Page 1

Business Black Box May/June

www.InsideBlackBox.com

U.S. $5.95


Business Black Box

1

May/June 2009


Business Black Box

SCB SPRE

2

May/June 2009


CBT READ

Business Black Box

May/June 2009

3


Business Black Box

ADVERTISER FULL

4

May/June 2009


Ever dream of being a rock star? Dr. Matt Bynum and his team give their patients the million dollar smiles they’ve always wanted! One step into Dr. Matt’s studios and you’ll quickly discover that this isn’t your average dental practice. Change your smile, and change your life forever with a show-stopping smile that’ll make you want to smile more than you ever thought imaginable! You’ll wonder why you waited so long.

ADVERTISER FULL

Call today.You deserve it.

May/June 2009

Business Black Box

Laser Whitening • Comprehensive Full Mouth Restoration Comprehensive general dentistry • Periodontal Antimicrobial Therapy Cosmetic and Aesthetic Dentistry

5


34

p.

Find out who’s changing the game

I C A R:

What it means to the rest of the world.

56

p.

62

Business Black Box

p.

6

The Big Business of Sports

66

p.

May/June 2009

the pros & cons of Outsourcing

Gary Player:

the

Black Knight

50

p.


The Measure of OUR Success... ...Is YOUR Trust.

ADVERTISER FULL Giving Upstate CEOs, executives, and investors access to potential

Investment Opportunities from around

the world.

Weir Capital’s Goal is to:

Call today.

(864) 967-9838

Business Black Box

• Help individual investors in striving to reach personal financial objectives • Make complicated financial decisions simple • Take only the necessary amount of risk to help clients reach goals • Give our clients access to relationships, opportunities, and products • Implement intelligent strategies that may help you preserve your principal and seek to multiply your assets

Securities offered through First Allied Securities, Inc. Broker/Dealer Member FINRA/SIPC. First Allied Securities is an Advanced Equities Company. May/June 2009 7


MAY09 every issue

20

11 Questions with John Kimbrell

74

Status Check: Cutting Back

26

30

8

16 28 72 96

EDITOR’S LETTER Speed Pitch Measure of Success in the bag

May/June 2009

Between the Lines: The Boomerang Effect

the think tank

Business Black Box

Big Picture: Chapman Cultural Center

94

78 81 82 84 86 89 90

Kid biz hR global sales law small bIZ politics

101 Days: Brian Morin, Innegrity


Business Black Box

11

May/June 2009


9

Business Black Box

9

May/June 2009


Why Business Black Box? Whether planes crash or crews overcome obstacles to successfully complete flights, airlines go to the black box to discover secrets, answers, and missing information to explain what happened and learn for the future.

Business Black Box

That’s the mission of our magazine, our connect events,and our interactive platform. News of businesses succeeding, failing, merging, hiring, firing and more are reported everyday, all over the Upstate. But in business, the real power is not just hearing the news, but about going behind the scenes, discovering, connecting, and learning from those that made it happen.

10

At the heart of every event, every blog, every magazine issue, and every documentary Business Black Box produces, you’ll find a relentless passion for connecting, advising and growing Upstate business. Watch the explosion at insideblackbox.com/genesis.

EDITORIAL Editor-in-Chief Editorial Assistant Contributing Writers

Proofreader

Andrew Brandenburg Julie Godshall Brown Andy Coburn John DeWorken Lydia Dishman Heather Magruder Adam Richeal Ravi Sastry Tony Snipes Alison Storm Judith Parnis

DESIGN Creative Director Art Director

Chad McMillan Lisa Worsham

Traffic Coordinator

Cullie Marsh

Graphic Design

Chris Heuvel

Photography

Conrad LaRosa Ernest Rawlins Photography

VIDEO & INTERACTIVE Interactive Coordinator

Conrad LaRosa

Video Services Director

Jonathan Shuler

Video Assistants

Eric Inafuku Andrea Kurtz Fred Pachter Ben Steenbeek

BUSINESS Publisher

Geoff Wasserman

Marketing Director

Trey Pennington

Account Executive

Laney Frick

Accounting May/June 2009

Jordana Megonigal

Melissa Sample


Subscriptions Annual Subscriptions are $19.95 and include six issues of Business Black Box, as well as one year of full access to Insideblackbox.com. If you have a question about your subscription, call us at (864)281-1323 ext. 1010, or reach us via email at circulation@insideblackbox.com.

Give a Gift Think someone you know would like to receive Business Black Box? To order, email us at circulation@insideblackbox. com or visit the “subscribe” section of our website. A complimentary gift card will be sent with each order indicating who the gift is from and when the recipient will receive their first issue.

Change of Address Special Keynote Speaker

Stefanie Schaeffer Winner of NBCs

When contacting us about changing your address, please provide us with both the old and the new addresses, as well as any other informational changes. The post office will only forward Business Black Box for 60 days, so make sure you let us know as soon as you have your information ready.

Back Issues When available, back issues of Business Black Box are available for $9 by mail or for $7 for pick-up through our office.

Tuesday, May 19, 2009

Business Black Box

Carolina First Center

12

Free Admission by pre-registering online.

GrowExpo.org

May/June 2009

Letters Do you have ideas you’d like to see in Business Black Box? Send us your input through our website, by email to info@ insideblackbox.com, or by mail to 1200 Woodruff Rd., Suite A8, Greenville, SC 29607.

Freelance Opportunities Local talent is what keeps us moving. If you’d like to write or photograph for Business Black Box, please contact the editor at editor@insideblackbox.com or by mail to Business Black Box, c/o Freelance Opportunities, 1200 Woodruff Rd., Suite A8, Greenville, SC 29607.


Tuesday, May 19, 2009 Carolina First Center

Registration 10 - 11a.m. Opening Remarks 11a.m. Exhibit Hall Open 11:30 a.m. - 7:30 p.m.

Don’t miss this chance to meet with nearly

100 of Greenville’s Finest Companies.

Join hundreds to hear Greenville’s top business leaders speaking on a variety of topics designed to help

take your

BUSINESS

to the

NEXT

LEVEL

• Leadership • Sales • Human Resources • Small Business Best Practices • Small Business Resources

• Fast Growth Technology • Business Women • Young Professional Leadership • Non-Profit Best Practices • Community Involvement

May/June 2009 Greenville’s Premier Event for Business Success

Business Black Box

Presenting Sponsors:

13


Photo/Video Requests If you’d like to request a copy or a reprint of a photo you’ve seen in Business Black Box, or of a Fly On The Wall video we’ve done for your event, please contact us for info and pricing at info@insideblackbox.com or by mail to 1200 Woodruff Rd., Suite A8, Greenville, SC 29607.

Reprints If you’d like to request a copy or a reprint of an article you’ve seen in Business Black Box, please contact us for info and pricing at info@insideblackbox.com or by mail to 1200 Woodruff Rd., Suite A8, Greenville, SC 29607.

Event Management/ Sponsorship Business Black Box hosts events monthly – from Business Connect networking held at local businesses to sponsoring events for other local organizations. If you’d like to find out more about hosting an event with Business Black Box, or about working with us to sponsor your event, please call our sales team at (864) 281-1323 ext. 1018 or email sales@insideblackbox.com. SPONSORS

Business Black Box (Vol.1, Issue 1) is published six times per year by ShowCase Publishing, 1200 Woodruff Rd. Suite A8, Greenville, SC 29607; phone (864) 281-1323; fax (864) 281-1310.

Business Black Box

Business Black Box is a registered trademark of ShowCase Publishing © 2009. Content may not be reproduced without written permission of Business Black Box. Excerpts may be reprinted, provided that credit is given to the author and to Business Black Box magazine.

14

www.insideblackbox.com

May/June 2009


Business Black Box

15

May/June 2009


A

Black

bo x EDITor’s letter

lmost a year ago, I embarked on a trek that would completely change me – grow me, stretch me, even make me hurt a little. Fortunately, I had a great team in place alongside me, to help make even the most painful, trying times a little easier.

Still, it seems there’s always a hurdle in the way.There is always failure, looming in the distance and waiting to jump in your path. And these days, with the global financial woes that seem to be finding their way into the Upstate ledgers, failure is a “dime a dozen.” Thing is, failure is a lot like the big bad wolf. It may jump in the way and make a lot of noise, but it’s only effective if you’re scared of it. If you run away screaming, or collapse in defeat, sure, it’s gonna eat you alive. But stand up to it, grab a big stick and smack it on the nose, and it will likely turn tail. In fact, “It’s probably more scared of you than you are of it.” So, on this journey, we decided two things at the very beginning. First, we wouldn’t be afraid of failure, because we all know that failure brings about success. (Even Thomas Edison alluded to it when he allegedly said “I haven’t failed. I’ve just found 1,000 ways that don’t work.”) If you’ve seen the movie “Meet the Robinsons,” you might be familiar with the statement: “From failure,we learn. From success, ehh...not so much.” Second, we decided we wouldn’t be the same old cliché.There are too many businesses that do everything the same way it’s always been done, or get “comfortable” and fade into the blur. But we decided this was not acceptable, and that we would step above and beyond that blur– in every single undertaking. It’s not easy.We’re less than a year old and already have seen our share of mistakes. Probably a good bit more than our share. But like you, we keep standing up, brushing off, and trying again. In my opinion, the trying makes the true difference between possible success and probable failure.

Business Black Box

Welcome to the first issue of Business Black Box. We’re not scared. And we’re not the same old cliché.

16

May/June 2009


Business Black Box

17

May/June 2009


Looking for your banker? Oh yeah, they made the switch...

Shouldn’t you?

Why? It’s Simple. Competitive Rates. Free Business Checking. No ATM Fees, and much more!

Business Black Box

PINNACLE

Tommy Warren Chief Financial Officer 23 Yr. Banking Professional

18

May/June 2009

David Weaver Chief Financial Advisor 27 Yr. Banking Professional

Jim Stewart Senior Market Executive 28 Yr. Banking Professional

Sherri Cox Senior Relationship Manager 12 Yr. Banking Professional


Safe. Secure. Strong. Greenville: 864-233-6915 Powdersville: 864-335-4804

www.PinnacleBankSC.com

CLE BANK

Charlotte Faulk Kevin Jones Senior Relationship Manager Mortgage Division Manager 17 Yr. Banking Professional 23 Yr. Banking Professional

Business Black Box

David Barnett Chief Executive Officer 28 Yr. Banking Professional

Micah Brandenburg Certified Mortgage Planner 9 Yr. Banking Professional May/June 2009

19


Black

bo x 11 questions

9

1

What was your biggest failure as a professional?

What was your first job? In high school I worked as a dishwasher at a local bakery.

I have made plenty of mistakes as a professional; my biggest failure is failing to identify a problem before it affected others. I am faced with many decisions on a daily basis and the failure to react and make a decision can sometimes greatly affect the outcome in a negative way.

By accident… I started as a volunteer at the Anderson Chamber and have been doing this line of work for 10 years.

3

What are some of the skills you developed early, that you’ve found to be beneficial or essential to your practices now? I have always thought of myself as a hard worker and a goal setter. It is important to have a goal in mind and do what it takes to reach that goal by surrounding yourself with good people that share a common vision.

4

How do you strike a balance between your personal and professional lives? I believe that in order to have a successful professional life you must have a balance in your life… therefore I make it a point to spend at least equal time for myself and my family as my profession. My family makes me happy and if I am happy I can be a better professional.

President, Greater Greer Chamber of Commerce E: john@greerchamber.com • P: 864.877.3131 Best way to contact John: email

5 What are some strategies you use to do so/keep yourself in check?

I am a person of priorities and evaluation, and each week I evaluate my failures and successes of the previous week. If my balance is off then I spend my time that week getting myself balanced again.

6

What vision do you promote for your employees, and how do you get your employees to buy into or tap into that vision? My role is to set a clear vision for the organization, get buy-in from the staff, empower them to make decisions and provide a great culture for them to work in. Communication is critical

and every staff person has an opportunity to discuss the direction of the organization. I have an open door policy and encourage two-way communication.

7

If you could choose one principle or piece of knowledge you know now that you wish you had known early on in your career, what would that be? That it is ok to make mistakes and that mistakes are usually the best learning experiences.

8

If you retired tomorrow and could change to any field except the one you have now, what would you pick? A doctor, or something in the medical field.

10

What did you do to recover from that failure? Never be ashamed to pick up the phone and ask for advice. I have been fortunate and blessed to have worked for some great individuals that have taught me a lot and have given me great advice. Whether it is a family member or a former boss… somewhere somebody has experienced the same type of issue that you are dealing with and I seek out their advice

11

How do you avoid similar failures today? I avoid those failures by making decisions more promptly and not shying away from a difficult decision. I hear all sides of the issue and decide what I think is right for the organization. If I need to seek others’ advice, then I identify the appropriate person. We asked John a few more questions. If you’d like to see what he said, visit the site at www.Insideblackbox.com.

Photo by Ernest Rawlins Photography

2

How did you get involved in your line of work?


Business Black Box

DETAIL RO

22

May/June 2009


Your home represents a lifetime investment. It also reflects your personality. To give your home a distinctive finish by using exquisite roofing materials from Detail Slate & Tile. Since 1995, we’ve specialized in slate, tile, shakes, standing seam metal, and all copper applications.

ROOFING

from the clubhouse at the Ritz Carlton in Sarasota, florida to the clubhouse and celebrity homes in the Cliffs Communities, we’ve supplied and installed distinctive roofing to ensure long-lasting beauty.

Exquisite Detail &Design. we also provide re-roofing, commercial roofing systems and are certified for all flat roof applications.

Slate | Tile | Shakes | Standing Seam Metal Copper | Gutters | Siding Residential and Commercial

DetailSlateandTile.com

May/June 2009

Business Black Box

P.O. Box 3705 | Greenville, SC 29608 P. (864) 884-6269 | F. (864) 298-3000 | info@DetailSlateandTile.com

23


Black

bo x STATUS CHECK

Cutting Back:

What’s the best way to handle making a layoff in your company? Business Black Box

Sadly, it’s something that’s happening a lot in today’s economy, but it doesn’t mean that the relationship has to end on a sour note. How can you handle necessary staff reductions without everyone hating you and your company forever? (And yes, it can be done!)

24

May/June 2009


STATUS CHECK Black bo x

As a manager for a global staffing organization,

I see many layoff scenarios and the pain and heartache associated with them. If your company is capable of offering out-placement services to your reduced employees, then that is often a good “benefit.” During these times, a layoff should not be a total surprise, especially if the communication channels are open. I have seen the “going away party” scenario before as well, and that is often received as a slap in the face. The “escorted out the door to the parking lot” scenario is also pretty common, but it is the best way to instill very hard feelings, as well as extremely hurtful...especially to long-term employees. Consideration of your laid-off employees is the best idea...doing so with encouragement and respect. Judy Bonner District Manager, Kelly Services

From my perspective, leading with as much honesty as the situation will allow is always the best approach. These rarely come totally unexpected, nor should they. The work force is being trimmed to preserve cash flow, not for any other reason. Management has wrestled with who is most expendable and some answers have emerged. So without elaboration, level with the affected employees and tell them once more why it needs to happen, and when. Performance is not an issue; the time for bargaining is past; this is how it has to happen. If you tell the truth and show respect, the company will not be hated forever. If times improve, and the employees can be brought back, a well-managed layoff will result in a high percentage personnel recall, depending on the length of the layoff.

