Prairie Business May 2018

PREMIER BUSINESS MAGAZINE OF THE NORTHERN PLAINS | MAY 2018

With charity for all THE REGION’S HOSPITAL FOUNDATIONS PLAY A VITAL HEALTH CARE ROLE PAGE 28

Susan Omdalen, Director of Development Essentia Health Regional Foundation Fargo, N.D.

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INSIDE

DEPARTMENTS

MAY 2018

VOL 19 ISSUE 5

EDITOR’S NOTE

10 12

FEATURES

28 32

HIGHER EDUCATION WILLISTON STATE COLLEGE’S GENEROUS SCHOLARSHIPS BENEFIT THE COLLEGE AS WELL AS ITS STUDENTS

BY JOHN MILLER

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With the help of the Altru Health Foundation in Grand Forks, N.D., Safe Kids Grand Forks offers extensive services to help familes with their car-seat needs.

For more on the work of hospital foundations, see page 28.

IMAGE: ALTRU HEALTH FOUNDATION

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CREATIVE EFFORTS TO SOLVE THE REGION’S PROBLEMS ARE STARTING TO PAY OFF

BY TOM DENNIS

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HUMAN RESOURCES

PUBLIC-PRIVATE PARTNERSHIPS HELP N.D. LEAD IN BROADBAND CONNECTIVITY

BY SETH ARNDORFER

BUSINESS STRATEGY

BY CUTTING QUALITY, CONSUMER BRANDS DRAIN THEIR ‘RESERVOIRS OF TRUST’

BY MATTHEW MOHR

WINONA, MINN., LEADERS EASE THE WORKFORCE SHORTAGE BY CONNECTING HIGH-SCHOOL STUDENTS WITH EMPLOYERS AND JOBS

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Business Insider

HEALTH CARE

22

PRAIRIE PEOPLE

36

INSIGHTS & INTUITION

38

BY THE NUMBERS

HOSPITAL FOUNDATIONS USE DONATIONS TO FILL HEALTH-CARE GAPS

INSURANCE THINK YOUR LOCAL BUSINESS IS TOO SMALL OR REMOTE TO NEED CYBER INSURANCE? THINK AGAIN

ON THE COVER Susan Omdalen, director of development for the Essentia Health Regional Foundation in Fargo, N.D., holds a quilt from an Essentia Health closet that’s full of donated clothing items, toiletries and other personal accessories.

The hospital’s emergency room uses the closet – a Foundation project – to clothe and supply patients, whose own clothes sometimes get cut off.

IMAGE: NICK NELSON/ FORUM NEWS SERVICE

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TECHNOLOGY

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DR. TANIA GONZALEZ SANTIAGO

prairie people VISIT WWW.PRAIRIEBUSINESSMAGAZINE.COM TO SEE THESE AND OTHER NEW HIRES, PROMOTIONS AND AWARD WINNERS IN THE REGION.

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DR. TANIA GONZALEZ SANTIAGO HAS JOINED SANFORD HEALTH IN FARGO, N.D. SHE’S BOARD CERTIFIED IN DERMATOLOGY AND DERMATOPATHOLOGY AND RECEIVED HER MEDICAL DEGREE AT THE UNIVERSITY OF PUERTO RICO SCHOOL OF MEDICINE.

TIM MEYER TIM MEYER HAS BEEN APPOINTED SENIOR DIRECTOR OF F-M AMBULANCE IN FARGO, N.D. MEYER HAS BEEN AFFILIATED WITH F-M AMBULANCE SINCE 1992, WHEN HE WAS HIRED AS A PARAMEDIC.

MAY 2018

Solve problems by learning ‘what works’

VOL 19 ISSUE 5

TOM DENNIS EDITOR

M

tdennis@prairiebusinessmagazine.com 701.780.1276

y favorite stories in Prairie Business are the ones that profile businesses or other organizations that go above and beyond.

There’s almost always a lesson in those organizations’ experiences, and I’ve often found myself being inspired by their example.

Case in point: the features in this issue that highlight Williston State College and the Winona Area Chamber of Commerce, organizations that creatively are tackling related and very widespread challenges.

At Williston State College in Williston, N.D., the challenge is enrollment – and the solution is scholarships, writes John Miller, president of the college, in his column.

Thanks to Williston State’s foundation and other donors, the college now is offering generous scholarships to students from throughout western North Dakota, eastern Montana and even southern Manitoba and Saskatchewan.

And there’s nothing like a scholarship to help a college student overcome the daunting barrier of cost.

In Winona, Minn., the Chamber of Commerce has partnered with the Minnesota Chamber to address the No. 1 issue facing our region’s businesses: the workforce shortage. As a result, Winona’s CEOs speak to eighth graders, K-12 teachers tour manufacturing facilities and high-school students get paid internships and other hands-on experiences in local businesses.

The idea is to let every Winonaarea student know that great jobs are available locally, and to show those students exactly how to get them, said Della Schmidt, president of the Winona Area chamber.

The Minnesota Chamber now is replicating the partnership in other communities. We’re happy to describe it in this issue of Prairie Business. PB

Good reading, Tom Dennis I welcome your feedback and story ideas. Call me at 701-780-1276 or email me at tdennis@ prairiebusinessmagazine.com.

PUBLISHER KORRIE WENZEL AD DIRECTOR STACI LORD EDITOR TOM DENNIS CIRCULATION MANAGER BETH BOHLMAN LAYOUT DESIGN, AD DESIGN ANDY GOBLE KRIS WOLFF ACCOUNT MANAGERS NICHOLE ERTMAN

800.477.6572 ext. 1162 nertman@prairiebusinessmagazine.com

JENNIFER LEROUX OLSZEWSKI

800.477.6572 ext. 1167 jlolszewski@prairiebusinessmagazine.com

Prairie Business magazine is published monthly by the Grand Forks Herald and Forum Communications Company with offices at 375 2nd Avenue North, Grand Forks, ND 58203. Subscriptions are available free of charge. Back issue quantities are limited and subject to availability ($2/copy prepaid).

The opinions of writers featured in Prairie Business are their own.

Unsolicited manuscripts, photographs, artwork are encouraged but will not be returned without a self-addressed, stamped envelope.

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ADDRESS CORRECTIONS Prairie Business magazine Box 6008 Grand Forks, ND 58206-6008 Beth Bohlman:

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ONLINE www.prairiebusinessmagazine.com

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Providing the highest level of continuous and coordinated care through a team-based, patient-centered medical home model

Led by primary care physicians, the patient-centered medical home model ensures the highest level of healthcare at Coal Country Community Health Center in Beulah, North Dakota

Coal Country Community Health Center in Beulah, North Dakota

Connect With Us www.eapc.net

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HIGHEREDUCATION

Regional scholarships

MAY 2018

VOL 19 ISSUE 5

transform Williston State College

By John Miller

John Miller is president of Williston State College in Williston, N.D. IMAGE: WILLISTON STATE COLLEGE

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WILLISTON, N.D. – The Williston State College Foundation’s efforts to support students through various regional scholarships can best be described as “transformational.”

The WSC Foundation and Williston State College offer eligible, regional full-time students many scholarship opportunities that fund tuition and fees for up to two years, or four consecutive semesters.

Williston State serves northeastern Montana and northwestern North Dakota, and the WSC Foundation’s scholarship programs support Williston State’s local recruitment. These programs enhance a traditionally fertile recruitment region for the college, drawing on the close economic and cultural ties that have long existed in the area.

The WSC Foundation leverages oil and gas leases, production assets, general endowments and gifts to support local scholarship programs.

The scholarship efforts began in Fall 2015 with the Williams County Graduate Scholarship funded by the WSC Foundation, the Alva J. Field trust and the North Dakota Challenge Fund. Thanks to the scholarship, graduates of a Williams County high school, regardless of year, are eligible for free tuition and fees at Williston State. Those who’ve earned a GED in the county also are eligible.

