBDC representatives spent more than 8,500 hours assisting entrepreneurs with loan applications, cash-flow management, business plans, government contracting and other needs at seven regional service centers and 17 sub-centers located throughout the state. As a

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|PRAIRIE NEWS| result, small businesses created and retained more than 1,500 jobs and 145 new firms were established, according to the report. The SBDC is primarily funded by the U.S. Small Business Administration, with matching funding in North Dakota provided by the state commerce department and local economic development groups, colleges and other partners.

Border States Electric to open Duluth branch Border States Electric, an employee-owned electrical distributor headquartered in Fargo, recently opened a branch in Duluth, Minn., bringing the company’s total number of branch locations to 57. The Duluth branch will operate out of a 16,400 square foot facility and will employ eight people initially. The branch will serve construction, industrial and utility customers and will be managed by Marc McLennan. “We are delighted to bring our innovative

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Prairie Business Magazine June 2013

product and supply chain solutions to northern Minnesota,” CEO Tammy Miller said in a news release. “Our expansion in Minnesota will allow us to fully serve our customers and provide opportunities for our employee-owners.”

AGCO to expand Minnesota manufacturing facility AGCO has begun a three-year $42 million expansion project at its Jackson, Minn., manufacturing facility to increase production capacity and efficiency in order to help meet growing demand for the tractors and application equipment built there. The first phase is scheduled to be complete this fall and includes a 30,000-square-foot expansion of the component manufacturing area, which will increase capacity by 20 percent and improve efficiency. The entire project is expected to create 75 jobs, bringing the total number of employees to more than 1,200, and will increase production capacity by 25 percent.

USD gets $1 million donation The University of South Dakota College of Arts & Sciences and the USD Foundation have received a $1 million gift from alumnus Lorraine Hart, which will be used to create three funds in the College of Arts & Sciences — a student enrichment fund to help students gain learning experiences outside of the classroom, a student and faculty fund for the department of mathematical sciences and a named professorship in the psychology department. Currently a resident of Minneapolis, Hart was raised in Vermillion, S.D., and received a bachelor’s degree in mathematics from USD. She also serves on the USD Foundation board of directors.

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PROFOUND GROWTH

North Dakota is booming – bringing the opportunity for both business growth, and to build a better and healthier state for generations to come. As Engineering News Record’s top firm in the region, Bismarck-based KLJ has more than doubled in size in the past few years. These new jobs mean more payroll dollars that will stay in North Dakota to boost the local economy, which will later be returned to KLJ in the form of new work…keeping KLJ strong well into the future.

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|PRAIRIE PEOPLE|

Heather Wilson

Wilson to lead SD School of Mines and Technology

SBA hires ND economic development specialist

Heather Wilson, a former member of Congress, Rhodes Scholar and small business owner who has worked with large defense and scientific companies, has been named the 19th president of the South Dakota School of Mines and Technology. She is the first female president in the school’s 128-year history. Wilson will assume her duties on the Rapid City campus this month. She succeeds the late Robert Wharton, who passed away in September. Duane Hrncir, provost and vice president for academic affairs, had served as acting president over the past several months.

Brittany Sickler has been selected as an economic development specialist for the North Dakota District Office of the U.S. Small Business Administration in Fargo. Sickler is a returning Peace Corps volunteer with her most recent assignment as a volunteer leader in the Sustainable Community Tourism program in Guatemala. Prior to serving a threeyear term with the Peace Corps, Sickler worked as a marketing and outreach specialist for ACCION USA in Miami, Fla. Her duties at the SBA will include marketing and outreach in southeastern North Dakota.

Brittany Sickler

Finken re-elected to U.S. Chamber board

Patrick Finken

Patrick Finken, majority owner and president of Odney, a full-service marketing firm with offices in North Dakota and Idaho, has been re-elected to the U.S. Chamber of Commerce board of directors for a second three-year term. “I’m honored to serve a second term on this board,” Finken said in a statement. “The U.S. Chamber is taking a lead role in the country’s economic recovery, and I’m looking forward to working with them to strengthen the business environment, allowing businesses to create the jobs Americans need.”

Thomas joins Cornerstone Bank

Jeff Thomas

SBA names Warberg Block ND small business person of year

Kari Warberg Block

Kari Warberg Block, CEO of Earth-Kind Inc. in Bismarck, N.D., has been selected as the U.S. Small Business Administration’s 2013 North Dakota Small Business Person of the Year. Nominated by The Center for Technology & Business, Warberg Block was selected following a statewide competition. The award recognizes exceptional small business owners who demonstrate the entrepreneurial spirit in starting and growing a successful business, according to the SBA. Warberg Block 's business began selling earthfriendly rodent repellent products in 1995. In 2007, Earth-Kind’s Fresh Cab rodent repellent gained U.S. Environmental Protection Agency registration as the first rodent repellent certified for indoor use. Earth-Kind now occupies a 7,000 square foot facility and achieves $5 million in annual revenue. Warberg Block will be among the nation’s top entrepreneurs honored at SBA’s National Small Business Week events June 17-21 in Washington, D.C.

Prairie Business Magazine June 2013

Jeff Thomas recently joined Cornerstone Bank, Fargo as senior vice president and business banking manager. In this role, he will oversee the overall operations and management of the business banking department, including maintaining and generating new business. Thomas has more than 26 years of experience in the financial services industry in the Fargo area. He currently serves as the 2013 United Way Campaign chairman, board member of the American Diabetes Association and serves on the investment committee of the Friends of Chimbote. He is a past chair of the Fargo Moorhead West Fargo Chamber of Commerce.

NDITC recognizes outstanding achievers

From left: Jim Robell, president and chief operating officer, Eid Passport Inc.; Steve Carrigan, general manager, Eid Passport; Johnathon Radamacher, chief technology officer, Sundog; ITCND President Gary Inman and Randall Thursby, North Dakota University System chief information officer.