Being transparent, truthful and upfront pays off in the long run for all parties involved. If you have an opportunity to help those you have to part from with networking and finding new opportunities, by all means do so! As a former turn-around executive I know what it means to send people home - it is the worst leadership task for any decent manager. Having to do that in a good economy really means that the leadership of the organization made mistakes in the first place by hiring too many people, hiring the wrong people or making strategic business mistakes. Unfortunately, the price is typically paid by those that were not involved in the decision making. In the context of the current economy the situation may be different; however, those that have to leave will still carry the pain. Consequently, providing any type of support possible is the correct, compassionate and ethic thing to do.

Be “ Honest.

Manfred Gollent Executive Coach, QLI International

I’ve worked in a company where we had several Reductions in Force in a short period of time. Since we often handled these reductions poorly, it was an excellent learning experience. I learned that if you disable an employee’s email account before his manager has “the talk,” it can lead to some really interesting conversations. No need to worry, however. They don’t last too long because they guy is headed out the door anyway. Also, if you let go more than a couple of people, be sure to have an armed guard at the front door the following day. There’s nothing like a rent-a-cop to make the remaining employees feel safe. If, as the President of the company, you’re going to have to let a lot of people go, it’s best to ride your brand new motorcycle down the halls to let people know that they don’t need to worry about you.The company may have some troubles, and may be firing some or a lot of the worker bees, but as the President, you are A-OK. Also, it is not cool, as a recently fired employee, to return your laptop with tire marks on the case. If you’re only going to get a couple of weeks severance pay, you don’t want to be forced to spend them on anger management.

Be Upfront.

O.K. two perspectives (without clear HR company rules on layoffs - which is a mistake to start!) If the employer is laying off for cause, let the employee decide how much to tell coworkers (quietly or notification to coworkers) and agree with employee (in writing) on what to tell coworkers. If the layoff is due to economic conditions, consider throwing a going away party and helping the employee network for a new position. These were the people helping you achieve your dream; how could you treat them as any less than the stars that they are? Hank Merkle Market Sales Engineer, ITW Shakeproof

I agree about being totally upfront and honest.

Patrick Greer Multimedia Developer and Consultant

Phil Yanov Founder, GSA Technology Council Join the discussion! Join our group – Business Black Box – on LinkedIn to give us your feedback on this and many other subjects!

Business Black Box

I have lost jobs twice in the past because of a reorganization. That part didn’t anger me as much as the stealthy interviews of the entire staff beforehand. Then, when I was laid off, the people who remained were told something other than what I was told apparently not to induce a panic. If you have ever seen the movie Office Space you know what I am talking about. This really isn’t an answer for how to do it but more on how not to do it.

Truth is the only policy.

Gil Gerretsen President, BizTrek International, Inc.

Tom Strange Director of Research & Development, St. Jude

are “iffy” so it is often not a surprise. Let the person know that you are not unhappy with them, but that you have a choice between unsavory options, and just level with them. Do not drag it out.

People know when things May/June 2009

25


Business Black Box

ADVERTISER FULL

26

May/June 2009


ADVERTISER FULL

Business Black Box

May/June 2009

27


Black

bo x SPEED PITCH

Karen Jackson wants to publish a book focusing on poetry in a new way. Does her pitch have what it takes to get her to the next level?

How she tells it: “Poems To Live By is a book filled with inspirational writing for people to visualize or to envision what God is relating to us. These poems relate to people in all walks of life. These poems include morning prayers to daytime meditation. I wrote this book for people to envision the very thought and heart of God in poetic terms. I want, through these poems, to bring people to a place where they have never been before. The accompanying CD consists of the book’s poems put to music with a contemporary sound and a flavor of jazz. The CD will take you to a place of great peace and tranquility.”

Karen Jackson Owner, Karen’s Kreations Founded: Sept. 2003

Brainstorm, advise, weigh in.

Wanna offer your advice? Log on to www.insideblackbox.com/SpeedPitch

Business Black Box

What They Say...

28

“Judging by your pitch, your intended market seems too broad. Poetry can be a tough sell so provide a better “hook” to draw me in. I’d like to know a few more specifics such as how many devotionals are there – enough for each day of the year or a month? Also, you may want to consider pitching MP3 downloads rather than a CD – it will save on production cost and peak the interest of publishers looking to relate to younger buyers.” Tim Lowry Chief Operations Officer Ambassador International

May/June 2009

“While obviously a worthy initiative, the pitch itself lacks three critical Cs: Clarity, Credentials, and Call To Action. I almost missed the fact that this is not only a wonderful book, but that the poetry has also been set to music and a CD is included, which may open up a much wider target audience to market this to – so the product offer lacked clarity. The credentials and capabilities of the writer/ musicians are nowhere to be found. If this is a first book and CD, maybe mention what inspired the writer to develop the project. If they have some established credentials, or the accompanying musicians Matt Dunbar do, that is a missing – and Managing Director Upstate Carolina Angel Network valuable – selling point. “While this statement provides a fairly clear description of the product and its intended benefits to the customer (or reader in this case), I wouldn’t consider it a “pitch” from an investor’s standpoint. An effective pitch requires a description of the value proposition of the opportunity and a clear call to action for the investor to consider, both of which are missing here. The pitch might also benefit from the inclusion of a short, powerful line from one of the writings to catch the investor’s attention and give the reader a sense of the quality of the product.”

Ultimately, every pitch should have a strong call to action, encouraging a reaction. Tell me what you want me to do – ‘fund the creation of this oneof-a-kind collection of poetry and music, and open up an entirely new genre of Christian entertainment…’ or whatever.” Sam Patrick President Patrick Marketing & Communications, Inc.


clemson university’s

Brilliant

MINDS

routinely create

World

Changing

i n n o vat i on s .

CURF

HELPS THEIR

contributions AND LABORATORY

CURF

discoveries

hospitals, plants, offices, and expand to

homes

worldwide.

Business Black Box

the researchers, scientists, and innovators at Clemson university invest their lives discovering new ways to make the world a better place. Clemson university research Foundation makes the connection to the world of medicine, business, foodservice, and manufacturing to promote the use of their innovations.

clemson.edu/curf May/June 2009

29


Black

bo x BIG PICTURE

Benches & Bands: $200,000 by Carolina Bomanite

Lighting:

$65,000 by Pace Electric

Construction of David Reid Theatre $16.5 million Designed by

David M. Schwarz Architects

Brickwork/Paving $70,000 by Paver Installation and Construction

Business Black Box

Big Pi

30

May/June 2009

Chapman Cultural Center


BIG PICTURE Black bo x

Overall Construction $46 million Designed by

Little Diversifield Architectual Consult

Landscaping

$50,000 by Roebuck Nursery

Flags

ts

$45 each by Spartan Stamp & Sign

200 East St. John St. Spartanburg, SC • 29306 864.542.2787 chapmanculturalcenter.org Opened: October 2007 Status: Non-profit Annual Budget: $2.5 million Average ticket cost: $9.50 Classes Offered

Plaza Design

by Michael Vergason Landscape Architects

Science Center: 700/year; 21 summer camps Ballet: 85/week; 14 summer sessions History: 8/year

Picture

Art Museum: 85/year Artisan Center: 3 summer sessions; private lessons available Theatre: 30/year

Business Black Box

May/June 2009

31


32

May/June 2009

Business Black Box


WORD spread 2

Business Black Box

May/June 2009

33


34

May/June 2009

Business Black Box


T B

R L A

A I Z E R

L S

People who are setting the stage for the next level of business. Developing a new software. A new product. Using business tools in a whole new way. Being a visionary thinker with the power to challenge “the way it’s always been done.” On the following pages, you’ll meet six Upstate leaders doing all of the above, and taking our business culture – locally, nationally and globally – to a whole new level. profiles by Lydia Dishman

May/June 2009

Business Black Box

Upstate Innovators Changing the Game

35


1995

F

Earns degree in Spanish and Business from Clemson Works for his brother’s software company, PICS

1997 2003

Joins inside sales at Scansource

2007 2008

Creates Big Leap GPS

Creates Gorilla Networks and sells to competitor, Main Street Wireless

or Joe Milam, necessity has been the mother (or father, as it were) of invention. The creator of Big Leap GPS says that he and his wife were looking for a device to keep track of their three young children that was small enough for the kids to wear easily, but didn’t come with a huge price tag. “We couldn’t find anything that wasn’t less than $500 for the unit and $60 per month [for service],” he says. So Milam, who’s the first to admit he’s got entrepreneurial blood in his veins, set out to build his own version to be more affordable and portable. And so the “world’s smallest,” portable GPS device was born, costing just $185 for a unit roughly the size of a 9-volt battery, and only $19 per month for service. It uses the same technology as the systems you’d find in a car, and taps into one of the largest service providers in the country. His five year old son was the first customer and now Big Leap’s best salesman. “He actually wants to take it to school,” says Milam. Even though it sounds like the time between formulating the idea and taking it to market happened overnight, Milam asserts that it didn’t. First, he had tried to build and manufacture it all himself. When that didn’t prove feasible, he set out to find something that already existed to adapt to his needs. Getting funding wasn’t a walk in the park either. “It should be a little difficult to start a business,” reflects Milam, “but not that hard.” Never one to give up, Milam recalled his early forays with Gorilla Networks – a time he admits was fraught with mistakes. Drawing on that experience, he took a different approach and “leveraged the heck” out of all his business and personal relationships. “You’ll always have someone tell you it’s not going to work, but keep fighting, and after a while punches in the gut don’t hurt so bad,” he laughs. Determination and collaboration with an innovative eye has led to success. Now he’s making the “leap” to market by partnering with different resellers focused on child protection, as well as looking at other outlets such as geriatric caregivers and park management officials where the need already exists. Like many entrepreneurs, Milam believes he’s a trailblazer, simply because he says, “I don’t know what else I can be, I tried everything.” Recognizing that it is OK to always be dreaming up new features for the device, but not always acting on them has been a tough thing for his irrepressible spirit. His advice to himself and others? “You have to have patience. Focus on one thing at a time, and if you fail, fail fast, get out, and do the next thing.”

Focus on one thing

Watch the full interview at www.InsideBlackBox.com

Joins Gnoso in business development, launches Log For Life

a t a t i m e,

and if you fail,

FAIL FAST,

GET OUT, and do the

NEXT THING.

Business Black Box

Believe it?

2,000 60 1

36

May/June 2009

Children reported missing Justice Enrollment

daily to 911 call centers nationwide according to Department of Juvenile

Percentage of over 5 million Alzheimer’s patients in the US

Mouse click to locate

who wander

a person wearing Big Leap GPS device


Business Black Box

37

May/June 2009


38

May/June 2009

Business Black Box


A

my Wood will admit she’s never been at a loss for words, and now she’s blazing an internet trail to find even more channels to broadcast the news. The veteran anchorwoman of WSPA has eagerly embraced multiple social media outlets from Myspace to Twitter in hopes of engaging viewers with her own brand of interactive anchoring. “Everything wonderful in my life has been a big lovely accident,” she laughs, explaining that the idea for the first live chat on her news broadcast came from using iGoogle at home. “I was chatting with my daughter [who was on another computer],” says Wood who quickly brainstormed how to transfer the concept to television. Though she began with just one viewer commenting on the story and asking questions, she remembers thinking, “This could be powerful.” And it was. Especially now, as old journalism models are rapidly becoming what the audience obsolete. Even though she started her career writing for the local newspaper,Wood refused to dig in her heels and stick to the old-school ways. Instead, Wood says she’s always thought of journalism as continuing education. New software and new applications are continually evolving – something she believes makes reporting engaging and exciting. Despite being on a months-long learning curve to figure out how to use Twitter, Wood finally hit her stride and scooped the big guys in the process. “I beat CNN to the social media scene, but it’s valuable for both [news organizations],” she states.Wood finds it adds a dimension to her reporting local news when Twitter and Facebook comments are reflected back in coverage. “I am a listening journalist. I care about what the audience thinks. It plays into the stories we do, helps drive what we produce.” Admitting that not every viewer is up to speed with social media usage, Wood is trying to branch out and use texting to involve more people. Reaching out to create a community has fringe benefits. It’s been a way to learn new tricks, one of her favorites being ping.fm, a website that connects all your social media accounts. That tool has been a boon to a busy woman who’s always willing to put herself out there and connect with people. But even with an aggregator, she’s quick to point out that it’s been a challenge to balance it all. By tweeting and blogging what she calls “slices of life” alongside news, she’s trying to walk the line between the personal and the professional, though you won’t find her broadcasting what she had for lunch. She says,“I try to make it useful. It is about having a relationship with people so they are comfortable sharing their opinions with me.”

1987

Graduates from American University with BA in broadcast communications First on camera reporting gig at KSAX-TV in Alexandria, Minn.

I’m a listening

1990

Arrives in Greenville to work for WSPA News Channel 7

I care about

1993

THINKS.

Anchors during some of the first wall-to-wall coverage of Susan Smith trial

1999

Wins Jaycees community service award

2006

Wins Emmy for station coverage on Andre Bauer’s plane crash

2008

Does first live chat on WSPA broadcast

2009

Anchors from her couch for ten hours when WSPA broadcast tower collapses

2009

Featured innovator for RTNDA

Watch the full interview at www.InsideBlackBox.com

journaliST.

Connect with Amy

on Twitter

Social Media Info

myspace.com/tvamy theribbit.com twitter.com/tvamy seesmic.com/tvamy 3241 (number of cyberstalkers – 0) “It’s a cool way to get engaged with the things you care about.” If you are interested in politics, Amy recommends checking out @SCTweets on twitter. May/June 2009

Business Black Box

Myspace Blog Twitter Followers

39


C

1984

Clemson BS computer engineering

1997

Clemson MBA Worked for NCR as a chip designer for 11 years Started a team hired by Cirous Logic in California for 3 ½ years

2007

A

Created Zipit Wireless

with bad

EXECUTION

Experience.