During the first year, 344 full-time students received scholarships. This accounted for a full 33 percent of the WSC student population.

In 2016, the Regional County Scholarship was created for the five counties surrounding Williams County, and a year later, the scholarship added five counties in Montana. The Regional County Scholarship is only available for recent graduates, including GED holders who earned their equivalency diplomas in those counties.

HIGHER EDUCATION This map shows the U.S. counties whose students are eligible for Williston State College scholarships. Graduates of Williams and nearby-county high schools (shown in purple and blue) are eligible regardless of year, while recent, academically eligible graduates from western North Dakota and eastern Montana (shown in green) also can qualify. Partial scholarships are available to some graduates of high schools in southern Manitoba and southern Saskatchewan. IMAGE: WILLISTON STATE COLLEGE

Over three years, the WSC Foundation has funded more than $4.8 million in scholarships to 983 students.

During the second year, 428 full-time students received scholarships.

This accounted for 41 percent of Williston State’s student population.

In 2017 when the program expanded into five Montana counties, 310 full-time students received scholarships, accounting for 28 percent of WSC’s student population.

Over three years, the WSC Foundation has funded more than $4.8 million in scholarships to 983 students. With continued program growth projected, annual foundation support will soon exceed $2 million.

For Fall 2018, the Foundation expanded yet again to cover nearly half of eastern Montana, western North Dakota and into southern Saskatchewan and Manitoba with its Academic Achievement Award.

The Fall 2018 Academic Achievement Award will cover $1,500 per semester for four consecutive semesters (excluding summer) for eligible southern Saskatchewan and southern Manitoba students.

Aside from increased scholarship opportunities, the program has fundamentally impacted the campus. From 2014-2018, Williston State grew at an overall rate of 16 percent, averaging 5 percent annual growth. The implementation of a $1,000-per-semester housing scholarship tied to regional scholarship recipients provides students an additional incentive to attend Williston State, fostering further growth.

When looking at two-year community college demographics across the nation, it is very common to find more part-time than full-time students. Because students must maintain full-time status, the scholarship has unintentionally changed Williston State’s demographics.

In 2014, before the program, the college’s part-time student population was 52 percent compared to a full-time population of 48

percent. But since the program began, the proportion of part-time to full-time students has reversed. In the fall of 2017, 56 percent of WSC students were full-time and 44 percent were part-time.

Ultimately, the power of the Williston State College Foundation and the scholarship programs lies in how they impact students. In the area covered by the program, some 1,400 high school seniors every year have the opportunity to explore Williston State as an alternative for affordable and quality college education.

Given the increasing costs associated with a college education, it is no surprise that a lack of financial resources still leaves many as “have nots.” The WSC Foundation and its generous donors have committed to “upping the ante” each year as they expand their program.

This scholarship program supports the college’s mission to provide accessible, affordable, life-changing and lifelong educational opportunities to our region. These scholarships have removed financial barriers for families from the communities we serve.

And the scholarships have transformed lives, our campus and our community. PB The WSC Foundation encourages anyone interested in donating to contact them at 701.572.9275.

For complete details on this each of the WSC Foundation scholarship programs, please visit www.willistonstate.edu/foundation or call 701.774.4200.

John Miller PRESIDENT WILLISTON STATE COLLEGE 701.774.4231 JOHN.S.MILLER@WILLISTONSTATE.EDU

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TECHNOLOGY MAY 2018

VOL 19 ISSUE 5

Connecting minds

N.D.’s broadband leadership benefits schools, the university system and more

By Seth Arndorfer

Seth Arndorfer, CEO, Dakota Carrier Network, Bismarck, N.D.

BISMARCK, N.D. – The proliferation of internet usage over the past 20 years has caused an evolution in education. Students today use the internet throughout the school day to take tests, access cloud-based curricula and perform research. And they’ll tell you there’s nothing more frustrating than when their school’s internet connection is slow.

Thankfully, by next summer this will no longer be a pain point for North Dakota’s K-12 and college students.

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Gov. Doug Burgum announced in March a 100-gigabit upgrade to STAGEnet, the state government’s closed broadband network. This upgrade will allow one-gigabit connectivity to all K-12 schools, higher education institutions and government agencies in the state.

It also will make North Dakota the first state in the nation to provide gigabit connectivity to every school district, giving North Dakota students a leading edge in access to technology to further their educations.

PRAIRIEBUSINESSMAGAZINE.COM

TECHNOLOGY

This advancement is being made possible through a contract extension between the state’s Information Technology Department and Dakota Carrier Network and its 15 owner companies. The contract allows us to complete extensive upgrades to STAGEnet by next fall, which will enable larger amounts of internet traffic to travel over the state’s network at a faster pace.

The 100-gig state network upgrade is a win-win for everyone because not only will the network enjoy faster connections, but also it comes at no additional cost to the state.

It’s also the most recent example of how North Dakota has quietly become a national leader in connectivity by embracing public-private partnerships with entities such as DCN. Prior to forming DCN, our 15 owner companies – all rural communications services providers – operated independently and provided services to customers only in their markets. Then when legislation passed in 1996 that allowed them to extend services beyond their markets, it prompted our owners to form DCN and collaboratively install a statewide fiber network to bring world-class broadband service to North Dakota residents, businesses and government agencies.

In the past decade, DCN and our owner companies have invested more than $1.3 billion in fiber infrastructure, which serves more than 164,000 people in nearly every community in the state. We reinvest in our network every year, which in turn makes it possible to upgrade the state’s network at no additional cost to taxpayers.

All government entities are connected to STAGEnet through a dedicated, private channel on our collective 40,000 miles of statewide

fiber. Because these physical fiber connections are already in place, to upgrade STAGEnet to 100-gigabit, DCN and our owner companies need only to install new electronic devices at government locations and reconfigure existing equipment at points of presence (POPs) along our fiber network.

Though North Dakota is known to many as an energy and agriculture leader, the collaborative efforts of the state, DCN and our owners have also positioned North Dakota to be a leader in broadband connectivity.

Thanks to the foresight of our owner companies and state leaders, we’ve been able to build one of the most extensive, reliable broadband networks available anywhere in the country.

And we continue to collaborate to create networks for government and businesses throughout the state. Customers benefit through accessing a unified network connection with DCN as the single point of contact for questions.

DCN and our owner companies are often asked how we’ve made a structure like ours work. Collaborating with 15 owner companies isn’t always simple, but we’re able to make continuous progress due to a shared common purpose: We believe North Dakotans, regardless of whether they live in a rural area or one that’s densely populated, deserve the best broadband connection out there, and we strive every day to make that happen. PB

Seth Arndorfer

CEO,DAKOTACARRIERNETWORK BISMARCK/FARGO 701-323-3000 SARNDORFER@DAKOTACARRIER.COM

LEADING OUR COMMUNITY Tonya Stende,

President, Dale Carnegie Training of ND | Accounting, 1994 We need to build a culture of engagement where all individuals thrive. We need to lead differently and find ways to engage and inspire employees, to treat them as valuable people with skills vs. people with valuable skills.

Transforming the world by transforming lives.

Read more about leadership from MSUM alumni at mnstate.edu/life-transformed Minnesota State University Moorhead is an equal opportunity educator and employer.

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BUSINESSSTRATEGY MAY 2018

VOL 19 ISSUE 5

When brands cut

quality, they squander consumers’

trust

By Matthew Mohr

Matthew Mohr. IMAGE: DACOTAH PAPER CO.

FARGO, N.D. – The idea of creating a lasting brand was established by such great corporations as Coca Cola, Ford Motor, IBM, McDonald’s and super marketers such as 3M and Procter & Gamble. Much of the value of branding came after World War II, when consumers were looking for consistent, reliable, quality products when uncertainty surrounded the market place.

