In Business Magazine - April 2012

APR. 2012

Roundtable: Where's the Bottom Line for Business on Fuel Prices?

The ever-changing policies, technology and products of healthcare

Power Lunch By the Numbers Business Events This Issue Valley Hospitals Profiled $4.95 INBUSINESSMAG.COM

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April 2012

The ever-changing policies, technology and products of healthcare

Power Lunch By the Numbers Business Events APRIL 2012 • inbusinessmag.com

Is Travelocity the New Model for Healthcare?

HEALTHCARE REFORM

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APR. 2012

IN BUSINESS MAGAZINE

Contents

Roundtable: Where's the Bottom Line for Business on Fuel Prices?

This Issue Valley Hospitals Profiled $4.95 INBUSINESSMAG.COM

Get ready to learn about exchanges, ACOs and more — the new rules of the game if the Affordable Care Act is ruled constitutional.

Gremlyn Bradley-Waddell talks with healthcare professionals, insurance professionals and government officials to explore the impact changes will have on business and what the healthcare sector is doing to prepare for them.

Departments

9 Guest Editor

Richard L. Boals, president and CEO of Blue Cross Blue Shield of Arizona, introduces the “Healthcare Reform” issue.

Features

18 Get Energized about Net Zero

Some energy-conscious people are taking a closer look at how well their homes and work spaces perform, and Sue Kern-Fleischer finds the emerging trend in sustainability is to not just reduce consumption but to produce energy.

18

Company Talent

The vast army of unemployed is not necessarily a ready source to fill the need for critical talent. RaeAnne Marsh talks to leading HR professionals to learn how some of the area’s major employers are addressing workforce needs.

30 It’s Time to Ditch the “Maximize

Shareholder Value” Mantra

Dan Adams discusses the advantages of concentrating on maximizing customer value, and how shareholder value will follow organically.

Pres

ents

Top Hospit als Valle

Special Sections

y Are Ex Hospitals celling

39 Top Hospitals

A spe cia spotlig l section healthc hts the stre on Valley hos ngth insigh are ser of our pitals vic t addres as to how es and provid sing the es the cha indust llenges ry is facing it.

Valle y is ho

me to

som

e of

the w orld ’s be

st . .

16 By the Numbers

Exports are growing business for Arizona companies. Plus: Key economic indicators provide a sense of the health of the local economy.

20 Trickle Up

View from the top looks at how Todd Davis, who founded LifeLock, built the company on technology and trust and a drive to protect people from identity theft.

29 Books

New releases explore the connections and relationships that drive the way people engage in their workplace.

Valley Hospitals Are Excelling

A p r i l 2012

37 Assets

Aston Martin Rapide and social media tools

Noted business and community leaders Glenn Hamer, Stephanie Gorman and Robert Meyer respond to IBM’s burning business question of the month.

“2012 a Growth Year for Franchising,” “Mobile Drug Testing: New Service Offers Convenience and Compliance,” “NFIB Beats Back the IRS on Proposed Paperwork Burden,” “Cost Cuts Build Franchise Opportunities” and “Commercial Development on the Rise in West Phoenix with 1,500 Acres of Business Parks Popping Up”

28 Downsizing May Have Drained

6

Homeward Bound Southwest Center for HIV/AIDS

12 Briefs

28

The

10 Feedback

32 Nonprofit

.

38 Power Lunch

“LGO: Boutique Grocery Store Remains Lunch Hot Spot” Plus: “Making Lunch Marketable”

50 Roundtable

“Where’s the Bottom Line on Fuel Prices?”

Business Education

36 Strengthening

Your Bench

Sales coach Mike Toney concludes his six-part series on selling strategies with advice on hunting and interviewing techniques to get the best salespeople.

Networking

33 On the Agenda

In Business Magazine guide to chambers of commerce, trade organizations and other business associations that host events to help you build business

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April 2012 • Vol. 3, No. 4

Publisher Rick McCartney Editor RaeAnne Marsh

Art Director Benjamin Little

Contributing Writers D an Adams Gremlyn Bradley-Waddell Dan Danner Mike Hunter Sue Kern-Fleischer Alison Stanton Mike Toney Sally Voyles

Photographer-at-large Dan Vermillion

Advertising

Operations Louise Ferrari

lferrari@inmediacompany.com

Senior L ouise Ferrari Account Executives lferrari@inmediacompany.com

April Ray

aray@inmediacompany.com

Cami Shore

cshore@inmediacompany.com

Greg Stiles

gstiles@inmediacompany.com More: Visit your one-stop resource for everything business at www.inbusinessmag.com. For a full monthly calendar of business-related events, please visit our website.

Inform Us: Send press releases and your editorial ideas to editor@inbusinessmag.com.

President & CEO Rick McCartney Editorial Director RaeAnne Marsh Senior Art Director Benjamin Little

Corporate Offices 6360 E. Thomas Road, Suite 210 Scottsdale, AZ 85251 T: (480) 588-9505 F: (480) 584-3751 info@inmediacompany.com www.inmediacompany.com Vol. 3, No. 4. In Business Magazine is published 12 times per year by InMedia Company. POSTMASTER: Send address changes to InMedia Company, 6360 E. Thomas Road, Suite 210, Scottsdale, AZ 85251. To subscribe to In Business Magazine, please send check or money order for one-year subscription of $24.95 to InMedia Company, 6360 E. Thomas Road, Suite 210, Scottsdale, AZ 85251 or visit inbusinessmag.com. We appreciate your editorial submissions, news and photos for review by our editorial staff. You may send to editor@inbusinessmag.com or mail to the address above. All letters sent to In Business Magazine will be treated as unconditionally assigned for publication, copyright purposes and use in any publication, website or brochure. InMedia accepts no responsibility for unsolicited manuscripts, photographs or other artwork. Submissions will not be returned unless accompanied by a self-addressed, stamped envelope. InMedia Company, LLC reserves the right to refuse certain advertising and is not liable for advertisers’ claims and/or errors. The opinions expressed herein are exclusively those of the writers and do not necessarily reflect the position of InMedia. InMedia Company considers its sources reliable and verifies as much data as possible, although reporting inaccuracies can occur; consequently, readers using this information do so at their own risk. Each business opportunity and/or investment inherently contains certain risks, and it is suggested that the prospective investors consult their attorney and/or financial professional. © 2012 InMedia Company, LLC. All rights reserved. No part of this magazine may be reproduced or transmitted in any form or by any means without written permission by the publisher.

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A p r i l 2012

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Richard L. Boals, President & CEO, Blue Cross Blue Shield of Arizona

Guest Editor

The Business of Healthcare

As president and CEO of Blue Cross Blue Shield of Arizona, Richard L. Boals provides his strategic vision and expertise to the state’s leading health insurer.

Boals joined BCBSAZ in 1971 and has seen the company through numerous years of stability and success. Prior to his appointment to chief executive officer in April 2003, Boals served as president and chief operating officer.

Boals is active in the community, and chooses to be aligned with organizations that focus on youth and education; health, wellness and human services; economic and civic development; and arts and culture.

Federal policy changes to the healthcare industry are presenting difficult and confusing scenarios for businesses of all sizes. Many business leaders I talk to say they are having a hard time understanding what will be expected of them, how to budget for healthcare expenditures and what elements of the recent Federal policy changes will actually be implemented or mandated.

As a veteran of the healthcare industry with more than 40 years of experience, I can attest to the fact that we’re currently undergoing unprecedented change. This, in turn, is dictating transformations for American businesses. In light of healthcare reform, business leaders are now focused on answering two questions: “What does this mean for me and my company?” and “What can we do now to prepare?”

These questions remain unanswered, as new regulations continue to be issued and healthcare insurers, providers and manufacturers make necessary adjustments. Moving forward, education will be the key — for both consumers and corporate decision-makers.

It’s no secret the face of healthcare as we have known it will change. Gremlyn Bradley-Waddell’s cover story addresses most recent law, the court cases interpreting the law and the eventual effect on business.

In speaking with doctors, healthcare professionals, insurance professionals, hospital administrators and government officials, she uncovers the realities each is facing and looks at the impact changes will have on business. While the laws are in flux, the healthcare sector is bracing for everything from new healthcare products for employers to innovative solutions to ensuring strong healthcare services and standards.

A long-time adage is that businesses with the best people do well. RaeAnne Marsh explores various hiring practices and expertise on the part of HR professionals to ensure companies are “on-boarding” the right people for their organization. She also takes a look at the consequences (and costs) of hiring the wrong people and the importance of getting it right the first time.

This issue also looks at the concept of maximizing shareholder value; something that few would dispute is a chief directive of many corporations. Dan Adams, president of Advanced Industrial Marketing, Inc., contends in his article that it takes much more than allegiance to this mantra to actually motivate employees to action.

Instead, an increase to maximizing customer value is more tangible, actionable and measurable, and beneficial to the bottom line.

In this month’s “Trickle Up” column, Alison Stanton introduces us to LifeLock founder Todd Davis. His innovative way of doing business from his early beginnings is a great lesson for any entrepreneur looking to take an idea and make it globally successful. His unique marketing strategies and focus on quality service are key to his success.

I know that you will be quite informed with this issue of In Business Magazine. The editorial staff at In Business Magazine works hard to heighten business within our community and enlighten readers as to what it takes to grow our economy. Please enjoy.

Sincerely,

Richard L. Boals President & CEO • Blue Cross Blue Shield of Arizona

Connect with us:

The Healthcare Effect It was tough for us to provide really substantial information on the plight of healthcare and how the issue will affect businesses’ bottom lines. Federal mandates and Constitutional questions have placed this issue in a bit of a holding pattern for now. We thank Richard Boals of Blue Cross Blue Shield of Arizona for his leadership on this issue. He and his staff have helped to uncover the important questions at hand for us as businesspeople and set the stage for

inbusine ssmag.com

how healthcare providers are coping. Gremlyn BradleyWaddell has provided a solid cover story on where we are, what we can likely expect and how healthcare will progress. Businesses will certainly need to stay tuned as decisions are made, presidential politics evolve and Constitutional questions are answered. In Business Magazine will stay atop the issue and present information on matters likely to affect businesses large and small.

—Rick McCartney, Publisher

Story Ideas/PR: editorial@inbusinessmag.com Business Events/Connections: businessevents@inbusinessmag.com Marketing/Exposure: advertise@inbusinessmag.com Or visit us online at www.inbusinessmag.com

A p r i l 2012

9

Feedback

Valley Leaders Sound Off

Executives Answer

How do you see healthcare fitting into the future of economic development for Arizona’s business community?

Stephanie Gorman

Glenn Hamer

I see local companies playing a greater role in the delivery of healthcare. With our institutions for higher learning, favorable cost of living and the demographics of the population, Arizona will continue to be an attractive business environment for companies across the healthcare spectrum. Cigna already has a significant presence in Arizona with more than 3,000 employees, and favorable business conditions enable us to continue to grow our Arizona employee base.

The business community will continue to face the challenge of managing the rising costs of healthcare for employees while trying to remain competitive locally, nationally and globally. A new study indicates that, for the first time, healthcare costs for the average employee who has health insurance through an employer will top $10,000 in 2012. We work with businesses as they define the role they want to play in offering healthcare benefits as a critical component of their human capital strategy and help them determine how to best engage employees in their health in a meaningful and sustained way that will improve employee health and productivity while controlling healthcare costs.

Arizona has attracted players at the cutting edge of medical research and treatment, such as last fall’s opening of a new MD Anderson Cancer Center in Mesa.

Not only are new facilities such as this responsible for hundreds of direct jobs, but they’re destination hospitals, attracting patients and their families from around the region.

While Arizona can boast of having these and other outstanding medical offerings, our community hospitals are faced with growing cases of uncompensated care. Costs rise as healthcare providers are forced to pass along rate hikes to private insurers, making healthcare increasingly more expensive for businesses and their employees.

Arizona faces a growing shortage of physicians, although the expansion of medical schools in Arizona is helping expand the future physician pipeline.

However, due to a shortage of hospital residencies, many of these new medical school graduates must leave the state to complete their training.

Often, they never return. There is a pressing need to find financial resources to fund hospital residencies so we can ensure a sufficient supply of doctors.

Arizona’s healthcare sector has actually been growing during this soft economy, but without thoughtful policy decisions, we risk doing harm to this important economic engine.

Cigna Healthcare of Arizona cigna.com

Arizona Chamber of Commerce and Industry azchamber.com

As president and general manager for Cigna Healthcare of Arizona, Stephanie Gorman oversees sales, new business development, and product and service innovation throughout Arizona, and works to enhance healthcare quality, access and affordability. She is actively engaged in a broad spectrum of the Arizona community, including sitting on the board of directors for the Arizona Chamber of Commerce.

Glenn Hamer is president and CEO of the Arizona Chamber of Commerce and Industry.

He has overseen the organization’s development into one of the most respected pro-business public policy entities in the state. In 2011, Hamer led the business community’s successful advocacy for passage of a landmark economic competitiveness package, hailed as the most significant job creation legislation passed in the state in a generation.

President and General Manager Cigna Healthcare of Arizona Sector: Insurance

Robert Meyer

President and CEO Phoenix Children’s Hospital Sector: Healthcare

A vibrant healthcare system helps drive economic growth for our region and reflects the true priorities of our community. Hospitals like Phoenix Children’s are a strong economic driver — high-quality jobs with excellent benefits improve the quality of life and spending power of our large work force. And healthcare is a growth industry.

Our geographic expansion creates jobs in ancillary industries, such as construction, and adds new jobs in the communities where we expand.

As specialty care hospitals develop new programs to serve the complex needs of our population, we recruit top physicians and staff.

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A p r i l 2012

President and CEO, Arizona Chamber of Commerce and Industry Sector: Business Advocacy Group

Clinical excellence attracts research opportunities, funding and patients from beyond the boundaries of our state and contributes to its growing reputation as a destination for the highest-quality medical care.

Arzona’s economic health has been well served by a strong commitment to collaboration within the medical and biosciences community here. Our alliances with Dignity Health, Translational Genomics (TGen), UA College of Medicine-Phoenix, ASU’s Biodesign Institute, Mayo Clinic and others have helped us eliminate duplication of services, advance clinical care, discover new treatments and envision a future in which every child has access to the care they need, without having to travel out of state.

Phoenix Children’s Hospital phoenixchildrens.com

As the chief executive of Arizona’s only freestanding pediatric hospital, Robert Meyer is responsible for planning, directing and managing the current operations, future growth and program development for Phoenix Children’s Hospital. He is credited with the rapid and significant turnaround of the hospital’s finances and operations since 2003. Meyer is also actively involved in the community in a variety of roles outside his hospital duties.

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Briefs

Quick and to the Point

Mobile Drug Testing: New Service Offers Convenience and Compliance

2012 a Growth Year for Franchising Franchise establishments in Arizona account for $17 billion in annual sales and 192,000 jobs. While growth of new franchise operations has been slow in recent years, the International Franchise Association predicts franchising to be on the rise again in 2012. Access to capital is one factor, explains IFA spokesman Matt Heller, along with “some increase in consumer spending.”

While there’s been no change in the business structure of franchise governance, Heller says what is different now is franchisors are more involved in helping franchisees gain access to capital and develop a relationship with bankers and lenders to get the franchise off the ground. “Some even capitalize franchisees themselves, becoming lenders to a degree,” he says, citing Denny’s and Cici’s as examples.

“Brands use the franchise model to grow successfully, to appeal to emerging trends,” Heller says. Keeping the brand up to par and making sure the franchisees are fully capitalized are vital to franchise success, he notes, adding, “And they’re getting smart about not growing too fast.”

There are 295 categories of businesses that use the franchise model to grow, according to the last census. Food is the largest sector, responsible for 40 percent of franchise establishments and 50 percent of the employment. “There’s been growth in specialty franchise, such as yogurt and juice bars,” says Heller,” and burger establishments continue to grow.”