 

ZipIt Up Safe and Easy Business Black Box

Highly Awarded

40

g o o d

I D E A,

Spun out a start-up, AV Active, developing home media products Formed AERonics to design software and hardware for other companies Watch the full interview at www.InsideBlackBox.com

1999

hances are, if you have kids between the ages of 10 and 15 they’ll know “Fred” of YouTube fame. And if they know Fred, they’ll know Frank Greer, President and CEO of Zipit Wireless. Well, maybe not Frank personally, but they’ll surely identify his company’s product – that nifty little device that Fred uses to text and instant message the girl he’s crushing on. Known as the Z2, it’s a dream product for households with teens and tweens. No longer do they have to compete for PC time or keep track of the number of text messages.They can communicate with abandon (if you can call it that with all the acronym-speak) thanks to Zipit, for the low price of $49.99 plus a one-year subscription. Creating a must-have product for a hot market is every entrepreneur’s dream. But Greer is quick to point out it was the work of many hands with years of experience. He and Ralph Heredia, VP of business development – much like the crowd of tech support in the Verizon commercial – have a competent team behind them. “It is a multifaceted business,” he explains, with a global crew but a great learning to manage it. Zipit has an engineering team in Greenville handling software and hardware development, and manufacturers in China. “The You’ve got to have two-person operation just doesn’t cut it,” he says. s o m e o f t h o s e. Greer also observes that Zipit’s cutting-edge embedded technology has been able to gain a big chunk of market share with distribution in such retailers as CompUsa, Best Buy, Target, and Amazon. Nailing those retail relationships with a winning product certainly helped impress investors – to the tune of $4.7 million in the first round of development and an additional $4 million in this difficult climate. Again, Greer says it took a village, crediting Zipit’s first appearance at InnoVenture in 2005 as a step on the venture capital funding path. Admitting they had to go back to the drawing board after their initial pitch, and it took a year to re-enter the market, he’s also not afraid to say that they’ve had tons of ideas that just haven’t worked. One venture into home entertainment, he states was, “A good idea, with bad execution, but a great learning experience. You’ve got to have some of those,” he says ruefully. Hard knocks aside, Zipit and company are poised for even greater success. Greer says they’ve already licensed technology to Sony and, “hopefully in the next six months you’ll hear some more big news.”

Built-in Protection MP3 Compatible High Resolution Display Versatile May/June 2009

The first-generation Zipit Wireless Messenger received the iParenting Media Award for ease of use and online safety. The new Zipit Wireless Messenger 2, a.k.a Z2, was awarded “Best of Show” in portable gear for 2007 by PC Magazine. Z2’s parental controls limit how often kids chat and offers built-in protection against messages from strangers through a Parent Portal on the Zipit website

MyTunez plays MP3 files from Mini-SD memory card as well as internet radio. Z2 has a high-resolution display for viewing and creating one or multiple slideshows. Enables chats with up

to 99 friends at the same time.


Business Black Box

41

May/June 2009


42

May/June 2009

Business Black Box


J

ohn Stockwell doesn’t consider himself a trailblazer. But he does believe that the University of South Carolina Upstate is a trailblazing institution. “It is an extremely important enterprise, and I’ve got a responsibility to make decisions for the future of it, because it is so fundamentally important to the future of Upstate South Carolina.” As chancellor (which is essentially the same as the president) for the past 15 years, Stockwell has cultivated the fertile ground of the growing campus (literally) according to a master plan approved about 10 years ago. As it nears completion, Stockwell looks with pride over the new athletic facilities, residential halls and the spreading branches of over 600 trees, an addition that earned USC Upstate recognition by the National Arbor Day Association as the first public university in the state to be named a “tree campus.” But, he says, there is always more to do. Even with a student population that has grown in size and become much more diverse, Stockwell is still focused on a future peopled with a greater number of college graduates. He believes there s o m e t i m e s is compelling need in the Upstate to boost the percentage of degree completion, simply because if it doesn’t happen, we cannot be economically competitive in the long haul. Explaining that the biggest jump in earning capacity occurs with completion of undergraduate studies, he’s putting out a challenge to the Upstate to get those current numbers up to 40 percent. “It’s not just a marketing gimmick,” Stockwell notes. He believes the single most innovative dimension of USC Upstate is its metropolitan mission. Using the I-85 corridor as a framework which connects all the towns and communities, the university’s students, faculty, and outreach have all been influenced by partnerships in the area. Taking a page from UNC Charlotte’s playbook, Stockwell says he’d like to see USC Upstate be an anchor in this region and make the same impact on economic development. Even with an eye on the greater economic development prize, Stockwell says the current downturn has played a role in how quickly USC Upstate has been able to implement this vision. “A lot doesn’t come together as you plan,” admits Stockwell. “The best ideas in the world sometimes can’t be funded and you have to wait.These are tough times, but we are ready when the opportunity arises.”

19691974

Ph.D. and Masters in theatre from Bowling Green State University B.A. in speech and theatre from Cedarville College

The best

ideas in the world be funded

and you have to

WAIT.

Also completed post-doctoral work in higher education administration at Harvard Watch the full interview at www.InsideBlackBox.com

CAN’T

Professor and director of theatre at California State University Northridge

19741981

Chair and professor of the department of Speech and Theatre at Indiana State University

19811988

Dean of the School of Arts and Sciences at the State University of New York-Cortland

19881994

Provost and interim chancellor of the University of WisconsinParkside

1994-

Chancellor of the University of South Carolina Upstate

Present

USC Upstate Spartanburg, SC 5,000 Liberal arts, sciences, business administration, nursing and teacher education; master degrees in education. 231 full-time; 268 part-time 17,000 $4,031 per semester (full-time) $8,202 per semester (full-time) May/June 2009

Business Black Box

Location Enrollment Degree Programs Faculty Alumni In-State Tuition Out-of-State Tuition

43


S

Graduated from JL Mann

My job is to

Studied acting with coach Herbert Berghoff; appeared in several productions with Berghoff and 3-time Academy Award winner playwright Horton Foote

H E L P p e o p l e

First female DJ of an AM drive show in a major market—Miami

Understand

GrEAT

Executive Producer and Host of the Emmy Award winning “Pulse of Miami”

Host of the Emmy Award Winning program “Blue Ribbon” on Turner South Network Host of the nationally syndicated talk show “Men are from Mars, Women are from Venus”

2002 2004

Opened Goddess Retail Boutique Host of the 2004 South East Region Emmy Awards

Watch the full interview at www.InsideBlackBox.com

Host of HGTV’s “The Big Reveal” Co-host, Beauty and Style Expert, Entertainment Correspondent for National Fox Television program “Good Day Live”

he’s got gumption. Though Bo Griffin was raised in a traditional Southern Baptist home, she says her family gave her roots and wings and most importantly,“The faith to believe that I could go off and do all the wonderful things I’ve done in my life,” she says with a hearty laugh. Under the strict eye of her parents, Griffin wasn’t allowed to do much beyond dream of what her future might hold, and boldly set down her five year plan in high school to be an actress, be on radio and television and also to become a designer. From New York to Miami to Los Angeles, Bo Griffin made a name for herself in radio and on television, just as she’d planned as a teenager. The only thing left to do was design. “I think I was just stone cold crazy,” laughs Griffin, “Why else would you start a business?” But she was through t h e with television and ready to set her own agenda. So she returned to Greenville, which had changed from the sleepy Southern town it was when she left. “I couldn’t wait to leave, and now I love it.” Good thing, because Griffin plunged into the women’s apparel business with abandon. Literally. Opening Goddess boutique on Black Friday in 2002 without a business plan would not T hem s elve s. be a move for the faint of heart. Despite juggling challenges such as cash flow and inventory, Griffin asserts that sheer determination propels her forward. That and she loves it. “And I’m good at it.” Indeed she is. Just three years ago, Griffin hit upon a big idea that is poised to thrust her into the national spotlight again. Like many entrepreneurs before her, she had a problem and thought of a creative solution. The woman who helped so many other full-figured gals slip into an elegant gown and feel like a million bucks, was struggling with tight-fitting undergarments one day. She just wanted a dress she could “put on, zip up, and go out the door.” It was an “ah-ha” moment. A talk with a seamstress, an application for a patent, and work with the Clemson Apparel Research Center yielded the Skinny Dress, which Griffin currently sells at Goddess and online. For just $109, women can purchase a chic cocktail sheath with a built in compression undergarment that slips on and makes them look pounds lighter. The Home Shopping Network noticed in short order, and Griffin is currently in talks with them for possible distribution. And while the Skinny Dress employs some high-tech construction, Bo Griffin is endearingly personal when it comes to describing what she hopes to achieve with the garment.“My job is to help people understand the great things about themselves. Be authentic, just enhance it. It really is retail therapy.”

things ab o u t

Skinny Dress Business Black Box

Origin

44

Sizes Colors Design May/June 2009

Created in 2006 7 different sizes: Small to 4X 7 different colors: Onyx, Scarlett, Mango, Lime, Turquoise, Jade and Hot Pink Manufactured by the same apparel makers which design for NASA

space teams


Business Black Box

45

May/June 2009


46

May/June 2009

Business Black Box


P

If you have a

TEAM yo u a r e Better able

to

f i n d

Solutions

Graduated Bob Jones University with B.S. in electrical engineering Designed and built software for Geerdes International

Watch the full interview at www.InsideBlackBox.com

eter Waldschmidt confesses that when he was just a kid, he took stuff apart all the time. “My goal was to learn how everything worked,” says the CEO of Gnoso, giving full credit to his dad for indulging this particular passion. From letting him take apart the family Chevy, to setting him on the path to programming with the purchase of an early home computer, Waldschmidt says this first mentor, “Gave me a lot of rope.” But unlike many entrepreneurs who tie themselves up in knots with said rope, Waldschmidt has taken his career in an industry that grows by leaps and bounds, one small step at a time. Beginning when one of his college professors hired him to write software, and moving on to robotics programming before partnering with another mentor, John Green, to start TetraData, Waldschmidt admits that though he’s made some mistakes along the way, he’s avoided major disasters and says each misstep was an opportunity to learn. “My biggest challenge was [to improve] my understanding of business,” explains the tech-savvy Waldschmidt who adds that he also had much to learn about selling and managing people. Though this trailblazer started Gnoso by himself, with just one product, NCover (a program that helps software developers make sure they are testing their coding properly), Gnoso’s grown to include Log For Life (an online application to monitor blood sugar levels in diabetics), he’s the first to tout the value of teamwork. “To build a company you need a team, especially with technology businesses covering new ground. The more creative things you do, the more expertise you need,” he says, citing an unofficial survey he conducted of companies such as Google, which were birthed and nurtured by a pool of talented people. “Most start ups have challenges, but if you have a team you are better able to find solutions to those challenges.” As Gnoso moves forward with its mission to take small, struggling web products businesses to the next level, Waldschmidt to challenges is keeping his eye on developing relationships to increase market share. To that end, he’s even dipping the company toe into social media water, but not without the understanding that even with such a “high-tech” approach to sales, “At the end of the day people are buying your products. You still have to be about people and relationships.”

1997

Co-founded TetraData Corporation with John Green serving as its Chief Technology Officer

2004

Raised venture capital to fund their continued growth

2006

Sold the company to Follett Software Corporation

2007

Left TetraData to found Gnoso Inc., a technology incubator currently rolling out NCover and Log for Life

Think you Gnoso?

Wanna know more?

2007 To build and grow product-focused companies 12 NCover (partnering with Microsoft to reach .NET developer community) LogForLife (ongoing partnership with the Juvenile Diabetes Research Foundation) The E-Myth by Michael Gerber “An entrepreneurship classic. It does a great job of explaining why being an entrepreneur is a lot more than just starting a business.” Conversation@gnoso.com May/June 2009

Business Black Box

Started Focus Employees Products Required Reading

47


BUSINESS BLACK BOX TEAM JOIN THE

We’re expanding! Business Black Box is currently interviewing for the following positions:

Business Black Box

JUTE (CR - client provided)

48

• Business Development/Sales (2 fulltime openings) • Interactive/Web Development (sumer & fall internships) • Video Production

Send resumes to editor@insideblackbox.com.

May/June 2009


Bentley Ad

NEXT is a collaborative that attracts and supports highimpact entrepreneurs in the Upstate of South Carolina. NEXT offers a number of resources to its members and to the outside community, including:

• Concierge services • Infrastructure development • Advocacy

Business Black Box

nextupstatesc.org 401 University Ridge • Greenville, SC 29601 864.239.3711

May/June 2009

49


Business Black Box

Gary P

50

May/June 2009


y Player

Business Black Box

May/June 2009

51


On hole number 16 of The Cliffs at Keowee Vineyards’ golf course, Gary Player welcomes foursomes to the tee. Although it must be overwhelming to play alongside the “World’s Most Traveled Athlete” and the man with more awards and acknowledgements than one can count, no one seems the least bit shaken to stand shoulder to shoulder with him, or to take a few tips on their swing. In fact, Player’s demeanor is one of a teacher – one who doesn’t judge, but is simply there to play a fun round of golf. He will do this with every foursome on the course today for the Gary Player Invitational – a global series that began in London, passes through Upstate South Carolina and Shanghai and ends in Cape Town, South Africa. He will give tips to businessmen from around the nation, and he will joke along with the occasional celebrity like chef Ming Tsai or Kevin Sorbo. Organized through the Player Foundation, one of the many arms of the Black Knight brand, the Invitational aims to unite top businessmen, celebrities and PGA Tour professionals for two days of “golf and giving” to enrich the lives of children. And although this event marks the union of two of Player’s passions – golf and wellness (or three, if you count, more specifically, children’s wellness) – the Black Knight brand encompasses many passions of Gary Player, one of the world’s most famous golfers for the past 50 years. It all began simply, when Player was a young boy in South Africa. In what he claims as his “biggest obstacle to overcome,” Player’s mother died when he was eight, leaving him with a segmented family – a father working 12,000 feet underground in a gold mine; a brother who went to the World War at age 17; and a sister who left for boarding school. Except for a worker close to the family, Player grew up mostly alone. It was at the age of 14 that Player played his first round of golf. Even then, he knew he would grow into greatness. “I said to [my father], ‘I’m gonna be the world champion,’” Player recalls. His father, in return, told him: “learn to speak well, dress well, read and strive for education, because this will help your business. But above all, you need to have a brand.”

“I said to [my father], ‘I’m gonna be the world champion.’” His father, in return, told him: “learn to speak well, dress well, read and strive for education, because this will help your business. But above all, you need to have a brand.”

by Jordana Megonigal


This advice has permeated Player’s entire career the same way it did in those early days. He became educated and learned to speak well – preparing himself for the days when companies would ask for his representation for their product. In traveling to the U.S. for one of his first tournaments, he saw the TV show “Have Gun, Will Travel.” In it, the character Paladin (played by Richard Boone) dresses all in black, and leaves calling cards with a chess knight emblazoned on them. Soon after, Player began to dress all in black for all golf tournaments. It quickly earned him the name “The Black Knight” by the media, and the Black Knight brand was born. Today, that brand includes Black Knight International, an umbrella company for Gary Player Real Estate, Gary Player Design and Gary Player Enterprises – which includes include licensing, publishing, videos, apparel, and memorabilia. There’s also The Player Foundation (where the primary objective is to promote underprivileged education around the world, and which has raised over $30 million), the Gary Player Stud Farm (which has received worldwide acclaim for breeding top thoroughbred race horses), and most recently, PLAYER magazine, a golf lifestyle publication. Because of his experience with it, Player is quick to point out that diversification has been vital to his business success. “Don’t put all your eggs in one basket,” he says. “If you look today at the United States – the leading country in the world – people who have all their eggs in one basket are facing quite a dilemma.” He points to the fact that although, as an example, golf course design in the U.S. is relatively non-existent these days, his own design group is busy all over the world, building in Abu Dhabi, India, China, Brazil, Argentina, South Africa, and the Caribbean. “If you have, as we have, seven or eight different businesses, if things go bad in the one, you still can balance it out in the others.” The many different focuses of Gary Player are born out of his passions – Black Knight International, out

Business Black Box

1. Change is the price of survival. 2. Everything in business is negotiable except quality. 3. A promise made is a debt incurred 4. For all we take in life we must pay. 5. Persistence and common sense are more important than intelligence. 6. The fox fears not the man who boasts by night, but the man who rises early in the morning. 7. Accept the advice of the man who loves you, though you like it not at present. 8. Trust instinct to the end, though you cannot render any reason. 9. The heights of great men reached and kept were not attained by sudden flight, but that while their companions slept were toiling upward in the night. 10. There is no substitute for personal contact.