Consumers and businesses were willing to pay for a product (brand) they could trust to meet their needs. Poor quality products failed and were not accepted.

But today’s consumers seem to have lost both their loyalty to brands and their insistence on quality. Younger buyers, especially millennials, seem to take more pride in getting a low price than in making sure the product actually works.

My formal training in marketing was as a brand seller, and my sales experience revolves around quality products that meet the customer’s needs. So, accepting poor quality and bad service is hard for me to tolerate.

The continued lowering of product quality will create more frustration for people as they try to use products that don’t perform.

Individual consumers and businesses across the country are starting to abandon products that fail, causing the sellers caught with the lowquality products to continue to cut prices in hopes of reducing excess inventory.

A study of the agricultural-implement market provides fascinating insight to the rise and fall of products. Many innovative, brand-specific products have been popular at one time only to be acquired or fade away. But in the midst of this highly competitive and extremely diverse market, a few names continue to stand out as a result of their brand.

Two national retail chains learned a hard lesson about quality and brand. Both JC Penney and Sears established themselves as brands the consumer could trust to always work. For whatever misguided reasons, both cut quality and tried to become price leaders. Consumers quickly learned they were not getting the quality they expected.

Both of these great companies have faced turmoil and lost market share. The survival of JC Penney and Sears is in question today, mostly because each tried to respond to what it thought consumers wanted to pay, failing to understand what consumers valued.

Toyota Motors is a recognized quality product today. At one time, the company had products with a questionable reputation. I was told one Toyota dealer near Minneapolis only drove a domestic (United States) make vehicle for years because, as a dealer of the Toyota brand, he didn’t trust it to be reliable.

Toyota spent countless dollars and used exemplary marketing strategies, along with drastically improving its product, to establish a long-lasting sustainable positive business and product brand.

Only a fool or someone with little experience would introduce low quality and use price cutting to try to achieve long-term success in any market conditions. True branding involves building security with the product users. Failing to provide security of use and performance simply accelerates the brand’s demise. PB

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Matthew Mohr CEO, DACOTAH PAPER CO. FARGO MMOHR@DACOTAHPAPER.COM

BUSINESS INSIDER

Editor’s note: The following is a Q&A with Ben Schroeder, the 2018 president of the North Dakota Association of Realtors, and Amy Hullet, the association’s 2018 president-elect.

Schroeder is a Realtor with Park Co. Realtors in Fargo, N.D. He was licensed in 2009 and served as president of the Fargo-Moorhead Realtors Association in 2016.

Hullet is a Realtor with Century 21 Morrison Realty in Bismarck, N.D. She was licensed in 2003 and served as the 2016 president of the Bismarck-Mandan Realtors Association.

The interview has been edited for clarity and length.

HOUSE PRICE INDEX FOR NORTH DAKOTA

400 360 320

Ben Schroeder and Amy Hullet are the 2018 president and president-elect (respectively) of the North Dakota Association of Realtors. IMAGE: NDAR

280 240 200 160

Getting real with Realtors Here’s a look at the housing market through the eyes of the N.D. Association of Realtors’ president and president-elect

Ben Schroeder 2018 PRESIDENT, NDAR Park Co. Realtors Fargo, N.D.

Amy Hullet

2018 PRESIDENT-ELECT, NDAR Century 21 Morrison Realty Bismarck, N.D.

120 80 40

1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

The House Price Index is a broad measure of the movement of single-family house prices. It serves as “a timely, accurate indicator of house price trends,” the Federal Reserve reports.

Shaded areas indicate U.S. recessions.

SOURCE: Federal Reserve Economic Data (FRED), fred.stlouisfed.org

Q.

WHAT’S YOUR SENSE OF THE 2018 HOUSING MARKET IN NORTH DAKOTA COMPARED WITH 2017, AND DOES THAT ASSESSMENT VARY BY REGION?

A.

Ben: A lot of people in real estate saw a slower market last year. I don’t say that negatively, because I think that after the three or four crazy years, the market finally balanced out.

In my view, that’s a good thing, because it gives buyers more time to do things such as come back to take a second look at a house, to sleep on their decision and maybe even bring Mom and Dad over to take a look.

Last year, people were in a wait-and-see mode, I think. They were asking, what is the economy going to do? What is President Trump going to do?

Now, buyer confidence is coming back. We have a balanced market, so I think this year is going to be a great year. A lot of the dust has settled, and it’s going to be good for both buyers and sellers.

Amy: I agree, and the only thing I’d add is that the confidence level and the comfort level of buyers are a lot stronger this year. So I, too, think we’re very strong going into 2018.

But I also think that the worry about interest rates is making buyers aware that the rates could affect the level of housing they can purchase.

So, when they’re deciding whether to buy a four-bedroom or a fivebedroom home, the interest rate will affect their decision.

As for whether the market varies by region, we do notice different things in different parts of the state. For example, sometimes we in Bismarck have inventory while Fargo doesn’t, and the same is true for other communities.

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BusinessInsider

OF BUILDING PERMITS, Q. SPEAKING WHAT’S BEEN THE STORY WITH NEW

MAY 2018

VOL 19 ISSUE 5

THE COUNTRY, ANALYSTS TALK Q. AROUND ABOUT HOME PRICES RISING BECAUSE

HOUSING INVENTORY IS IN SHORT SUPPLY. WHAT’S THE SITUATION IN NORTH DAKOTA?

A.

CONSTRUCTION?

A.

Amy: It’s interesting because in the Bismarck area right now, we actually don’t have a shortage of housing inventory. Because of the uncertainty or lack of confidence in 2017, we came into 2018 with quite a large amount of inventory.

We have a lot of houses for buyers to choose from, and in every price range.

I do know that when you talk about building permits, they are down a little bit. But again, that’s because buyers already have a lot of options, so there’s less demand for new construction at the moment.

Q. WHAT’S THE DIFFICULTY? A.

Ben: A key trend in new construction has been the cost. When you’re talking about a single-family home these days, you’d be hard-pressed to find any builder who would build anything under $200,000. And with that, depending on the development, you also can tack on an additional $40,000 to $60,000 in special assessments.

That’s really a second-home price point; it’s too much for the average person or couple who are buying their first home. So those first-time buyers usually have to find an existing home that’s available for a lower price, and that becomes the challenge.

Ben: Here’s the thing. First-time buyers, they’re often looking for a house in the $150,000 to $160,000 range, and that typically is an older existing home. Also, those first-time buyers often have to take advantage of FHA, VA or similar financing, because they can use those programs SOURCE: Compare50.org, U.S. Census Bureau, Building Permit Survey to get in with a lower down payment, a lower interest rate and sometimes a lower credit score.

The trouble is, there are a lot more requirements on those homes that the appraiser has to satisfy in order for that federally backed loan to be secured.

And these are older homes, remember. So, they may not have the best roof or the best windows, or they may have a foundation wall that’s bulging a little bit.

That leaves the buyers in a situation where they’re looking at a $150,000 home, but the appraiser comes through and says that in order to sign off, the house needs many thousands of dollars worth of work.

The result is that for a first-time buyer, it’s very difficult to buy even an existing older home.

Amy: That’s why you’ll see very good homes out there where it says right in the listing, “Conventional financing or cash offers only.” Because the sellers know that while there may be some issues with the property, these are good homes. They just may need a little work – but as the listing agent knows, that fact means the home is not going to meet Federal Housing Administration, VA or U.S. Department of Agriculture loan requirements.

We’ve run into a FHA requirement right now in which the the house in question needs paint. But our winter hasn’t quit, so no one can paint. And we’re supposed to close on the house in two weeks.