The Information Technology Council of North Dakota recognized three of the state’s IT providers for outstanding achievements during the group’s 13th annual awards program, held May 1 in Fargo. Fargo-based Sundog received the Premier IT Business award for its success in developing and providing IT business solutions to its clients. Minot-based Eid Passport Inc. received the Technology Innovator award for its use of innovative technology to serve its primary customer. Randall Thursby, chief information officer for the North Dakota University System received the North Dakota IT Champion award for his use and development of IT in the academic realm.

|PRAIRIE PEOPLE|

Heather Welle

Bismarck-Mandan YP elect new leadership The Bismarck-Mandan (N.D.) Young Professionals Network recently elected Heather Welle, a Bemidji, Minn., native who has lived in Bismarck for 10 years, as its next vice president. Welle will serve one year as vice president before assuming the role of president. Joe Fink, a mortgage consultant at Wells Fargo, currently serves as president. Angil Wanner of SIA Marketing/Schmidt Insurance moved from president to chairwoman of the network.

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|BUSINESS DEVELOPMENT|

Encouraging entrepreneurial values Event brings community together to inspire entrepreneurs BY KRIS BEVILL Arthur Ventures Growth Fund LLC co-founder Doug Burgum, left, Forbes magazine publisher Rich Karlgaard, center, and Atlassian cofounder and co-CEO Mike Cannon-Brookes answer attendee questions during an event held April 26 in Fargo to inspire and encourage entrepreneurship in the community. PHOTO: KRIS BEVILL, PRAIRIE BUSINESS MAGAZINE

Prairie Business Magazine June 2013

ich Karlgaard is on a bit of a self-described rampage about jerks. The Bismarck, N.D., native, Forbes magazine publisher, entrepreneur and investor says heâ&#x20AC;&#x2122;s been noticing a trend that young people, particularly in the Silicon Valley, think they must be jerks to succeed in business. The problem, he says, is that they donâ&#x20AC;&#x2122;t realize their early jerky

|BUSINESS DEVELOPMENT|

behavior will come back to haunt them in later years. “People will work for a hard-nosed CEO if it’s not about his ego, but about maintaining value of the company, serving customers, innovating, keeping on a hard pace,” he says. “People will work for [those kinds of CEOs]. They won’t work for the ego-driven jerk. I’m just shocked at the profound misunderstanding people have about that.” Karlgaard was in Fargo to take part in Cultivate.you, a public event hosted by local venture capital fund Arthur Ventures Growth Fund LLC on April 26 with the goal of inspiring and encouraging entrepreneurship in the community. In a conversation prior to the event, Karlgaard spoke at length about the factors paving the way for Midwest communities like Fargo to stake their claim as leaders in returning the U.S. economy to acceptable annual growth rates. He noted that not only is Fargo less affected by the egotistical behavior on display among young entrepreneurs elsewhere, it also boasts available startup capital through firms like Arthur Ventures, a solid base of existing role models with a history of successful business experience, and a density of technological talent supplemented by thousands of new prospects at nearby universities. Add to that the fact that technology development tools are now widely available and affordable, and that the cost of living in places like Fargo is ridiculously low compared to cities in Silicon Valley, and the potential for a technology hub to emerge in Fargo is supreme. “All the forces are lining up for a community like Fargo,” Karlgaard said. “You can have the best software developers in the world and you can have access to billionaire venture capitalists, but if the playing field has been leveled and you can develop technology cheaper, you don’t need billion-dollar venture capitalists. What matters is domain expertise.” The technological transformation of health care, manufacturing, agriculture and education will be key in returning America to a 4 percent annual growth rate, compared to its current lackluster 2.9 percent economic growth rate, and the Midwest holds domain expertise in all of those areas, according to Karlgaard. But it will take more than domain expertise to succeed in what he

says is the most binary economy he’s ever seen. “Average doesn’t cut it anymore,” he says. “You have to be good, striving for great, or you’re going to be in trouble.” Karlgaard believes the most successful companies will continue to be those built upon strong moral values with a deep sense of purpose — characteristics which also help retain the best employees. “I’m a huge believer in the value of culture and that culture springs from a profound purpose – not a purpose that is written as a corporate mission on a wall but something deeper,” he says. “If you don’t get that right then you’re off on a wrong track and you will never be able to attract the right kind of people.” Arthur Ventures co-founder Doug Burgum echoed that sentiment and said the fund is focused on supporting companies with the right combination of values and ideas. “If the CEO and the founder don’t have the right values, then it’s a nonstarter no matter how good the idea is,” he says. About 750 people attended the morning-long event, which included speeches from Karlgaard and Mike Cannon-Brookes, co-founder and co-CEO of Australian software development company Atlassian, as well as a question-and-answer session with both speakers and Burgum. Attendees included Arthur Ventures partner companies, college students, young professionals and entrepreneurs of all ages, including 100 eighth graders from West Fargo’s STEM center, who were welcomed by Burgum as being “future entrepreneurs.” Cannon-Brookes, likely unknown to many in the crowd prior to his speech, captivated the audience with an entertaining look at how he and fellow company cofounder Scott Farquhar grew Atlassian from a startup launched on a shoe-string budget a decade ago by two young 20-somethings to the 700-employee global software development firm that it is today. He, too, stressed the importance of values and innovation in the workplace, but through a slightly different approach, reflecting that of the young professional generation. He drew laughs from the crowd with a slide displaying Atlassian’s five straight-forward core values: Open Company, No Bullshit; Build with Heart and Balance; Don’t #@!% the Customer; Play, as a Team and Be the

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|BUSINESS DEVELOPMENT|

Prairie Business Magazine June 2013

Change You Seek. Cannon-Brookes offered several examples of Atlassian’s innovative approach to the workplace, including company-wide “ShipIt” days held every quarter, which consist of a 24-hour period given over to brainstorming and delivering pitches for anything related to company products. Some of the ShipIt ideas become new features for company products, but the true motivation behind the activity is simply to foster creativity and make the workplace a little more fun. Atlassian also gives employees five work days each year to devote to nonprofit projects. CannonBrookes said the nonprofit work allowance wasn’t created as a public relations strategy, but it has proven to draw in employees, reducing Atlassian’s recruitment and training load. “So if you need a