A few franchise concepts that have their eye on Phoenix for growth are 5 & Diner, which now has 12 locations across five states after being founded in Phoenix in 1989, with plans for six to eight new locations in Phoenix; Papa Murphy’s, which operates more than 1,300 franchised and corporate-owned locations in 37 U.S. states and Canada and has four locations opening in Phoenix this year; Teriyaki Madness, which has locations throughout North America and plans to open 13 in Phoenix over the next five years; and Tempe-based Tilted Kilt, which opened its sixth Phoenix-area location in February and plans to open another 1 or 2 in the next 18 months.

—RaeAnne Marsh

Bringing the security of a drugfree work place to the work place, Gina and Nathan Kesler launched their USA Mobile Drug Testing of N. Phoenix and SE Valley in January. Market research that the Keslers commissioned found clients cited convenience as the number one advantage of the mobile service. Instead of paying an employee for the down time to visit a lab, in some cases also paying down time for a second employee to go along as chaperone, businesses lose only a few minutes of the employee’s productive time. And employees reported they were happier not having to go to a lab, losing either work time or their own family time and sitting in a room with potentially contagious individuals. “It’s a onestop shop for compliance and questions,” says Gina Kesler, president of the business.

“In the last 20 years, it’s become commonplace for large companies to adopt drug-free workplace policies,” says Kesler, speaking with the experience of her many years in compliance, sales and consulting.

So employment at a small business is more attractive to substance abusers, she observes.

Adding to that susceptibility is the smallbusiness mindset of “We’re run like a family; everybody here is family” and an aversion to creating a sense the business owners lack trust in their employees. A mobile testing service can facilitate a positive “We’re ensuring a safe place for everybody” instead of a negative “We’re going to find the users” atmosphere in the work place, Kesler emphasizes.

USA Mobile Drug Testing services can be project-based or ongoing, covering preemployment, post-accident or incidents of reasonable suspicion as well as regular, random testing events. The company will help clients put a drug-free program in place, including educating them about how easy it can be to accomplish that. For businesses that are federally mandated to have a drug-free program, such as heavy hauling and aviation — among which the specific mandated procedures vary — USA Mobile Drug Testing also provides the expertise of keeping up with changes in the mandate.

—RaeAnne Marsh USA Mobile Drug Testing of N. Phoenix

International Franchise Association franchise.org

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and SE Valley phoenixmobiledrugtesting.com

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A p r i l 2012

13

Briefs

Quick and to the Point

NFIB Beats Back

the IRS on Proposed Paperwork Burden

NFIB nfib.com

Cost Cuts Build Franchise Opportunities

Cousins Subs is expanding in the Phoenix area, and Cliff Jones, area developer with his wife Susan Serrano for the franchise operation, says rents are “a little more negotiable” in today’s real estate market. Presently working with a franchisee developing two stores on the west side and another franchisee interested in Mesa, he helps in finding locations and says, “… the right location is a little less expensive than a few years ago.” But the big difference in the cost facing an interested franchisee comes from Wisconsin-based franchisor Cousins Submarines, Inc. itself.

“Cousins trimmed the start-up costs to $200,000 from $300,000, so it’s more accessible to more people,” says Jones. “They looked at the size of the stores and the equipment list, and what makes sense and what they can do to change things.” The new design calls for reach-in refrigerators and

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Commercial Development on the Rise in West Phoenix with 1,500 Acres of Business Parks Popping Up

Three major business parks, totaling in excess of 1,500 acres, are being jointly developed in West Phoenix by Phoenix-based John F. Long Properties LLLP and Chicago-based The Alter Group, Ltd. The parks will offer medical office buildings, Class A office space, light industrial and retail, and are expected to drive economic expansion for West Phoenix for several decades.

Projections estimate up to 65,000 people being employed in these parks when they are fully built.

“The West Valley, with the creation of Westgate, its two signature sports arenas and the completion of the west Loop 101 in the past decade, is positioned to be a major economic and employment area,” says Jake Long, general partner of John F. Long Properties. “As experts and veterans of West Valley real estate, we are creating these new employment parks now that the community is ready, and we’re investing for not just decades but generations to come.” And estimates show approximately 70 percent of future housing in the Valley will be focused in the West Valley.

The three new parks are Aldea Centre, situated on 150 acres at the southwest corner of 99th Avenue and Bethany Home Road; Algodon Center, 1,000 acres bisected by Loop 101, stretching from Thomas Road to Campbell Avenue just south of Camelback; and 300-acre Copperwing Business Park, at the southeast corner of Glendale and 115th avenues adjacent to the Glendale Airport. Aldea, scheduled to deliver its first sites in mid-2012, is being planned for office and “flex” space users. Algodon’s first phase is Algodon Medical and Office Park, situated directly across Thomas Road from Banner Estrella Hospital. Copperwing will offer commercial space for manufacturing and light industrial users. Each of the three masterplanned business parks is fully zoned and ready for build-to-suit consideration, according to the developers.

—RaeAnne Marsh The Alter Group, Ltd. alterwestvalley.com John F. Long Properties LLLP jflong.com

freezers instead of walk-in ones. Stores can be built in smaller spaces — 1,200 square feet instead of 2,000-3,000 square feet — which reduces both start-up and operating costs. And it even cuts down on labor when preparing the food by making it in closer reach, Jones explains.

Jones believes there is potential in the Phoenix market to grow the Cousins Subs franchise from its current eight stores to 50-60 stores, and anticipates opening 5-10 stores in the next three years.

—RaeAnne Marsh Cousins Submarines, Inc. cousinssubs.com

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Photo: The Alter Group

It began as a new line slipped on the annual small business income tax return. IRS regulators decided that the government was being short-changed by businesses not reporting or underreporting their electronic payments, and they proposed to close the gap by forcing small businesses to reconcile gross receipts with the figures reported on a new form: the 1099-K. The National Federation of Independent Business called on the IRS to eliminate it.

NFIB shared small business’s concerns that something as simple as a customer’s request for a cash-back transaction on a debit card purchase could significantly increase owners’ paperwork burdens. In addition, the demand could task them unnecessarily with sorting through payment certificates to subtract state and federal point-of-sale taxes that third-party processors aren’t always able to separate.

The IRS agreed that the taxes captured wouldn’t be worth the damage inflicted on the nation’s job creators. Not only did the agency drop the requirement for the 2012 tax year, but officially stated that it had no intention of requiring such reconciliation in the future.

—Dan Danner, president and CEO of NFIB

“They’ll stand behind us” Jeff and Diane Starkweather, Starkweather Roofing Alerus Bank & Trust Commercial Banking Customer

“With their Midwest roots, Alerus Bank & Trust has a ‘we’re here to take care of you’ mentality that you don’t find in other banks. We finally feel like we’re working with a partner, not just a banker.”

Read the Starkweather Roofing story—and others—at alerusbiz.com.

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A p r i l 2012

15

By the numbers

Metrics & Measurements

Exports Growing Business for Arizona According to the International Trade Administration in Washington, D.C., Arizona merchandise exports increased 12 percent in 2011 compared to 2010, growing from $15.6 billion to $17.5 billion.

Francisco Sánchez, the Under Secretary for International Trade, claims that 85 percent of world economic growth over the next five years will take place outside of the United States. Arizona’s 2011 merchandise export sales increased to many top destinations, including Japan (up 34 percent), Malaysia (21 percent), the United Kingdom (20 percent), Germany (16 percent) and Mexico (14 percent). Key merchandise export categories include computer and electronic products, transportation equipment, machinery manufactures, agricultural products, and minerals and ores.

“Data shows that U.S. companies that export pay higher overall average wages and make higher profits,” says Karen Dickinson, chair of the Arizona District Export Council. “More and more Arizona companies are starting to get that, and that can only be good for the state’s economy.”

The U.S. Commercial Service, the trade promotion arm of the U.S. Department of Commerce’s International Trade Administration, operates an Arizona branch with offices in Phoenix and Tucson to assist

Arizona companies in their efforts to export using local partners. The Service, led in Arizona by Director Eric Nielsen, works to encourage firms to “tap their export potential,” according to Nielsen. “Only a small fraction of all U.S. companies export, and of those that do, 58 percent sell to only one foreign market.”

One way Arizona firms can expand international sales and promote job growth is through the Arizona Commerce Authority’s State Trade and Export Promotion grant program. The STEP grant combines funds from the U.S. Small Business Administration with ACA matching funds to provide financial assistance to qualified small and medium-sized Arizona companies eager to build their exports.

A February 2012 report entitled “U.S. Metro Economies: Exports in the Next Decade” projects that exports will outpace imports by 2020. Metropolitan Phoenix exports are expected to better than double by 2020 as exports will grow by 53.4 percent. Computers and electronic products made up 45.4 percent of exports in 2010; by 2020, it is expected to be 49.4 percent. Export potential based on metropolitan Phoenix’s industrial make-up is 59.8 percent by 2020.

—Mike Hunter

Key Indicators Key indicators for the Metro Phoenix economy are provided in each issue to identify those key numbers that give readers a sense of the health of our local economy.

Economic Indicators (Metro Phoenix)

Number

Unemployment (Jan. 2012)

7.9%

-5.92

1,723.9

1.9

No. of Housing Permits (Jan. 2012)

676

35.8

Consumer Confidence* (Q1 2012 to date) (Arizona)

69.5

9.64

22.97

-0.22

Job Growth (in thousands) (Jan. 2012)

Average Hourly Earnings (Jan. 2012)

Eller Business Research

Retail Sales (Arizona) Nov. 2011

Total Sales

4,493,048

5.8

Retail

2,797,075

3.2

Food

672,235

3.9

Restaurants & Bars

564,364

10.7

Gasoline

459,372

21.1

Contracting

512,089

12.1

Arizona Commerce Authority azcommerce.org

Eller Business Research

Arizona District Export Council exportaz.org International Trade Administration trade.gov

Nation’s Largest Metros Are the Top Exporters Metro areas account for 88% of the nation’s exports

Real Estate

2010 Level Rank GMP Exports

Q4 2010

27.9%

28%

Net Absorption (in SF)

92,786

-100,127

Rental Rates (Class A)

$23.45

$24.72

Commercial: Indust.***

New York-Northern New Jersey-Long Island, N.Y.-N.J.-Penn.

1

1

2

3

Vacancy Rate

Chicago-Naperville-Joliet, Ill.-Ind.-Wis.

3

7

Net Absorption (in SF)

Washington-Arlington-Alexandria, D.C.-Va.-Md.-W.V.

4

22

Houston-Sugar Land-Baytown, Texas

5

2

Rental Rates (General Industrial)

Dallas-Fort Worth-Arlington, Texas

6

10

7

Q4 2011

Vacancy Rate

Los Angeles-Long Beach-Santa Ana, Calif.

Residential:

9

Total Sales Volume

Q4 2011

Q4 2010

12.3%

14.5%

2,853,602

105,408

$0.51

$0.53

Feb. 2012

Feb. 2011

7,293

6,520

San Francisco-Oakland-Fremont, Calif.

8

13

Total Median Sale Price

$130,000

$120,300

Boston-Cambridge-Quincy, Mass.-N.H.

9

11

New Build Sales Volume

542

346

Atlanta-Sandy Springs-Marietta, Ga.

10

17

New Median Sale Price

$224,396

$224,362

Miami-Fort Lauderdale-Pompano Beach, Fla.

11

5

Resale Sales Volume

6,751

6,174

Resale Median Sale Price

$122,500

$116,000

Seattle-Tacoma-Bellevue, Wash.

12

6

Minneapolis-St. Paul-Bloomington, Minn.-Wis.

13

12

Detroit-Warren-Livonia, Mich.

14

4

Phoenix-Mesa-Scottsdale, Ariz.

15

28

Source: Census Bureau, Bureau of Economic Analysis

16

YOY % Change

Retail Sales (in thousands)

Commercial: Office***

Philadelphia-Camden-Wilmington, Penn-N.J.-Del.-Md.

YOY % Change

A p r i l 2012

Note: export values through the first half of 2010

* Rocky Mountain Poll ** Consumer Price Index refers to the increase or decrease of certain consumer goods priced month over month. *** Cassidy Turley BRE Commercial Latest data at time of press

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A p r i l 2012

17

Bottom line

The Buck Stops with You

Time to Get Energized about Net Zero

The emerging trend in sustainability is to not just reduce consumption but to produce energy

By Sue Kern-Fleischer When it comes to energy efficiency, some energy-conscious people are taking a closer look at how well their homes and work spaces perform. In many cases, the buildings they occupy are wasting energy, both in terms of the energy they consume and the energy they could be creating. Enter the Net Zero concept, which seems to be getting a lot of buzz lately. It’s a forward-thinking concept in which a home or commercial building could not only reduce the energy it consumes, but produce enough or a surplus of energy so that there are no longer monthly utility bills.

“The Net Zero concept has been kicked around a lot for years, and the challenge is putting it into practice,” says Andy Hill, LEED AP and chief estimator for DPR Construction’s Phoenix regional office. DPR, a national general contractor and construction manager specializing in technically complex and sustainable projects, built Arizona’s first targeted Net Zero commercial building last October. Based in Phoenix’s Discovery Triangle, the innovative building serves as DPR’s headquarters and is on track to achieve Net Zero by October 2012.

Phoenix-based Meritage Homes built Arizona’s first Net Zero home in April 2011, and since it introduced the option, dozens of homeowners in Meritage’s 26 national communities have chosen to invest in building a Net Zero home. “How you get to Net Zero is critical. The process needs to be cost-efficient for the benefit you receive,” says C.R. Herro, Meritage’s vice president of environmental affairs.

Global Race to Net Zero Achieving Net Zero is a complex task.

Factors to take into consideration include assessing the existing building for energy inefficiencies and then looking at ways to refurbish and add renewable energy components or rebuild. In the long run, the initial investment and labor is worth it, or so certain countries believe. “Germany is a good forecaster of where we are going because their energy is so expensive. It is three times more expensive than ours. Solar panels are on 80

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A p r i l 2012

percent of their homes. That’s the trajectory we are on,” Herro says.

Germany is not alone. According to a February 2011 European Council for an Energy Efficient Economy report, Europe is leading the way, with many countries having already set targets for zero energy or zero carbon by 2020. In the United States, focus has been on research and promotion of the drive toward Net-Zero Energy Buildings (NZEB).

States leading the change include California, which has committed to achieving zero net energy for all residential construction by 2020 and for all commercial construction by 2030, and Massachusetts, which plans to achieve NZEB for all buildings by 2030.

Re-thinking How We Live and Work Here in Arizona, some residential and commercial builders are taking an aggressive approach to reaching Net Zero. DPR Construction has received accolades for moving its headquarters to the Discovery Triangle and redeveloping a former Castle Boutique with the goal of reaching Net

Zero within a year of moving in. The fasttrack project was designed in January 2011 and construction was complete by late September. The 16,500-square-foot building accommodates 58 full-time employees and serves as a living laboratory for how to live and work sustainably in our desert environment.

The entire team — DPR, architect SmithGroupJJR, energy consultant KEMA Engineering and several DPR building partners — designed all components of the building to yield a 10-year return on investment.

“When we started the process, I had an idea of what Net Zero meant, but having lived through the process, it takes more creativity and work. You have to re-think how you are going to approach it. The only way you achieve Net Zero is to first concentrate on reducing dependency on the grid,” Hill says. Dissecting a building for energy use is important, but Hill says one of the most critical components to achieving Net Zero is adjusting human behavior. “We involved our employees in the process before we started construction.

We conducted surveys and explained the inbusine ssmag.com

Photo: DPR Construction

process as the project evolved. If we had not considered them, we wouldn’t have people committed to reaching our goal of Net Zero,” he says.

People were also a key factor to consider for Meritage Homes when it designed its first Net Zero production home, which it unveiled in April 2011 in Verrado as the first of its kind in the country. While more than 100 Net Zero homes dotted the country, they were either custom-built with expensive price tags or homebuilder spec-display homes.

Meritage calls its focus on Net Zero a residential revolution that the company started by re-thinking how it built homes. To accomplish that, the homebuilder challenged its industry by hiring Herro, a Ph.D. and environmental engineer. “A house is the most expensive thing we buy. My job is to ask dumb questions and look for product innovation.