In these situations, we do have the first-time buyers, in other words. And we do have affordable homes.

But we don’t have the means to make the needed improvements in a timely way.

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Ben: In Fargo and some other cities, if a sewer line break happens, the city rolls the cost of the repair into your specials – your special assessments.

So, one idea is that if something like a new roof is needed for a home sale to go through, the city could pay, but the bill would be attached to the property, almost like another special assessment.

That way, the buyer would pay over time; and if he or she decided to sell a few years later, the balance would be treated just like special assessments are. It would either be assumed by the new buyer, or paid off by the seller.

Is that a perfect solution? I don’t know. But it would be an incentive for homebuyers, because they’d know that if they sold the home within a certain time, they might have to pay only a pro-rated part of the loan.

That’s one way of filling the gap between the first-time home buyer’s price range and the type of financing that those buyers use. Because right now, that gap is what’s keeping a lot of people from buying their first home.

Amy: If there was such a program, it would be a great help.

Again, we have a lot of houses that first-time home buyers like and can afford. We just don’t have the means to get them to meet the FHA and other requirements.

DID YOU CHOOSE REAL ESTATE Q. WHY OVER OTHER FIELDS?

A.

Ben: The one thing about real estate is that you have to enjoy a fast-paced environment. There is just so much information out there for our buyers, and not all of it is accurate, so you really have to be more than just a person who sells houses.

You have to answer people’s questions, you have to know what’s going on with interest rates, legislation and all of the assistance programs that are out there.

If you like that challenge, and you like the fast-paced environment of having to deal with that information, then real estate is a great career.

But if you want that 8 to 5 steady paycheck, it isn’t.

Amy: What I love about real estate is that it’s ever-changing.

Spring is never the same as fall, summer markets are not the same as winter, and I do love that challenge.

Furthermore, I’m not a 9-to-5 kind of gal. In fact, the joke that we say in real estate right now is, “I work a hundred hours so I don’t have to work 40.” (laughs) And Ben nailed it: We do have to stay on top of current events in the marketplace. We do have to have the knowledge that the Internet provides the consumer. To survive in this business, that’s the challenge. You have to be better than the Internet.

ARE SOME OTHER Q. WHAT ISSUES THAT REALTORS

Business Insider

Q. ANY SUGGESTIONS? A.

THEMSELVES ARE TALKING ABOUT STATEWIDE?

A.

Ben: There’s also a concern about flood insurance. With the flooding in Minot, Bismarck and Fargo, it’s a big factor when it comes to home values. Is the home considered to be in the flood zone, and if it is, how much is that flood insurance going to be?

Amy: It definitely affects the price. And the other thing that I think is becoming a factor is how they decide what actually is in a flood plain. There are some units that have never flooded, even when other properties around them did; but because the authorities changed the maps, the properties now are in a flood zone.

Ben: And there are different interpretations, too. For example, if the lot touches the floodplain, what does that mean? It turns out, it means the homeowner may have to pay thousands of dollars in flood insurance.

I just had a client who had a house with a deck, the corner of which was in the flood plain. And because the deck was attached to the house, the house was considered to be in the flood plain, too, which meant it needed $4,000-a-year in flood insurance. if the deck had been free-standing and not attached to the house, the house would not have been in the flood plain.

Then there’s the fact that if Fargo doesn’t make good progress on its diversion project, FEMA has said it’s likely to remap the area. That potentially could put 20,000 to 22,000 homes in the flood plain that aren’t currently in it.

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Choosing the right IT resource for your organization

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By Justin Stansbury

Most IT Directors, CIOs, and business owners with more than 50 employees arrange their IT function like this: • The CIO does ® long-range planning, overall management, and project design • The network admin manages the network printing, issues. laci•nDesktop hcesupport t ylhhandles tnom fo email, tsoand c passwords, eht ecetc. ud eR .sulP ®egatnavdA ygolonhceT ,eci The former tasks arerthigh-level The y latter tasks tend routine, and time n consuming. ®ebusiness-specific. gatnavdA go lon hto cbe eT a h tiw oitcnujnoc ni esU .naicinh tca noc and The problem these businesses face is 1) demand for desktop support help is unpredictable sometimes .esira yam taht seussi 1 reiT yna fo ehalf rac ekat dna tegdub ylht the company needs help at the same time, while at other times there’s insufficient work for a full time employee. 2) Involving the CIO or network admin in support work is an inefficient use of valuable resources. 3) The budget won’t allow hiring :u oyan radditional of ofull d time naresource. c sulP ®egatnav

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So what’s the solution? Corporate Technologies’ CTO Assist offers businesses qualified professionals who possess the right level of technical skills and industry exposure without a full time commitment. Whether you require expertise design development, technology noitinasystem rtsin imand dA liamEinformation • management, or technical support and computer services our engineer’s skills are centered on an extensive range of hardware platforms and noitartsinimdA yrotceriD evitcA • software disciplines.

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By choosing CTO Assist , your business has access to technology resources with the expertise and skill sets you require for as little as three months euto ssupplement sI PSIyour•current IT staff, we or as long as you need. Whether you have a short term project or need someone onsite a few days asweek can accommodate your needs.

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Justin Stansbury is the Vice President of Corporate Technologies.

Reach him at justin.stansbury@gocorptech.com or 701.893.4097.

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For more Solutions, ta suinformation hcaeronnour acOnuSite oyITsPlacement noitulo S ®egyou atcan nareach vdAusyatgolonhceT ruo no noitamrofni erom roF 701-893-4000 Street SW, 100 Fargo, 58103 30185 •• www.gocorptech.com DN ,ograF • •02000 0144th etS ,W S Ste tee rt•S ht4ND 4 •0 002 • moc.hcetpro©c2017 og.Corporate www •Technologies, 0004-3LLC 98-10

PRAIRIEPEOPLE

MORT NAMED DEAN OF COLLEGE OF PHARMACY AT SDSU

MAY 2018

VOL 19 ISSUE 5

PRAIRIE PEOPLE FRITZ JOINS KLJ AS MARKET DIRECTOR BISMARCK, N.D. – Martin Fritz has joined engineering firm KLJ as a market director for the company’s Energy and Natural Resources Division in Bismarck.

Fritz comes to the company with more than 20 years of high-level industry experience, KLJ reports. Most recently, he served as president and CEO of WBI Holdings, a pipeline and midstream company.

During his career, Fritz has also owned his own consulting firm and served as executive vice president of Midstream Operations, Land and Construction at EQT Corp.

Fritz holds a law degree from the Dickinson School of Law at Pennsylvania State University and practiced as an attorney for a number of years.

BROOKINGS, S.D. - Jane Mort, who served as interim dean of South Dakota State University’s College of Pharmacy and Allied Health Professions for the past two years, has been named dean of the college following a national search.

In her role as interim dean, Mort led a team that included 45 staff members and three degree programs, including the doctor of pharmacy, the Ph.D. in pharmaceutical sciences and the bachelor of science in medical laboratory science.

The college is also the academic home for the collaborative Master of Public Health program.

Mort has been at SDSU for 31 years, serving as associate dean for academic programs, coordinator of assessment and professor of pharmacy practice, among other roles.

She began her career at SDSU in 1986 as an assistant professor of clinical pharmacy.

Mort was awarded a doctor of pharmacy from the University of Nebraska Medical Center in 1985.

GODFREAD NAMED REGIONAL DIRECTOR OF MAKE-A-WISH N.D.

OTTER TAIL COMPANIES NAME HOFF TO DUAL EXECUTIVE ROLE FERGUS FALLS, Minn. – Stephanie Hoff has assumed the role of director of corporate communications for Otter Tail Corp. and director of public relations for Otter Tail Power Co. Hoff started working with Otter Tail Power Co. in 2000 as a freelance writer. She officially joined the company in 2006 as communication specialist. For the past 11 years, Hoff has served primarily in the public relations area and as manager since 2013.