P&L [profit and loss] reason to do good, that’s one,” he told attendees. During the question-and-answer session, one of the eighth-graders asked for advice for students interested in starting a business. The trio advised that the first rules of entrepreneurship are to break the rules, be curious, be passionate and challenge the status quo. Karlgaard then suggested that would-be entrepreneurs ask themselves to identify and utilize their unfair advantage. “Passion and stick-to-itiveness can be unfair advantages,” he said. “An unfair advantage can be a good thing. It means the thing that you do that no one else can do.” PB Kris Bevill Editor, Prairie Business 701-306-8561, kbevill@prairiebizmag.com

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|EVENT|

A Dedication to Remember Bill Gates speaks to students, public at Concordia College business school dedication BY KRIS BEVILL

Microsoft co-founder and philanthropist Bill Gates speaks to a crowd of about 4,000 people at Concordia College in Moorhead, Minn., as part of a dedication celebration for the school’s renovated business school. PHOTO: JOHN BROSE

Prairie Business Magazine June 2013

nticipation was high on April 27 as nearly 4,000 people buzzed about the campus of Concordia College in Moorhead, Minn., awaiting a question-and-answer session with Microsoft co-founder and philanthropist Bill Gates. Outside the auditorium, ticket holders milled about, soaking up the sun on one of the first 70-degree days of the spring before heading through tight security at the building’s entrance and making their way to their seats. All of the auditorium’s 3,800 seats were spoken for, filled with students from Concordia, Moorhead State University at Moorhead, North Dakota State University and the University of North Dakota, Concordia faculty and staff and quick-thinking citizens who were able to snap up complimentary tickets in their short time frame of availability. Hundreds of others watched the event via live stream at various locations. Gates was on campus as part of a daylong dedication event for the newly renovated Grant Center, home of the Offutt School of Business. The school’s namesake, Ron Offutt, chairman and CEO of R.D. Offutt Co. and RDO Equipment Co., is a Concordia alumnus and provided a substantial donation for the $16.2 million project, which included the addition of a new story to the Grant Center and the installation of environmentally friendly features to qualify the building for LEED

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The Grant Center at Concordia College in Moorhead, Minn., is home to the Offutt School of Business. PHOTO: JOHN BROSE

(Leadership in Energy and Environmental Design) certification. The project also included the construction of a 200-seat auditorium, named the Barry Auditorium in honor of alumnus D. John Barry, founder and chairman of MidAmerica Capital Partners. Concordia’s business program is liberal arts-based and focuses on global understanding, entrepreneurship, ethics and leadership, fundamentals which dove-tail well with Gates’ history of leadership, innovation and a philanthropic focus on global issues with a goal of improving lives around the world. In his introductory remarks, Offutt said the dedication event was an “epic” day for him and for the college. “[Gates’] creativity has opened doors to the world,” he said, adding that it would now open the doors to the Offutt School of Business. Prolonged applause welcomed Gates to the stage, after which he addressed the crowd for about 10 minutes, offering a brief history of what he called his “two careers” — Microsoft and philanthropy. He noted that the two paths are different in that Microsoft focuses on selling software to people who can afford computers while philanthropy focuses on providing for those in need, but they also share a common underpinning. “At its core, it’s basically the same thing, which is finding innovators, be willing to back them, understand what they’re working on, measure what they’re coming up with, try to make sure that when it’s delivered it really has the impact it’s supposed to have, and getting into a feedback loop, driven by very precise measurement,” he said. “I feel like all of the things I learned at Microsoft really just prepared me, as well as providing the resources, to do the work that I do now.”

Gates commended Concordia for its efforts to send students out into the world as part of the higher education learning experience and said that being aware of global issues will help students better decide which area of work to pursue. He also noted the ability of technology to assist in providing richer learning experiences. “I envy kids growing up today,” he said. “When I was young, I had to read the World Book [Encyclopedias] alphabetically. It didn’t have any videos you could click on. It’s weird to learn things alphabetically. The empowerment now, the opportunity to see what’s going on, has never been so great.” The first student to pose a question to Gates asked for his input on which global issues are the most critical for students to address. Gates settled on three: the economic divide between the rich and poor, energy and health care in the U.S. “We have a [health care] model in the United States that’s an unaffordable model,” he said, adding that determining solutions for each of those three complex issues will require “all of the ingenuity that all of you have.” Several of the questions presented to Gates related to his dedication to philanthropy through the Bill and Melinda Gates Foundation. Concordia President William Craft, who joined Gates on stage for the duration of his 70-minute appearance, asked how the couple decides where to focus its funding efforts. Gates said he and Melinda determined that education is a key issue in the U.S. and therefore have dedicated about $1 billion each year, which amounts to one-quarter of the foundation’s annual philanthropic budget, toward improving education in America. The remaining threefourths of the foundation’s financial contributions are dedicated to

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|EVENT|

helping improve the lives of poor people, often through the invention and distribution of vaccines. He said the cost of essentially saving a life through deploying those types of health care improvements is surprisingly low, often less than $1,500 per person, and yet prior to the Gates Foundation, many of those research areas were not being adequately funded. “That was kind of stunning to me,” he said. “I thought when I came to philanthropy that all of the really ‘good’ stuff, the really high impact stuff, somebody would have done and we would just get to do the next marginal thing. Unfortunately for the world, some of these great opportunities weren’t being worked on.” As an example, he said that when the foundation contributed $40 million for malaria, it equaled just 10 percent of the amount that had been donated by others to research a cure for baldness. He also pointed out that the treatment for most types of worms in humans today is derived from a treatment developed in the U.S. for dogs. “Somebody just said, ‘Let’s try it on the humans in Africa,’ and it happened to work perfectly,” he said. “It was donated, which is a fantastic thing, but it never would have been created except for these rich dogs that needed to be de-wormed.” The free market often overlooks worthy issues, such as malaria, because their consumers are poor and don’t have a voice in the marketplace, he said. Therefore, he believes philanthropy should be willing to take on those types of risky projects. “It has to pick things that the market won’t do for some reason and the government won’t do for some reason,” he said.