Building science has evolved more in the past few years than 40 years combined,” Herro says. The first thing Herro and his team did was change the way the home worked before considering renewable energy. “Ideally, you can do the opposite, but that is not the best thing for the consumer,” he says. “Solar is sexy, but it is not as easy to change insulation, light bulbs and air conditioning. Our homes consume half the energy required before we add renewable energy. Net Zero really shows off how well the whole building works.” The initial investment to purchase a Meritage Home with Net Zero features averages from $15,000 to $25,000 extra depending on utility offsets. “You need to ask if the cost to do it is valuable. I’ve seen homes where builders spend $60,000 to get there. You also need to embrace the concept of pre-buying energy — spending

$10 today to make $20 tomorrow,” he said.

Mick Dalrymple works at Arizona State University Global Institute of Sustainability as project manager for Energize Phoenix, a unique program designed to save energy, create jobs and transform neighborhoods along a 10-mile stretch of Phoenix’s light rail line. The city of Phoenix was awarded a $25-million federal grant from the U.S. Department of Energy Better Buildings Program and the American Recovery and Reinvestment Act to launch Energize Phoenix, in partnership with ASU and Arizona Public Service. Currently, there are more than 200 projects in the commercial program, 800 apartments in the rental program and more than 120 homes in the residential program. ASU’s role is to evaluate the energy savings generated by the program. Dalrymple said DPR’s office is impressive because it is a retrofit. “It was done based upon their experience with their San Diego office. We’ll see if they get to zero through this summer.

Meritage Homes is building and selling new Net Zero homes as a way to distinguish itself in the marketplace and give people a reason to buy new homes instead of resale homes,” he says.

Net Zero can also be applied to manufacturing facilities. Al Halvorsen, senior director of environmental sustainability for PepsiCo, says the company decided about three years ago to try to bring its Frito Lay plant in Casa Grande to Net Zero. “As a continuation of our strong environmental sustainability program, we decided to retro-fit one of our plants to be as far ‘off the water, electric and natural gas grids’ as possible,” he says. Noting the trends for improved efficiencies and renewable energy use are increasing and pointing out other companies

in Arizona are also doing great things, he says PepsiCo’s implementation of the concept in a manufacturing plant is unique.

“Many plants or businesses have one or two features (such as photovoltaics and/or a bio mass boiler), but to combine water recycling, renewable steam, renewable electricity, a highefficiency fleet and a zero landfill program all into one manufacturing site — that’s the most innovative feature,” Halvorsen says, noting that the integration of all the projects has also been the greatest challenge. “The design of each project had potential to impact the other areas.

We needed to understand this interaction before finalizing the design.” In fact, some have come to refer to the Casa Grande facility as two plants — a chip plant and a utilities plant. Explains Halvorsen, “In a normal plant operation, all the water, steam and electric come from the grid — you turn on the tap or the switch; it always flows or turns on. With this project, we are producing these resources right along with Doritos and Lays.”

Calculating Success Going back to all the buzz about Net Zero, the question is how to measure progress.

Harvey Bryan, Ph.D., a professor at ASU’s Design School and Global Institute of Sustainability, has been teaching energy efficiency and renewable energy systems for several years. “Various agencies and businesses are working to bring their carbon footprint down to Net Zero, but transparency is very important to convince our community,” Dr. Bryan says. “A lot of people are making claims, but we need verification. A building might be Net Zero one month and not the next.

We need to examine each building’s energy performance over a year.”

Dr. Bryan is optimistic, pointing out that, because of our ample solar energy in Arizona, Net Zero in a low-rise building with a fairly large roof is very achievable. He cites ASU’s Tempe campus as an example. Despite having a number of older buildings, ASU is close to 20 percent on target to achieving Net Zero. “It shows it can be done. We have 56 solar projects installed, and you can view how each building is performing in real time on our Campus Metabolism website,” he says.

DPR Construction dpr.com Energize Phoenix energizephx.org

DPR Construction’s headquarters in Phoenix’s Discovery Triangle

inbusine ssmag.com

Meritage Homes Corp. meritagehomes.com PepsiCo Inc. pepsico.com

A p r i l 2012

19

Trickle Up

A View from the Top

Todd Davis: Building LifeLock on Technology and Trust He made it all about securing the information

by Alison Stanton

20

A p r i l 2012

More than a credit monitoring service, LifeLock helps protect its clients’ personal information through a combination of data surveillance techniques and outstanding customer service — all day, every day.

LifeLock’s key competition, Davis notes, is the credit bureaus. But, he adds, “no one thinks of Experian and the others as people who protect our identity.”

Although LifeLock immediately took off as a company, growing very quickly and making the Inc. 500 list of fastest-growing companies two years in a row, Davis admits there were some challenges along the way.

“The main issue was how to tell people who are already worried about identity theft to give us their personal identification information,” he notes. This challenge led Davis to star in a memorable commercial that he says clients still mention to this day. “I became best-known as the guy who gives out his Social Security number,” he says, adding the advertisement helped establish credibility for what his company was able to do.

“People would think, ‘What is that crazy guy doing? He’s either crazy or passionate and believes in what he does.’ I haven’t run that ad campaign in years, but people still talk to me about it. And our clients know they can hand over the keys to their kingdom to us, because they know us and trust us so much.” Effective though it was, Davis’s ad drew complaints from various attorneys general who didn’t like him giving out his Social Security number. “I wanted to respect them, so we changed our marketing a bit and now use ads that feature ‘LockMan,’ who takes on criminals with his army of LockMen.” Rather than live in fear, Davis wants people to work with a company like LifeLock to make it harder on the criminals so they won’t be able to get away with stealing identities. He is also concerned about the increased popularity of peer-to-peer file sharing, which he says can often lead to an entire hard drive being

Job Security

■■ Todd Davis flaunted his Social Security ■■ ■■ ■■ ■■

number in commercials he ran in 2007, ‘08 and ‘09, to build credibility for his company’s ability to do the job of protecting individuals’ identity.

LifeLock employs about 470 people, who perform a variety of tasks that range from product development, engineering, software development, research and development to marketing.

LifeLock received a 2010 Stevie Award as Best New Product or Service of the Year for the LifeLock Identity Alert™ system.

LifeLock provides its clients “5 Points of Protection,” monitoring identity, scanning for identity threats, responding to identity theft, offering a service guarantee and tracking credit scores.

Davis earned a Bachelor of Business Administration in Entrepreneurship from Baylor University.

exposed to other people. “By taking advantage of the technology and being more prudent, we will help deter more criminals.”

Davis hopes he can leave a legacy that goes beyond simply creating an easily-recognizable brand. His ultimate goal is to take on what he calls the most-reported crime in America and eliminate it. He is also proud that his company has created so many jobs in Arizona. “We are going to beat back the crime of identity theft,” he says.

LifeLock lifelock.com

inbusine ssmag.com

Photo: LifeLock

As Todd Davis, founder of LifeLock, has learned first-hand, success comes from identifying an issue society is facing and then creating a new, easily identifiable industry to help solve it. Just as Kimberly-Clark Corp. got people asking their friends to hand them a “Kleenex” rather than a “facial tissue,” Davis set out to create a company that would not only solve a serious problem but also become a brand leader in the process.

“I wanted to apply technology to a unique challenge that society faces,” Davis says, recalling the many stories he read and saw on the news about the prevalence of identity theft. “When I started LifeLock, identity theft was already one of the most reported crimes to the Federal Trade Commission. I found these stories to be both scary and fascinating.

I’d hear the stories about the horrible things that would happen to the people who had their identity stolen and how they worked to get their lives back, but then the end of the story was always, ‘So be careful who you give your information to,’ which I thought was crazy.”

Rather than wait until the worst happens and identity is compromised, Davis thought it made more sense to apply technology on behalf of the consumers to keep their data as safe as possible. After all, he notes, people cannot just quit giving out their personal information. “We give it to our doctor, and to our dentist, and our employers. I wanted my company to do something to make this process safer.”

Although Davis, who had previously worked at Dell Computer, had a solid background in technology, he knew he needed to find experts who could help determine exactly what was needed for his business. In 2005, the self-described “entrepreneur by nature” went out and found “the rocket scientists” of the technology industry and started his company with eight employees. “I just told them, ‘This is what I want to do. Now please go out and solve X,’” he says.

w ast No ut F rve O se ing Re Sell ’re We

Business Owners, Executives & Entrepreneurs: Please join us for this groundbreaking event. Meet our Guest Editors for an intense discussion on the local economy.

Topics include: • Emerging Economic Opportunities • Strengthening our Workforce • Business Funding • Government Policy and much more . . .

Growing Local Business

In Business Magazine brings together its Guest Editors for this annual event that is certain to impact your business.

Moderating Event

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Host, Arizona Horizon, KAET Eight

In Business Magazine Guest Editors invited to attend*

Craig R. Barrett

Janice K. Brewer

Vicki Panhuise, Ph.D.

Candace D. Wiest

Jerry Colangelo

Retired CEO/Chairman of the Board, Intel Corporation

Governor The State of Arizona

President and Owner VePoint Consulting Group, LLC

President & CEO West Valley National Bank

Principal Partner JDM Partners

John Huppenthal

Jos Anshell

Donald Brandt

Howard Lein

Barbara Barrett Ph.D.†

Superintendent of Public Instruction, State of Arizona

CEO Moses Anshell

Chairman & CEO Arizona Public Service Company

Founder & Owner RE/MAX Excalibur

President, Thunderbird School of Global Management

Derrick Hall

Wyatt Decker, M.D. ††

Jim Pederson

Rich A. Rector

Donald Smith

President & CEO Arizona Diamondbacks

CEO Mayo Clinic in Arizona

CEO Pederson Group, Inc

Owner & Executive Chairman Realty Executives Phoenix

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Guest Editors since November 2010

Friday, May 18, 2012 For more information: Phone: 480-588-9505 x213 Email: info@inbusinessmag.com

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† Dr. Barrett replaces Ángel Cabrera, Ph.D., who was Guest Editor for our April 2011 issue, as president of Thunderbird School of Global Management. †† Dr. Decker replaces Victor F. Trastek, M.D., who was Guest Editor for our February 2011 issue, as CEO of Mayo Clinic in Arizona.

Get ready to learn about exchanges, ACOs and more — the new rules of the game if the Affordable Care Act is ruled constitutional

22

A p r i l 2012

inbusine ssmag.com

“This is completely turning buying and selling health insurance … upside down,” says Don Hughes, healthcare policy advisor to Arizona Gov. Jan Brewer, of the Affordable Care Act.

by Gremlyn Bradley-Waddell

W

ith new technology, policies and products emerging for healthcare, what will be the impact on a business’s bottom line? Will something like the Travelocity concept be the future of healthcare? Who knows. While passions still run high in debating the merits of the Patient Protection and Affordable Care Act, and amidst the uncertainty of the unfolding presidential campaigns and impending Supreme Court decision, In Business Magazine is focused on the effects businesses can expect from its implementation and how compliance will function.

Since the Affordable Care Act — the vast healthcare reform package sometimes referred to as ObamaCare — was signed into law a little more than two years ago, it’s safe to say many Arizona business owners inbusine ssmag.com

A p r i l 2012

23

and entrepreneurs have been among those wondering what the impact will be on their livelihood, their wallets and the economy at large. And, of course, whether they should change their insurance and, if so, which healthcare options they can offer and which healthcare options employees will want. “This is completely turning buying and selling health insurance … upside down,” says Don Hughes, healthcare policy advisor to Arizona Gov. Jan Brewer, of the Affordable Care Act.

anticipated risk cost, the system will collapse under the increased demand for medical care.”

The Affordable Care Act, in Brief While the new law is complicated and runs an impressive 1,000 pages, approximately, the Kaiser Family Foundation website tidily summarizes the legislation’s key points in this way: • Most individuals will be required to have health insurance beginning in 2014.

Hughes describes Arizona’s health insurance exchange as similar to Travelocity, a one-stop shop for consumers. … folks can figure out how to get the most for their health insurance dollar.

Although there’s no way to know all the outcomes yet, Hughes says at least one result everyone here is hoping to see from the Affordable Care Act is a substantial decrease in the number of uninsured individuals in Arizona. Reducing the rate of uninsured folks is, after all, one of the major aims of the new law. According to the website of the Henry J. Kaiser Family Foundation, a respected source for information on key health policy issues, the Congressional Budget Office has estimated that the legislation will reduce the country’s number of uninsured by 32 million in 2019 at a net cost of $938 billion over ten years, while reducing the deficit by $124 billion during this time period. Hughes says he’s expecting Arizona’s number of uninsured individuals to drop from the current rate of 19 percent to just 11 or 12 percent. “[The Affordable Care Act] has the potential, from that aspect, of having a positive impact on insurance,” he says.

Bill Weaver, managing partner of Focus Benefits Group in Phoenix and an insurance broker with 35 years’ experience in the industry, worries about another function of these numbers. “Medical claims are caused by sick people who need care. Care costs money, and increased technology and increased access to care make it even more expensive.” He is concerned about the long-term viability of the system. “If you provide increased coverage to more people and charge less than the

24

A p r i l 2012

• Individuals who do not have access to affordable employer coverage will be able to purchase coverage through a state health insurance exchange with premium and cost-sharing credits available to some people to make coverage more affordable.

Small businesses will be able to purchase coverage through a separate exchange.

• Employers will be required to pay penalties for employees who receive tax credits for health insurance through the exchange, with exceptions for small employers.

• New regulations will be imposed on all health plans that will prevent health insurers from denying coverage to people for any reason, including health status, and from charging higher premiums based on health status and gender.

• Medicaid will be expanded to 133 percent of the federal poverty level ($14,404 for an individual and $29,327 for a family of four in 2009) for all individuals under age 65.

Although there is no employer mandate within the law — that is, there is no requirement for a company to provide health insurance for its employees — the state’s smaller business owners, or those with up to 100 employees, will likely be working to become familiar with the exchanges and tax credits described in bullets two and three, above, in the coming months. That’s because an Arizona-run health insurance exchange will be a new place they can turn to for private, and affordable, insurance for their employees.

inbusine ssmag.com

Like Travelocity for Healthcare According to HealthCare.gov, a federal government website managed by the U.S. Department of Health & Human Services, small businesses have paid, in the past, an average of 18 percent more for the same healthcare as large businesses. The exchange, essentially, is an online site and call center from which individuals and small businesses may compare health plans, buy insurance, determine their eligibility and even enroll in programs such as AHCCCHS or food stamps. Hughes describes Arizona’s exchange as similar to Travelocity, a one-stop shop for consumers. But instead of getting the most for their travel buck, folks can figure out how to get the most for their health insurance dollar.

While Arizona is still studying its options as to what kind of marketplace it will be, Hughes, who is heading up the creation of Arizona’s exchange, says the state exchange will likely feature an open-market approach in which companies that meet the minimum requirements are permitted to sell their products. In other words, it will be a level playing field where all the packages are comparable; there will be bronze, silver, gold and platinum “tiers,” according to the Kaiser website.

What’s more, the legislation stipulates that all states must have an exchange up and running by 2014; if they don’t, the federal government will step in and create one for them. inbusine ssmag.com

But there’s just one thing. All these efforts could be all for naught.

individuals to purchase health insurance and penalizing them if they do not.” The coalition’s lawsuit is now before the Supreme Court. Oral arguments were slated for March, and Hughes says a decision is expected by the Supreme Court sometime in June.

While the governor believes the law is unconstitutional, Hughes notes, “The law is still the law,” so the state’s work on its exchange will continue. His primary goal is to see that employers and employees get as many choices of healthcare plans as possible through the exchange. He’d also like to reduce administrative hassles and associated costs for small employers. Hughes says the exchange will provide the traditional defined benefit but it will also allow employers to use what’s known as a “defined contribution,” which makes it easier for an employer to control costs. For example, an employer might wish to provide only $200 per person, per month, for health insurance.