Hoff will be accountable for internal and external communication, including media relations, for both the utility and its parent. She succeeds Cris Oehler, who will retire from a similar role in mid-April.

Hoff earned her Bachelor of Arts degree from the University of Minnesota, Morris, in communications with an emphasis in media. She served as executive director for the Fergus Falls Chamber of Commerce before her employment with Otter Tail Power Company.

Hoff is a native of Fergus Falls, where she lives with her husband and daughter.

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FARGO, N.D. – Make-AWish North Dakota has named Amanda Godfread as its firstever regional director located in Bismarck-Mandan, N.D. Godfread brings more than 15 years of public relations experience to this new role for the statewide chapter.

She graduated from the University of North Dakota with a bachelor’s degree in communication and French and served her alma mater through the Alumni Association and UND Foundation for seven years.

She has served the state of North Dakota through the governor’s office before becoming the director of strategic engagement at Odney.

She has served as a Make-A-Wish volunteer for the past year. She and her husband, Jon, have three children.

Since its inception, Make-A-Wish North Dakota has granted more than 850 wishes. The average cash cost of a wish is nearly $7,000, the nonprofit reports.

PRAIRIE PEOPLE

WILLISTON STATE’S BONDY NAMED TO N.D. WOMEN IN HIGHER ED BOARD

WILLISTON, N.D. – Kaylyn Bondy, vice president for student affairs at Williston State College, was named to the North Dakota Women in Higher Education Network board.

The board meets most months to discuss how it can advance women’s careers and leadership in North Dakota Higher Education.

The group has two main programs to help with its mission: The Next Step Mentorship Program and the network’s annual conference in November.

Membership open to anyone with a commitment to advancing women’s leadership in North Dakota higher education.

DAKOTA RESOURCES NAMES NEW PRESIDENT

BREINER JOINS ACKERMANESTVOLD

RENNER, S.D. – Joe Bartmann has been named president of Dakota Resources, a Renner, S.D.based nonprofit that focuses on rural economic and community development.

Bartmann’s experience includes three years as vice president of community innovation at Dakota Resources, where he also led the organization’s local rural leadership development initiatives.

Earlier this year, Bartmann was selected as one of 25 BALLE Local Economy Fellows chosen from an international pool of rural leaders.

The appointment follows the retirement of former President Beth Davis, who led Dakota Resources for 20 years.

MINOT, N.D. – Paul Breiner has joined the Ackerman-Estvold Minot office in the company’s architecture group.

Breiner earned bachelor’s degrees in environmental design and architecture from North Dakota State University in Fargo, N.D. He has worked in the architecture industry throughout the region for more than 14 years.

His responsibilities will include conceptual design, design development and construction management on architectural projects throughout the region.

OLSON TO SERVE AS LIAISON TO NATIONAL CREDIT-UNION ASSOCIATION BISMARCK , N.D. – Jeff Olson, president and CEO of Credit Union Association of the Dakotas, has been appointed to serve on several committees on the board of the American Association of Credit Union Leagues.

Olson has been appointed to one-year terms on the organization’s Membership Dues Task Force, Political Involvement & Grassroots Committee and Regulatory Advocacy/Compliance Advisory Committee, the latter two committees as board liaison.

Olson was elected by his fellow league presidents to serve on the AACUL board in November.

The association is a voluntary membership association for credit union leagues that are members of the Credit Union National Association.

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HUMANRESOURCES MAY 2018

VOL 19 ISSUE 5

‘It’s really high tech, super cool stuff’

Winona, MN 24

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In Winona, Minn., high-school students in the REACH program get hands-on experience at a variety of local manufacturers. IMAGE: Winona Area Chamber

By showing high-school students and their teachers the reality of modern manufacturing, that’s the reaction the Winona Area Chamber hopes to inspire

By Tom Dennis The schools that are crowded with students are over here. The manufacturers that desperately need workers are over there.

And ne’er the two shall meet.

Except in Winona, Minn., that is.

Because there, they’re now meeting all the time.

In partnership with the Minnesota Chamber, the Winona Area Chamber is bringing CEOs into classrooms, students and teachers into factories and everybody into the local technical college for a huge annual career fair.

The purpose? To ease Winona’s workforce shortage – not with student and teacher labor, but by showing students the terrific opportunities that await them, just down the street.

“These manufacturing facilities – they’re not dark and dirty any more,” said Della Schmidt, president of the Winona Area Chamber.

“Instead, they’re full of robots, they’re full of touch screens. It’s really high-tech, super cool stuff.”

That’s news to most students, as are facts such as these: You know the ball – the 11,875-pound ball – that’s lowered in Times Square on New Year’s Eve? The winch doing the work hails from Thern Inc., a Winona-based winch and crane maker. And Thern’s just one of 100-plus manufacturers in Winona, pop. 27,000.

“Remember, this is a generation that’s growing up with more technology in their phones than we had on the rockets to the moon,” Schmidt said.

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human resourceS

REACH students solder electrical components at a Winona, Minn.area manufacturer. The Winona Area Chamber is sponsoring the program to help students learn about careers in manufacturing.

IMAGE: Thern Inc., Winona, Minn.

We want to show the students that not only do these facilities use that technology in amazing ways, but also, that there are things being made in Winona, Minnesota, –Della Schmidt that have global reach.

PRESIDENT WINONA AREA CHAMBER

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“We want to show the students that not only do these facilities use that technology in amazing ways, but also, that there are things being made in Winona, Minnesota, that have global reach.”

The partnership has its origins in an economic emergency: Minnesota’s workforce shortage, said Laura Bordelon, senior vice president for advocacy with the Minnesota Chamber of Commerce.

“We have 2,300 members, and we know they’ve experienced a real crush on workforce for years,” Bordelon said.

But it’s different now. It’s worse: “Back then, they were having trouble finding skilled workers,” she said.

“Now, they can’t find any workers. We simply don’t have enough people to help us fill the jobs we have available, let alone the jobs we could be creating if we had the people to staff up.”

The partnership with Winona is an effort to solve the problem, vs. waiting for schools, colleges and legislators to get the job done, Bordelon said.

Using $400,000 in grant money from the Bush and Carlson Family foundations, the chambers developed a pilot project called Business Education Network. The organizations launched it in 2015, and results now are coming into view.

The key components include:

CEO in the Classroom This program, which invites executives to speak with eighth graders about high school and the road ahead, “was already in place,” Schmidt said.

But thanks to the partnership, “we expanded it.

“Now, we’re in every eighth grade classroom at some point during the year, and not only in Winona but also within a 40-mile radius.”

The execs often start by asking the students, How much does it cost to live on your own?

“The typical answer is $1,000 a month,” Schmidt said.

“These students think, ‘If I made $1,000 a month, woo-hoo!’”

After that, the execs walk the students through a more realistic budget. They point out how much more than $1,000 a month many Winona-area jobs pay, and exactly what the students must do in high school to prepare.

“We cover all of the social stuff, too: Don’t get pregnant, don’t do drugs, watch your reputation,” Schmidt said.

“We talk about the importance of math and science, of being part of a team. The whole idea is to say, ‘You have the next four years to lay a foundation. But they’re going to go fast, so here’s what you need to do.’”

Winona, Minn., Senior High School science teacher Bill Braun (left) speaks to Operator Matt Hoepner about the manufacture of continuous glass filaments at PlastiComp in Winona, Minn. Braun took part in the Winona Area Chamber’s Teacher in the Workplace project in 2016. IMAGE: Winona Area Chamber

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human resourceS

Teacher in the Workplace

REACH

“In this program, we take high-school teachers and put them in private-sector manufacturing businesses in the summer, for one to two weeks,” Schmidt said.