Philanthropic Connections Concordia was able to obtain Gates as a speaker for the event through connections made via the college’s Global Leadership Council. Harold Hamm, CEO and chairman of Continental Resources and member of the council, introduced Gates at the event and said he came to know Gates through the Giving Pledge, a group comprised of billionaires who have publicly committed to giving away the majority of their wealth to philanthropy. According to Gates, the idea of the Giving Pledge, which was developed by the Gateses and Warren Buffett, was to bring together people who were already doing philanthropy or thinking about doing philanthropy, so that they could share their knowledge on how best to contribute their wealth. He said the public pledge to commit the majority of one’s wealth ensures that Giving Pledge members have “some skin in the game” in terms of philanthropic contributions. Currently, 105 people are members of the group, which has recently been expanded to include billionaires outside of the U.S. who may be interested in

Prairie Business Magazine June 2013

joining. Gates said that while it’s hard to measure, he believes the Giving Pledge is having a positive impact and that it will continue to have an impact for generations.

Eye Toward Education Regarding education reform, Gates noted that one of the key differences between countries that are doing well in K-12 education and the U.S. is a feedback system for teachers. “They invest in having other teachers sit in the classroom or training the principals,” he said. “They have career ladders where at an early stage as a teacher you are given a lot of guidance and if you achieve a certain level of skill you move up. Our system has fallen into a mode where teachers basically get no feedback. I think it’s important that we build that feedback system. Exactly how you do that, how much you connect that to the pay system … we need experimentation and we can look at these other countries that have done it.” As for higher education, Gates said the largest issues facing the U.S. are the cost of higher education and student graduation rates. He cited technology as a possible solution to the current high costs of higher education. “There’s a lot of excitement about this,” he said. “There’s these massive online open courses (MOOCs) that various people are doing and our foundation is the biggest funder of those.” However, he added that it is not yet clear how online education can be best blended into brick-andmortar curriculums. Gates’ vast knowledge of world issues was apparent throughout the event as he easily addressed questions relating to concerns over vaccine distribution in parts of the Middle East, agricultural education in India and China’s view toward personal wealth. He also displayed a rather unexpected sense of humor, responding to a question on the negative impacts of great wealth by saying, “As far as I can tell it’s had no negative effect on me.” He followed that statement with a display of humility, by noting that he believes any kind of success has the potential to be dangerous. “You can think that whatever your success was, [it] was because you were magically gifted in understanding things,” he said. “Whereas of course any success, particularly a gigantic success, is a huge number of factors, including hard work and understanding, but timing, other people who came to work with you, people who might have done the same thing but somehow messed up in doing it. Often you have too much confidence about what you understand.” PB Kris Bevill Editor, Prairie Business 701-306-8561, kbevill@prairiebizmag.com

Prairie Business Magazine June 2013

|WORKFORCE|

Get Them and Keep Them Tips to finding and retaining the right workers for your business BY KRIS BEVILL ave you taken time recently to thank your employees for a job well done? Is company culture a top priority for your company? Does your leadership team value work/life balance for all employees? Would you want to work for you? If you were able to answer these questions affirmatively, chances are good that you have a satisfied staff. If not, you may be finding it difficult to recruit and retain workers. And considering the region’s enviably low unemployment rate, business owners must place new emphasis on not only recruiting the right employees for the jobs but also on providing an atmosphere that makes them want to stay. Because recruitment and retention has been a recurring concern among area businesses, the Minnesota Department of Employment and Economic Development recently held workshops in six northwest Minnesota communities to provide employers with advice related to those issues. Ted Schick, corporate trainer and owner of Schick Corporate Learning, offered participants tips on hiring, early-stage employment review processes and long-term motivation and retention strategies. Schick pointed out that despite the high cost of employee turnover many organizations don’t keep track of those expenses or even know how to calculate the cost. Multiplying the employee’s salary by 1.25 factors in expenses associated with lost productivity, temporarily filling a vacant position and time spent hiring and training a new employee, he said.

Recruitment Gov. Dennis Daugaard promotes South Dakota job opportunities to a visitor at the state’s recruitment kiosk in the Mall of America in Minnesota on May 13. PHOTO: SOUTH DAKOTA DEPARTMENT OF LABOR AND REGULATION

Prairie Business Magazine June 2013

Organizations should of course strive to hire the right person for the job the first time in order to lessen the likelihood of turnover and provide a solid base for a successful retention strategy. In Minnesota, the DEED collaborates with employers to evaluate their interview process and provides job profile data to help identify the skills needed for workers to fill a position. The department actively promotes the use of ACT’s National Career Readiness Certificate by employers to evaluate a potential employee’s skill set and compatibility for a position within the company. Schick, who likens the interviewing process to a first date, recommended that a test such as NCRC be one part of a comprehensive interview process that includes thoughtfully prepared questions to effectively screen

|WORKFORCE| The department took action by developing a list of strategies to focus on improving internal communication, and providing employee recognition and professional development opportunities. Smaller items were addressed immediately, such as updating office furnishings, allowing for additional casual-dress days and emphasizing employee recognition efforts by supervisors. The initiative is an ongoing effort and will include regional meetings to provide updates to staff on the initiative’s progress. Additionally, a workgroup has been formed to identify ways to best train new staff members.

Culture and Recognition Basin Electric Power Cooperative sponsors an annual childhood cancer research fundraiser called “Brave the Shave," during which volunteers solicit donations in exchange for shaving their heads. This year’s shavees included CEO and General Manager Andrew Serri, shown here. PHOTO: BASIN ELECTRIC POWER COOPERATIVE

applicants. Adequate skills for the job are important, but possessing the ability to learn — aptitude and attitude — can be the most important quality in a new hire, he said. In this region, sometimes simply locating potential applicants to interview can be a struggle. South Dakota, which currently has more than 10,000 job openings in various fields, recently took its statewide recruitment efforts on the road, enlisting Gov. Dennis Daugaard to serve as a job recruiter during an hour-long visit to the Mall of America in Minnesota. Minnesotans have shown the greatest interest in moving to South Dakota and the trip was meant to create awareness of the state’s ample job opportunities and to provide information so that people could make educated decisions regarding relocation, according to Dawn Dovre, director of public affairs at the South Dakota Department of Labor and Regulation. She says the trip generated media interest and boosted traffic to the state’s job recruitment website, DakotaRoots.com, by more than 86 percent. “Many people the governor visited with had ties to South Dakota and were interested in the area,” Dovre says. “Active Minnesota job seekers who had already registered with DakotaRoots.com received a special invite and were thrilled the governor wanted to visit with them.”