May/June 2009

53


54

May/June 2009

Business Black Box


Mentors: My mentors are Sir Winston Churchill, Mother Theresa, Mahatma Ghandi, and Nelson Mandela. I loved the way Martin Luther King was not in favor of violence. My mentors were all people who were non-violent. The people who are very militant never get the message through to the extent that they should. Athletes as Role Models: The athletes today are making so much money that they have an obligation to put something back in the youth and to try to be as good an role model as possible. Everybody will have failures. That’s God’s plan. Go on your hands and knees and say ‘thank you’ for your failures, because failure breeds success. A child should always be given love and discipline, but never deny them adversity! His favorite quote: “The heights of great men reached and kept were not attained by sudden flight, but while their companions slept were toiling upward in the night.” Children’s health: It the responsibility of the parents and schools – bring back Physical Education. Advise on diet. Don’t rely solely on doctors – doctors have mortgages to pay. Traveling: I think traveling gives you a great appreciation for business – to understand cultures, and religions and foods and just, ways of living. You can’t travel around the world for business and be emphatic that your way is the right way, because it might not be the right way in someone else’s country. Travel is the university of the world.

Business Black Box

of his passion for golf; the Stud Farm, out of his passion for racehorses and a peaceful life of ranching; and the Foundation, out of his desire to help children across the world. Even his partnership with the Cliffs, a relationship that eventually brought Player to the Cliffs and Mountain Park, where he has designed a course and built his U.S. headquarters, was born out of a shared passion – one between Player himself and Cliffs founder Jim Anthony, both who share a passion for health and wellness. “Every four days, 4,000 people die due to obesity-related diseases,” Player stresses. And for those who think his emphasis on health is unrelated to the business empire he’s built? “It all relates to business,” he says heatedly. “You can have an education, but if you don’t have a body to pursue that, how are you productive?” For Player, business is not about economics. It’s about taking a holistic approach to the subject. Health. Diversity. Mentorship. Determination. And in good measure – rest. “I’m pretty much a workaholic,” he admits openly, with a small smile. “But you can be a workaholic and also take the time to smell the roses.” For Player, his “roses” are spending time with his family – including 21 grandchildren in two countries (the U.S. and South Africa) – and spending time at his favorite place – his South African ranch. From humble beginnings, Player has emerged a world-renowned golfer, and even more importantly (from a business perspective), has built one of the largest, well-known brands ever known. Still, he continues to build the Black Knight brand, now with help from his son, Marc, and a team of great people in offices all around the world. He continues to travel, to follow his 10 Commandments, to remain a role model and to keep growing. Interestingly enough, the Player family crest – created hundreds of years ago and now hanging in Player’s office– holds two clues to its pre-existing knowledge of Player’s eminent success. One, the Latin creed that, once translated, means “To Give Back.” The second, a solid image of a black knight.

May/June 2009

55


Business Black Box

56

This time last year, Nabil Elkouh, Ph.D., the Chief Technology Officer of American Titanium Works (ATW), didn’t really know much about Greenville, S.C.

May/June 2009


by Lydia Dishman May/June 2009

Business Black Box

He had, however, heard about CU-ICAR.

57


S

o when ATW was doing their homework to select a site for their new operations – to include a mini-mill for producing melted and rolled titanium products and a research facility – the Palmetto State was definitely on the radar. “We first did a thorough selection process,” Elkouh explains, citing critical needs such as proximity to the airport, access to a qualified labor pool and good labor rates as points that put Greenville among the top five of 15 contenders. At that point, a delegation of eight representatives ranging from Bob Geolas, CU-ICAR’s executive director, to Joe Taylor, South Carolina Secretary of Commerce, paid a visit to the ATW execs on their home turf in Chicago. “They impressed us with coordination and with how well they understood our needs. Most states couldn’t see beyond a co-location close enough to collaborate but for each to have a different purpose,” he says about the company’s dual need for a manufacturing plant to handle processes from raw material preparation to finishing and testing, as well as a research laboratory. Each of the states in the running offered handsome tax incentives. But what cemented the decision to invest an estimated $422 million and employ more than 300 people in S.C. was CUICAR. Elkouh says, “CU-ICAR’s very clear vision is what made us choose them.”

i’ve been all over the

” ”

World...everyone’s

heard of

cu-icar.

Elkouh admits he had not been fully aware of the scope of the academic/corporate partnership that flourishes at CU-ICAR, but as he and the ATW principals learned more, they found “it had a similar mission to ATW’s: to interact with academia and business.” In mid-November, as the automotive industry awaited news of a bailout, ATW announced they would locate facilities in Laurens County as well as on the CU-ICAR campus, offering a ray of hope for the economic woes that had leveled businesses in many different industries – not just the automotive sector. A few weeks after the ATW announcement, CU-ICAR welcomed another potential investor, Carbon Motors Corporation, a start-up company with plans to manufacture a vehicle specifically designed for law-enforcement. The E7 Homeland Security Vehicle, a muscular black-andwhite beast of a sedan, rolled onto the stage at the Carroll Campbell Graduate Engineering Center with its siren blaring and blue and red lights flashing. Its appearance was part of a multi-city tour to showcase purpose-built features such as an infrared camera for night vision and a built-in radiation detector. But perhaps what was more exciting was the news delivered by William Santana Li, chairman of the Atlanta-based company, that the company was considering locating manufacturing facilities and headquarters in South Carolina. Li doesn’t remember exactly when he first heard about CUICAR, but says he’s been following its progress since his first visit to the campus three years ago. Currently, Carbon Motors is 58

deliberating among six states with a decision forthcoming in the second quarter of 2009. While there is no formal agreement yet, Li emphasizes that no matter where they end up, he is keen to keep a working relationship with CU-ICAR. Eric Miller stood off to the side of the auditorium after the E7 presentation. He smiled and nodded as if opportunities like this came along every day at breakfast. Maybe not every day, but according to Miller, director of business development of the Upstate Alliance, though CU-ICAR is just a few years old, its reputation as a well-executed model of the academic/corporate partnership, is becoming more widespread. “I’ve been all over the world,” Miller says with a broad grin as he ticks off locations in Europe and Asia as well as across the U.S. “Everyone’s heard of CU-ICAR.”

Turning the Ignition These latest events and announcements add to CU-ICAR’s impressive and ever-growing corporate roster. As of mid-2008 CU-ICAR accounted for $225 million in public and private investment and the creation of 500 new high-paying, technology-oriented jobs. According to Vice President for Research and Economic Development Dr. Christian Przirembel, who was involved in the development from its genesis back in summer of 2000, CUICAR grew

their portfolio of partners organically out of a stepby-step process. The systematic approach began with identifying Clemson University’s academic strengths, then locating a property to be anchored by the academic unit and surrounded by buildable land to attract private sector investors. The next piece was to design a campus that invited interaction – not just in meetings but also informally – and then to put forth a dedicated effort to recruit partners. The project that Przirembel is quick to note, “started with no money and no land,” was able to break ground just three years later, due to the dedication to early recruitment. Now such names as AT&T, Timken, Sun Microsystems, Mazda, two Tier One suppliers, and Michelin and BMW (both sponsors of the endowed chair program), have put down roots on the campus.


Looking back at the evolution, Clemson President James Barker says that CU-ICAR can serve as a template for economic development in South Carolina. “It brings together the academic and research strengths of a research university, the public support of state government and the private support of an existing strong industry in the region. “None of these entities could have created CU-ICAR without the involvement and support of the other two,” Barker says. “But together we present a powerful statement to the automotive industry and to the world about what Clemson University and South Carolina have to offer.”

Revving the Engine

The template for economic development in concert with academic research is becoming more widely known as the CUICAR staff attends conferences all across the country and overseas. Most recently, Przirembel says he was approached at a conference for the American Competes Act at Oakridge National Lab by several people, including the President of the University of Tennessee, who confessed, “We shamelessly used your model to attract VW to Chattanooga.” He went on to add that Congressman Zach Wamp said it was the best model they had seen to bring research and automotive together. “I think it is well known in the auto industry,” Przirembel finishes modestly. Jim Morton concurs that the auto industry is indeed a small world. The retired Nissan and Michelin executive, now principal of Morton Consulting, believes that Clemson University had established a good name for itself in international circles that preceded the creation of CUICAR. His own connection to the Upstate made him aware of CU-ICAR when he was employed at Nissan, and he continues to bring some current clients to see the progress. “Michelin, BMW, Timken – these companies have an interest in CU-ICAR, and that is sometimes the best advertising, especially when (those companies) talk it up. If people are looking to have a certain relationship with a customer like BMW, they will look at ways to connect with them, and CU-ICAR is a great way to do it,” says Morton.

The Students

“It is a closed industry and word spreads quickly,” says Carl Flesher, CU-ICAR’s Global Business Director, who keeps his focus on long-range planning and marketing. “In tough times, strong marketing makes a lot of sense,” he says, adding, “I believe in smart marketing, asking, ‘What are the types of companies do we want to attract?’ The OEs are in a lot of financial trouble and their ability to maneuver is hampered, but a lot of smaller companies are the ones generating solutions that major manufacturers will be looking to in the future.” Flesher says his plan is to continue to look at industry trends and materials, to have a better idea of how to prepare students and build capability. “Marketing also means assessing ourselves and looking out five years to remain relevant,” he explains. To do so means taking a look at the academic component. He sees a basic problem in the decline in graduation of engineers and, “Their education – though good – is not prepping them to move into management.Those two needs are recognized by major companies.”

Michelin, BMW,Timken These companies have an interest in

-

cu-icar.

It is, apparently, being recognized by students as well. Flesher notes that there are 210 applicants for just 30 positions at the Campbell Graduate Center. Agreeing, Dr. Tom Kurfess, professor and BMW Chair of Manufacturing in the Department of Mechanical Engineering and Director of the Carroll A. Campbell Jr. Graduate Engineering Center, says that number is “amazing” and attributes it to the labs, equipment and faculty which he believes are unparalleled anywhere. Though Kurfess used some of his contacts to originally draw students such as John Limroth (now a third year Ph.D. candidate) who used to work for National Instruments, there have been plenty of students who have used plain old-fashioned research to find out more about the graduate engineering program. Chan Wong, originally from Malaysia, found out about CUICAR through the internet. “I was looking for a school to further pursue an automotive degree after getting my M.S. degree in electrical engineering at Tulane University.” Wong, also a thirdyear candidate, says he might even like to stay in the Upstate after graduating, “if possible, with an automotive OEM such as BMW,” though he doesn’t discount the possibility of returning to Malaysia to work with their own automotive OEM, PROTON, or at the academic campus they are building similar to CU-ICAR. To emphasize the torrent of activity, Kurfess says, “Every week we have a seminar or a speaker from the industry. We’ve had visitors from Toyota and Honda and have a memo of understanding with Nagoya Institute of Technology.” In Kurfess’ eyes, this translates to a head start in tough economic times. “Others want to duplicate us, but won’t be able to for at least a few more years.”

Driving, Not Idling

Snapping up a piece of the knowledge economy through the endowed chair program at CU-ICAR is a big proactive move to make to assist the local growth of the industry, according to Kurt Mueller, vice president of Chassis Systems ZF Lemforder North America. 59


“It is a great step in many ways and represents the maturity we’ve reached in the industry,” Mueller, who is based in Detroit, says, comparing it to ZF’s growth in scope with an increase in their business. “We started as assemblers and became a center of competence for design. CU-ICAR’s whole partnership with the state, the university and businesses to develop curriculum with suppliers and BMW in mind, is the right direction to go in now.” Elkouh sums up.“I’ve seen a lot of the parks that universities have put together, and I’ve never seen anything like this that has such a unified vision and ability to execute that vision. It’s really, really impressive.”

we started as

and became a

assemblers

center of

competence for design

ICAR: In BRIEf

In 2002, a unique combination of circumstances created a unique economic development opportunity. BMW was well established in South Carolina and wanted to expand. One in six BMW cars sold worldwide was manufactured in the state. Clemson University was interested in a university presence in Greenville, and 250 acres of suitable property was available along I-85. Clemson initially proposed to build a full-scale wind tunnel on its proposed site for research and development by the growing regional automotive and motorsports sector, including NASCAR race teams. BMW already had a wind tunnel in Germany and was not interested in another.The company expressed strong interest in a strong academic program to educate U.S. automotive engineers and create an environment to attract the company’s German engineers to the state. With an existing strong academic program in mechanical engineering and a critical mass of automotive and motorsports companies along the I-85 corridor, Clemson was in an excellent position to expand its degree programs to offer master’s and doctoral degree programs in automotive engineering. BMW invested $400 million in its manufacturing plant and received an incentive package worth $80 million from the S.C. Dept. of Commerce.The incentive package included $15 million for a new BMW Information Technology Research Center that brought several hundred new high-paying Research & Development jobs to South Carolina.The ITRC was the first BMW research facility to be located outside Germany. At BMW’s request, the S.C. Dept. of Commerce invested $25 million in funds for construction of Clemson’s Carroll A. Campbell Jr. Graduate Engineering Center (CGEC) next to the BMW ITRC on the I-85 site. BMW invested $10 million, matched by $10 million in SC Centers of Economic Excellence (CoEE) funds, for two Endowed Chairs in the new automotive engineering graduate program. Clemson subsequently added two more CU-ICAR CoEE Endowed Chairs with support from Michelin and Timken.Timken subsequently located a second R&D facility on the campus, bringing several hundred additional R&D jobs to the state. Total public and private investment in CU-ICAR to date totals more than $200 million. By 2008, the four Endowed Chair positions were filled, six junior faculty were hired, and Clemson’s new graduate program in automotive engineering had 55 master’s and doctoral degree candidates enrolled in the CGEC.The graduate program will ultimately accommodate 100 students. A number of other partners have joined CU-ICAR; a full list is available at www.cu-icar.com.

CU-ICAR

by the Numbers $215 million+ Total public and private investment 38 Partners 500 Jobs generated 10 Faculty 4 Endowed chairs 55 Graduate students 15 Countries represented by students

3 Countries where students are

currently completing internships

250 Acres

Information provided by Clemson University


61


Business Black Box

by Alison Storm 62

May/June 2009


the

pros & cons

OUTSOURCING of

What does celebrity Jessica Simpson have in common with an old Spartanburg carpet factory? The answer: Votivo candles.