The teachers get paid. But that’s not the point, and neither is the teachers’ labor.

Instead, the point is to show the teachers what’s out there. “These are teachers, many of whom have always been in academia,” Schmidt said.

“So, many have no idea what happens in manufacturing.” But the more they learn, the better able they are to advise and prepare students.

A side benefit: When an industrial tech teacher did an immersion, “we discovered something,” Schmidt said.

“We discovered that the technology in our high school’s Industrial Tech area is so antiquated, it’s no longer even relevant to what’s happening in business.”

The news brought a donation, and the high school’s tech area now boasts a $40,000 piece of computer numerical control or CNC equipment.

“It has been my experience that when a local chamber is working on the issues that are most important to its members, the members will be happy to write the checks to make things happen,” Schmidt said.

The partnership’s most ambitious project, REACH gives 30 Winona High School juniors a two-year immersion experience in manufacturing and tech careers.

The 30 will become 60 next year, when REACH will add a second program focusing on health and human services careers.

“REACH is a three-legged stool,” Schmidt said.

“The first leg is soft skills and career readiness. It is facilitated by business professionals; we come into the classroom, and we make sure students understand the basics – shaking hands, looking people in the eye.”

The second leg is dual-credit classes, which the students take during their senior year. After studying blueprints, computer-assisted design, precision machining and other subjects, the students can graduate with a semester of college credit, Schmidt said.

The third leg involves multiple field trips to local manufacturers, as well as paid internships.

This is REACH’s first year, so nobody’s being hired yet, said Tom Wynn. He’s the retired president and CEO of Peerless Chain in Winona, the largest chain maker in North America and one of the largest in the world.

“But I am extremely optimistic, because we are planting the seeds,” Wynn said. Thirty students will become 60, and 60 will become 120 before long.

That’ll give Winona an ever-growing cohort of career-ready graduates, all of whom also will be up-to-date on the region’s opportunities, he said.

The Minnesota Chamber is so impressed, it’s expanding the partnerships to other communities, including Brainerd.

“They have a slightly different take there, because Brainerd’s acute worker shortage is in the hospitality industry,” said Bordelon, the state chamber’s senior vice president.

“It’s a resort community, and they have these wonderful, legacy, family-run resorts that are have some real needs in terms of workers.”

Luckily, hospitality is a big field, Bordelon said. So, Brainerd’s REACH program can expose students to finance, event planning, marketing, recreation management and multiple other careers.

“Our goal is to solve the workforce problem, not just study it,” Bordelon said.

“In Winona, employers already are identifying students they’d like to hire, and more and more students are seeing exciting career opportunities right in their hometown.

“That’s a good day in this workforce environment. It really is.” PB

High School Career Expo Five years ago, Winona’s Career Expo drew people from three high schools and about 30 businesses.

But in recent years, “we’ve had to take over the entire campus of our technical college, Minnesota State College Southeast,” said Sue Pronschinske, HR director for Chamber member Thern Inc. in Winona.

Some 18 school districts now are taking part, busing in upwards of 2,000 students to talk with more than 100 companies.

“And what’s great is that having it on campus means the students’ experience is hands-on,” Pronschinske said.

As the high schoolers explore the campus, the college’s faculty and students stand by. Prospective truck drivers can climb in and out of the school’s semis, aspiring nurses can take manikins’ vital signs, and so on.

“Even the tech school is upgrading as a result,” Pronschinske said.

“It takes all of these elements being in place for the Business Education Network to work.”

Tom Dennis EDITOR, PRAIRIE BUSINESS 701.780.1276 TDENNIS@PRAIRIEBUSINESSMAGAZINE.COM

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HEALTHCARE MAY 2018

VOL 19 ISSUE 5

Leslie Saulsbury, music therapist at Altru Health System, uses music to help a young patient cope with a hospital stay. Child Life Services such as music therapy are among the programs that are supported by the Altru Health Foundation.

IMAGE: ALTRU HEALTH FOUNDATION

Foundational

By helping patients heal and providers go ‘above and beyond,’ hospital foundations play a vital regional role

By Tom Dennis

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HEALTH CARE Susan Omdalen, development director of the Essentia Health Regional Foundation in Fargo, N.D., holds a blanket while standing by a locker of donated clothing and other items. ER staffers at the Essentia hospital can clothe patients out of the locker, which the foundation stocks.

IMAGE: Nick Nelson/Forum News Service

Over the past 10 years, more than 19,000 family members of Trinity Health patients have stayed at the Trinity Guest House, which is located across the street from the Minot, N.D., hospital. The Guest House is made possible through donations to the Trinity Health Foundation. IMAGE: Trinity Health Foundation

It’s simple: A patient rolls into the emergency room at Essentia Health-Fargo, and if time is of the essence and the injuries seem dire, ER staffers will cut off the patient’s clothes.

Now it’s hours or days later, and the patient is ready to go home.

But wearing what?

The answer is, wearing clothes – clothes drawn out of a supply locker that the Essentia Health Regional Foundation keeps stocked.

“We heard about this need from the staff, we asked some businesses to partner with us, and now we keep a closet full of clothing in the ER,” said Susan Omdalen, the foundation’s development director.

“It’s the kind of thing a hospital can’t charge an insurance company for, but that provides that little extra warmth to our patients – because they’re not wearing paper shorts home.”

The clothes operation is just one of hundreds or thousands of similar efforts by hospital foundations around the region, efforts that add up to millions of dollars in value.

Or even billions, considering the region’s leading health-care philanthropist, T. Denny Sanford, is approaching that milestone on his own. “To date, Mr. Sanford has entrusted Sanford Health with nearly $1 billion in gifts to advance bold research and patient care initiatives,” notes the Sanford Health Foundation’s 2017 annual report.

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HEALTHCARE MAY 2018

VOL 19 ISSUE 5

Camp Good Mourning is a three-day grief camp, supported by the Altru Health Foundation, that helps children ages 6 to 18 cope with the loss of a loved one. IMAGE: ALTRU HEALTH FOUNDATION

And while no other regional hospital’s foundation can approach Sanford’s worldwide reach, all of them are making dramatic – and generally unsung – contributions to the region’s health care and quality of life.

Filling the gaps In Grand Forks, N.D., the Altru Health Foundation supports Camp Good Mourning, North Dakota’s only grief camp and a chance for children who’ve lost a loved one to experience both high ropes and low adventures such as canoeing, wall climbing, campfires and crafts.

In Fargo, parents of babies in Essentia’s expanded Neonatal Intensive Care Ward will be able to sleep in their child’s room, thanks to pull-out couches being provided by the Essentia foundation.

And in Minot, N.D., the Trinity Health Foundation offers 10 $3,000 nursing scholarships a year. Do the nurses have to commit to working at the Trinity hospital in return? No, they do not, said Al Evon, foundation director.

“It’s a true scholarship program; it doesn’t matter what school people go to or where they’re going to go to work,” Evon said.

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“The fact is, there’s a shortage of nurses, and that could have a dramatic effect on the health and well-being of people across the state. We just thought, ‘Let’s attack this head-on.’”

Around the country, philanthropy plays a significant role in the health care revenue stream. For example, donations to American and Canadian nonprofit hospitals and health care systems totaled nearly $11.7 billion during the 2016 fiscal year, a $63 million increase over 2015, the Association for Healthcare Philanthropy reported.

And those numbers are going to keep going up, because philanthropy’s importance is certain to rise, said Jon Green, Altru Health Foundation director. ”There are a couple of reasons for this,” Green said.

“First, health care reimbursements from Medicare, Medicaid and insurance companies keep shrinking. That’s not a complaint; it’s just reality. So reliance on donors is going to keep growing.”

Just as important, the term “health care” now refers to a great many things that bring little reimbursement at all – notably, prevention.