For some employers, a defined contribution may be the ideal option. Others, however, may determine that they’re financially and, perhaps, administratively better off not providing health insurance for their employees and encouraging employees to use the exchange and benefit from a tax credit.

Is the Affordable Care Act Constitutional?

As it turns out, Gov. Jan Brewer, Hughes’ boss, doesn’t believe the legislation is constitutional. She’s not alone. Arizona is one of 27 states that have joined a coalition and, together, are challenging the law. In a May 2010

To Be In or Out, That Is the Question HealthCare.gov notes other provisions in the new law that small business owners will want to know about: • Businesses that have up to 25 employees, pay average annual wages below $50,000 and provide health insurance may qualify

Some employers … may determine that they’re financially and, perhaps, administratively better off not providing health insurance for their employees and encouraging employees to use the exchange and benefit from a tax credit. press release posted on the governor’s website, Brewer is quoted as saying, “Health care regulation is a power reserved to the States by the Tenth Amendment of the U.S. Constitution.

Congress has overreached by requiring

for a small business tax credit of up to 35 percent (up to 25 percent for nonprofits) to offset the cost of their insurance. This will bring down the cost of providing insurance.

A p r i l 2012

25

• Starting in 2014, the small business tax credit goes up to 50 percent (up to 35 percent for nonprofits) for qualifying businesses. This will make the cost of providing insurance even lower.

• Employers with fewer than 50 employees are exempt from new employer responsibility policies. They don’t have to pay an assessment if their employees get tax credits through an exchange.

brokers don’t adapt. “Brokers who cling to the current business model and make no changes are not going to survive,” he says.

But they still have a place, he adds, because small business relies on brokers to help them navigate the insurance world. In fact, Weaver feels the Affordable Care Act becomes harder to define the more it is rolled out, so brokers may become even more important than ever — especially in Arizona, where “we still

“Products are being offered to agents with very little knowledge of how these products actually work, and the representatives for these companies frequently have no idea what they’re selling,” Weaver notes.

And, even if a company does face paying a penalty for not providing insurance to its employees, Hughes says the law is written in such a way that an employer might be better off financially in the long run not providing insurance — even after bumping up employee pay to assist that individual with healthcare-related costs. Of course, while this may make financial sense in some instances, “it may not make employee-relations sense,” Hughes adds. He says employers considering that approach will have to weigh the matter, noting also that implementing a communications plan for employees is always a smart move. As for how the payment process will work, he says the exchange will give an employer a consolidated bill and then the employer will simply send a check to the exchange. The exchange then distributes the money to the proper insurance companies.

have vibrant competition” among several insurance carriers.

“Products are being offered to agents with very little knowledge of how these products actually work, and the representatives for

these companies frequently have no idea what they’re selling,” Weaver notes. For instance, several carriers have come out with what are called partial self-funding plans. In this plan, an employer is given a very large deductible, possibly $20,000 or $30,000 per person. There is also an aggregate deductible that makes it possible for the employer to not be severely penalized should several people have those very large claims. “In a state where there are very few carriers and where rates and access to plans are controlled, this may be a workable concept because an employer who tried the self-funding concept and got in trouble with it could always go back into the fully insured arena,” says Weaver. Not so here, he explains, because an employer who experienced a loss much larger than he could withstand and decided to go back into the fully insured market might be faced with a rate differential of as much as 400 percent as a new policy holder. “In Arizona, this is potentially financial suicide for the employer. In Arizona, if you leave the fully insured pool you become subject to all of the vagaries of self-insurance that very few agents will actually understand.”

Still Room for Brokers Thus far, Hughes says he and others associated with the exchange have gotten fairly positive feedback from business owners and employee groups about the potential upcoming changes. As for the broker community, well, that’s a different story. Hughes says they initially believed they were all out of a job, thanks to the streamlined approach of the exchange. That could still happen, he says, if

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Heart & Mind™ Network Presents

Accounting for Accountable Care Organizations Nathan Laufer, M.D., F.A.C.C., medical director of the Heart & Vascular Center of Arizona and immediate past president of the Maricopa County Medical Society, says one part of the law that concerns him is the mandated “accountable care organizations,” or ACOs. He believes the establishment of such organizations is “an attempt to fix costs of healthcare by the government.”According to Laufer, it’s a no-win situation in which physicians and hospitals are expected to cut costs and improve quality at the same time or else their incomes will drop dramatically. The consequences will be that physicians will be driven away from private practice, he says.

Explaining a different point of view, Thomas Maxwell III, M.D., chairman of the board for the Peoria-based Arizona Integrated Physicians and an internal medicine physician in Sun City, says ACOs “will provide the opportunity to reward physicians for providing the high quality, patient-centered, cost effective care that they were trained to provide.” AIP’s view is that, instead of being in competition, physicians will be encouraged to work together in an integrated, coordinated continuum and will be rewarded for not only taking care of the patient but for aligning outcomes. A sharing of costs replaces the fee-for-volume approach, thus lowering the overall cost of healthcare.

The Bottom Line A lot of questions have yet to be answered.

Will doctors leave their practices? Will that cause a run on effective care? Will small businesses and individuals successfully navigate the new exchanges? And, adding uncertainty to all these critical concerns: Will the Affordable Care Act be ruled constitutional?

But it’s a short timeline for those waiting on the court’s ruling. Hughes says that if smaller employers haven’t already begun, they need to start doing their due diligence and learning about the health insurance exchange, which is slated to have an open enrollment by Oct. 1, 2013.

REAL BUSINESS. REAL PURPOSE. REAL PROFIT. Who Should Attend: CEOs; COOs; VPs of Marketing, Sales and Operations, Entrepenuers and Small Businesses.

Featured Speakers:

Rick McPartlin

Kathy Heasley

Lon Safko

Michelle Sterling

Revenue Strategist and Creator of The Revenue Game®

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Grow your business in 2012 and beyond. Join us for the event that unites SALES - BRANDING - MARKETING - LEARNING to drive business, purpose and profit.

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• New sales strategies that drive revenue • Branding that delivers quality leads • Organizational alignment that powers results

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HealthCare.gov healthcare.gov Henry J. Kaiser Family Foundation kff.org Maricopa County Medical Society mcmsonline.com

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$398 per person Register before April 30 and save $100

Seating is limited for this highly interactive, hands on event.

Register today!

Arizona Integrated Physicians arizonaphysicians.com

Heart & Vascular Center of Arizona heartcenteraz.com

• New methods to take your brand to the streets • How to leverage the power of purpose and win

Download our map of the Phoenix Metro Hospitals

GPE1.COM/ Phx-Hospital s-Map A p r i l 2012

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HR

People Are Key

Downsizing May Have Drained Company Talent

And the available talent pool may be shallower than it looks

by RaeAnne Marsh Although the downsizing that many companies went through in the past few years did result in personnel cost containment, many companies found it also resulted in executives handling responsibilities they were not sufficiently trained for. Now, as companies look to the future, they recognize the importance of a pipeline for talent to fill current and projected openings — and the vast army of unemployed is not necessarily a ready source to fill this need.

Deloitte calls it the “talent paradox” in a study the professional services company recently released on this situation. The talent shortage exists in critical areas even while unemployment overall remains high and layoffs continue, says study co-author Robin Erickson, Ph.D. “Executives expect to see talent shortages in functional areas of executive leadership, operations, IT, strategy and planning.” There are skills shortages in technology and healthcare fields, especially in medical coding as more demands are placed on the billing process. While the study

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surveyed major companies around the world, Dr. Erickson says the shortages are more pronounced in North America than in the Asia Pacific or EMEA (Europe, Middle East and Africa) regions.

Even companies that currently have the talent they need may be at risk. “Sixty-five percent of employees said they are already looking for new employment or thinking of looking,” Dr. Erickson says. One risk factor is a change in leadership; even with no change in job description, the unwritten agreement founded on relationships and an understanding of performance expectations is broken, she explains.

How are companies keeping their workforce needs filled?

Pipelines, Mentoring and Hiring to the Company Culture RSC Equipment Rental has hired 700 people in the past 18 months, according to Mark Krivoruchka, senior VP of Human Resources.

Equipment rental, which he points out tends

to be cyclical, fell off in 2008 and ’09. As the company downsized, it combined districts that were under-performing. Now on the front end of the economic turnaround, the company has experienced double-digit growth in the past six months and needs district managers in place to run the territories. To fill the positions with qualified employees, it relies on its district manager mentoring program, an intensive one-year program that involves monthly sessions as well as pairing the most experienced district managers with inexperienced ones. “It’s quicker than experience,” Krivoruchka says.

He’s finding there is good talent available in functional areas such as human resources and information technology, but the hardest area is “good, effective salespeople,” he says.

“Most good employers and good talent should [already] be connected, so I do have people in the pipeline I can invest in, groom and develop,” Krivoruchka says, noting he spends more time than previously on building mentoring programs and assessment processes to cultivate his own talent base.

Successful performance and leadership starts with carefully establishing the criteria to evaluate success, Krivoruchka says. “Make sure there’s linkage and alignment between the culture, how you measure performance and how you look at criteria for leaders.” Every company has a culture and values, he points out, and trying to measure competencies that are not supported by the value systems may create conflict.

A fit with the company culture is also crucial to Avnet’s hiring practices. Pauline Crone, director of Talent Acquisition & Staffing, notes that applicants are encouraged to talk with employees and to read company press releases.

“We provide as much information as we can relevant to the position they’re applying for,” she says. Recruiters are expected to find out applicants’ goals and motivation and how that aligns with the business. “Hiring managers do the same, to set appropriate expectations, so it’s a win-win.”

Whether hiring from outside the company or promoting from within, Avnet qualifies its applicants by looking at how the individual has applied his or her skills in the past and how that aligns with the role being applied for at Avnet. “The company has put together competencies and identified skill sets that are needed, based on what has been successful for incumbents in those particular roles,” Crone inbusine ssmag.com

Books says. Avnet looks at transferrable skills from similar industries or with similar roles and responsibilities. “The skill sets are pretty much the same, but have broadened,” she adds, explaining it’s now a more multi-faceted role. “In the past, it was important the employee knew the industry and the technology, but now we’re looking for someone who can also take a look at a situation, understand the impact on the industry, then look at all the different types of solutions and services Avnet can provide from our different lines of business.”

To fill the talent pipeline, Crone says Avnet listens to feedback from employees as well as partners, and puts together programs that include mentoring and stretch assignments to develop the employees for advancement. “We will identify and help employees achieve target goals in terms of their career.” The talent shortage she’s finding is expertise in semi-conductor components and engineering.

Arizona Public Service’s shortage is more from attrition than the economy, and the company is preparing for it. When the long period of growth essentially evaporated in 2008 due to the market, it impacted the construction area of the business but not the leadership ranks, according to Lori Sundberg, Senior VP of Human Resources and Ethics. However, APS is watching retirement numbers carefully as many of its employees will reach retirement age in the next three to ten years. “We’re working to strengthen our talent bench. It’s there, but probably not sufficient.” It starts with having really good data, she says. “We’re continuously looking to determine our future needs and if we have the right leadership structure.”

Last year, APS launched a Performance Mastery Series to strengthen leadership skills in its existing population. It also implemented a talent review and management program to discuss “who are our high potentials who have the ability and desire to take on expanded leadership roles, and then work on targeted development programs directed to our high potentials,” Sundberg says. And a Succeeding at Leadership program, for new hires and employees promoted from within, aims to ensure a common foundation and platform of leadership basics that includes company values and how to lead in alignment with those values.

APS is also watching its pipeline for journeyman craft positions, as apprenticeship is a five-year program. Another challenge Sundberg notes is finding the right level of math and science skills for more technical positions, and she is anticipating shortages in that area.

It’s not necessarily, however, a question of skill, Sundberg notes; an applicant who had been downsized out of a job may not be ready to make the adjustment to return to a different level of the work force, where he or she is not setting the agenda but rather delivering against it. To overcome an issue of hiring and investing in training people who may be just taking any job until they can get the one they want as well as the historically higher attrition rate among employees in their first five years because they see a low opportunity to advance inside the company, she says APS’s aim is to help new hires “understand the company and the culture so they will stay longer term.” In general, Sundberg says, “I think the skill sets are out there. The challenge is the ‘will and the fit.’”

Arizona Public Service aps.com Avnet, Inc. avnet.com Deloitte deloitte.com RSC Equipment Rental, Inc. rscrental.com

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Top People Matter

Recruiting, Interviewing, Selecting & Orienting New Employees This fifth edition of the classic employment “Bible,” considered the most comprehensive manual produced on the subject, provides all the step-by-step guidelines and readymade hiring tools in the four key stages of the employment process needed to get the best employees on board. This detailed handbook includes hundreds of sample interview questions and dozens of full-length interview dialogs. It also supplies checklists, job ads, an application for employment form, an interview evaluation form, sample letters of acceptance and rejection, and many other valuable, ready-to-go tools.

Diane Arthur $49.95 • AMACOM • June 2012

Sleeping with Your Smartphone: How to Break the 24/7 Habit and Change the Way You Work Most of today’s busy professionals are always “on.” They can’t go an hour without checking their Blackberry, iPhone or the smart device of choice. This keeps them in tune with their team, but at what cost? Harvard Business School professor and ethnographer Leslie Perlow delves into the new connected world of work and challenges the notion that success requires a businessperson to be constantly plugged in. Her work and her research suggest this 24/7 mentality is actually counterproductive. With anecdotes of successful implementation, she recommends a radical yet simple idea: Take “disconnected” time off, and both individual and team members will benefit.

Leslie A. Perlow $27 • Harvard Business Review Press • May 2012

Building a Magnetic Culture: How to Attract and Retain Top Talent to Create an Engaged, Productive Workforce This is a book with fascinating ideas for building a corporate culture that attracts top talent, but also a guidebook for working across generations — Traditionalists, Baby Boomers, Gen-X and now Millennials (born 1980-1992) — all of whom are motivated by different incentives, work with or without constant feedback and supervision, and who have different defining moments in their lives. For instance, Millennials grew up being kept constantly busy by their parents, require more positive feedback, work less to deadlines, and consider career as just one component of their lives, not the defining component.

Using the ideas in this book, a hiring team can look to attracting and motivating the kind of talent that can create a desirable and productive work environment.

Kevin Sheridan $28 • McGraw-Hill • On shelves and online

A p r i l 2012

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Management

Decisions that matter

It’s Time to Ditch the “Maximize Shareholder Value” Mantra Maximize customer value, and shareholder value will follow organically

by Dan Adams Maximize shareholder value. If you’ve heard it once, you’ve heard it a thousand times. It’s the pledge of allegiance recited in boardrooms around the world, the North Star used to guide the decisions of the business masses. But what if that faithfully followed star is actually a mirage? What if we get to where we think we’re going only to find … nothing?

Maximizing shareholder value is a lovely result, but it’s a lousy goal.

What happens when you give your employees a rousing speech about maximizing shareholder value? Once they wake up from their boredominduced nap, they’ll go back to doing exactly what they had been doing before. After all, what can they do that will raise earnings per share?

It’s like you’re asking them to count all the stars in the sky. In other words, maximizing shareholder value — a mantra made popular in 1976 by the most-cited academic business article of all time, Jensen and Meckling’s “Theory of the Firm” — is just too vague and uninspiring to move employees to action. This viewpoint was also expressed by Peter Drucker, who insisted the primary purpose of a business is to acquire and keep customers.

People need something tangible and actionable to focus on — something that will result in maximizing shareholder value. Tell an employee to increase shareholder value, and he’ll struggle. Tell him to increase customer value, and he can think of a dozen things to do, many of them actionable, measurable, and beneficial to your bottom line.

The uninspiring nature of the “shareholder value” mantra is only one reason to consider embracing a new one. The whole notion of shareholder value is built on a foundation of failed logic. Here are five reasons why it’s time to focus instead on understanding and meeting the needs of your customers: Shareholders care more about how healthy your company looks than how healthy it is. According to the authors of the 2008 Harvard Business Review article “Innovation Killers,” “Over 90 percent of the shares of publicly traded companies in the United States are held in the portfolios of mutual funds, pension funds and hedge funds. The average holding period for stocks in these portfolios is less than 10 months.” In other words, that hedge fund manager you were trying so hard to please last year has already dumped your stock. Shareholders have very little interest in the long-term health of your company, only in the appearance of long-term health. It might be more accurate to refer to today’s shareholders as “sharehandlers.” It’s time to stop thinking of the typical shareholder as a grandma in Peoria holding shares of stock for 20 years.