A recent issue of Marie Claire featured an article listing 40 things you don’t know about Simpson. Number 39 divulged her passion for red currant-scented Votivo candles, handmade by Spartanburg-based Grace Management Group, claimed as one of Oprah’s favorite things and even found in Madonna’s home. various factories to find the best bargains. That move has paid off big time. For example, one small metal decorative detail on the Votivo candle used to cost the company 50 cents per candle. Hall was able to outsource the piece and cut the cost dramatically. “We went from 50 cents to two cents per package just by making a switch. It is a significant difference in the margin for a company like ours,” he says. “That was a real good day.” Seeing the $avings Robert Chandler describes his whole business as helping other companies survive. And he does that by helping them find opportunities for outsourcing that translate into big savings. He’s the president of The Initiative Group’s Global Sourcing Division. What that means is that he helps multi-million to billion dollar companies find low-cost manufacturing solutions. “Generally if we can’t save them at least 15 to 20 percent off what they’re doing it’s not worth them making the change,” explains Chandler. But in some cases he’s saved companies 50 percent off their manufacturing costs by moving operations to Mexico, China or Japan. One of Chandler’s clients is Fuji Film. He has helped to pinpoint cheaper ways to manufacture injection molded plastic parts in products like disposable cameras. He says ultimately it means consumers pay less for a superior product. “It’s been able to help Fuji reduce their costs and be more productive as well as more strategic,” says Chandler, three things that are extremely

May/June 2009

Business Black Box

Grace Management Group set up shop in a former carpet factory five years ago, but they’ve been around much longer, according to Product Development Manager Johnnie Hall. “[Our company] started as a nursery and was seasonal,” explains Hall. “[President Bob Caldwell] tried to figure out another way to generate income in the off-season. He created sachets.”Those little scent-filled envelopes launched what would grow to encompass several brands and dozens of product lines including reed diffusers, hand soap and fragranced aerosol sprays. Around 350 people work in the fragrant factory on Pine Street in Spartanburg. Workers hand-pour wax into molds, carefully straighten wicks, and even wrap each Votivo candle in delicate tissue paper. The company knows it could save a lot of by moving manufacturing overseas, but fear they’d lose the quality their product lines are known for and possibly some of the tightly-kept secrets surrounding their fragrances. “We feel like the thing that makes our brand one of the best is the quality of our fragrances,” says Hall. “We’re able to keep that quality up by keeping manufacturing here in the United States.” But in order to stay competitive among a crowd of candlemakers, Grace Management Group outsources some product packaging to China. Hall says the company’s president saw the benefits of sending some work overseas early in the company’s history and has spent the past decade forming relationships with Chinese contacts. “At first they went over there cold turkey and found an interpreter,” explains Hall. Eventually they made connections and were able to hire a full-time China-based worker that gathers price quotes from

63


important when trying to remain competitive with film-giant Kodak or what Chandler calls “pirate, no-name disposable cameras that offer a low price but don’t try to meet the same quality requirements.”

Hall says outsourcing overseas is a practice that is hard to hide since companies are required to mark their packaging with the phrase “made in China.” “There’s a struggle because you want to be a ‘made in the USA’ company, but it’s about staying viable,” says Hall. “If you can buy the same thing at Wal-Mart than at Haywood Mall, why not go to Wal-Mart if it’s cheaper?” Hall says while it’s tough to send any work outside U.S. borders, it would be more difficult to be forced to shut down because of an inability to compete. “Our price point would be different,” he says, “which would end up hurting our company and the jobs we are able to provide here.” Hall believes consumers wouldn’t pay what his products would cost if they were completely American-made. Unless, of course, you’re Jessica Simpson and obsessed with the Red Currant Votivo.

Not Just A Corporate Opportunity But you don’t have to be a huge company like Fuji Film to take advantage of the benefits of outsourcing. Even small businesses and non-profits are looking to outsource as a way to cut costs. Jill Vales, President of Greenville-based JMV Management Services, says her business has picked up substantially because of companies looking to outsource human resource positions and financial management services. “People are a company’s most valuable assets, but compensation is also your biggest expense,” explains Vales. “The biggest way [outsourcing] is going to affect your bottom line is if you were paying a full-time person, and you can go to a part-time basis.” For • Use a local contact with outsourcing instance, with human resources, Vales expertise to find out if it’s something that suggests delegating non-critical items to can save you money. someone else in the organization and then outsourcing more complex tasks like • Obtain customized proposals from at least two compensation management, terminations, firms to ensure you’re getting the best deal. recruiting, and legal compliance. Vales warns against outsourcing your • Research the firm’s reputation: are they true product or key functions. Don’t a trusted firm, or just an unemployed outsource any services that would affect professional between jobs? the quality of the product you offer,Vales says. If you do layoff employees and opt • Be prepared to make quick decisions to instead to outsource the position, make react with the changing market. sure you’re open with all remaining staff members. “It’s very important to spend • Communicate openly with current time communicating with the employees employees about company changes. that are left,” she says.“In some cases they may have to pick up additional duties.” • Don’t outsource your core expertise or product.

Business Black Box

Quick Outsourcing Tips:

64

SOUNDOFF: We asked a few Upstate businesses to tell us what the benefits of outsourcing were. Here’s what they told us:

“I currently outsource all the work a normal Administrative Assistant might tackle, and I’ve just recently outsourced all of my telemarketing as well. Outsourcing has been a huge benefit to me personally and to the growth of my business. Rather than paying for more office space, computers, telephones, payroll, benefits and all the office supplies having an in-house staff requires, I’m able to reinvest that money back into my business. I only pay for the hours I need. It’s truly a much more efficient way to run my business. Having employees in other areas poses another set of distinct advantages. First, I can choose from a much deeper The “Un-American” Outsourcing • Focus on outsourcing processes that add to employee pool, allowing me the luxury Paradox your bottom line. of picking the absolute best people But outsourcing experts agree—it’s a available. For example, I actually have practice that’s becoming more common and more necessary. “Outsourcing has become a major structural two Virtual Assistants. One is in California and the other in India. tool for companies to help stabilize business in a world of fast and Having someone on the West Coast is great because it effectively unpredictable changes,” says the Chairman of the International adds three hours to SellPhone Marketing’s “hours of operation”. If Association of Outsourcing Professionals, Michael F. Corbett. “For I have a project that needs to be done after six p.m., I can forward some it has become a tool for leading that change; for others, it is that to Kim in California and I know she’s still working...it’s only a means of adapting quickly to changes imposed upon them.” But three p.m. on the West Coast. Likewise, if I have data processing work that needs to be done, there is still a stigma attached to outsourcing, especially when it I can send that to Prasad, my Virtual Assistant half way around the means sending American work overseas. Several companies contacted for this story refused to comment world. While I sleep, he’s hard at work putting my research together for fear they would appear un-American when revealing their for me so that I can be ready to go first thing in the morning. I outsourcing practices. Chandler says many of his clients want to have impressed many clients who gave me a “last minute” project remain anonymous. “A lot of our customers want to outsource or at 6 p.m., and found the finished proposal in their email by 6 a.m. want to use the services discreetly because of a push to be American- Prasad is a great example. He has an MBA and is vastly overqualified for most of the work I give him. However, because of the economic made,” Chandler explains.

May/June 2009


minute” project at six p.m., and found the finished proposal in their email by six a.m. Prasad is a great example. He has an MBA and is vastly overqualified for most of the work I give him. However, because of the economic situation where he lives, he is wellpaid at $3 per hour. I couldn’t POSSIBLY afford to pay someone here $10 to 12 per hour for some of the larger projects he can handle in a quarter of the time and for one-eighth of the cost. In fact, before hiring him, I did all that work myself and would get three or four hours of sleep a night – I was so busy working in my company, rather than investing that time and energy working on my company.” Jay Handler President SellPhone Marketing “The added pressures of a harsh economic climate that has forced many businesses to lay off workers and do more with less have provided little relief. But professional employer organizations, which are essentially outsourced human resources, are flourishing in this climate by offering small businesses the chance to outsource their headaches and save money at the same time. Human resources outsourcing in a down economy is something that gains a lot of attention because part of the value proposition is some reduction in costs, whether that’s hard costs or soft costs. Very few people got into business to deal with employee administration, and part of what a professional service employment organization does is enable them to focus on their core business.” Michael Murray Broker/Agent First Place Employer Services

65


SPOR

66


In the Upstate, you can ORTS find sports fans around every corner. So, why do franchises struggle to survive?

To borrow from Lance Armstrong, seven-time winner of professional cycling’s best-known event, the Tour de France, and one of the United States’ bestknown professional cyclists, “it’s not about the...

May/June 2009

Business Black Box

by Heather Magruder

67


BIKE .” Armstrong, whose former teammate George Hincapie lives in Greenville, used that as the title of his book about his cycling career and his battle with cancer, but it might also be used as a central point in any discussion of the big business of sports in the Upstate of South Carolina. Here in the Upstate, it turns out that the business of cycling is, indeed, not about the bike, despite the presence of the U.S. Pro Cycling Championships and a number of other big cycling events. Here, the business of baseball is not about the bat and the ball, even though one of the Upstate’s cities boasts a professional baseball stadium right downtown. Here, the business of sports is not truly about any of the goalposts or any of the other balls or pucks you might find in an arena or stadium, or on a rink, pitch or a gridiron.

the added twist that it’s not just about itself – meaning that you don’t develop the big business of, say, baseball, by focusing on baseball. Because we have no major-league teams who are resident, and so no huge-name players to follow and therefore (with the obvious exception of college football) no loyalty or tradition on which to base any team’s success, making a successful business out of any sport requires attention to some extra details. Success derives from a big dollop of athletics, yes, but also from a slathering of politics, a smattering of public/private partnership, some consideration of timing and, perhaps above all, a great big helping of entertainment.

#1:

It’s about RULE

entertainment

“It’s not just about

itself...”

The Upstate region has or has had just about every sport you can think of – baseball (at a couple of different levels), arena football, basketball (men’s and women’s), soccer, rugby, ice hockey, college football and professional football, if you count the Panthers’ training camp. Just the same as it is anywhere you go, the business of sports here is interdisciplinary, requiring an understanding of all the standard issues that face any business – management, marketing, developing clients, information technology, accounting, ethics, and so on. But the sports market in the Upstate dictates

Some folks have learned this the hard way. Greenville Grrrrowl owners, for instance. Byron Rucker recalls the start of the pro ice hockey team in Greenville in 1998. “There was the curiosity factor. There were a lot of people who grew up in the Northeast. We made it entertaining and loud,” says Rucker. Then there was the venue: the BI-LO center was the result of one of the largest public/private partnerships ($64 million) in the region, and it sought to involve as much of the local community as possible. Sports seemed a natural fit. The first year’s attendance at Greenville Grrrowl games, which was record-breaking, seemed to affirm the hunch that hockey and the Upstate were a great match. Encouraged by hockey’s success, Scheer Sports quickly added an arena football team.Then basketball. Soon, Greenville had hockey, basketball and arena football all under one roof, with one owner. “Taking on two other sports (after hockey) seemed to make sense,” says Carl Scheer.“We were thinking in terms of economies of scale.” And then the Grrrowl won the championship – the Kelly Cup – in the 2001-02 season. “We thought season tickets would bounce off the shelves,” Rucker says. But they didn’t. That was the first clue that it wasn’t just about hockey. Or arena football. Or even basketball. All three of the teams drew good crowds at the start. All three of the teams seemed to be on the path to success. All three, within eight years, closed. “We realized that, at that level, it didn’t matter if you win. It’s about entertainment,” Rucker says. His advice to that end is simple. “With football and hockey, we made a mistake by putting everything out there the first year,” he says. He recommends holding something back for years two, three, four and beyond. The Grrowl shuttered in 2006, following the Groove’s close in 2003. By the end of their third year, the Rhinos could see that they should take the option of getting out of the league without the financial penalty.


It’s about #2: building RULE

the brand

So it was that the Upstate had a plethora of professional sports one year and then not so many the next. Since then, colleges and private businesses have learned a lot about the intersection of sports and business. At USC-Upstate, sports and the fans they attract are not used for themselves, but as a way to provide a public relations benefit for the university. Athletic Director Mike Hall says last year’s move to NCAA Division I was a bold move for the university, which was approached by the Atlantic Sun Conference around three years ago, in part because of its location amid a hotbed of economic development along the I-85 corridor. The way Hall sees it, it doesn’t matter so much whether the teams win – the leap to NCAA Division I has drawn an increase in local fans, created a huge surge in media coverage and helped make USC-U more of a contender for students in higher education. “All of that is helping get the name of USC-U out,” says Hall. And that is the business that USC-U is really about. In other words, they’ve got one eye on the ball and one eye on providing something that is a bigger draw than just the sport itself. Other teams in the Upstate – some older and some newer – seem to also have the sense of having one eye on the ball, or the bike, as the case may be, and one eye on the entertainment, yet still keep their sights on what to pull out of the bag for the future. But success doesn’t have to lie in an actual competition to draw fans. The Carolina Panthers Training Camp at Wofford College in Spartanburg is successful because it has something for just about everyone. In addition to being able to watch practice sessions for free, kids can be part of the Panthers Experience and Panthers Pals, a combination of entertainment, skill building and one-on-one time with professional players. During the dog days of summer, this is the perfect entertainment for kids who need to get out of the house (and parents who want to get them out) and – even more important – a perfect launchpad for loyalty in later years.

RULE

#3:Here, it’s

about family On a smaller scale – specifically a Class A, South Atlantic League scale – one of the Upstate’s newer endeavors, the Greenville Drive, seems to be meeting with success, so far.

FROM To locker BOARD room room In any business, there are things that must be done immediately, and others that should be done constantly. Here, Main Street Events’ Executive Director Byron Rucker (former GM of three Upstate sports franchises) gives tips on how to manage a start-up business as well as which cards you should play your first year and which ones you should keep on hand for smart play in future years.

where to start • Build your team. Build a team that shares your vision and enthusiasm for your mission; don’t let it dwindle! Your clients will draw off your attitude too, so if you’re excited they will hopefully pick up from that. • Communicate well and often. Communication— especially initial communication—is key but can be tricky. One area this is most evident in is opening promotions. While you want to run promotions to draw people to your business, don’t cheapen your products or services (or yourself) by making the deals too great— consumers will think you don’t value what you have to offer.

to promote your business. Sit down and say, “here’s what we need to do to get started and be solid.” • Compile—make a list of everything you have that screams (or even hints at) potential: the “what ifs: well, what if we did this, or what if we added this, or what if we did that.” Basically, list anything that will help market your business. • Separate—Take all of the ideas you’ve put together and split them into two lists: “Year 1” and “Following Years.” Take 75 or 80 percent of these ideas and put them into a list you can file away for a year or two or three down the road. • Focus—During your first year, put all your effort into making your business what it’s meant to be. No amount of advertising or promotions can compensate for poor service. • Rejuvenate—Here’s where years two, three, four and beyond factor into the equation. Remember that list from the brainstorming stage? It’s time to implement some of those great ideas you wanted to use during year one that you held back. Pulling from the idea pool will be especially helpful if creativity is at a temporary low.

what to save for years to come • Brainstorm—come up with as many ideas as possible 69


65years.