“How do we spend our dollars keeping people healthy instead of after they’ve gotten sick? That’s a real focus here at Altru,” Green said.

“But we haven’t quite graduated in the reimbursement world to paying well for prevention.”

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“Literally, we are spending $10,000 a month in gas cards, and $4,000 to $5,000 a month on hotel stays. … We have an arrangement with a hotel in Rochester, Minn. They direct-bill us, when our patients have to go down to the Mayo Clinic.”

HEALTH CARE

That’s why the Altru foundation offers free mammograms, free colonoscopies, and free diabetes-related foot and vision exams for financially eligible patients.

“So a doctor says to a patient, ‘You’re 62 with a family history of colon cancer, but you’ve never had a colonoscopy,’” Green said.

“The patient says, ‘I know, Doc, but I can’t afford it.’ And the doctor says, ‘We have a program that can help.’”

Why give?

These and other programs directly benefit patients. Some foundations directly support their hospital, too. The Trinity Health Foundation, for example, has promised to raise $10 million Another area where hospital to support Trinity Health’s new foundations pitch in is with $275 million hospital in Minot, expenses related to long-term construction of which will start stays. this spring.

Some time ago, a Minot-area But how about donors? What family traveled to Washington motivates them? state to visit a loved one in Simple: The desire to make a a hospital, and stayed in the difference, said Bobbie Tibbetts, hospital’s guest house. “They vice president of the Sanford said, ‘That’s such a great idea, Health Foundation in Sioux let’s bring it back to Minot’,” Evon Falls, S.D. said.

During its 2017 fiscal year, So they did. And this year, the Sanford foundation raised the Trinity Guest House is $40 million from a total of nearly celebrating its 10th anniversary.

20,000 donors, Tibbetts said.

The 12-bedroom guest house Some donors bestowed has hosted 19,000 people from gifts in memory of a loved 46 states over the years, Evon one. Others gave through the said.

Guardian Angel program, which Then there’s the Trinity lets people honor a Sanford CancerCare Cottage, which is patient-care staffer. for cancer patients. “We have “It’s such a joy hearing those people coming from several stories as they come in,” Tibbetts hours away, and often they have said. “It may have been a doctor to go through four to six weeks who stood out, or it may have of treatment,” Evon said. been the nurse who every single “The cottage is available Susan Omdalen, development director of the Essentia Health Regional Foundation time during cancer treatments, to them so they don’t have to at Essentia Health-Fargo, stands with a “before and after” photo showing a child who’d been a patient in Essentia Health’s neonatal intensive care ward. The greeted patients with a smile.” drive back and forth every day. foundation is raising money to support the NICU’s expansion. IMAGE: Nick Nelson/ Other times, fundraisers It minimizes their travel and Forum News Service either solicit donations for a it helps them relax, and that specific need, or help donors find the area where their money will do means it helps them recover a little faster every day.” the most good.

Thanks to its annual Cancer Center golf tournament, the Altru In all of this, that word “donors” is the one to remember, Altru foundation also offers lodging for cancer patients, Green said. “That Foundation’s Green said. started because we literally saw cancer patients sleeping in their cars “When I hear people say, ‘Gosh, the foundation does such good in the parking lot in front of the cancer center.” work,’ I say, ‘We’re just the pipeline. We’re the conduit.’

Then there were patients who skipped treatment sessions because “It’s the donors – our wonderful donors who understand our “they couldn’t afford to put gas in their car,” Green said. mission, and are willing to help.

So for patients who qualify financially, the Altru Foundation will pay “They get the credit. Not us.” PB for gas, lodging and nutritional supplements for patients who can’t tolerate solid food.

“You ask, what does the foundation spend its money on?” Green Tom Dennis EDITOR, PRAIRIE BUSINESS said.

Travel and housing

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PB

INSURANCE MAY 2018

VOL 19 ISSUE 5

IMAGE: iStock.com/ Terminator3D

Cyber insurance 101 Coupled with improved security, insurance can help companies stay afloat on a sea of cyber risk

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GRAND FORKS, N.D. – In the history of fire insurance, the Great Chicago Fire stands as a milestone.

The 1871 fire destroyed some 3½ square miles of the city and bankrupted 68 of Chicago’s 200 fire insurance companies. But the city and the insurance industry not only recovered, they did so while pioneering dramatic improvements in fire protection, firefighting and fire insurance practices.

Today, businesses and homeowners routinely carry fire insurance.

And they need it blessedly seldom, because thanks to prevention, catastrophic fires now are rare.

Here’s hoping the recent ransomware attacks in Atlanta and Baltimore help speed a similar evolution. Because right now, too many “cyber structures” in America are rickety and made of figurative wood – and as we’re learning, it doesn’t take much to make the structures go up in virtual flames.

Cybersecurity is a big part of fixing that situation.

So is cyber insurance, and that’s what this story is about.

Cyber insurance helps protect companies financially against hacking, ransomware and other internet-based risks. It’s one of the fastest-growing areas of insurance; premium totals will triple in the next few years, jumping from $2.5 billion in 2017 to $7.5 billion in 2020, PWC Global predicts.

The growth is understandable. “Cyber crime is the greatest threat to every company in the world,” Ginni Rometty, IBM’s chairman, president and CEO, said in 2015.

Rometty had a point, as Atlanta and Baltimore’s experiences in March showed. “Hackers launched cyberattacks in both cities,” reported Governing magazine, “hobbling the 911 emergency response system in Baltimore, crippling a wide swath of city services in Atlanta, knocking out Wi-Fi at the nation’s busiest airport and forcing city workers to keep records with pen and paper.”

Such attacks get people’s attention, coming as they do on the heels of infamous breaches of Target, Equifax and other large firms.

But Prairie Business readers, take note: It can happen here.

That’s because these days, small and mid-sized businesses in the

INSURANCE

By Tom Dennis

upper Midwest and elsewhere are at serious risk, said Adam Hamm, former North Dakota insurance commissioner and past chairman of the cybersecurity task force for the National Association of Insurance Commissioners.

“Cyber attackers are looking for soft targets,” Hamm said.

Small businesses often qualify because they lack strong cybersecurity protections.

The response of any business should be twofold: First, strengthen cyber defenses; and second, consider cyber insurance.

Basically, “it doesn’t matter what size business you are, whether you’re a multinational or on Main Street,” Hamm said.

“A cyber liability insurance policy is likely a prudent course of action.”

The region’s organizations now are learning this first-hand, said Gregg Schaefer, senior producer and vice president of sales at Vaaler Insurance in Grand Forks.

“I spoke with one fellow, he bought a policy and a week later, he got hacked,” Schaefer said.

“That claim probably was in the $20,000 range. We also had an $85,000 claim; we had written it for a client, and 10 days later, he got hacked, too.”

These days, about half of all cyber attacks target small businesses, Schaefer said.

“Before it was, ‘This will never happen to me,’” he said.

“Now, it’s happening a lot, and people are hearing about it.”

Organizations that are thinking about buying cyber insurance should engage in a four-step process, said Hamm, who’s now in Chicago as a managing director and cyber insurance expert for Protiviti, a consulting firm. n “The first question is, ‘What kind of coverage does your business need?’” Hamm said.

For example, first-party policies cover the company’s direct costs in the event of a breach. These may include notifying customers, buying credit monitoring for those customers, recovering blocked data and mounting a PR campaign to restore the company’s reputation.

Third-party policies protect against lawsuits, such as from individuals whose credit-card numbers were accessed during the breach.

In these 2016 file photos, then-North Dakota Insurance Commissioner Adam Hamm testifies before Congress on cybersecurity and cyber insurance. Hamm was chairman of the cybersecurity task force for the National Association of Insurance Commissioners at the time.