Asking an executive to maximize shareholder value can be a very bad idea. If a stock’s P/E ratio is 20-to-1, then only 5 percent of a firm’s value is driven by this year’s earnings. To put it another way, 95 percent of shareholder value is driven by shareholders’ expectations of the future …

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which can be manipulated. Most of those shareholders are not actually going to be around to see whether the company meets its long-term earnings goals. So the executive with stock options has great incentive to manage investor expectations. And when managing the expectations of Wall Street analysts conflicts with the actual job of building the firm’s long-term competitive strength, guess which wins? Every quarter becomes “the most important quarter in the company’s history.” Employees will become numb to this familiar refrain because they hear it all the time.

Expectations might stay the same or increase or decrease, but not as a result of the proactive effort of the company to create long-term strength.

Maximizing shareholder value doesn’t work anyway. We should not be shocked to find this failed logic has led to failed results. Roger Martin (“The Age of Customer Capitalism,” Harvard Business Review, Jan. 2010) researched and compared the pre-maximize era (pre-1976) with the post-maximize era (post-1976). Here’s what he found: The compound annual real shareholder return actually dropped from 7.6 percent to 5.9 percent. The new goal of maximizing shareholder value did nothing to … maximize shareholder value.

Companies that were successful often found they had created more illusion than reality. Jack Welch, the poster child for maximizing shareholder value, was highly successful over his tenure. But GE shareholder value plummeted after his retirement, most likely because investors were trading on the appearance of health — not the actual long-term health — of GE. And that appearance changed dramatically with Mr. Welch’s retirement.

It’s been 10 years since he retired, and GE’s market capitalization is still inbusine ssmag.com

only one-third of what it was when he left. It may be a long time before his successor(s) can “manage expectations” to the peak he reached.

Failed logic and failed results do not mean we should ignore shareholder value. We simply must understand shareholder value for what it is and what it is not. Let’s look more closely.

Only tangible goals, pursued day after day, ultimately get results.

Finishing a marathon is a noble goal. But it’s important to note that the personal satisfaction you feel afterward is the result of achieving your goal; it is not the actual goal. If you planned to run a marathon and made personal satisfaction your goal, you would fail to focus your training on the more tangible task of running more than 26 miles.

During the marathon, you would be tired, sore and frustrated — and fall well short of personal satisfaction. By confusing the result with the goal, you’d miss out on both. And, like achieving personal satisfaction, in and of itself maximizing shareholder value can be a difficult thing to figure out how to achieve. But when you instead focus on something tangible, like improving customer satisfaction, you can begin to see how that goal will result in maximized shareholder value.

The more happy customers you have, the happier your shareholders will be. The more miles you run leading up to the marathon, the more likely you’ll put in a satisfying performance on the day of the race. The organization behaving as though its goal is to understand and meet the needs of its customers will outperform competitors fixated on shareholder value.

Employees need a higher calling to be inspired. According to Napoleon, “Small plans do not inflame the hearts of men.” If you’re the CEO and you think your employees are passionate about this quarter’s earnings per share, you’re out of touch. You might be excited about it because you have large stock options, but that’s not the kind of passion that’s going to rub off on your employees. In fact, many employees will question your motivation to reach the goal when they know you’ll benefit disproportionately — sometimes wildly disproportionately — from the achievement of that goal.

These same employees, however, can become very motivated when given the opportunity to deliver real and measurable value. As Steve Jobs asked when recruiting John Sculley from Pepsi, “Do you want to sell sugar water for the rest of your life, or do you want to come with me and change the world?” Employees will quickly forget last quarter’s earnings, but years from now they’ll be telling their grandkids how they were on a new product team that turned their industry upside-down.

Meeting customer needs requires understanding them — and from that understanding can flow a river of profits. A worthy new goal is to understand and meet the needs of your customers. Note that “customers” includes both existing and new customers (sometimes in new markets), and that “meeting needs” must include both value creation and value capture. Value creation is a new offering that provides value beyond the customer’s next-best alternative. Value capture is returning some of this customer value to the supplier through appropriate pricing. Done correctly, meeting customer needs will not reduce your profits; it will increase them.

But why should the goal be to understand and meet — not just meet — customers’ needs? Nearly four decades of research says the new product battle is usually won or lost in the “understanding” phase, often referred to as the “front end of innovation.” Companies that directly engage their customers to understand their needs have operating income growth rates three times higher than those that do not (“The Global Innovation 1000,” Booz Allen Hamilton, 2007). When you see a gulf that large between good and poor practitioners, it should scream, “Opportunity!”

The executive’s dilemma, of course, is to find a way to survive the short term while building the long term. After all, those short-term “sharehandlers” will continue to form expectations, and the board of directors will continue to watch these expectations impact stock price.

The only solution is to take a two-pronged approach of finding new ways to influence investors while rapidly seeking to understand the customer needs that have, so far, gone unmet. This will require a lot of energy and focus, and that’s why it’s such a great idea. Not everyone is willing to expend the blood, sweat, and tears it takes to create a new reality inside his of her company and make a mark in the marketplace. Just imagine what will happen if you’re able to make this shift before your competitors.

The edge you’ll gain will be tremendous — and so will be the rewards.

Advanced Industrial Marketing, Inc., • New Product Blueprinting: The Handbook for B2B Organic Growth newproductblueprinting.com

Dan Adams, president of Advanced Industrial Marketing, Inc. and author of New Product Blueprinting: The Handbook for B2B Organic Growth, has more than 30 years of working within and with major B2B corporations and has explored every aspect of product development. He is a chemical engineer and holder of many patents and innovation awards, including a listing in the National Inventors Hall of Fame. Adams’ extensive experience in Fortune 500 marketing, business development and leadership positions includes being head of strategic planning for a billion-dollar company. An award-winning speaker, he is a guest lecturer at Wharton’s Executive MBA program and trains in every region of the world.

Make the Leap from Shareholder Value to Customer Value Help investors look forward, not just backward. A consistent stream of quarterly “good news” is one way of influencing investors’ expectations, but not the only way. For example, the stock price of a pharmaceutical company can be driven by its pipeline of new products — something that is “knowable” due to the public reporting of clinical trials. So consider ways to supplement the “backward-looking” metric of consistent earnings with appropriate “forward-looking” insight. You may not be able to ignore quarterly earnings reports, but take a cue from Steve Jobs or Jeff Bezos (who ran Amazon at quarterly losses for seven years) and look for other ways to inspire investors.

Work to rapidly understand customer needs. Regardless of your message to investors, you’ll probably need to show

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tangible financial results sooner than you’d like. Most suppliers are squandering more than half of their R&D resources on new products that will fail — usually because customer needs were not understood. The shortest line between this state and blockbuster new products is to close the gap in understanding customer needs.

If you’re a B2B supplier, this will be an especially fruitful venture. For most B2B suppliers, the gulf between how they currently understand customer needs and how they could do so is enormous. Compared to the consumer goods buyer, the B2B customer is more knowledgeable, more interested and more rational. Using new methods, skills and tools, you can shift your focus from maximizing shareholder value to quickly understanding customer needs in great depth.

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NonProfit

by Alison Stanton

Actions to build Community

Homeward Bound: Ponying Up to Help People in Need Women in elaborate hats sipping mint juleps. Men in pastel seersucker suits cheering on their favorite horses. A feast of classic and delicious Southern dishes. These are just a few of the scenes attendees of A Derby Affair can expect to enjoy.

The event, which will be held from 1 p.m. to 4:30 p.m. on Saturday, May 5, on the Derby

Lawn at the Arizona Biltmore Resort & Spa in Phoenix, is a major fundraiser held by Homeward Bound, a nonprofit organization that has been working with the homeless and victims of domestic violence since 1990, trying to break multi-generational cycles of these issues.

Attendees can stroll down Millionaires’ Row, mingling with other party-goers and placing bets on their favorite horses. The event will culminate in a live simulcast of the 138th Kentucky Derby shown on big screens throughout the lawn area.

Tickets range from $200 to $1,000.

Snapshot

■■ ■■

nnually, Homeward Bound assists more than A 250 families, including at least 500 children.

The 2010-2011 annual budget was $7.4 million. The money comes from government funding, United Way donations and special events like A Derby Affair.

The fundraiser’s proceeds help Homeward Bound provide transitional housing; a 12- to 24-month comprehensive social services program that includes mental health services for adults; and assistance in finding employment as well as food, clothing and emergency services. “We really work hard to provide all of the resources needed by families so that they can get back on their feet,” says Dana Bailey, director of development.

Homeward Bound hbphx.org

■■ The nonprofit owns and operates 155 housing units.

■■ More than 26,000 volunteer hours are logged every year. About 60 people are on the staff.

■■ Each family who participates must contribute 30 percent of their adjusted gross income for housing, utilities and support services.

Southwest Center for HIV/AIDS: Impacting Lives On Saturday, May 12, hundreds of attendees will converge at the Montelucia Resort & Spa in Scottsdale for the 17th Annual Night for Life Gala.

The fundraiser, which is ranked number 11 in Phoenix Business Journal’s list of Top 50 Charity Events, will begin at 6 p.m. with a cocktail reception, followed by a formal dinner and presentation at 7:30 and entertainment at 8:30. Simon Doonan, creative ambassador-at-large for Barney’s New York, will serve as Master of Ceremonies.

The black tie event, which will include a live and silent auction as well as other special activities, will raise money for Southwest Center for

HIV/AIDS, a Phoenix nonprofit organization that President and CEO Carol Poore says has three goals: to prevent infection, to improve the quality of life for those impacted by HIV and AIDS, and to contribute to worldwide research.

Individual tickets start at $350. The funds help provide “a plethora of programs and array of support services, including preventive programs for men, women and youth; mental health counseling; information on nutrition and supplements; and support groups that address a variety of topics,” says Poore.

Southwest Center for HIV/AIDS swhiv.org

■■ ■■ ■■

ounded in 1990, the organization is F the largest privately-supported HIV and AIDS program in the Desert Southwest.

34 employees and 10 to 15 outsourced providers work at or with Southwest Center for HIV/AIDS. The organization serves 70 percent of Arizona’s at-risk and impacted for HIV/ AIDS community. Annually, about 1,200 people seek services at the nonprofit organization.

■■ The annual budget is $2.4 million, of

■■

which about 60 percent comes from privately funded sources that include donor gifts and annual campaigns.

The remaining 40 percent comes from government grants.

For the past 17 years, the nonprofit organization has been part of a clinical trial program testing drugs, medications and devices. Of the 31 drugs available for HIV and AIDS, Southwest Center for HIV/ AIDS helped with research on 29 of them.

In business to do good for the community, nonprofits enrich the lives of those who contribute as well as those who receive. In Business Magazine showcases two nonprofits in each issue, focusing on their business organization and spotlighting an upcoming fundraising event.

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Photos: H omeward Bound (top), Southwest Center for HIV/AIDS (bottom)

Snapshot

www.inbusinessmag.com

April 2012

O n t h e Ag e n D a

A listing of Greater Phoenix business organizations and their events. Visit www.inbusinessmag.com for an expanded monthly calendar of educational, networking and special business events.

Greater Phoenix Chamber of Commerce

Mayor’s State of the City Address and Luncheon Arizona Small Business Association

Enterprise Business Awards Luncheon Tues., May 1 — 11:00a – 1:00p Join the Arizona Small Business Association at the Arizona Biltmore for this Valley classic event celebrating the successes of small business in Arizona. The 19th Annual Enterprise Business Awards Luncheon honors eight small-business owners for their accomplishments. This motivating event showcases the many successes of remarkable Arizona small businesses and presents the prestigious U.S. Small Business Administration Awards for the State of Arizona.

The event will take place at the Arizona Biltmore with Valley business leader Todd Davis, CEO of LifeLock, delivering the keynote speech. Learn from a seasoned entrepreneur how a gutsy, spur-of-the-moment marketing decision turned this Arizona-based startup into a 2-million-plus customer phenomenon. Davis is a man who knows how to make people take notice.

His efforts have been recognized with numerous regional and national business, consumer and leadership awards.

Find out who Arizona’s most amAZing™ small business is when the winning video from the Small Business Video Contest is revealed at the luncheon. Attendees will also be able to stop by the Sonoran Studios Video Booth to tell why their business is amAZing™. Videos will be featured on asba.com in celebration of National Small Business Month.

Arizona Small Business Association asba.com

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Wed., April 11 — 11:30a – 1:30p Phoenix Mayor Greg Stanton’s 100day milestone is coming up, and the Greater Phoenix Chamber of Commerce will be presenting the Mayor’s State of the City address with a luncheon on Day 100, April 11, at the Phoenix Convention Center, North Building. It will be an opportunity for the community to hear the mayor talk about his vision for economic development, education and other issues that are important to the overall community.

The Chamber wants to ensure the community has access to the presentation.

There is a fee to attend the luncheon ($70 for Chamber members, $85 for non-members), but seating in the back of the room is free of charge. Nicole Sommers will take the registration, which is required, via e-mail at nsommers@phoenixchamber.com.

Close to 900 people typically attend the annual State of the City address and luncheon, according to Chamber spokesperson Jody Ryan. It’s a high-energy, fun event, she says, noting the luncheon also offers a networking opportunity for those looking to build their business or do business in Phoenix.

The Chamber has been working with the mayor’s office for several years on the State of the City address, and this year’s is particularly exciting, Ryan says, because it is Mayor Stanton’s biggest presentation to the community since he was elected.

—RaeAnne Marsh Greater Phoenix Chamber of Commerce, Mayor’s Address phoenixchamber.com/mayors

Notable Dates This Month Fri., April 6

Good Friday

Sat., April 7

Passover begins

Sun., April 8

Easter

Sun., April 22 Earth Day Agenda events are submitted by the organizations and are subject to change. Please check with the organization to ensure accuracy. See more events online at www.inbusinessmag.com.

A p r i l 2012

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O n t h e Ag e n d a AHWATUKEE FOOTHILLS CHAMBER OF COMMERCE S.C.O.R.E. One-on-One Business Counseling Thurs., April 5, 19

Call for appointment Free Ahwatukee Foothills Chamber of Commerce 4435 E. Chandler Blvd., Phoenix (480) 753-7676

Chamber Masters Golf Tournament Fri., April 13 1:00p Shotgun Start; 6:00p Dinner, Raffle & Awards

To benefit the Red, White & Boom Fireworks Festival.

Foursome: $375; single player:$100; dinner only: $25 The Foothills Golf Club 2201 E. Clubhouse Drive, Phoenix ahwatukeechamber.com

ARIZONA ASSOCIATION FOR ECONOMIC DEVELOPMENT Phoenix Luncheon Tues., April 3 11:15a – 1:15p

Speaker: Jerry Colangelo Members and guests: $40; non-members: $50 Phoenix Convention Center 100 N. 3rd St., Phoenix bridgette@aaed.com

ARIZONA SMALL BUSINESS ASSOCIATION The Process of Business Development Thurs., April 12, 26 9:00a – noon

Three-hour presentation and one-hour business review process for each client, to help start-up and existing business owners create a realistic overview of a new business model or integrate a new function into existing business.

ASBA members: $25; non-members: $40 ASBA’s Business Education Center 4600 E. Washington St., Phoenix asba.com/events

April 2012

needs. Presented by Mountain States Employers Council. Includes breakfast.

Members, free; non-members: $25.

ASU SkySong 1475 N. Scottsdale Rd., Scottsdale aztechcouncil.org

Members: fee varies with membership; non-members: $75; advance registration required Fairmont Scottsdale Princess 7575 E. Princess Dr., Scottsdale econclubphx.org

Arizona Health and Medical Technology Expo

GLENDALE CHAMBER OF COMMERCE

Speakers and exhibitors with information relevant to every business in the healthcare technology industry.