Retention Like MN DEED, the South Dakota labor department also provides job retention advice to businesses in the state, and tries to set an example through its own high worker retention rates. The department employs about 450 full-time workers and boasts one of the highest longevity rates among the state’s offices, but like many businesses in the state, South Dakota’s labor department employs an aging workforce. Almost one in three staff members are eligible for retirement within the next five years, according to Dovre. Knowing this, the department launched an initiative last year to further improve upon its retention strategy, beginning with an employee satisfaction survey. “We learned departmental pride, teamwork and meaningful public work ranked high,” she says. “However, there was room for improvement as far as equipment, resources, career advancement and training.”

Justin Welk, talent coordinator at Sundog, a marketing and technology firm headquartered in Fargo, says the company enjoys an extremely low turn-over rate, in part because the firm conducts a comprehensive hiring process but also because the firm emphasizes work/life integration and company culture. “We spend a significant amount of time in our interview and selection process to make sure that we’re hiring for not only the right skill set and technical ability, but we also want to find a person who is going to be a culture fit in our company,” he says. “We want to avoid at all cost hiring culture misfits.” Culture is so important to the firm that it has established what it calls a “culture club.” The club includes representatives from every aspect of the company and exists to organize activities and events for employees as a way to encourage camaraderie and recognize company and employee achievements. “One thing we found is that while the big events we do are exciting, they’re surprising, they’re fun, it’s the small, frequent activities and recognition pieces that are really critical to our culture and our retention,” Welk says. One example of small but appreciated measures is a peer-to-peer award which allows employees to nominate co-workers for a job well done. “It’s been amazing to see how receptive people have been to that award and how excited they get for each other when people do good jobs,” he says. An atmosphere of camaraderie is also a key component of Basin Electric Power Cooperative's employee retention strategy. The organization, which employs more than 2,000 people in various skilled and professional trades, has a 2.3 percent turn-over rate, compared to a national average of about 3.5 percent. It was also recently selected by the Bismarck-Mandan Young Professionals Network as one of the Top 10 places for young people to work. About 35 percent of Basin Electric’s current staff members are under the age of 40. Daryl Hill, media relations supervisor, says that while the salary and benefits are important, camaraderie among co-workers plays a key role in the cooperative’s workforce retention rates. “Coming to work with my friends, people who I trust, that is a big factor,” he says. Basin Electric also readily supports employee participation in community events, which simultaneously promotes team building and social awareness. Employees serve meals at a local homeless shelter once a month and participate in other community activities as needed, such as clean-up after river flooding. “Those kinds of things are not uncommon around here,” Hill says. PB Kris Bevill Editor, Prairie Business 701-306-8561, kbevill@prairiebizmag.com

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|SOUTH DAKOTA|

Rapid City startup sets sights on safe water CalxAqua receives Giant Vision award to help commercialize water treatment system BY KRIS BEVILL

ince 2005, the state of South Dakota, the South Dakota Chamber of Commerce and Industry and private industry members have come together once a year to reward innovative new business ideas with the Governor’s Giant Vision awards. Created to honor ideas that will spur economic growth, create employment and spawn opportunities for future entrepreneurs, the awards program offers entrants the opportunity to compete for seed money provided through public and private funds. Twenty-two applicants entered the business competition this year, of which 12 were selected to compete for prize money. A total of $47,000 was awarded to businesses and students whose ideas met judging criteria for innovation, uniqueness, market potential and solid management and financial planning. Mary Anne Boyd, vice president of program services at the South Dakota chamber office, says Gov. Dennis Daugaard committed $40,000 in public funds for the program this year, to be used in prize money as a match to pri-

S CalxAqua LLC received this year’s top honor at the annual South Dakota Governor’s Giant Vision awards, held during the Governor’s Office of Economic Development conference April 16 in Sioux Falls. From left, David Owen, South Dakota Chamber of Commerce and Industry president; Mat Peabody, CalxAqua LLC president and Gov. Dennis Daugaard. PHOTO: CHAD COPPESS, SOUTH DAKOTA DEPARTMENT OF TOURISM

Prairie Business Magazine June 2013

vate funds raised by the chamber for the program. Citibank N.A. of Sioux Falls served as the corporate sponsor for the program. Other sponsors included Black Hills Power and Black Hills Corp., Christiansen Land & Cattle Ltd., Dacotah Bank, Daktronics Inc., South Dakota EPSCoR, Toshiba America, U.S. Bank, Wheeler Manufacturing and Xcel Energy. “The goal of this program is to encourage people to explore being a business owner and to create an exciting future while also expanding South Dakota’s economy,” David Owen, president of the South Dakota Chamber, says. “While the prize money will help the finalists, the contacts and rigor required to be a qualifier will prepare each entrepreneur to advance their business idea.” This year’s top prize, $20,000, was awarded to Rapid City-based CalxAqua LLC, a South Dakota School of Mines and Technology startup focused on providing an affordable and environmentally friendly system to remove hazardous heavy metals from drinking water.