IMAGE: NORTH DAKOTA INSURANCE DEPARTMENT

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INSURANCE MAY 2018

Gregg Schaefer is senior producer and vice president of sales for Vaaler Insurance in Grand Forks, N.D. IMAGE: NICK NELSON/FORUM NEWS SERVICE

VOL 19 ISSUE 5

“In your first conversation with an insurance agent, you want them to understand what you do in your business, and what kind of data you have that a breach could expose,” Hamm said.

“Then you work backwards to decide what kind of coverage you need. That’s Step 1.” n Step 2 calls for figuring out the company’s maximum liability.

Is the business a small shop where an attack might cost thousands of dollars? Or does the firm’s extensive data and Internet presence potentially expose it to a multi-million dollar expense?

Remember, even a business with seemingly little exposure probably keeps employee data – including Social Security numbers – on its computers.

Also remember “supply side attacks.” Like the 9/11 terrorists who leveraged box cutters into destroying the World Trade Center, cyber crooks used the stolen credentials of a single HVAC vendor – not Target itself – to penetrate Target’s defenses and steal 40 million credit and debit card numbers in 2013.

So, if your company links with other organizations’ systems, then mind your cybersecurity, lest you be used as a backdoor. n In Step 3, the company simply balances how much risk it wants to transfer to the insurer, with how much premium the company is willing to pay. n “And the fourth question is really the difference between the companies that make this purchase with their eyes open, vs. those that may be in for a rude awakening,” Hamm said.

That question is this: What will the policy not cover?

“Because this type of insurance is developing so fast, there’s very little consistency between products regarding what’s covered, what’s not covered and how much the policies cost,” Hamm said.

For one thing, not enough actuarial data has been gathered to bring about industry-wide consistency. For another, cyber crooks keep launching new and unexpected attacks – and that keeps saddling American industry with new and unexpected risks.

There is good news in all of this, and one piece is the fact that cyber insurance doesn’t have to break the bank. The field’s growth means companies are fighting for market share, and consumers can benefit from the prices that result.

For example, consider a policy offering $100,000 in coverage. It might cover notifying customers, recovering data, paying the ransom in a ransomware case, lost-income expenses and a list of other firstand third-party costs of an attack Depending on the type of business and other factors, the premiums for such a policy might start at less than $100 a year, said Desiree Khoury, vice-president for specialty reinsurance at NAS Insurance Services in California. (North Star Mutual Insurance Co. in Cottonwood, Minn., is among those that offer NAS’s cyber insurance plans.)

With higher limits will come higher premiums. At Vaaler, for example, a construction company’s annual premium for a Travelers cyber insurance policy with a $1 million limit likely will be in the neighborhood of $5,000, Schaefer said.

But in all cases, the focus on insurance mustn’t blind executives to the need for good cybersecurity. To protect against the potential devastation of a fire, today’s business owners have smoke detectors, sprinkler systems and fire insurance, Khoury said.

That’s the way owners can lower their cyber risk, too.

“So, when you get that reminder to do a security update on your computers, don’t just click out of it,” she said.

“Make sure you make the update.” The whole process starts with sweating such details, because businesses first should make their systems as hacker-proof as they can be. PB

Tom Dennis EDITOR, PRAIRIE BUSINESS 701.780.1276 TDENNIS@PRAIRIEBUSINESSMAGAZINE.COM

Cyber crime is the greatest threat to every company in the world –Ginni Rometty

CHAIRMAN, PRESIDENT AND CEO IBM

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INSIGHTs & INTUITION What’s the most effective program or tool that your organization has found for leadership development?

The Teaching Transformation and Development Academy is committed to providing faculty and staff leadership opportunities designed to support and enhance the UND student experience. One tool we find very effective is the CliftonStrengths® assessment. As a Gallup-Certified Strengths Coach, I help individuals and teams in developing a stronger understanding of their talents and how to leverage them as “Leaders in Action.”

Through effective coaching, individuals and teams experience enhanced performance, stronger collaboration and improved levels of service.

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STAFF CAREER AND PERSONAL ADVANCEMENT COORDINATOR TEACHING TRANSFORMATION AND DEVELOPMENT ACADEMY UNIVERSITY OF NORTH DAKOTA GRAND FORKS, N.D.

Lynn Beiswanger HUMAN RESOURCES DIRECTOR BASIN ELECTRIC POWER COOPERATIVE BISMARCK, N.D.

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We created our internal leadership program, BE Leaders, to help employees grow personally and professionally within the cooperative.

Our program focuses on the positive influence of leadership, not simply leadership as a title. Participants dedicate 12 months to exploring various aspects of leadership through discussions, knowledge exchange, assignments, networking opportunities and a team leadership project. Ultimately, participants end the program knowing more about themselves and their leadership abilities, as well as more about other areas in our organization.

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With multiple offices and departments at EAPC, we promote key leadership roles for our mid-level managers for each department and office. With a lead-by-example approach, the Ownership group provides trust and latitude for managers to confidently guide their teams.

We also have subsets of these multiple office and department managers. EAPC provides extensive Project Management training to teach this set of leaders how to effectively manage projects through completion with minimal errors and industryleading profitability.

Lastly, we foster healthy competition between offices and departments by using metrics to measure completion of goals. We also share “lessons learned” and encourage teamwork between PMs, office managers and department managers to fill the valleys and shave the peaks of work in our very active and fast-paced business.

One of the most effective and rewarding ways for our employees to develop leadership skills is to get involved with civic and charitable work within the community.

We encourage and support our employees’ efforts within the communities we serve, and have found that our employees develop valuable leadership skills that also translate well in their work for our organization.

Internally, the most effective avenue we’ve found for developing leadership is for employees to serve on one-time, special-project committees or on more-permanent, ongoing management committees.

Service on these committees exposes less-experienced employees to more-experienced leadership, day-to-day operational challenges and participation in developing solutions to those challenges.

Patricia Roos PERSONAL LINES MANAGER AND EDUCATION DIRECTOR VAALER INSURANCE GRAND FORKS, N.D.

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BYTHENUMBERs

bakken region

MAY 2018

new-well oil production per rig

VOL 19 ISSUE 5 Barrels/day 1,500

Rise of the robots Industrial robots in district states, 2010 and 2015

1,250

7.5k 2010

Rig count rigs 250

2015

5k

200

1,000

150

750

100

500

50

250

2.5k

0 2009 2010

0k

Pictured here are the scores and trends over time for Minnesota, North Dakota, South Dakota and the nation. The scores from Massachusetts also are included for comparison; Massachusetts students have scored first or statistically tied for first place on NAEP tests in fourth and eighth grade reading and math since 2005.

The NAEP Reading and Math scales range from 0 to 500. Some differences shown may not be statistically significant.

Source: NAEP

eighth grade reading:

2012 2013 2014 2015 2016 2017 2018

New-well oil production per rig

Source: Brookings Institution analysis of International Federation of Robotics data Chart: fedgazette.com (Federal Reserve Bank of Minneapolis)

The following charts use the latest results from the National Assessment of Educational Progress, released in April, to show the average scale scores, both regionally and nationally, for all students in 8th Grade reading and math.

2011

0

Rig Count

Source: U.S. Energy Information Administration/Drilling Productivity Report

bakken region oil production Thousand barrels/day 1,400 1,200 1,000 800 600 400 200 0

2009

2010

2011

GAS  +37

million cubic feet/ day month over month National

Massachusetts

Minnesota

North Dakota

South Dakota

eighth gradE math:

2012

2013

2014

2015

▲▲▲ Source: U.S. Energy Information Administration/Drilling Productivity Report.

Icons made by Freepik from www.flaticon.com ▼▼▼

bakken region natural gas production Million cubic feet/day 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0

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2016

2017

OIL  +12

thousand barrels/day month over month

2018