Members, $20; non-members: $30 Hilton Scottsdale Resort & Spa 6333 N. Scottsdale Rd., Scottsdale aztechcouncil.org

S.C.O.R.E. Consulting Sessions

Thur., April 5 12:30 – 6:30p

ASSOCIATION FOR CORPORATE GROWTH, ARIZONA April Breakfast Tues., April 10 7:00a – 9:00a

Features Dana Garmany, Troon Golf CEO Members and sponsors: $49; non-members: $69 Arizona Biltmore Resort & Spa, Grande Ballroom 2400 E. Missouri Ave., Phoenix acg.org/arizona

CENTRAL PHOENIX WOMEN Cocktail Reception Tues., April 10 5:30p – 7:00p

Author Angella Nazarian will present “Pioneers of the Possible: Celebrating Visionary Women of the World.” $75 The Ritz-Carlton, Phoenix 2401 E. Camelback Rd., Phoenix centralphoenixwomen.org

CHANDLER CHAMBER OF COMMERCE Centennial Celebration Fri., April 27 4:00p – 9:00p

ASBA members: $50; non-members: $60 Arizona Biltmore Resort & Spa 2400 E. Missouri Ave., Phoenix asba.com/events (See article on page 33.)

The Chandler Chamber turns 100 years old and celebrates with food and fun for all, from Karts to Hot Laps, and a birthday cake with a “Happy Birthday” sing-along.

General admission: free; pit pass for 6 race driving events: $100 Bob Bondurant School of High Performance Driving 20000 S. Maricopa Rd., Chandler (480) 963-4571

ARIZONA TECHNOLOGY COUNCIL

ECONOMIC CLUB OF PHOENIX

Council Connect: Employing Foreign Workers

Dean’s Council of 100 Executive of the Year Luncheon 2012

A look at the challenges and possibilities in using foreign-born workers to meet staffing

Honored as Executive of the Year: Dr. Irwin M. Jacobs, co-founder of Qualcomm Inc.

Enterprise Business Awards Luncheon Tues., May 1 11:00a – 1:00p

Wed., April 4 8:00 – 10:00a

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Please confirm, as dates & times are subject to change.

Thurs., April 19 11:30a – 1:30p

Mon., April 2, 9, 16, 23 9:00a – noon

Call for appointment.

Free Glendale Chamber of Commerce 7105 N. 59th Ave., Glendale (623) 937-4754

GREATER PHOENIX BLACK CHAMBER OF COMMERCE SBA Loan Clinics Fri, April 6 9:00a – 11:00a

Learn about SBA loans and how to go through the application process. At the Chamber office and on the Web. Free Greater Phoenix Black Chamber of Commerce 2828 N. Central Ave., Phoenix phoenixblackchamber.com

Executive Luncheon Thurs., April 12 11:30a – 1:30p

“How to Effectively Use Local Resources to Market Your Business” Members: $15; non-members: $35 Renaissance Phoenix Downtown 50 E. Adams Street, Phoenix phoenixblackchamber.com

GREATER PHOENIX CHAMBER OF COMMERCE Marketing Summit Thurs., April 5 1:30p – 5:30p

Learn how to shape your brand, generate media hype, cultivate leads and effectively monitor media feedback.

Members of Arizona Technology Council, Business Marketing Association or Greater Phoenix Chamber of Commerce: $35; non-members: $65 Edward Jones Training Facility 8333 S. River Pkwy. phoenixchamber.com

Mayor’s State of the City Address and Luncheon Wed., April 11 11:30a – 1:30p

Come early to network with city officials and City Council members.

Members: $70; non-members: $85 Phoenix Convention Center, North Bldg.

100 N. 3rd St., Phoenix phoenixchamber.com (See article on page 33.)

MESA CHAMBER OF COMMERCE 100th Annual Leadership Awards Fri., April 27 5:00p – 6:30p

$50 Hilton Phoenix East/Mesa 1011 West Holmes Ave., Mesa mesachamberofcommerce.org

NATIONAL ASSOCIATION OF WOMEN BUSINESS OWNERS NAWBO University Wed., April 11 9:30a – 11:00a

Event by: Ginny McMinn, Coach for Solutions Free Phoenix Country Club 2901 N. 7th St., Phoenix nawbophx.org

SCOTTSDALE AREA CHAMBER OF COMMERCE Behavior Targeting Tues., April 24 8:30a – 10:00a

Jennifer Meyer presents how to leverage behavioral targeting online into your marketing mix in order to grow your business. $10 Location to be determined scottsdalechamber.com

Breakfast with the Mayor of Scottsdale Fri., April 27 7:30a – 9:00a

Mayor Lane will discuss upcoming economic development initiatives and work on the city’s General Plan, and what lies ahead for Scottsdale.

Members: $20, day of event: $25; guests: $30, day of event: $35 DoubleTree Resort by Hilton Hotel Paradise Valley – Scottsdale 5401 N. Scottsdale Rd., Scottsdale scottsdalechamber.com

SURPRISE REGIONAL CHAMBER OF COMMERCE Business Education Seminar Wed., April 25 8:30a – 10:00a

Continuing SRCC’s partnership with Greater Phoenix SCORE, this session is entitled “How to Create Credibility When Marketing to Skeptical Prospects.”

Presenter: Tom Trush.

Free UltraStar Cinemas 13649 N. Litchfield Rd., Surprise Mary Orta, (623) 583-0692

inbusine ssmag.com

Please confirm, as dates & times are subject to change.

TEMPE CHAMBER OF COMMERCE “Doing Business With” Series Wed., April 18 8:00a – noon

Learn how you can provide services and products to the State of Arizona; City of Tempe; Arizona State University; and Phoenix Sky Harbor International Airport. Each of four 45-minute sessions, feature a representative from the purchasing or contracting department of each institution.

Members: $20; non-members: $30 Four Points by Sheraton Tempe 1333 S. Rural Rd. tempechamber.org

Hot Topics and Lunch: Getting Positive Press Thurs., April 19 11:30a – 1:00p

Learn how you can work successfully with the media. Presenter Cary Pffefer, founder and owner of ClearComm Consulting, will guide you through the best practices and risks of dealing with the media. Catered by Celebrated Cuisine.

Members: $25; non-members: $35 Twin Palms Hotel 225 E. Apache Blvd., Tempe tempechamber.org

VALLEY FORWARD ASSOCIATION

WOMEN OF SCOTTSDALE

Quarterly Luncheon

“Hats” Luncheon

Topic: What’s the impact of the environment on our health?

Members: $45; non-members: $60 Hyatt Regency Phoenix 122 N. Second St., Phoenix valleyforward.org

$35 The Westin Kierland Resort and Spa 6902 E. Greenway Plwy., Scottsdale womenofscottsdale.org

Tues., April 3 11:30a – 1:00p

WEST VALLEY WOMEN “Hats” Luncheon Tues., April 3 11:30a – 1:00p

$35 SKYE • 16844 Arrowhead Fountain Center Dr., Peoria westvalleywomen.org

WESTMARC WESTMARC Economic Development Summit 2012 Wed., April 18 10:00a – 1:00p

Panel and speakers to discuss West Valley regional economic development.

Keynote Speaker: Jerry Colangelo.

Members: $60; non-members: $75 The Wigwam Resort – Litchfield Park 300 Wigwam Blvd., Litchfield Park westmarc.org

Fri., April 20 11:30a – 1:00p

OTHER BUSINESS EVENTS Business Professionals Breakfast Thurs., April 12 8:30a – 1:00a

An open format for you to get the answers pertaining to your business or industry. Starbucks coffee and a continental breakfast will be served.

Free The Microsoft Store 7014 E. Camelback Rd., Scottsdale scottsdaleevents@microsoft.com

“Growth Nation — HCS CARES” Tues., April 10, 2012 Noon – 2:00p

“Creating A Rewarding Educational System” is a series of educational events designed to support your business growth.

Free SkySong 1475 N. Scottsdale Rd., Scottsdale growthnation.com/seminars/ in-the-community

How amAZing is your business?

“West Side Story: Growing Green” Tues., April 24 8:00a – noon

Tips for CEO’s, business owners and others looking to grow their business by tapping in to the Green Revolution.

Presented by the City of Peoria and the Green Chamber of Commerce. $20 advance registration, $25 at the door Peoria Community Services 9875 N. 85th Ave., Peoria westsidestorygrowinggreen.eventbrite.com

ACCESS 2012 International Trade Forum Tues. & Wed., April 24-25 Full day

Learn about opportunities and business trends in Africa, the Middle East, and South Asia markets. $425 Thunderbird School of Global Management 1 Global Place, Glendale export.gov If your event is directed to helping build business in Metro Phoenix, please send us information to include it in the In Business Magazine events calendar.

Email the information to: events@inbusinessmag.com.

™

Tell us for a chance to win

$500 and more great prizes!

To celebrate National Small Business Month, the Arizona Small Business Association (ASBA) is on the hunt to find the most amAZing™ small business in Arizona. Tell us how amAZing™ your business is, and you could win a $500 cash prize among other great prizes.

Submit your video!

Visit asba.com/amazingbusiness for details | Deadline: Friday, April 13

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A p r i l 2012

35

Education

Series on Growing Revenues

Strengthening Your Bench Hunting and interviewing to get the best salespeople

by Mike Toney Our last article made the point that you should know what selling style you need in order to acquire the right talent for your sales team to be successful. This article will give you some interviewing tips that will reduce mishires and increase productivity.

Going Shopping or Hunting?

A good catch is a rarity. I get asked every week, “Where do I pick up a sales rep?” It is asked as if there is a store full of salespeople and truck loads of these people delivered daily, like bread.

Even if there were such a store, one of the biggest mistakes business owners could make would be shopping when they are hungry.

Being desperate clouds your judgment.

But, of course, there is no store for salespeople. So do we hunt or shop? I say hunt.

Successful salespeople have jobs — a person who can sell is not likely to be unemployed.

However, an employed sales professional may not be happy in his or her current position for many legitimate reasons, such as family issues, change of company culture or ownership, or travel affecting lifestyle.

To hunt for sales professionals, use a strategy of leverage as much as possible: Get your employees, vendors and peers looking for you regularly and consistently. You can always hire a better person than you currently have if 1) you believe good salespeople don’t cost you money; they make you money; and 2) you have the courage to do what’s right for your company and employees by getting the best possible person for the position.

You Found a Salesperson. Now What?

Our last article explained that everyone wears a mask during the interview process to make themselves look as good as possible to ensure getting the job. Your job is to get this mask off as soon as possible to see what is real.

First, recognize that the ability of the interviewer to see the truth is dependent on the interviewer’s mindset and preparation.

There is a scarcity factor — the greater your need to hire, the less attuned you will be to an applicant’s weaknesses —

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and an emotional one — it’s hard to be objective about someone you like. So, as the interviewer, remove your scarcity and emotional attachments from the process.

Create the Environment to Get the Outcome You Want Typical interviewing methods cover the applicant’s relevant scope of knowledge and some behavioral questions. The downside of this approach is people can see the intent of the questions asked and, as a result, answer with enough intellectual superficiality to pass the test. An effective, fast way to peel the mask off is to create an environment that is unpredictable. This enables you to get a sense of the emotional thinking behind the applicant’s real-world reactions, as emotional thinking can’t sustain a false pretense in an unpredictable environment.

Lay down ground rules for the unpredictable environment you wish to create. Go ahead and let the candidate know you intend to create this unpredictable environment to induce so much pressure during the interview that there will be no doubt about how he or she will react in the job.

I’ve found the strong sales professionals love this approach; the amateurs will do everything from lock up to start to cry.

The following are a few of the many ways to add pressure to the interview: Group interviews — This can take two forms: 1) Have your executive team (3-4 people) sitting in the room when the candidate arrives, but saying nothing, and have the interviewer run the meeting as if there are only two people in the room. 2) Have multiple interviewees present their skills to a committee

in front of their peers.

Videotaping — Have a big camera in the room and a release form for the candidate to sign.

Rapid-fire Questions — Keep the candidate off balance with a series of questions on things that are not obvious as to why you would be asking.

Trap Questions — Ask questions that lay a trap to be exposed as wrong or incorrect later.

Role-playing — Play out scenarios of selling for your company. Bring to the table obstacles that you have actually struggled with to see how the candidate handles them.

Alternatively, you can create a safe environment. This will also minimize the mask; the safer someone feels, the more open he or she tends to be. Making someone feel safe is actually tougher than it sounds. One way to create the perception of a safe environment is to jump in the car as soon as the candidate arrives, saying you want to take him or her with you to a client, lunch or somewhere else off-site. A car ride can’t be a part of the interview right?

Wrong. But candidates never see it that way, and you will see things you never imagined.

What they say in the car will surprise you.

The more unpredictable the interview, the closer you will get to hiring the real person.

Conquest Training Systems, Inc. conquesttraining.com

Michael Toney, CEO of Conquest Training Systems, drew from 20-plus years of education and experience in sales and sales training — including consulting with TRW, IBM, Allied Signal and other Fortune 50 corporations — to develop the dynamic program of leadership and consultative and strategic sales techniques.

Sales — the Education Series Sales Is Not a Bad Word!

Systems and Correct Measures of the Sales

Compelled to Sell: It’s a Process

Building Your Sales Team Correctly

Silos and Structures of Revenue and Sales

Strengthening the Bench

To reference published segments, please access the archived “Education” articles on the In Business Magazine website, www.inbusinessmag.com.

inbusine ssmag.com

by Mike Hunter

Social Media Tools for Business

In this day and age, building a business starts with a great idea, a solid business plan and secure financials. Things the successful will be certain are obtained. New to that list are social media tools to keep relevant and to float the brand in a cost-effective and notable way.

Here are some of the tools that every business should be working with — and, for the most part, they are free.

Social Networking Managing social media platforms is getting increasingly more complicated. Keeping tabs on when, what and how often communications go out is a full-time job to optimize branding success. Try HootSuite. It is a multi-platform dashboard that easily schedules messages and tweets, manages multiple social profiles such as Facebook and Twitter, and can track brand mentions and social media traffic.

HootSuite hootsuite.com

Blogging This is a content-heavy chore that will keep someone in the company chained to his or her desk. If done properly, this is a useful tool to engage readers and followers and to attract attention to the brand. DISQUS is a comments platform that helps a business owner build an active community from the business website’s audience. It has awesome features and powerful tools, and it’s easy to install.

We Value What We Own

ASSETS

Aston Martin Sporty for Four This four-door sports car was introduced to acclaim in a market where engines are getting reinvented with fewer cylinders and a turbo charge to boost output.

The Aston Martin Rapide has a 470-horsepower, 48-valve, 6.0-liter V12 engine that is considered “oldschool” but attains impressive speeds and output. With 443 pound-feet of torque and a clocked 0-60 mph in 5 seconds, the Rapide is not as quick as its Porsche, Jaguar and Mercedes competitors; however, it will not disappoint. The transmission is a 6-speed automatic with paddle shifters to manipulate speeds.

The classic styling is present in this luxury sedan.

Appointments are of the craftsmanship and standards one can expect from this British car company. The appointments are all natural and authentic leathers, woods and even sapphire crystals that give this interior remarkably well-designed appeal (even at this price). A center LCD screen houses the Garmin navigation system, which is integrated electronically with the Bang & Olufsen 15-speaker sound system complete with the expected CD player, iPod/USB interface and satellite radio. Exterior styling is an impressive sight.

Trimmed with alloy bound by the classic curves and colors, the Rapide is a gorgeous vehicle. The Luxe edition offers some upgrades and token accessories and colors, but, overall, the styling and equipment is the same. An inventive accessory is the Jaeger-LeCoultre wristwatch transponder that comes with the vehicle, making it convenient to enter and leave the car with the key fob.

Roominess is not why one would purchase this creation by Aston Martin. Tight and snug in the front (as most would expect), its sporty feel may lead the driver to forget it’s a sedan.