Providing design integrity, insight, and innovation for over

Freeman & Major

Zen Greenville

A contemporary event place in an historic West End warehouse

864.672.0202 • One McDaniel Greene, Greenville, SC • www.FMARCH.com 70

A Signature Architects LLC Company


“We thought we could have a successful product,” says General Manager Mike deMaine. “We are in a sport with a long tradition. We have a ballpark downtown. We’re what people like to do during the summer.” DeMaine and his team have eyes on more than just what happens in the park, though. “We focus on what Greenville’s about,” he said, and that’s not baseball. Even with its rich, textile league baseball history, the success of a baseball team in the Upstate depends on more than good ball playing. The way deMaine sees it, Greenville is, in large part, about family. “You’re not going to see us do things that go on at other parks…we keep the focus on family.”That focus includes pricing, entertainment value, and even the way the park is set up – with a family playground on one side and the bar area on the other. The Drive even keeps their catering in-house to keep prices reasonable. “Our most expensive tickets are still cheaper than going to the movies,” deMaine says.

about #4:It’s partnerships RULE

In addition, a sense of partnership with the city has helped. DeMaine cites the ease of working with the city manager, the Chamber of Commerce, the West End Neighborhood Association and the mayor all as assets. That partnership component is echoed in other sports – even ones that are still thought of as being more European, like cycling. Andy Lee at USA Cycling notes that when USA Cycling was considering moving the U.S. Pro Championships from Philadelphia, where it had been for 20 years, cooperation was a key consideration. “Local government, police agencies, the sponsoring organizations like Greenville Hospital System have been wonderful all around,” he says. The fact that George Hincapie makes his home here, and that the Upstate boasts strong cycling communities and clubs (like Bike Town Spartanburg, the Freewheelers, the Greenville Spinners and others) helped because they implied a strong general fan base. Lee notes that, although those were considerations, one of the key components to making the U.S. Pro Championships a successful event is Medalist Sports’ development of ancillary events to make the weekend have broad appeal. “The M.O. for cycling is ancillary events to attract the casual fan,” Lee says. Those events might include everything from the typical food, drink and music found at city festivals to kiddie bike races and fundraising rides like the P3, Palmetto Peloton Project. So it is for just about any sport here in the Upstate. Whether you’re dealing with the kind of sport that has its roots planted firmly in the historic soil of our textile communities or you’re tapping into new, traditionally European or northeastern sports, the message is the same: know the basics of business, the fundamentals of the sport and your community, but above all, seek to entertain, entertain, entertain.

71


Black

b o x measure of success

{

international business in the Upstate

Evaluating our glob al impact aRe our Upstate Exports matching our global imports?

International Manufacturers/ Distributors in Upstate Counties

Data provided by Upstate Alliance. Companies represented in data were chosen based on where the parent company is located.

When examining the global impact of Upstate S.C., we wanted to look at two different points of view – our imports (here, the countries and cultures represented through our Upstate manufacturing and distribution companies), and our exports (college graduates with the evergrowing “International Business” degree). As you can see, the numbers paint quite a picture of what our International business looks like.

International Business Degrees, by institute

Business Black Box

*Note: Colleges/Universities not represented do not have an International Business Degree program. As USC-Upstate does not have such a program, UCS was substituted for this report.

72

May/June 2009


measure of success Black b ox

Upstate International Manufactu rers/Distributors, shown by Country Represented 75

19

15

28

6 11 2

2

2

1 UK

Lu

xe m

bo

an

rea Ko

Jap

Ita ly

2

an

1

16

8

Ta iw

lgiu

2

nd s Slo ve nia So uth Af ric a Sw ed en Sw itz er lan d

2

r la

1

urg

1

the

3

Ne

1

m Be rm ud Ca a na da Ch ina De nm ar k Fra nc e Ge rm an y Gr ee ce Ho ng Ko ng Ire lan d Isr ae l

2

Be

Au st

ria

3

25

Data provided by Upstate Alliance. Companies represented in data were chosen based on where the parent company is located.

Total Overall Degrees Granted, by institute

73


101 DAYS

2,424 hours

145,440 MINUTES

8,726,400 SECONDS

When Innegrity CEO Brian Morin decided to take his company to the next level, he never expected the changes that he’d see within just a few months. We followed Morin for 101 Days – documenting the many ups and downs – and here’s what we saw... Hurdling towards disaster OR conquering the mighty competition.

74

the PERSON

the PLAN

the PURPOSE

Brian Morin is CEO of Innegrity, a high-performance fiber manufacturer located in the Upstate, currently developing applications in the ballistics, marine, rope, automotive, and sporting goods markets. In 2004, Morin quit his job and began doing his first experiments a few weeks later in a small lab. For 18 months he created fiber manually, producing about a pound an hour. Morin started the company in 2004 and in 2008 had already hit $1 million in revenue. Today, Morin still heads Innegrity, with the unchanging focus to provide high-performance fiber for everything from surfboards to Formula 1 racing cars.

I began tracking Morin following a press conference announcing that Innegrity planned to move from its location in Greer to a new, 120,000 square foot operation in Mauldin. At this point, Innegrity had commissioned a $2.5 million machine to be built by Reimotec in Germany – all on good faith that the money would have come in by the time of payment. However, after two funding sources fell through, Morin is late on payments to Reimotec for the equipment. At the same time, a number of partnerships are in the mix – one, ironically, with Reimotec to create Innegrity Europe GmbH – a European arm of the company. A second is with a company located in Canada – to provide the same sort of partnership on a North American level. Finally, Innegrity is working out a partnership to create e-fiber – a fiber used in high-frequency circuit boards to increase speed and efficiency of high-speed electronics.

With this move serving as a trigger, Morin hopes that their growth will soon parallel their new home. There are many partnerships and possibilities in progress that could catapult Innegrity into a multi-million dollar business seemingly overnight. But like any other business, Morin faces the typical problems – staffing, sales revenue, financing, board conflict and resolution, and customer service. Although he is well-positioned to take the market by storm with a product that costs a quarter of what his competitor’s does, they still have a longer record of experience, and a much higher financial net. Still, Morin is optimistic. “The demand is high enough that we won’t have a problem,” he says.

May/June 2009


Day 2: A local news station gets the story wrong; the news report shows footage of a torn-down open shelter when referring to the new building. Morin laughs it off, saying “I don’t know how we’ll fit all our machinery in there, but apparently, that’s where we’re moving!”

Day 5: I met with Morin today to discuss some pressing issues. Most important is the status of the new machine from Germany. The machine, a $2.5 million cost, had been built on good faith by Reimotec that it would be paid for upon completion. Unfortunately, two major contracts under Innegrity have been delayed, and now Morin is negotiating with banks for the funding. Earlier this morning, Morin received a call from the manufacturer, who told him they’d be meeting with their board in five days to discuss the Innegrity account, with the probable end result of dismantling the machinery and putting Innegrity on a blacklist for cash-only purchases. “A lot will fall through if this falls through,” says Morin, who is in the process of negotiating funding through a few different sources.

A lot will fall through if this falls through.

This move will markedly expand our technology and manufacturing facilities in Greenville County. The expansion will help us meet growing customer demand and build a world-class, high-performance materials company.

Day 1: A press conference held today announced Innegrity’s acquisition of a new building in Mauldin. The building, at 120,000 square feet, will allow for what is being reported as 150 new jobs to the area over the next three to five years. The building is part of an anticipated $15 million investment by Innegrity. A release from the Greenville Area Development Corporation quotes Morin as saying: “this move will markedly expand our technology and manufacturing facilities in Greenville County. The expansion will help us meet growing customer demand and build a world-class, high-performance materials company.”


Black

b o x101 days Day 7: Round one of funding materializes – a bank loan in the amount of $1.4 million, provided that Innegrity can find equity in the amount of $800,000. After much discussion, the board agrees to back the financing of the machinery from Reimotec.

Day 20: Morin works to finish up all paperwork and send revisions to the attorneys. Unfortunately, instead of everything being finalized, there are still gaps in the agreement that will keep it in limbo for a while longer.

Day 9: I sit with Morin again in his office, as a smile spreads across his face.This morning, the equipment from Germany began its long trek over the water. It will take almost six weeks to arrive, and will go straight into the new building. Once in place, what he used to create in an hour on the old machine can now be done in one-third the time. Still, all things come in balance – also this morning, an employee, let go earlier this month, has threatened to sue for wrongful termination. Morin, who has been through more legal battles in the past year than an entrepreneur should have to suffer through, is ready for another call to his lawyer, but says he hopes it “won’t materialize.” He has also made an offer to a local competitor’s plant manager to become their Director of Manufacturing. In hopes he will accept, Morin estimates that he’ll begin his career with Innegrity within the next month.

Day 22: After visiting another fiber manufacturer in Germany, Morin goes back to Reimotec to discuss the business end of what will be Innegrity Europe GmbH, instead of the legal issues, which thus far have dominated the conversation.

Day 12: Morin has a call today with another employee regarding their performance. He is hopeful, but not convinced, that it will turn around. If not, it may mean another firing (and another lawsuit?).

Day 16: In preparation for a trip to Germany to visit with Reimotec (whom Innegrity has a plan to partner with to build Innegrity Europe GmbH, as well as the company who built the machinery for Innegrity earlier), Morin sends over the contracts to speed up the negotiation process.

Day 19: At 2 p.m., Morin arrives in Absteinach, Germany (south of Frankfurt), to discuss the details of the possible deal with Reimotec. He has taken one of his board members, Kurt Herwald, with him. Immediately, they note that things are very tense. “Several of the terms in the contract were ambiguous, and it looked like we were triple-charging them, and not giving them the rights they were promised,” says Morin. After four hours of clarification, Morin holds a conference call with his attorneys. They point out a conflict of interest. Out of this conversation, a two-page list of permissions is created for the General Manager (as well as the General Manager of Innegrity Europe GmbH). At 8:30 p.m., the group goes to dinner. Over dinner discussion, it comes to light that the German company had several multimillion dollar machines sold to U.S. companies that were delayed by financing and put them more than three months behind. This explains the threats to dismantle machinery, as well as some of the tension in the negotiations.

Day 23: Morin boards a plane bound for home.

Day 41: A two-hour conference call is held with lawyers for the Canadian deal. About six weeks ago, the lawyers for the Canadian company said they had to rewrite the contract. Morin is skeptical. “Their lawyers saw a big deal about to happen and wanted to get more in fees,” he says, cynically. Today, he will focus on reexamining the contract to turn it around quickly.

{

Day 44: The contract for the Canadian deal is finally in place, and has been sent back to the lawyers for the other company.

Day 48: I met with Morin today at the new building. It is still empty and a vast amount of renovations are in progress, but overall, the space is impressive. The warehouse will allow a great amount of expansion for Innegrity, and the office space allows for personnel growth as well. The 120,000 square foot location is a far cry from the 7,000 square feet in the current building. Morin tells me that the estimated move-in date is in about three weeks. The plan is to get the new machine from Germany, which has been on the water for a little over a month now, and set it up in the new location. Once it is in place and producing, the machinery at the old location in Greer will be shut off and moved, piece by piece. This allows Innegrity to never stop operations for such a large move, and never to go one day without having something manufactured. Because, as Morin says, “even though it’s only a 10mile move, you never know what can happen!” The entire move should be complete within two months. Day 49: Today, Morin will be examining the current sales force. After a few personnel changes over the past months, it is necessary to get high-performing (and high-selling!) people in place, quickly.

76

May/June 2009


{

101 days Black b ox

Day 61: Morin is at the IBEX Boating Show in Miami. The Innegrity fiber can be used for durable nautical ropes, and while the trade show is evidence of the oncoming recession, Morin’s goal is to focus on the high-end customers who are “recession proof.” An email he sends today says: “Terrific trade show, and looks like we’ll be sold out forever…”

Day 63: Morin jumps from Miami to Washington D.C. for a ballistics trade show held by the U.S. Army, where they will show the Innegrity fibers’ capabilities – with better ballistic performance in certain situations than standard Kevlar, and far cheaper. Military usage for this type of product could potentially skyrocket Innegrity fibers. One of Innegrity’s reps scouted out the trade show before Morin arrived, and with a focused effort, they had follow up meeting scheduled with all of the “big players” at the show within four hours. They also scheduled time with the Canadian firm and the composites distributor to update them on Innegrity.

Day 66: In the continual fight to build a strong sales force, Morin hires a full-time sales rep, Alison Russell, who has had previous experience with local Upstate company ScanSource.

Day 72: The Innegrity Board holds their first meeting in the new offices. There’s no furniture – just an open conference room. They discuss the end of the third quarter, and fortunately, there is nothing major to report at this time. “No agenda, no filibusters,” Morin says. “It was a very simple meeting.”

Day 84: Today begins the High Performance Fiber show in Charleston, S.C., where Morin will be presenting to a group of 200 people on his work in high-performance fibers. Though he says “this show is always so awkward,” it will allow him the opportunity to visit with the majority of his customers, face-toface, in one week. Over the next three days, Innegrity will cultivate a partnership with a rope manufacturer that will be the beginning of a longterm sales agreement – generating $20 million over the course of five years.

Day 91: I met with Morin today to discuss his recent investment in an advanced fiber Center of Economic Excellence at Clemson University. He and his wife, Mandy, donated $250,000 to the center’s endowment in hopes that it will foster more growth in the specialty. A release from Clemson quotes Morin as saying: “There is no better place in the world in which to develop advanced fibers than in South Carolina, where the infrastructure and talent are so ingrained through our rich textile and fiber heritage.”

Day 100: The Canadian contract has come in. Everything put into the first drafts of the contract has now changed. It will take a lot of scrutiny, and likely many more rounds between lawyers, to hammer out the final deal.

Day 101: I meet with Morin for the last time, talking about the changes he’s seen over the past days. Looking back, Morin is astounded at the growth his company has seen in a little under four months. “Before we got our investment [to pay for the machinery] we had a small little company who didn’t have the money to do things right,” he says. “A lot of this was fixing things that were broken – or had been broken for a very long time, because we didn’t have time or money to fix them.”

Today, there are three very large partnerships in the mix – one is finalized, and the other two are drawing to a close. There are more possibilities for contracts and partnerships than Morin himself imagined at the beginning.

Day 56: The first of the machinery is placed into the new building.

Today, there are three very large partnerships in the mix – one is finalized, and the other two are drawing to a close. There are more possibilities for contracts and partnerships than Morin himself imagined at the beginning. And of course, the new building, the trigger for this whole adventure, is now outfitted and inhabited; and although the space might be hard to get used to at first, the opportunities for expansion are more than evident – they are obvious.

May/June 2009

Do you have a business venture that you would like us to track? Drop us a note and let us know more: www.insideblackbox.com

Day 51: The new machine from Germany docks in Savannah. Providing it clears customs easily, it should be on its way to the Upstate soon.

77


Black

b o x kidbiz by

tony

snipes

Tony Snipes is Director of Redemption Marketplace Alliance, a Greenville-based entrepreneurship training program, where he utilizes a unique combination of years of leadership experience in the corporate arena with ministry experience in the community. Tony has spent over a decade as an internet publishing and advertising expert, helping clients for news media companies such as the Greenville News, The St. Petersburg Times, and News Channel 7 WSPA. Tony’s three daughters offer him a unique perspective that he brings to KidBiz.