|SOUTH DAKOTA| “Potable, safe water is paramount to good health worldwide, identified in South Dakota, Arizona, Michigan and Texas. The comand there are regions of the world where arsenicosis (arsenic poison- pany is also looking for sites in California, Colorado, New Mexico and ing) is endemic and a huge health issue,” CalxAqua President Mat Wyoming. In the future, the technology could also be used in the Peabody says. “The problem has been around for quite awhile and the remediation of mine tailings and fracking fluids. “My initial thought current solutions tend to be quite expensive. Our system is consider- is to leverage the [award] money along with the Dakota Seeds proably less expensive and just as effective, if not more effective, than cur- gram, and matching funds from industry and SDSMT to sponsor one rently practiced technology.” or two Ph.D.-level students to do some additional studies to continuCalxAqua’s proprietary technology uses limestone as well as ally improve on a good thing and make it even better,” Peabody says. limestone coated with iron to remove arsenic and other unwanted Because arsenic poisoning is a worldwide issue, Peabody enviheavy metals from water. The company utilizes technology originally sions CalxAqua becoming a global provider of water treatment sysdeveloped by SDSMT and Rohm and Haas in 2005. SDSMT’s first tems from its base in Rapid City. He credits the state, SDSMT and Pete effort to commercialize the technology, a startup known as Lien & Sons for providing support to launch the company and says Hydrotech Engineering, focused on using pure limestone, but it failed the result is an example of what can be achieved when academia, govto gain traction. Last year, after the school brought in SDSMT alum- ernment and industry cooperate and communicate. “It has really nus Peabody, a chemical engineer and serial entrepreneur, to serve as been a collaborative effort,” he says. its entrepreneur-in-residence and commercialize some of the techBoyd says the chamber will begin promoting next year’s Giant nologies created at the school, it was determined that the limestone Vision program in September. The deadline for applications will be technology deserved another chance. CalxAqua was born as the sometime in February 2014. Winners will be selected during the result. Governor’s Office of Economic Development conference, scheduled Peabody says the technology’s cost effectiveness when com- to be held April 15, 2014, in Sioux Falls. For more information on the pared with similar technologies and ability to provide safe drinking program, visit www.southdakotagiantvision.com. PB Kris Bevill water worldwide made its potential for commercialization very Editor, Prairie Business interesting. However, rather than focus on pure limestone, as 701-306-8561, kbevill@prairiebizmag.com Hydrotech did, CalxAqua’s focus will be on using treated limestone. After determining to move forward with CalxAqua, Peabody negotiated an exclusive worldwide license from Dow (owner of Rohm and Haas) for the patented technology to use treated limestone. He also formed a partnership with Rapid City-based mining company Pete Lien & Sons Inc. “They have the limestone and they know how to process and handle limestone in industrial commercial situations,” Peabody says. “They are an ideal partner because we’re adding considerable value to limestone and certainly we will benefit from their expertise in this area.” CalxAqua’s offices and lab will ! Voice and VoIP Connect your business to the Enventis be located at Pete Lien & Sons’ site in fiber network for a reliable, flexible, ! Data and Internet Rapid City. The company is also and affordable business solution. ! Hosted and moving ahead fairly rapidly with Managed Services plans to build a manufacturing plant at the site and will complete the project by later this year, according to Peabody. The company is expected to initially employ about 15 people and will market its technology to municipalities, homes and businesses. Pilot sites have been

IdeaOne is now Enventis

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|WESTERN NORTH DAKOTA|

The price you pay Property values continue to climb in oil patch BY KRIS BEVILL he active construction market and high selling prices for properties in western North Dakota continues to impact the value of both residential and commercial properties in the area, some more than others. In Williston, residential property assessments increased by up to 35 percent this year, while commercial properties values were determined to be up to 10 percent higher than last year. Meanwhile, Dickinsonâ&#x20AC;&#x2122;s commercial property assessments skyrocketed. The average increase for existing commercial properties in Dickinson this year was 42 percent, according to city assessor Joe Hirschfield. When including new construction, the assessed value of commercial properties in the town increased this year by a staggering 108 percent compared to 2012. Building permit data illustrates the frenzied rate of growth in Dickinson over the past year compared to other western North Dakota communities, offering an explanation for the jump in property assessments. The value of residential and commercial building permits issued by Dickinson last year topped $400 million, representing a nearly 200 percent increase over the prior year. The city issued 120 new

Prairie Business Magazine June 2013

commercial building permits in 2012, triple the number issued in 2011, which accounted for nearly half of the total permit values. To compare, Willistonâ&#x20AC;&#x2122;s building permit valuations last year came in at $470 million, compared to about $358 million in 2011. The city issued 106 new commercial permits in 2012, valued at about $209 million. Hirschfield says that because assessed values reflect the previous yearâ&#x20AC;&#x2122;s sales and must remain between 90 and 100 percent of median sales prices, if market values continue to climb, property owners can expect increased assessments again next year. That scenario appears likely as the city prepares for an extended period of growth, driven by oil and gas-related activities. Eighteen new commercial structure building permits had been issued by the city between January and April this year, compared to 14 during the same time frame the year prior. The number of new single-family home permits is down significantly so far this year compared to 2012, however, with 76 permits issued during the first four months of 2013 compared to 209 last year. The downside of higher property values is seemingly inevitable tax increases, but Hirschfield says he doubts whether assessed values,

|WESTERN NORTH DAKOTA| and potentially higher taxes, will have a negative impact on new business projects in Dickinson. “I anticipate that increased valuations will have minimal, if any, effect on potential business owners,” he says. “Any potential buyer will weigh property taxes as a cost of doing business.” It’s not yet known how much Dickinson’s commercial property taxes might increase as a result of this year’s higher assessment values. Hirschfield anticipates there will be an increase, which he says is due to commercial properties being undervalued historically, but the actual amount will not be determined until the city undertakes its budget process in the fall. He says the most concerned property owners are those with long-term lease agreements in place because they may not be in a position to increase rental rates in order to recoup additional property tax expenses. PB

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Editor, Prairie Business 701-306-8561, kbevill@prairiebizmag.com

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|TECHNOLOGY|

Seeing is believing Video conferencing as an alternative to travel, phone meetings BY KRIS BEVILL

here’s a lot to be said for the value of face-toface conversations when interacting with coworkers and business associates, but hectic schedules and distances between offices can sometimes make in-person meetings difficult to arrange. But as technology has improved and expanded to include more options for video communication at more affordable prices, a growing number of companies are turning to visual communication systems to bridge the gap between workers and replace the standard conference call, according to Mike Werch, president and CEO of video conference systems and services company Video Guidance. “As the technology has evolved, we find that it’s a logical extension to have video anywhere,” he says. Video Guidance is headquartered in Bloomington, Minn., and has offices and video demonstration facilities in Wisconsin, Fargo and Bismarck, N.D., and Sioux Falls, S.D. The company provides services for a variety of entities, typically with multiple locations and a dispersed workforce, including banks, educational institutions, government offices, manufacturers and health care providers. It currently serves more than 50 mid- to large-sized customers in the Dakotas, according to Werch. While the company has done business in South

Video communications systems offer a solution for face-to-face meetings for businesses with widespread workforces. PHOTO: VIDEO GUIDANCE