However, the back-seat passengers will not forget so easily. It is a small space, but the 2012 Aston Martin Rapide experience is memorable due to a separate City MPG . . . . . . . . . . . . . . . . . . . . . . . . . . 13 entertainment system, which is standard in Hwy MPG. . . . . . . . . . . . . . . . . . . . . . . . . . 19 the Luxe edition, and a ride that will turn 0-60 MPH. . . . . . . . . . . . . . . . . . . . . 5.0 sec heads for sure.

Aston Martin astonmartin.com

Transmission. . . . . 6-speed automatic MSRP. . . . . . . . . . . . . . . . . . . . . . . $207,895 MSRP Luxe. . . . . . . . . . . . . . . . . $226,850

Photos: Aston Martin (left), HootSuite, DISQUS, YouTube (right, top to bottom)

DISQUS disqus.com

Multimedia This is an area that continues to expand, but there is one standard that every business will need to master — YouTube. This multimedia platform is the most viewed and easiest to manage; it’s a common platform on which to gain brand attention. Instructional videos are readily available, and lessons on best practices are a dime a dozen.

YouTube youtube.com

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Power Lunch

by Mike Hunter

Meals that matter

Making Lunch Marketable A healthy lunch provides the energy needed for the rest of the day. High-protein, low-carbohydrate lunches will do the trick. So what’s the best bet?

How about the nearest, freshest grocer. Here are some options.

Urban Grocery and Café Market

Locally sourced produce, fresh meats, sandwiches, soups and salads make this urban market the ideal healthy midday lunch. Located at Phoenix Public Market, the Café has limited menu items that include roasted organic vegetables and seasonal organic soups with gluten-free, vegan and soy-free options.

14 E. Pierce, Phoenix (602) 254-1799 foodconnect.org/phxmarket

Sprouts Farmers Market

Who would have thought that a quaint corner in a moderate neighborhood would be the beginning of eclectic and funky food in Phoenix? La Grande Orange Grocery may have been that upstart.

La Grande Orange started out as an idea to offer organic and pure food and products and simple service in a gourmet, boutique grocery store more than a decade ago. This eatery has remained relevant since then and is packing in the breakfast and lunch crowd.

A casual “order and wait for them to call your name” atmosphere would normally be a hassle at lunch, but this smoothly operated effort is worth it. The food is worth it.

For lunch, patrons can order from the bistro-inspired menu. The tasty Croque Madame is a broiled, open-face classic with tomato, ham, sunny-side-up egg, spicy mustard sauce and Gruyere cheese. The Tuna Steak sandwich is a healthier favorite on fresh-baked, nine-grain slices with tomato, greens and a pickle. The salads are creative and inventive, reminding foodies they are in a grocery store. Fresh, tossed and served to perfection, they include variations of the Caesar, Thai Chicken and Tuna salads. Breakfast items are also available at lunch. The favorites by far are the Famous French Pancakes, which are a crêpestyle delight, and the Commuter Sandwich, with eggs, tomato and mayo on a homemade English muffin with choice of bacon, turkey, smoked salmon or avocado.

Seating at LGO is limited, but the Pizzeria (another creation of the LGO group) is open next door for comfortable seating. The outdoor area is reminiscent of an “eat in the park” setting along the street. This may not be the client pleaser for lunch, but it is certainly a treat on the fly, with or without colleagues.

Whole Foods Market

Gourmet organic and natural foods and ingredients that include all the favorites are in-store at each of the five Valley locations. From international cuisine to well-known prepared food items, organic and all-natural is the order of the day. Whether eating in the quaint café or set up at the sushi bar, patrons will find healthy, locally grown foods that will please the palate.

5 locations Valley-wide wholefoodsmarket.com Urban Grocery and Café Market

La Grande Orange Grocery 4410 N. 40th Street, Phoenix • (602) 840-7777 • lagrandeorangegrocery.com

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Photos: LGO Hospitality (top), Urban Grocery and Café Market (bottom)

LGO: Boutique Grocery Store Remains Lunch Hot Spot

Custom-made sandwiches, freshest produce and drink choices to suit all tastes is the attraction here.

Food can be prepared to take back to the office or enjoyed in the small, café-style dining area. Special services include letting patrons find their own produce for salads (they’ll make it to order) and adding one of the store’s products to an individual’s favorite deli dish.

15 locations Valley-wide sprouts.com

Presents

Top Hospitals Valley Hospitals Are Excelling

A special section on Valley hospitals spotlights the strength of our healthcare services and provides insight as to how the industry is addressing the challenges facing it.

The Valley is home to some of the world’s best . . .

Top Hospitals

The Business of Care

Hospitals operate high-quality healthcare on slim margins

by RaeAnne Marsh

H

ospitals in Arizona represent the cutting edge of medical research and treatment.

Specialized facilities are destination hospitals, attracting patients and their families from around the region. And growth in the industry creates jobs in ancillary industries, from construction to purchase of goods and services.

Healthcare as a sector has been growing, even during the economic downturn of recent years. It is one of the largest job leaders in Arizona, says Pete Wertheim, vice president of Strategic Communications for the Arizona Hospital and Healthcare Association. Two specialty hospitals have opened in recent years: Cancer Treatment Centers of America, which opened its Western Regional Medical Center in Goodyear in 2008, and MD Anderson Cancer Center, which Banner Health opened in Gilbert last fall. And there is a new general acute care hospital for the Greater Phoenix area that opened a few weeks ago south of the Valley: Florence Hospital at Anthem.

Hospitals overall, however, have been facing a much more challenging situation than many others in this sector, shedding jobs or not filling positions as they become vacant.

“Hospitals spend a lot of time anticipating what communities will look like,” says Wertheim, noting they are building to meet the needs of not just today but of tomorrow. But they operate on slim profit margins, particularly the “safety net” hospitals that provide healthcare for people without health insurance.

And they face further cuts in reimbursements although there will likely still be segments of the population left uncovered even when the Patient Protection and Affordable Care Act is fully implemented. In fact, according to Wertheim, hospitals expect that under the Affordable Care Act, they will be treating more people at even slimmer margins.

To continue to provide high-quality care, hospitals are streamlining operations. “They are gaining efficiencies, consolidating services and finding greater value in the healthcare system,” says Wertheim. Hospitals are doing more to collaborate with outside

stakeholders to make sure patients are using the appropriate facilities for their healthcare.

For instance, many people, traditionally, use emergency room services in lieu of a primary care physician. Hospitals have begun to focus on helping such patients find the lower-level care that would answer their needs, including behavioral health and rehabilitation, through networking and collaboration.

Arizona Hospital and Healthcare Association azhha.org

Valley Hospitals 1 Arizona Heart Hospital

1930 E. Thomas Road, Phoenix (602) 532-1000 abrazohealth.com 2 Arizona Regional Medical Center

515 N. Mesa Drive, Mesa (480) 898-3333 3 2050 W. Southern Avenue, Apache Junction (480) 237-3200 myarmc.com 4 Arrowhead Hospital

18701 N. 67th Avenue, Glendale (623) 561-1000 arrowheadhospital.org 5 Banner Baywood Medical Center

6644 E. Baywood Avenue, Mesa (480) 321-2000 bannerhealth.com/baywood

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6 Banner Boswell Medical Center

10 Banner Gateway Medical Center

14 Banner MD Anderson Cancer Center

10401 W. Thunderbird Blvd., Sun City (623) 832-4000 bannerhealth.com/boswell

1900 N. Higley Road, Gilbert (480) 543-2000 bannerhealth.com

2946 E. Banner Gateway Drive, Gilbert (480) 256-6444 bannerhealth.com

7 Banner Del E. Webb Medical Center

11 Banner Good Samaritan Medical Center

15 Banner Thunderbird Medical Center

14502 W. Meeker Blvd., Sun City West (623) 524-4000 bannerhealth.com

1111 E. McDowell Road, Phoenix (602) 839-2000 bannerhealth.com

5555 W. Thunderbird Road, Glendale (602) 865-5555 bannerhealth.com

12 Banner Heart Hospital

16 Cancer Treatment Centers of America at Western Regional Medical Center

8 Banner Desert Medical Center

1400 S. Dobson Road, Mesa (480) 412-3000 bannerhealth.com/desert 9 Banner Estrella

6750 E. Baywood Avenue, Mesa (480) 854-5000 bannerhealth.com 13 Banner Ironwood

Medical Center

Medical Center

9201 W. Thomas Road, Phoenix (623) 327-4000 bannerhealth.com

37000 N. Gantzel Road, San Tan Valley (480) 394-4000 bannerhealth.com/ironwood

14200 W. Fillmore Street, Goodyear (623) 207-3000 cancercenter.com 17 Cardon Children’s Medical Center

1400 S. Dobson Road, Mesa (480) 412-5437 bannerhealth.com inbusine ssmag.com

am

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Tom Darlington Dr

104th St

92nd St

32ia Linda

well Rd

McDowell

Hawes Rd

Thomas Rd McDowell Rd

Williams Field Rd

Pecos Rd

Pecos Rd

Sosaman Rd

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18 Chandler Regional Medical Center

475 S. Dobson Road, Chandler (480) 728-3000 chandlerregional.org 19 Gilbert Hospital

5656 South Power Road, Gilbert (480) 984-2000 gilberter.com 20 John C. Lincoln

Deer Valley Hospital 19829 N. 27th Avenue, Phoenix (623) 879-6100 jcl.com 21 John C. Lincoln

North Mountain Hospital 250 E. Dunlap Avenue, Phoenix (602) 943-2381 jcl.com

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22 Maricopa Medical Center

2601 E. Roosevelt Street, Phoenix (602) 344-5011 mihs.org 23 Maryvale Hospital

5102 W. Campbell Avenue, Phoenix (623) 848-5000 maryvalehospital.com 24 Mayo Clinic Hospital

5777 E. Mayo Blvd., Phoenix (480) 515-6296 mayoclinic.org 25 Mercy Gilbert

26 Mountain Vista Medical Center

30 St. Joseph’s Hospital & Medical Center

1301 S. Crismon Road, Mesa (480) 358-6100 mvmedicalcenter.com

350 W. Thomas Road, Phoenix (602) 406-3000 stjosephs-phx.org

27 Paradise Valley Hospital

31 St. Luke’s Medical Center

3929 E. Bell Road, Phoenix (602) 923-5000 paradisevalleyhospital.com

1800 E. Van Buren Street, Phoenix (602) 251-8100 stlukesmedcenter.com

28 Phoenix Baptist Hospital

32 Scottsdale Healthcare

2000 W. Bethany Home Road, Phoenix (602) 249-0212 phoenixbaptisthospital.com

Medical Center

29 Phoenix Children’s Hospital

3555 S. Val Vista Drive, Gilbert (480) 728-8000 mercygilbert.org

1919 E. Thomas Road, Phoenix (602) 933-1000 phoenixchildrens.com

ou

se

13 Rd

Shea Medical Center

9003 E. Shea Blvd., Scottsdale (480) 323-3000 shc.org 33 Scottsdale Healthcare

Osborn Medical Center

7400 E. Osborn Road, Scottsdale (480) 882-4000 shc.org

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Top Hospitals

Profile

Gilbert Hospital Gilbert Hospital, the first hospital in Gilbert, Ariz., opened on February 2, 2006, at Power Road and Galveston. Over the last six years of service to the community, more than 256,000 emergency room patients have been treated, 4,500 surgeries performed and more than

Gilbert Hospital 11,700 patients admitted to the inpatient unit.

The hospital’s medical staff roster of 200 physicians represents more than 20 specialties.

Florence Hospital at Anthem opened on March 8, 2012, as a 36-bed, 96,000-squarefoot hospital. The medical staff roster of 105 physicians represents 16 specialties.

Both hospitals offer services for Emergency, Inpatient/ICU, OR/PACU, MRI/CT, Digital X-ray, Nuclear Medicine and Ultrasound. Florence also has a correctional unit. Each hospital has a full-service laboratory, blood bank and inpatient pharmacy.

Both facilities are licensed by Arizona Department of Health Services (ADHS) as General Acute Care Hospitals, the .Door to Doc in 31 Minutes” TM mission guarantees patients will be seen by a board-certified emergency physician within 31 minutes of arrival. To provide efficient continuity of care, Southwest Ambulance and Air Methods (air ambulance service) are at both hospitals 24/7.

Our mission, philosophy and goals center on the delivery of the absolute

Main Address: 5656 S. Power Rd., Gilbert Main Phone: (480) 984-2000 Website: gIlberter.com Head of Hospital: Tim Johns, M.D., F.A.C.E.P., Founder No. of Licensed Beds: 19 No. of Physicians on Staff: 200 Top 5 Specialties: • Emergency Medicine • Internal Medicine • Cardiology • General Surgery • Orthopedics highest-quality service of healthcare to all who walk through the doors. Our staff are expected to think “outside the box,” satisfy our customers at every level, and put forth an attitude that “raises the bar” on quality and commitment as stated in our mission.

“The patient, in our model, is the center of the universe; not the hospital,” says Tim Johns, M.D., founder.

From Door to Doc in 31 Minutes™ Now in Maricopa and Pinal counties to serve you!

Gilbert Hospital 5656 S. Power Road Gilbert, AZ 480-984-2000 gilberter.com

Florence Hospital at Anthem 4545 N. Hunt Hwy Florence, AZ 520-868-3333 fhanthem.com

Peoria Regional Medical Center Lake Pleasant Pkwy & Yearling Road Opening in 2013

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Our people make your care the best.

Our ranking makes it official.

Sure, we’re honored to accept a top-five ranking for large health systems from Thomson Reuters. But we’re even more honored to have some of the best caregivers in all of health care working tirelessly to provide great treatment, care and support to you. They’re what make us one of the five best large health systems out of 321 studied nationwide. And it’s their dedication and commitment to greatness that continue to make us the best we can be. Isn’t it time you find out what a top-five ranked health system can do for you?

www.BannerHealth.com Connect with us: FacebookTwitter

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Top Hospitals

Maricopa Medical Center Maricopa Integrated Health System is headquartered in the heart of Phoenix, Ariz.

The cornerstone of our system is Maricopa Medical Center, a major teaching hospital with a history dating back more than 100

years. Best known for our critical care services, Maricopa Medical Center offers level one trauma and intensive care for adults, babies and children. MIHS is also home to the nation’s second largest burn treatment facility, the Arizona Burn Center, as well as 11 family health centers located conveniently across Maricopa County.

Maricopa Medical Center is a full-service, 522-bed hospital that sees nearly 20,000 inpatient admissions every year. We are the only hospital in Arizona with an adult and pediatric trauma center verified by the American College of Surgeons. Our hospital features advanced medical services and has been recognized by U.S. News and World Report in its report on “America’s Best Hospitals” for excellence in respiratory disorders, urology, medical care, education and research.

Maricopa Integrated Health System is committed to offering comprehensive medical services to all of those who live in Maricopa County, including the

Profile Maricopa Medical Center Parent Company: Maricopa Integrated Health Systems Main Address: 2601 E. Roosevelt St., Phoenix Main Phone: (602) 344-5011 Website: mihs.org Head of Hospital: Betsey Bayless, President and CEO No. of Licensed Beds: 522 No. of Physicians on Staff: 425 Top 5 Specialties: • Burn • Trauma/Emergency/Critical Care • Ambulatory Care • Pediatrics • Women and Infants underserved and medically needy, through a continuum of care that keeps our community healthy. We are also committed to fostering academic programs that train physicians for the future and to support clinical research programs for improved healthcare outcomes for all ages.

mihs.org

Your Community Depends on Maricopa Integrated Health System A strong public hospital is as much a mark of a healthy community as good universities, modern transportation systems and thriving arts organizations.Yet the Maricopa Medical Center is just the most visible part of the Maricopa Integrated Health System, which includes the Arizona Burn Center, the Arizona Children’s Center, two psychiatric hospitals, 11 neighborhood health clinics and the region’s only HIV/AIDS clinic. Our vital work in caring for patients, preventing disease and training the next generation of physicians reaches across generations and touches nearly every corner of Arizona.