3 steps to growing

Your Own Entrepreneur What’s the benefit of giving your child an allowance? Although most parents may not admit it, many would agree that it is a method where we don’t get nagged by our kids when we’re at the store. It’s our opportunity to say “you can buy it yourself out of your allowance money” when they ask for those extra things that they always ask for. So what have they learned with the allowance process? That money still comes from mom and dad? That if they want something, they should wait until the next automatic “parent payout” comes around and they can get it? What if they want something that the regular allowance doesn’t cover? The well-meaning parents give their son or daughter an allowance so that they will learn how to be responsible with their money. Let’s take that lesson of responsibility to another level that connects with your child’s natural creativity and teaches them something that can actually last through adulthood. Teach your child to be a young entrepreneur. Teaching your child the principle that if they want something, they can use their own resources to gain it will be a priceless lesson that will last a lifetime. The most interesting thing about the process you’ll find is that you very seldom have to sell the child on the concept, especially with the promise that they can use the money the way they want to.

First, stop the allowance. If you haven’t already gone down this road with your child, GREAT! You’re in the clear. If you already have, it’s OK. Simply meet with your young entrepreneur and let them know that this will give them a chance to earn more than the set allowance rate you gave out each week.

Identify your child’s gifts, talents and passions. Selecting a

Business Black Box

business idea for your child to launch in order to earn their own money can be fun for them, especially if it’s related to something that they like or are really good at. Two of my three daughters earned some of their own Christmas money by making and selling their own jewelry at a local craft show. They had a blast just making the jewelry anyway, but it was even more fun when people bought what they made.

78

Feedback Brainstorm, advise and weigh in when you visit InsideBlackBox.com/KidBiz. May/June 2009


kidbiz Black b ox Let your child decide on the entrepreneurial venture. This is the temptation that I wrestle with most.You may know what idea would be the best for your child to earn money from, but the key is to recommend, advise, then let them decide. The main reason for this is that your child will be more bought in to the concept if it’s “their” idea rather than something their parents have them doing. Keep in mind that this business does not have to be long term, but rather something they try out and repeat if it works (or if they like it). If it isn’t a success, it’s OK. They can move on to the next money making idea. Regardless, you’ll be proud to watch your young entrepreneur making decisions through their new business experiences.

4 new entrepreneurial ideas for your kids to try: Mother’s Helper– Not quite babysitting, but close. The young person helps a mom with her baby or toddler by helping to keep an eye the baby allowing the mom to get other things done. Can also play with the child to keep him/her entertained. Neighborhood Car wash– This is a good idea where friends can pitch in and help. Promote in the neighborhood throughout the week then perform on the following Saturday. Plant Sitting– Helping a neighbor out of town or even helping an office building or bank by inexpensively providing water to their plants. Launch a Blog– Your child can write a blog that reviews a book, or better yet, a new toy. Money can be made by serving ads on the site from Google’s Adsense program.

Is your child a budding entrepreneur? Whether it’s a lemonade stand, petsitting service or something totally outside the box, we’d love to see them in action! Send us your best, funniest, most creative, or simply your favorite photo of your family’s KidBiz Whiz.

Be sure to include: Name Age Description of Biz (75 words or less)

Then, keep your eyes peeled! We might feature your up-andcoming entrepreneur right here in a future issue of KidBiz! To send your photos, visit: www.InsideBlackBox.com/KidBiz

What's your kid's "lemonade stand?" The lemonade stand is the classic symbol for kid entrepreneurship. You may have had one yourself. But not every kid gets excited over lemons. Here are some other ideas they might flip over: Dog walking Car washing Yard cleaning Pet sitting Selling on Ebay Creating designs for t-shirts, mugs or other items • Blogging with sponsored ads or affiliate links

Business Black Box

• • • • • •

Keep your eye on your young entrepreneur’s likes and passions, and this should help you identify their “Lemonade Stand”.

May/June 2009

79


Imagine if your business could have... • More energy, reduced stress • Lower insurance costs • Fewer injuries • Reduced WSIB/WCB claims • Less human error • Improved culture and morale • Less absenteeism & sick days • Improved productivity

...Simply by having healthier employees. CEO’s: Call today for a complementary risk assessment of your industry, your team, and opportunities for your own corporate wellness program, team workshops in stress management, nutrition and more.

BEGIN TRANSFORMING

YOUR ORGANIZATION from the INSIDE OUT...

Business Black Box

ONEAT ALIFE TIME.

80

864.420.2992 May/June 2009


are

people

hr Black b ox

your most

Valuable Asset?

During the best of times, we all tell our employees, our clients, and our business partners that “our people are our best asset”—and we really mean it. We know that the most successful firms in the world are those who hire top talent and maintain a culture that utilizes that talent to the fullest. During this recessionary period, holding on to and investing in our key employees is more critical than ever before. Over the past decade, we have experienced an unprecedented period of “good times.”You might argue that we hit a bump in the road during 2001, but overall, we have been blessed with a very long stretch of economic prosperity. During these times, we learned a great deal about how to become an “employer of choice,” how to screen and select the “right”employees, how to properly “onboard” an employee into our organizations to ensure their success, how to retain and develop top talent, how to recruit top Gen X’ers, how to manage and excite the Gen Y’ers, and how to best utilize the fastest growing talent pool—our seniors. Millions of dollars have been made by authors and trainers and millions have been spent by corporations to find the magic potion—all in an effort to gain, keep, and best utilize top talent. So here we are…in one of the toughest economic times that most of us have ever experienced.Yet, our new laser focus on the bottom line does not have to negate all that we have learned about taking care of Most businesses our employees. Most businesses will do everything w i l l d o in their power to prevent a layoff. We see many companies choose to implement a reduction in hours or temporary lay off rather than a permanent in t h e ir pow e r reduction in force. This alternative makes particularly to p re v ent a good sense if you feel that you may need to replace staff within three to six months and have invested a great deal of time and money in your employees’ training. So often, we see firms toggle between layoffs and hiring binges. But have you ever considered the cost of this type of decisionmaking? Long and short term costs include training and recruiting dollars, reputation, morale, intellectual capital, and client service disruption, to name a few. Time Magazine recently reported a study demonstrating that reducing staff to a four-day work week led to unexpected rewards in terms of higher morale, less absenteeism, and lower turnover. If a permanent layoff is the best choice for your firm, it is imperative to make communication with remaining employees a priority. Research has shown that “survivors” (the very marketable employees that you do not want to lose) suffer due to a layoff of their coworkers. Thus, it is critical for management to communicate openly and honestly with the remaining employees, so they understand the business conditions that led to the layoff decision and your compassion for those who were affected. If your firm values the survivors and wants to hold on to them, there is no better time to let them know. Let the surviving staff members know that you will continue to invest in their careers and that you plan to come out of the downturn in an even stronger position. (Legal note: Do not make promises of employment that could be later construed as an employment contract and violate the “at will” status of the relationship.) Though common sense would cause an employer to believe that survivors are happy to have their job and feel loyal to the company that has protected them, employees are often surprisingly loyal to coworkers. Survivors feel grief for their coworkers and often feel animosity towards the employer for their actions. Rebuilding morale and loyalty takes time, yet is so important to maintaining your key employees. The truth is that your best employees are also the most attractive to your competition. Oftentimes, companies will find that a round of involuntary layoffs will eventually be followed by a wave of employees who decide to jump ship to higher ground. Morale may not seem like a hard-driving business concept; however, emotions play a large role when an employee considers a job change. Those responsible for human resources in their firms have the opportunity to play a vital role during economic uncertainty. Communicating transparently, often, and with a consistent message at all levels is key to maintaining the morale of your employees. When has it ever been more important to protect our most valuable assets – our employees? After all, good times are surely around the next “quarter”!

by julie godshall brown Julie Godshall Brown has spent the last 14 years running her family business, Godshall and Godshall Personnel Consultants, Inc., which specializes in direct hire and contract staffing solutions in healthcare, legal, financial, accounting, technical, and other professional markets. Julie holds a Masters in Personnel and Employee Relations from USC and a Bachelor’s in Marketing from Clemson University.

everything

layoff

Brainstorm, advise and weigh in when you visit InsideBlackBox.com/HumanResources.

May/June 2009

Business Black Box

Feedback

81


Black

b o x global by

ravi

sastry

Business Black Box

Feedback

Brainstorm, advise and weigh in when you visit InsideBlackBox.com/Global.

82

May/June 2009

call for

Smart Measures The growth in China in the past 10 years has been unprecedented. China is still the most popular destination for foreign manufacturing investments on the globe – in 2007, it attracted more than $80 billion in Foreign Direct Investments (FDI). Still, the China economy continues to “overheat.” This “cancerous” growth (China’s average annual GDP growth in 2002-06 was 10.3 percent, while per capita GDP growth was 9.2 percent) comes with very high costs in terms of quality, efficiency, banking and securities controls, and geo-political fallout. In order to “cool off ” the economy, the Chinese government has implemented some stopgap measures over the past 18 months –some of which impact U.S. companies doing business in China. Wages. In Guangdong province, which has some of the lowest wages in the PRC, the average wage increased 25 percent from 2002 to 2004 and 17 percent from 2004 to 2006. The increased 46 percent does not include any burden (medical, meals, lodging, etc.)In other words, the largest resource in this country has increased its cost to 25 percent per year in almost every industry. Exchange Rate. The China RMB or Yuan was histor ically pegged to the U.S. dollar at a rate of 8.2865. In 2005, the currency was allowed to free float, and as of May 31, 2008, the exchange rate to the dollar was 6.9348 or, a 19.5 percent increase in value. This translates to a one percent decrease in profits of a local Chinese company fo r eve r y t h re e p e rc e n t devaluation of the dollar. Taxes. According to official statistics, as of the end of 2005, there were about 500,000 companies with foreign investment registered in China. Of those, about 330,000 had started operating. About 55 percent of the foreign companies operating reported losses between 2001 and 2004. In 2005, the figure dropped to 42.96 percent. It is interesting that while Chinese enterprises – including state-owned, joint-stock and private companies – have been making profits in recent years, nearly half of all foreign-invested businesses have been losing money.Yet while so many foreign enterprises claim to be losing money, China witnesses a continual rise in its FDI. According to a research report by the NBS on foreign companies claiming losses in China, two-thirds of them have “extraordinary losses.” Chinese officials believe many of these foreign companies are in fact using transfer pricing and other ways to reduce taxable income. In reaction, China is phasing out its practice of charging lower corporate tax rates for foreign-owned companies. Another key impact on the tax is Value Added Tax (VAT), paid when goods

Fact Check:

Ravi Sastry is president of International Innovations, a consulting firm specializing in American and Asian business and commerce. He has held senior management positions in international sales, marketing, logistics, and operations. During his 25-year career, he has lived and worked in 14 countries on three continents, forging strategic relationships with industry leaders like Bosch, IBM, McKinsey, Samsung and others.

tough times

The total wages for employees in China reached 2.34 trillion Yuan in 2006 from 1.32 trillion Yuan (US$309 million) in 2002 (minus inflation), according to the National Bureau of Statistics (NBS). The average annual wage of an employee reached 21,001 Yuan in 2006, up 70 percent by real terms from 12,422 Yuan in 2002, after deducting price hikes.


global Black b ox are used or made in country. This VAT is then refunded if the goods are exported. However, this is not a 100 percent refund; in fact, there have been three rounds of VAT rebate reduction since 2005. China’s rates of VAT rebate for exports comprise five levels – five percent, nine percent, 11 percent, 13 percent and 17 percent. On July 1, 2007, China adjusted the VAT rebate rates for certain exports. The most recent China reduction of the export VAT rebate has further impacted profitability of most companies. Risk Mitigation. These are some of the key economic effects that are a natural progression for a developing nation. However, as policies change, the consequences have a rippling effect on

many companies. In order to maximize on the cost advantages and mitigate the risks of a one-country strategy, as the PRC continues to make policy changes, understand the following alternatives. One of the major advantages of China’s development and influx of FDI is the maturity and depth of supply chain infrastructure that has been established. Many Western organizations are perhaps not “localized enough” to be able to optimize these supply chains. In difficult times, relationships become a critical factor to ensure one takes advantage of supply chain processes. Collaboration rather than individual activities brings

greater purchasing leverage by optimizing the supply chain relative to costs, lead times, and freight. Local knowledge is to know how to classify your products. Perhaps changing from fully built to “semifinished goods”, with finishing taking place closer to the end customers will allow the company to optimize on the VAT rebates. Companies that are already established in the PRC or are in the process of doing so need to have a “multi-country” Asia strategy. This means moving or establishing a presence in other parts of Asia, i.e.,Vietnam, India, while keeping the same strategy for lower costs and or proximity to markets. It is estimated that over 40,000 Hong Kong based enterprises have done just that.

Maybe the strategy you set three to five years ago did not come to fruition or conditions have changed so much that it is time to bring some of the operations/activities home and minimize the investments. Although China has intoxicated investors throughout history, it is neither the only nor the right answer for everyone. North America and parts of Europe (Eastern) are still very viable business investments for manufacturing and sourcing, depending on the margin sensitivity of the business. However, this strategic change should not be taken lightly, since investments in time, capital and resources have been established. The winds of economic change will shift again and to re-establish in the PRC will be very costly.

Business Black Box

May/June 2009

83


Black

b o x sales by

adam

Business Black Box

ocean

Selling

richael

Adam Richeal started his first company, Closet Tamers of Macon, at the age of 22 years. Soon, he was recruited to a sales position with Hardware Resources, where he was the fastest to break several sales records for the company – $1 million in 14 months – and set up more than 400 accounts in 18 months. Today, Adam is still with Hardware Resources after serving as Vice President for Carolina Closets, based in Anderson.

84

blue

I recently read a fantastic book entitled Blue Ocean Strategy by W. Chan Kim and Renee Mauborgne. In the book, the authors focus on winning by not competing – a strange and yet profound approach to business strategy. Instead of wading among your competition, they define a blue ocean as a market that has yet to be realized or created. A great tool, many of the strategies and principals dissected in the book directly relate to the future of the selling profession. The sales profession, like many others, is constantly moving and changing to meet the demands of our now flat world. However, there are principals and laws involving human nature and relationships that will never change. I was very fortunate to learn and begin practicing one of these never-changing laws early in my life. That law is very simple “Whatsoever you sow, that shall you reap.” The problem is the vast majority of salesmen are trying to reap where they have not sown. Think of this: When you go into a sales call, who and what is on your mind? Are you calculating your potential commission, going over your presentation (which just happens to be all about your product and what you think it can do for your prospect), checking to see if you brought plenty of brochures (inevitably destined to line the prospect’s trash can)? If you walk in the door with nothing to offer and nothing to sow, why are you surprised when you walk out the door without the contract? Now, by saying “nothing to offer” I am not talking about your “product offering” or “service value.” Everyone, including your competition, has that. Instead, blue ocean selling is becoming a partner and a consultant to a prospect before you get the first sale or contract from them. You are sowing your hard work, time-consuming research, and hard thinking into them before you ask for a single thing. Imagine being a couch salesman and sitting down with Howard Schultz, the founder of Starbucks, at his small coffee shop in Seattle’s Pike Place Market in 1971. Your pitch sounds something like this: “Mr.Schultz, thank you for investing a few minutes of your time with me today. I realize that, as a small business owner, your time is very valuable and because of that, I have poured much time and effort into an idea that could potentially change the way the world views a cup of coffee. Would you like to hear it?” The focus does not have to be on selling your couch over the competition’s couch. There is no competition. After all, who sells couches to a coffee shop? Obviously this is not the way that Starbucks was originally founded, but what if it was? How many couches would that guy have sold? Everyday that you wake up, you hold the potential to create a blue ocean idea for your customer and industry that changes everything (including your income). It is obviously not an easy task, and not every idea will be a home run, but you will soon develop an ability to see the opportunities with less time and effort. By sowing these efforts and ideas into your prospect/customer, you will never have to “ask for the sale” or “ask for the appointment.” You will simply reap what you have sown. In fact, if done well, they will invite you to see them, because every time you visit you add value to their business.