Prairie Business Magazine June 2013

Dakota for years, it expanded its focus there last year through a strategic partnership formed with information technology (IT) solutions provider Connecting Point Computer Center, which has locations in Sioux Falls, Watertown and Pierre, S.D., and Bismarck. Video Guidance expanded to North Dakota last summer as well and has a strategic partnership with Fargo-based IT solutions provider Network Center Inc. Werch says he expects the company’s cloud-based video services and strategic partnerships in the Dakotas will allow for continued growth in the small- to mid-sized markets, particularly in the “explosive” vertical markets of health care and education. Essentia Health began using a Video Guidancesupported video conferencing system in 2011. Brett Baker, manager of desktop support and mobile technology, says the concept of video conferencing has been growing in popularity ever since. “We get requests on a daily basis to be added to our video conferencing capabilities,” he says. Essentia’s 12,000 employees are spread throughout many locations, so the ability to connect via video rather than drive somewhere for a meeting is a major attractant, according to Baker. “[Demand] is going to continue to grow and at the rate we’re seeing it, we’re going to

|TECHNOLOGY| continue to expand our system,” he says. “Video technology allows us to be much more flexible. It doesn’t matter where the other person is as long as they have Internet capabilities.” In the past, the cost of installing a video conferencing system has been a deterrent, but Werch says that organizations can now utilize the cloud to use systems without purchasing equipment up front, which drastically reduces costs. For example, before cloud services were available, a company utilizing five conference room systems could expect an average three-year total cost of about $200,000, he says. With cloud services, that same company would now pay half that amount. With the increasing popularity of BYOD (bring your own device) and use of video in daily lives, Welch says he believes video will eventually replace phone calls, driven in part by young work-

ers who seek to incorporate video into their professional lives the same way that they are already incorporating it into their personal lives. “A lot of organizations are very nervous that if they don’t have a platform and a strategy around video there will be renegades — the younger people will bring in video in some fashion — and organizations want their communication to be secure, encrypted and with a logical plan around video and usage of the network so it doesn’t bring the network down,” he says. “Keeping up on the best way to get this technology into the end-users hands and getting them comfortable with it is what we do.” PB Kris Bevill Editor, Prairie Business 701-306-8561, kbevill@prairiebizmag.com

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Technology offers coal plants simultaneous pollutant control Great River Energy teams with Israel-based firm to test method at EERC

Lextran Ltd., an Israel-based air pollution control company, has developed technology to simultaneously reduce nitrogen oxides and sulfur oxides at coal-fired power plants. IMAGE: LEXTRAN LTD.

BY KRIS BEVILL echnology recently tested at the Energy & Environmental Research Center in Grand Forks, N.D., could prove to offer a cost-effective method to reduce nitrogen oxides (NOx) and sulfur oxides (SOx) from flue gases at North Dakota’s lignitefueled power plants. Yuval Davidor, CEO of Israel-based air pollution control company Lextran Ltd., says his company’s technology is unique in that it can remove both pollutants simultaneously. Conventional systems substantially remove only one pollutant, thus requiring multiple processes and infrastructure to support each process. To achieve simultaneous NOx and SOx removal, Lextran’s technology replaces the lime emulsion typically used to absorb SOx with an organic catalyst mixed with water, which enables the absorption of both SOx and NOx at the same time. Next, a base material such as potassium hydroxide or ammonia is added to the oxidized gases to convert them to a nitrogen-rich fertilizer. Davidor says other pollutant removal methods either convert the gases to lower-value gypsum byproducts or simply dispose of the gases. Lextran’s technology was initially developed in 2000 and went through several years of research and pilot testing before its first commercial deployment in 2009 at a 25 megawatt treatment facility in Romania. Since then, the technology has also been applied at two commercial facilities in China. While the technology has been applied at various types of industrial facilities, Lextran had not tried it on lignite flue gas until a series of connections resulted in a weeklong test conducted in January at EERC’s demonstration facility. Davidor says the test was the result of a meeting between Lextran and Great River Energy executives at an air quality conference. “Great River Energy is a very innovative company,” he says. “They initiated the contact with the vision that this technology is promising to North Dakota lignite particulars, which make it very

Prairie Business Magazine June 2013

difficult to control NOx emissions with conventional technologies.” EERC’s testing demonstrated Lextran’s technology is capable of removing at least 85 percent of both pollutants from lignite-fired flue gas, with the potential for higher removal efficiency. Davidor says the results, which showed lower removal levels than at other test site applications, were likely due to the small size of the facility and the fact that the test window didn’t allow for facility optimization. Other tests have shown Lextran’s technology to be capable of removing up to 99 percent of SOx and up to 90 percent of NOx. Great River Energy operates North Dakota’s largest power plant. Coal Creek Station, located near Underwood, N.D., about 50 miles north of Bismarck, has a total generation capacity of more than 1,100 megawatts and uses up to 8 million tons of lignite coal per year. According to the company, it has invested about $200 million in environmental equipment since the plant was built in the late 1970s to ensure it uses the best available technology to control emissions and continues to seek ways to further reduce emissions, including testing novel methods. Davidor says he is unsure when Lextran’s technology will be tested at a commercial scale at a North Dakota lignite-fired plant and that it will likely require either a visionary owner who sees the potential financial benefit of implementing the technology or a consortium of plant owners willing to share the risk and investment costs. He noted that research conducted by the Electric Power Research Institute suggests an operator of a 500-megawatt boiler could save an estimated 40 percent in combined capital and operating costs over 10 years by using Lextran’s multi-pollutant control technology compared to base-line pollution control methods. PB Kris Bevill Editor, Prairie Business 701-306-8561, kbevill@prairiebizmag.com

|ENERGY|

An analysis conducted by the U.S. Bureau of Labor Statistics highlights the change in employment levels in counties with Bakken shale oil wells from 2007 through 2011. SOURCE: U.S. BUREAU OF LABOR STATISTICS