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Profile

Mayo Clinic Hospital Mayo Clinic Hospital is the first hospital planned, designed and built by Mayo Clinic.

Completed in the fall of 1998, the hospital was designed to deliver high-quality inpatient medical care in an efficient environment, friendly to both patients and visitors.

The hospital is equipped with computerized systems that speed the flow of decision-making information to physicians and improve the quality of care,

and an electronic medical record system gives physicians access to historical as well as up-to-the-minute information on test results, treatment plans and patient progress. A filmless, computerized radiology system allows physicians to access X-ray pictures on a computer screen almost immediately after the pictures are taken, and physicians in multiple locations can view the images simultaneously and enlarge or enhance them for better interpretation. The entire hospital is wired for telemetry so monitoring of heart and other vital signs can be done from any patient room, which allows many patients to stay under the care of nurses who have expertise caring for their specific health conditions, as opposed to moving to a dedicated telemetry unit.

Mayo Clinic Hospital is located on a 210-acre site at 56th Street and Mayo Boulevard (near the Loop 101 Freeway) in the fast-growing corridor of northeast Phoenix. The hospital provides inpatient

Mayo Clinic Hospital Parent Company: Mayo Foundation for Medical Education and Research Main Address: 13400 E. Shea Blvd., Scottsdale Main Phone: (480) 515-6296 Website: mayoclinic.org Head of Hospital: Wyatt Decker, M.D. No. of Licensed Beds: 244 No. of Physicians on Staff: 437+ Top 5 Specialties: • Bone marrow, Solid Organ & Heart Transplant • Cardiovascular and Thoracic Surgery • Neurologic Surgery • Ophthalmologic Surgery • Cancer Care and Medical Research care to support the medical and surgical specialties and programs at the clinic. Mayo Clinic and Mayo Clinic Hospital together offer medical expertise dedicated to providing comprehensive diagnosis and treatment in more than 65 medical and surgical specialties, with careful attention to individual patient needs.

I’m a three-time national rodeo champion.

One day after training I had a seizure.

Tests showed I had a rare brain tumor, and surgery to remove it could have left me paralyzed. Today, I’m back in the saddle.

My answer was Mayo Clinic.

Raley Mae Radomske, New Mexico

Thousands travel to Mayo Clinic each year for treatment, diagnosis, or a second opinion. Mayo Clinic is an in-network provider for millions, and a physician’s referral is typically not required. To request an appointment, visit mayoclinic.org.

Visit mayoclinic.org/arizona

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Top Hospitals

Profile

Phoenix Children’s Hospital Phoenix Children’s Hospital has provided hope, healing and the best healthcare for children since it was born in 1983, and has grown to become one of the largest children’s hospitals in the country.

With a medical staff of nearly 1,000 pediatric specialists, Phoenix Children’s provides inpatient, outpatient, trauma and emergency care across more than 45 pediatric subspecialties, the most

Phoenix Children’s Hospital

comprehensive pediatric care available in the state. The Hospital’s six Centers of Excellence have grown in size and expertise to place them on par with some of the most prestigious of their kind in the U.S.: • Barrow Neurological Institute at Phoenix Children’s Hospital • Phoenix Children’s Heart Center • Center for Pediatric Orthopaedics • Center for Cancer and Blood Disorders • Level One Pediatric Trauma Center • Neonatal Intensive Care To meet the needs of our growing community, Phoenix Children’s continues to expand, adding new physicians, staff, programs and facilities. Specialty and urgent care centers in high-growth areas of the Valley and across the state serve the needs of patients and families in their own neighborhoods.

Today, the most visible evidence of growth is a new 11-story tower on the Hospital’s main campus, which offers a comprehensive, family-centered hospital that allows our

Parent Company: Children’s Healthcare of Arizona, Inc., an Arizona 501(c)(3) nonprofit corporation Main Address: 1919 E. Thomas Rd., Phoenix Main Phone: (602) 933-1000 Website: phoenixchildrens.com Head of Hospital: Robert L. Meyer, President and CEO No. of Licensed Beds: 465 No. of Physicians on Staff: 924 Top 5 Specialties: • Pediatric Neurosciences/Neurosurgery • Pediatric Cardiology/Cardiovascular Surgery • Pediatric Orthopaedics/Orthopaedic surgery • Pediatric Cancer and Blood Disorders • Pediatric Trauma doctors and nurses to deliver expert care and healing to our community’s youngest patients.

At each location, in each doctor, nurse, technician, staff member and volunteer, you’ll see the difference in a Hospital that’s 100 percent for children.

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St. Joseph’s Hospital and Medical Center Located in the heart of Phoenix, Ariz., St. Joseph’s Hospital and Medical Center is a notfor-profit hospital that provides a wide range of health, social and support services with special advocacy for the poor and underserved.

St. Joseph’s is a nationally recognized center for quality tertiary care, medical

education and research. It includes the internationally renowned Barrow Neurological Institute®, which offers care for people from throughout the world with brain and spine diseases, disorders and injuries; the Heart & Lung Institute®, which integrates medical staff and faculty staff to enhance inpatient treatment and education, and facilitate research into new technologies and treatment modalities; Adolescent Center, which provides a multidisciplinary approach to adolescent health issues and is one of the few outpatient sub-specialized adolescent medicine centers in the Valley; and a Level I Trauma Center that is the first ACS Level I Trauma Center in the state verified by the American College of Surgeons. The hospital is also a respected center for maternity care, orthopedics, oncology and many other medical services.

St. Joseph’s is consistently recognized as a Best Place to Work by The Phoenix Business Journal. U.S. News & World Report routinely ranks St. Joseph’s among the top 10 best

Profile St. Joseph’s Hospital and Medical Center Parent Company: Dignity Health Main Address: 350 W. Thomas Rd., Phoenix Main Phone: (602) 406-3000 Website: stjosephs-phx.org Head of Hospital: Linda Hunt No. of Licensed Beds: 607 No. of Physicians on Staff: 1,267 Top 5 Specialties: • Neurology and Neurosurgery • Trauma • Children’s Rehabilitative Services • Adolescent Medicine • Maternity hospitals in the United States for neurology and neurosurgery.

Founded in 1895 by the Sisters of Mercy, St. Joseph’s was the first hospital in the Phoenix area. The hospital is part of Dignity Health, one of the largest healthcare systems in the West, with 40 hospitals in Arizona, California and Nevada.

Barrow Neurological Institute®

50 Years of Bringing Great Minds Together U.S. News & World Report Top 10 Hospital

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Index IndexDan, by30 Name Adams, Arthur, Diane, 29 Bailey, Dana, 32 Boals, Richard L., 9 Bryan, Harvey, 18 Crone, Pauline, 28 Dalrymple, Mick, 18 Danner, Dan, 14 Davis, Todd, 20, 33 Index by Company 1-800 Got Junk, 4 Advanced Industrial Marketing, Inc., 30 Ahwatukee Foothills Chamber of Commerce, 34 Alerus Bank, 15 Alter Group, The, Ltd., 14 Arizona Association for Economic Development, 34 Arizona Chamber of Commerce and Industry, 10 Arizona Commerce Authority, 16 Arizona Diamondbacks, 48 Arizona District Export Council, 16 Arizona Heart Hospital, 40 Arizona Integrated Physicians, 22 Arizona Petroleum Marketers Association, 50 Arizona Public Service, 28 Arizona Regional Medical Center, 40 Arizona Small Business Association, 33, 34, 35 Arizona Technology Council, 34 Arrowhead Hospital, 40 Association for Corporate Growth, Arizona, 34 ASU Design School, 18 ASU Global Institute of Sustainability, 18 Avnet, Inc., 7, 28 Banner Baywood Medical Center, 40 Banner Boswell Medical Center, 40 Banner Del E. Webb Medical Center, 40 Banner Desert Medical Center, 40 Banner Estrella Medical Center, 40 Banner Gateway Medical Center, 40 Banner Good Samaritan Medical Center, 40 Banner Health, 43 Banner Heart Hospital, 40 Banner Ironwood Medical Center, 40 Banner MD Anderson Cancer Center, 40 Banner Thunderbird Medical Center, 40 Barrow Neurological Institute, 47 BestIT Corp., 51 Blue Cross Blue Shield of Arizona, 9, 13 Cancer Treatment Centers of America, 40 Cardon Children’s Medical Center, 40 Cassidy Turley BRE Commercial, 8 Central Phoenix Women, 34 Chandler Chamber of Commerce, 34 Chandler Regional Medical Center, 41 Cigna Healthcare of Arizona, 10 Conquest Training Systems, Inc., 4, 36 Cousins Submarines, Inc., 14

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Dickinson, Karen, 16 Erickson, Robin, Ph.D., 28 Gorman, Stephanie, 10 Halvorson, Al, 18 Hamer, Glenn, 10 Heller, Matt, 12 Herro, C.R., 18 Hill, Andy, 18 Hughes, Don, 22

Johns, Tim, M.D., 42 Jones, Cliff, 14 Kesler, Gina, 12 Krivoruchka, Mark, 28 Laufer, Nathan, M.D., 22 Maxwell, Thomas, III, 22 Meyer, Robert, 10 Nielsen, Eric, 16 Perlow, Leslie A., 29

Poore, Carol, 32 Sánchez, Francisco, 16 Sheridan, Kevin, 29 Stanton, Greg, Mayor, 33 Sundberg, Lori, 28 Toney, Mike, 36 Voyles, Sally, 50 Weaver, Bill, 22

Deloitte, 28 Delta Dental, 3 DISQUS, 38 DPR Construction, 18 Economic Club of Phoenix, 34 Energize Phoenix, 18 Focus Benefits Group, 22 Frito Lay, 18 Gilbert Hospital, 41, 42 Glendale Chamber of Commerce, 34 GPE Commercial Real Estate Services, 27 Grand Canyon University, 15 Greater Phoenix Black Chamber of Commerce, 34 Greater Phoenix Chamber of Commerce, 33, 34 HealthCare.gov, 22 Heart & Mind Network, 27 Heart & Vascular Center of Arizona, 22 Henry J. Kaiser Family Foundation, 22 Homeward Bound, 32 HootSuite, 38 International Franchise Association, 12 International Trade Administration, 16 John C. Lincoln Deer Valley Hospital, 41 John C. Lincoln North Mountain Hospital, 41 John F. Long Properties, LLLP, 14 KEMA Engineering, 18 La Grande Orange Grocery, 40 LifeLock, 20, 33 Linda Land, 4 Maricopa County Medical Society, 22 Maricopa Integrated Health System, 44 Maricopa Medical Center, 41, 44 Maricopa Workforce Connections, 11 Maryvale Hospital, 41 Mayo Clinic, 45, 52 Mayo Clinic Hospital, 41, 45 Mercy Gilbert Medical Center, 41 Meritage Homes, 18 Mesa Chamber of Commerce, 34 Mountain Vista Medical Center, 41 National Association of Women Business Owners, 34 National Bank of Arizona, 5 National Federation of Independent Business, 14 Paradise Valley Hospital, 41 PepsiCo, 18 Phoenix Baptist Hospital, 41 Phoenix Children’s Hospital, 10, 41, 46

Reliable Background Screening, 17 RSC Equipment Rental, Inc., 28 SCF Arizona, 2 Scottsdale Area Chamber of Commerce, 8, 34 Scottsdale Healthcare Osborn Medical Center, 41 Scottsdale Healthcare Shea Medical Center, 41 Scottsdale Healthcare Thompson Peak Hospital, 41 SmithGroupJJR, 18 Southwest Center for HIV/AIDS, 32 Sprouts Farmers Market, 40 St. Joseph’s Hospital and Medical Center, 41, 47 St. Luke’s Medical Center, 41

Surprise Regional Chamber of Commerce, 34 Tempe Chamber of Commerce, 35 Tempe St. Luke’s Hospital, 41 Urban Grocery and Café Market, 40 USA Mobile Drug Testing of N. Phoenix and SE Valley, 12 Valley Forward Association, 35 Wells Fargo, 17 West Valley Hospital, 41 West Valley Women, 35 Western Regional Medical Center, 41 WESTMARC, 35 Whole Foods Market, 40 Women of Scottsdale, 35 YouTube, 38 Bold listings are advertisers supporting this issue of In Business Magazine.

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A p r i l 2012

49

Roundtable

A Candid Forum

Where’s the Bottom Line on Fuel Prices?

by Sally Voyles

The price of fuel has a huge impact on commerce, touching commercial end-users that include farmers, construction firms and local and state governments as well as retail costs in the transportation of goods. It is an emotional issue that affects everyone. There are frequent demands for investigations into fuel price gouging and popular campaigns to promote cheaper fuel through public policies and consumer boycotts, resulting in consumers, consumer groups and policymakers wondering how best to respond to rising fuel prices.

The price of gasoline directly relates to the global price of crude, which, at time of press for this April issue, is exceeding $106 for West Texas Intermediate and $123 for Brent Crude, both grades of crude oil used as a benchmark in oil pricing. Every barrel of crude oil produces approximately 19 gallons of gasoline.

A recent phenomenon in the oil markets is the price spread between the North Sea Brent crude oil contract and the WTI crude oil contract. While WTI used to be the world’s benchmark for pricing crude, it no longer reflects worldwide demand; Brent does — and Brent has become the world’s benchmark. The Brent Crude Oil Contract is now traded on the Intercontinental Exchange (an over-the-counter exchange). Since Brent is now considered the world’s oil benchmark and much of U.S. coastal prices are now based off the Brent contract, it has led to higher prices.

The American Petroleum Institute reported in February that oil consumption in January dropped 5.7 percent from a year ago to 18.026 million barrels per day. With WTI supplies well above its five-year average, demand down by 1 million barrels per day (bbl/day) — currently at 18 million bbl/day compared to two years ago when daily oil demand averaged more than 19 million barrels — and the Euro weakened against the U.S. dollar (the dollar has strengthened considerably), oil prices should be low.

However, as we often hear, many companies that are buying crude oil contracts (speculators) believe that Israel might attack

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Iran’s nuclear facilities, creating a regional conflict that could create a global shortage of oil. Hence a tremendous rise in an already overly saturated buying market for crude.

There is too much liquidity in the futures markets. Banks have too much cheap money and are using that capital to speculate on crude contracts. Some members of Congress have chosen to limit funding to the Commodity Futures Trading Commission so that the CFTC is unable to limit banks.

There is language in the Dodd-Frank Act (Title VII) that will help to minimize excess speculation once the Title is fully implemented. However, the banking industry is aggressively lobbying Congress to roll back Title VII, which would protect Wall Street and do more damage to Main Street.

To complicate matters, many refineries have switched over to produce summer blends of gasoline (required by the U.S. Environmental Protection Agency), which annually creates shortages of gasoline. Additionally, consumers should keep in mind that approximately 50 cents per gallon is cost due to Federal, State and local taxation.

Arizona Petroleum Marketers Association apma4u.org

Sally Voyles is president of Arizona Petroleum Marketers Association, a state trade association representing petroleum marketers and operators who own, operate or supply approximately 850 service stations and other retail motor fuel outlets in Arizona and associate members who represent all of the diverse fields associated with the petroleum distribution system and convenience store industry.

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There MUST be a better way!

There is.

We have a simple solution for you.

Contact me for additional information: Larry Bua Executive, Business Vision and Innovation 3724 N 3rd Street, Phoenix, AZ 85012 Direct: 602.828.2254 Larry.Bua@BestIT.com

I thought I was healthy and fit. When I learned I had a two-inch hole in my heart, my world turned upside down. Today I’m training for a marathon.

My answer was Mayo Clinic.

Monica Harlow, Maricopa, AZ

Monica Harlow led an active life despite being born with a serious heart condition. When a checkup showed that she might need a transplant, she was referred to Mayo Clinic. Monica’s team was able to close the hole in her heart using her own natural tissue. Mayo Clinic is an in-network provider for millions of people. In most cases you don’t need a physician referral.

For more information or to schedule an appointment, visit www.mayoclinic.org/arizona or call 800-446-2279.