Feedback Brainstorm, advise and weigh in when you visit InsideBlackBox.com/Sales. May/June 2009


ADVERTISER FULL

SpECIAlIZING IN

FROM THOUGHT TO FINISH

Toll Free: 1.888.458.7488. www.DynamicExhibits.com

Business Black Box

creative solutions, clemson.edu/curf

May/June May/June 2009 2009

85 1


Black

b o x law

7

tips

For Financing in Troubled Times by

andy

coburn

As an attorney with Wyche, Burgess, Freeman & Parham, Andy Coburn regularly represents clients in mergers and acquisitions, corporate reorganizations, structuring of joint ventures, securities offerings and other financing transactions. Andy also advises and assists public and private company clients in the design and implementation of executive compensation arrangements, equity compensation plans and broad-based employee benefits.

In the current economic turmoil, financing is an even greater challenge for those who need it and has become an issue for many who thought that their financing was secure. Although it can be stressful, there is still money out there, and with a focused effort, you can still get financed. Accept reality. Obviously, financing is less readily available, investment and credit standards are higher and financing terms are tougher. Enough said. Accept the reality. Shop around for the best terms you can get, but don’t expect to get terms that would have been typical a year ago. Know your financing sources. Obtaining financing is more challenging, but lenders are still lending, and investors are still investing. Focus your financing efforts, however, on sources that are likely to be a good match for you. Whether you are talking to bankers, venture capitalists, angel investors or strategic investors, you need to know their lending or investment profile – who do they want to lend to or invest in? Typical criteria are industry, company size, historical and current financial performance (EBITDA, debt-to-equity ratio, revenue growth rate, etc.), financial projections, market potential, intellectual property assets and available collateral (for lenders). Strategic (industry) investors are looking for good investments. Companies with a lot of cash are searching for investment opportunities. Some typical advantages of financing with strategic investors are (a) they know their industry and can often move very quickly in making an investment decision and (b) even in these times, they may not impose terms that are as demanding as venture capital or private equity terms. Some typical disadvantages are (a) strategic investors are often very specific in what they are looking for, technology, access to certain markets, etc. (i.e., just being a great business in their industry may not interest them) and (b) a strategic investor may be interested only in buying the business, not in providing financing. Advance preparation for due diligence is more critical than ever. If you are a good financing candidate, don’t screw it up because you don’t have a sharp business plan or proper financial statements, or can’t readily produce important documents and information. Keep in mind that lenders and investors in many cases are paying attention to documents and information that were ignored or glanced at just to check them off on the due diligence list when financing was easy and investors and lenders were still chasing deals.

Business Black Box

Collateral is king; personal guarantees aren’t worth what they used to be. Bankers are often now insisting on collateral where none was required before or more collateral to back the same size loan. Where a personal guarantee used to be sufficient to back a loan, lenders may require the guarantor to provide collateral for the guarantee or even a letter of credit. Long-term relationships are no guarantee that financing will be renewed. Banks are dropping longtime customers, even customers who have never made a late payment. In some cases, the lender has decided to stop lending to an industry or in a geographic region, so the creditworthiness of the borrower may be entirely irrelevant. Well before your financing expires, determine whether your lender will renew and review other financing options. Don’t rely on verbal assurances of renewal. Get a commitment letter or, even better, go ahead and get an extension. If you can’t, you will find out with plenty of time to line up other financing.

Feedback

Brainstorm, advise and weigh in when you visit InsideBlackBox.com/Law 86

May/June 2009

Close financing quickly. Letting a financing drag out has always raised the risk that a financing will fall through. Under current circumstances, only the foolhardy would not move to close on a financing as quickly as possible, and a disturbing number of deals fail due to delay. Typical situations are a financial investor whose bank financing commitment expires because the deal did not close on time or a strategic investor who shelved the deal because business difficulties came up that required them to focus on their core business.


Business Black Box

87

May/June 2009


Ledbetter Fair Pay Act Signed into Law Dept of Labor Issues Model COBRA Subsidy Notices and Forms Employers Must Use Revised I-9 Form Fines for I-9 Violations Raised FCRA Address Discrepancy Rule Applies to Credit Checks Calls for More Action Against Misclassifying Independent Contractors Reductions in Force Present One Gotcha after Another

What happens if you get ANY of these rules

WRONG?

Employee Free Choice Act Would Apply to Small Businesses

To make sure you get it call

Business Black Box

RIGHT,

88

Featuring HR Director On Call

sm

HRExpertsOnDemand.com | (864) 527-0490 May/June 2009


use

your

small biz Black b ox

downtime

To Your Advantage

"Hunker down" with Your Current Customers One of the by-products of any size business in the middle of a slow economy is that sales activity may have slowed down significantly more than normal. Rather than struggle with this fact of economic life, choose to turn the downtime toward your advantage. Use this time to connect more with your current customers now than ever before. Small businesses and entrepreneurs seldom have much time to do many of the “extras” that they’d like to do. The reduction in sales activity can be used toward your advantage by setting out to determine how to keep your current customers coming back for more business based on getting to know more about their needs. It’s harder (and costs more) to acquire a new customer than it is to do more business with a current customer. Rather than racking your brain on how to get people who never have bought from you in the first place to buy from you now, use this time to learn who your current customer really is: 1. Stop assuming who they are, what they do, how they communicate, etc, and find out for sure. Find out who they really are, not who you think they are. This will give you a more accurate picture of what they need and how you can be the one to supply it for them.

by

tony

snipes

Tony Snipes is Director of Redemption Marketplace Alliance, a Greenville-based entrepreneurship training program, where he utilizes a unique combination of years of leadership experience in the corporate arena with ministry experience in the community. Tony has spent over a decade as an internet publishing and advertising expert, helping clients for news media companies such as the Greenville News, The St. Petersburg Times, and News Channel 7 WSPA.

2. Once you have a clear idea of who your customer is and what they really need….sell to that need: • Ask yourself: “Based on what I now know about my customer, do my current products and services address the needs I have just uncovered?” • “Is there a new product or service that I can launch to address those needs that I uncovered?” Here’s an idea that will engage your customers while allowing you to gain valuable feedback from them: “Be On Our Team for A Day and Get Our Employee Discount”You tell us, if you ran this store (business, etc), what would you maintain? What would you change? For “working” with us today and sharing your feedback, you get to enjoy our Employee Discount.” Here are a few more ways you can find out more about your customer:

Business Black Box

1.Throw a party! Do a product launch party or event, making sure that those you especially invite are part of the target audience you need to reach. 2. Do a brief but informative survey, giving something of value in exchange if they respond. 3. Just ask ‘em! Just ask your current clients when they come in, by email, or by phone. Don’t lose time by putting too much thought into how…just ask! You’d be surprised at the number of customers that are willing to share feedback that you can use. The current economy may have created a void in your business activity. Fill that void with practical steps resulting in knowing more about your current customers and how you can sell them more based on their uncovered needs.

Feedback

Brainstorm, advise and weigh in when you visit InsideBlackBox.com/SmallBiz.

May/June 2009

89


Black

b o x politics by

john

deworken

John DeWorken is the vice president of public policy and lobbyist for the Greenville, Spartanburg, Greer and Anderson Chambers of Commerce, serving 6,300 members through these Upstate Chambers. John is a member of the advisory council for Business Black Box, advising on topics pertaining to politics and public policy.

business must rise to fight for

Workers Rights

In a day when businesses are competing with companies overseas that do not have like regulatory requirements, certain legislation puts businesses and workers at a competitive disadvantage, furthering the nation’s inability to compete on a global stage. One such bill, known as the Employee Free Choice Act (EFCA), otherwise known as the Card Check bill, which is making its way through Congress, is designed to more easily unionize businesses, both large and small. EFCA, which has already passed the House and is pending in the U.S. Senate, would eliminate many vital safeguards for employees and employers, essentially abolishing workers’ and employers’ rights. What is particularly troubling is that unions could use this legislation to more easily unionize the smaller businesses – businesses that do not have the wherewithal to fend off sophisticated union tactics. Under current law, if a union attempts to unionize a business, it must first obtain signatures from a significant number of employees to even conduct a campaign to unionize. So, if a union does get a significant number of employees to sign a card, then the National Labor Relations Board (NLRB) is called in to referee a 45-day campaign between the employer and the union. It is at this time that the employer and the union both have their opportunities to campaign the employees as to why or why not they should vote to unionize. After the 45-day campaign is up, then the NLRB conducts a secret-ballot vote of the employees, essentially voting the same way citizens vote during a general election campaign – anonymous voting. If more than 50 percent of the employees vote to unionize, then the employer must recognize the union as the official collective bargaining negotiator. Opposed to the level playing field that the current law offers, EFCA gives an incredibly unfair advantage to unions. EFCA eliminates employees’ anonymous voting rights. Under the language of the EFCA bill, all a union would have to do to unionize is to get more than 50 percent of the employees to sign a card, agreeing to unionize. That’s it. Once that is done, then the employer must recognize the union. Furthermore, if the employer and union were unable to reach an agreement, then a federal mediator would be called in to write the contract. Why is this troublesome and unfair? First, because only 50 percent plus one of employees’ signatures are required to unionize, employers would be blindsided by the union – giving the employer absolutely no chance to state their case to its employees. Additionally, unions could eliminate 49 percent of the business’ workforce from the unionization process. And, anonymity (secret ballot voting) is eliminated, thereby increasing the chances of strong-arm tactics by the union. Secondly, if the employer and union were unable to meet an agreement and a federal mediator were required to write the contract, the employer would be lawfully required to follow the contract, giving the employer two choices: (1) Follow the contract or (2) close its doors to business. Congress must pass legislation that helps raise our nation’s productivity and potential for prosperity. EFCA clearly hurts the nation’s chances of doing just that. As mentioned before, EFCA already has passed the House of Representatives, with S.C. Congressmen Inglis, Barrett, Wilson, and Brown opposing it, and Representatives Spratt and Clyburn supporting it. Now in the Senate and opposed by Senators DeMint and Graham, the business community has the opportunity to rise and tell the US Congress that EFCA is bad for business and bad for workers.

Make your voice heard.

Contact your local senators regarding the EFCA bill. Jim DeMint Business Black Box

105 North Spring St, Suite 109 Greenville, SC 29601 Phone: 864-233-5366

90

Lindsey Graham 101 East Washington Street, Suite 220 Greenville, SC 29601 Main: (864) 250-1417 or 140 East Main Street, Suite 110 Rock Hill, SC 29730 Main: (803) 366-2828

Feedback May/June 2009

Brainstorm, advise and weigh in when you visit InsideBlackBox.com/Politics.


Business Black Box

91

May/June 2009


Business Black Box

92

Global Pebble Project is a Water of Life initiative to help raise awareness and support for building wells and bringing fresh water to people in places around the globe. Through your support, we have helped deliver fresh water to thousands of people and offer them hope of a better future. Through Global Pebble Project, Water of Life is able to fund the building of well systems in places like Liberia and Honduras.

Water of Life |2009 P.O. Box 24151 | Greenville, SC 29616 | 864.241.6222 May/June


Specializing in Wedding, Portrait, Event and Sports Photography

122 Edinburgh Court • Suite B10 • Greenville, SC 29607 • (864) 356-0230

Business Black Box

professional business portraits • senior portraits christmas cards • special occasions • concert photography • churches & schools

KeithDriggersPhotography.com

May/June 2009

93


Black

b o x between the lines

Business Black Box

Success: It Isn’t As Difficult As Pulling Teeth (or as cliché)

94

Your biggest question at this point: how could a book aimed at revolutionizing dentistry practices possibly help you better manage your business? Initially, your suspicions would be valid. It won’t pertain to me and my very “non-dental” business. The first few pages of The Boomerang Effect for Dental Professionals by Drs. Matthew J. Bynum and Arthur J. Mowery, Jr. demonstrate how valuable the principles have been to their dental practices and—more importantly—universal to business philosophy and management. In addition to this book, Bynum and Mowery have partnered together to offer marketing and business aid for dentists at www.bynummoweryway. com. Bynum currently runs a practice in Simpsonville, S.C.; Mowery, in Gainesville, Fla. Perspective is everything. The Boomerang Effect begins by explaining this principle. Readers are asked to fill in these blanks: “The world is a _________ place. The world is full of _________ people.” The words you insert color how you view life and manage your business, whether you realize it or not. From this jumping point, Bynum and Mowery delve into how different responses affect your business and then branch into 10 key areas of belief including “My Success Is a Choice”; “To Have Different, I Must Do Different”; and “I’m Here to Serve My Team and Patients.” If managed well, these areas will generate success. May/June 2009

Bynum and Mowery focus on creating balance (or harmony) in five key areas of life in order to generate wealth and success in both business and life: relational; mental; spiritual; physical; and financial.

The Boomerang Effect is broken down into three sections: In “The Power of Belief ” the authors explain how what you believe colors your world. The “Ten Empowering Beliefs” are ten different mindsets that, when applied to life properly, can spark success both in business and personal life. Then in “Harmonic Wealth®”, Bynum and Mowery explain how people can set SMART goals in the five areas of Harmonic Wealth® in order to maximize potential. The book’s only major “flaw?” It sells itself short— its content is valuable to more than just dental professionals. It’s a quick, easy read and offers valuable and fresh insight to business philosophy in all specialties Don’t mistake The Boomerang Effect for a book of simple tips and tricks for success. But if you’re looking for ways to step up your business, you’ll want to check it out. – Andrew Brandenburg

Find out more:

http://bynummoweryway.com Author info:

Matt Bynum Bynum Aesthetic Dentistry 1334 South Highway 14 Simpsonville, SC 29681 http://www.drmattbynum.com

Arthur J. Mowery Mowery Arthur J DMD 4960 West Newberry Road Gainesville, FL 32607

Harmonic Wealth: http://harmonicwealth.com

To get a copy

of The Boomerang Effect, visit www.Insideblackbox.com/store


Business Black Box

95

May/June 2009


Black

b o x in the bag

Erika Spinelli

Business Black Box

Director, yW Empowerment Center Owner, SC COM

The best ideas in the world get borrowed. The idea for In the Bag came from Spike Jones at Brains on Fire, with a project they did in 2008. To see the original, visit: http://flickr.com/photos/brainsonfire/sets/72157603954656822/

96

May/June 2009


Business Black Box Issue 1  

The premier issue of Business Black Box,

Read more
Read more
Similar to
Popular now
Just for you