Breaking down Bakken jobs Report examines employment, salary shifts BY KRIS BEVILL n analysis recently released by the U.S. Bureau of Labor Statistics takes on the complex task of evaluating employment and wage changes in the Bakken region over the past few years as a result of the area’s ongoing oil and gas boom. The report, released in April, compares employment and wages in specific sectors from 2007, before the boom significantly ramped up, until 2011, which is the most recently available annual data. Analysts found overall employment in the region increased by nearly 36 percent during that time frame, with Williams County experiencing the greatest amount of growth. The number of workers in Williams County, which includes the towns of Williston, Ray, Tioga and Epping, increased by more than 12,500 from 2007 to 2011, more than doubling the county’s employment, according to the report. As expected, about half of the jobs added were in mining, quarrying and oil and gas extraction. Report authors Paul Ferree and Peter Smith noted that while Ward County had just one oil-producing well as of March 2011, that county also experienced significant job growth from 2007 to 2011. About 3,200 jobs were created during that time. Ward County, which includes the city of Minot, holds the largest number of jobs in the Bakken region and accounted for more than 31,000 jobs in 2011. New jobs created in the county during the timeframe analyzed for the report were spread across several sectors, including mining, quarrying and oil and gas, as well as construction, transportation and hospitality. Region-wide, the mining, quarrying and oil and gas extraction industries experienced a 276 percent increase in employment from 2007 to 2011, accounting for about 14,500 workers in 2011. However, the report found that other industries actually experienced higher percentages of growth. Employment in the professional and technical services and transportation and warehousing

Prairie Business Magazine June 2013

industries each grew by more than 300 percent from 2007 to 2011. The professional and technical services industry employed just 521 workers in 2007, but grew to include more than 2,400 workers in 2011. Meanwhile, the transportation and warehousing sector increased from 1,465 workers in 2007 to nearly 6,350 in 2011. Real estate and rental leasing salaries experienced the greatest increase during the four-year period. Salaries in that sector doubled from 2007 to 2011, up to an average annual pay of about $72,000 in 2011. The report found that the professional and technical services industry experienced the second largest increase in pay, increasing by 85 percent over the four-year timeframe. In 2011, the average annual pay in that industry was about $64,500. The report also found that while the region’s overall employment increased, some sectors experienced a decrease in employment. The health care and social assistance sector lost about 1,350 workers from 2007 to 2011. Administrative and waste services, which already had a lower concentration of employment in the area compared to the national average, experienced the second largest decline, with 727 fewer workers in 2011 compared to 2007. “These two decreases had an offsetting effect on the region’s employment growth equal to about 7.4 percent of the size of the region’s net job increase,” the authors said in the report. The overall result of the Bakken energy boom, according to the report, is a regional economy dominated by oil and gas-related employment, with a lower percentage of jobs in industries that have not experienced the same amount of rapid growth, including government, health care and retail trade. PB Kris Bevill Editor, Prairie Business 701-306-8561, kbevill@prairiebizmag.com

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Feb-12 3.00% 3.8 4.4 5.2 1.9 4.3 3.7 5.1 0.9 4.40% 5.1 4.9 4.1 4.2 4 4.2 3.8 5.3 3.8 4.9 4.4 5.70% 6.1 6.2 8.5 10.5 6.2 7.6 8.4 5.7 6.7 6.3 5.7 5.1

EMPLOYMENT Feb-13 Feb-12 384,327 377,654 57,690 58,534 114,372 113,805 51,183 52,252 20,780 19,223 9,723 10,287 34,674 33,802 10,897 11,216 40,308 31,146 427,634 426,551 62,143 62,921 126,891 124,476 22,051 22,203 18,410 18,441 9,423 9,336 12,622 12,557 11,523 11,588 12,064 12,134 7,511 7,596 18,079 18,177 11,273 11,171 2,821,356 2,800,719 1,759,979 1,733,113 19,345 19,204 20,004 20,084 39,925 40,162 10,091 10,712 27,543 27,968 17,444 18,021 13,901 13,984 24,097 23,750 22,274 23,334 27,702 27,411 10,770 11,013

Employment Regional percentage change in employment, three sectors

70 Percent change in employment from one year ago

North Dakota Bismarck MSA Fargo MSA Grand Forks MSA Dickinson MiSA Jamestown MiSA Minot MiSA Wahpeton MiSA Williston MiSA South Dakota Rapid City MSA Sioux Falls MSA Aberdeen MiSA Brookings MiSA Huron MiSA Mitchell MiSA Pierre MiSA Spearfish MiSA Vermillion MiSA Watertown MiSA Yankton MiSA Minnesota Minneapolis-St. Paul MSA Alexandria MiSA Bemidji MiSA Brainerd MiSA Fairmont MiSA Fergus Falls MiSA Hutchinson MiSA Marshall MiSA Red Wing MiSA Willmar MiSA Winona MiSA Worthington MiSA

Feb-13 3.30% 3.7 4.2 4.8 1.9 4.5 4 5 0.9 4.40% 5.1 4.4 3.9 3.7 4.6 4.4 3.7 4.9 4 5 4.5 5.50% 5.5 5.7 8.1 9.6 6.1 7.4 7.7 5.6 6.5 6.3 5.3 4.8

| SPONSORED BY Mining Mnfg Health

60 50 40 30 20 0 -10 -20 Jan2005

Jan2007

Jan2010

Jan2012

Jan2014

NOTE: S.D. mining data not available

Regional Employment and Projections

700,000 600,000

2010 2020

500,000 # Employed

|BY THE NUMBERS| Employment UNEMPLOYMENT RATE

400,000 300,000 200,000 100,000 0 Mining

Oil Production

Feb-13 Feb-12

Producing Wells

Average Daily Production

8,492 6,726

778,971 558,558

Total Permits 218Jan-13 170Jan-12

1.6

1.5

1.4

1.3

1.2

Jan2000 Jan2002 Jan2004

Average Rig Count

Price

185 181

87.89 88.09

Jan2006

Jan2008

Jan2010

Jan2012

Jan2014

Effective federal funds rate 10-year treasury constant maturity rate

1.1

0.9

Transport

NOTE: S.D. mining data not available

Interest Rates

Percent

Canadian Dollars to One U.S. Dollar

Exchange

M anufacturing

Jan2000 Jan2002 Jan2004

Jan2006

Jan2008

Jan2010

Jan2012

Data provided by David Flynn, chair of the University of North Dakota Department of Economics. Reach him at david.flynn@business.und.edu.

Prairie Business Magazine June 2013

Jan2014